Economics Commons^™

Asset Ownership And The Probability Of Repayment: An Examination Of Microcredit Data From Bangladesh, Roger White, Shamma Adeeb Alam

Economics

Employing data for 34,255 loans made by the Bangladesh Rural Advancement Committee (BRAC) to 12,455 repeat borrowers during the 2002-6 period, this article examines the relationship between borrowers’ asset holdings and microloan repayment. Estimating a series of binomial probit specifications, it finds a positive relationship between land ownership and loan repayment; however, taken collectively, ownership of non-land assets diminishes the likelihood of repayment. Influences of specific assets on repayment probabilities vary across asset types: ownership of land, corrugated tin houses, vans and rickshaws increases the likelihood of repayment, while ownership of sewing machines, televisions, radios and bicycles corresponds with a …

Economic Growth And Recovery In The United States, 1919-1941, Alexander J. Field

Economics

The first part of this chapter provides an overview of what lay behind record productivity growth in the US economy between 1929 and 1941. The second part considers the role of rigidities and other negative supply conditions in worsening the downturn and slowing recovery. While arguing consistently that the overarching explanation of the Great Depression will and should continue to emphasise a collapse and slow revival in the growth of aggregate demand, the chapter spends relatively little time on what drives this. The emphasis of the chapter is on aggregate supply—both the broad array of positive shocks that propelled potential …

John Kenneth Galbraith, Alexander J. Field

Economics

Galbraith, John Kenneth (15 Oct. 1908-29 Apr. 2006), economist and author, was born in Iona Station, Ontario, Canada, to Archibald Galbraith and Sarah Catherine Kendall. Galbraith, who advanced and reinterpreted institutionalist and Keynesian traditions in economics while promoting a liberal and progressive political agenda, was arguably the best-known and most influential economist and public intellectual of his generation. He published dozens of books, served in a number of high-level government positions, and, as a faculty member at Harvard University for more than a quarter of a century, advised every Democratic president from Franklin Roosevelt to Bill Clinton. Galbraith's political education …

Mellon Banks, Alexander J. Field

Economics

The Mellon banks were a group of financial institutions instrumental in the industrial development of the greater Pittsburgh area in Pennsylvania, as well as, to a lesser degree, of other regions of the United States. Mellon funding played important roles in the development of coal, fabricated (but not primary) steel, aluminum (in particular Pittsburgh Reduction, which became Alcoa), and oil (in particular Gulf). Other notable companies benefiting from Mellon funding and oversight were Carborundum, a maker of grinding materials, and Koppers, a maker of advanced coking ovens that captured rather than simply vented valuable by-product gases such as toluene and …

Do Immigrants Enhance International Trade In Services? The Case Of Us Tourism Services Exports, Roger White, Bedassa Tadesse

Economics

That immigrants affect trade in goods between their home and host countries is well established in the literature. Little evidence exists, however, as to whether immigrants also affect trade in services. Using data on international tourist arrivals from 86 countries to the United States during the years 1995–2004, we provide the first empirical evidence on the effect of immigrants on exports of tourism services. Our results suggest that immigrants significantly enhance exports of tourism services (as measured by the number of tourist arrivals in the US from different home countries).

Return, Purchase, Or Skip? Outcome, Duration, And Consumer Behavior In The Rent-To-Own Market, Michael H. Anderson, Sanjiv Jaggia

Economics

Rent-to-own (RTO) is attractive to financially distressed consumers. It allows immediate access to merchandise and an opportunity for eventually acquisition. Yet goods can be returned at any point without penalty or other adverse consequences. We use a competing risk methodology that accounts for unobserved consumer heterogeneity to study how contracts conclude, estimating the probabilities of exit— via return, purchase, or skip—and the associated durations. The estimated outcome probabilities highlight the use of the embedded return option by RTO consumers and the trade-offs and cross-subsidization implicit in the RTO contractual arrangement.We offer rational and behavioral explanations of consumer behavior in the …

Obesity And Hyperbolic Discounting: An Experimental Analysis, Timothy J. Richards, Stephen F. Hamilton

Economics

Models of rational addiction suggest that obesity is consistent with time-consistent preferences. Behavioral economists maintain that addictions such as alcoholism, smoking and over-eating represent examples of present-bias in decision making that is fundamentally irrational. In this article, conduct an experiment to test whether individual discount schedules are time-consistent and whether discount rates are higher for subjects who exhibit patterns of risky behavior. Our results show that discount functions are quasi-hyperbolic in shape, and that obesity and drinking are positively related to the discount rate. Anti-obesity policy, therefore, would be best directed to informing individuals as to the long-term implications of …

Gendered Production And Consumption In Rural Africa, Michael Kevane

Economics

Recent research underscores the continued importance of gender in rural Africa. Analysis of interactions within households is becoming more sophisticated and continues to reject the unitary model. There is some evidence of discriminatory treatment of girls relative to boys, although the magnitudes of differential investments in health and schooling are not large and choices seem quite responsive to changes in opportunity costs. Social norms proscribing and prescribing male and female economic behavior remain substantial, extending into many domains, especially land tenure. Gender constructions are constantly evolving, although there is little evidence of rapid, transformative change in rural areas.

The Adversity/Hysteresis Effect: Depression Era Productivity Growth In The U.S. Railroad Sector, Alexander J. Field

Economics

Throughout its history the United States has endured cycles of fi nancial boom and bust. Boom periods have been marked by weakened or absent regulation of the fi nancial sector and a growing willingness on the part of households, nonfi nancial businesses, and fi nancial businesses to hold riskier assets and to fi nance these positions with higher leverage (higher debt to equity ratios). These twin engines fuel fi nancial sector profi ts and remuneration so long as asset prices continue to appreciate, but they (especially the trend toward higher leverage) render the system vulnerable when asset bubbles burst. In …

Us Manufacturing And Vertical/Horizontal Intra-Industry Trade: Examining The Smooth Adjustment Hypothesis, Roger White, Cheng Chen

Economics

Using data that represent the six-digit North American Industrial Classification System-classified industries that comprise the US manufacturing sector and that span the years 1989–2005, we test the validity of the smooth adjustment hypothesis (SAH). To our knowledge, this is the first examination of the SAH for the USA. The results of our empirical analysis are consistent with the confirmation of the SAH. Further, using measures of vertical marginal intra-industry trade and of horizontal marginal intra-industry trade, we find that the latter has a stronger effect on employment of production workers than does the former. The findings suggest that for total …

Fragmenting Forests: The Double Edge Of Effective Forest Monitoring, Andrew R. Bell, Rick L. Riolo, Jacqueline M. Doremus, Daniel G. Brown, Thomas P. Lyon, John Vandermeer, Arun Agrawal

Economics

The link between ineffective forest monitoring and forest degradation is well known. Under REDD+, monitoring stands to become more important as a means of maintaining incentive. Little attention however has been paid to the possible adverse consequences of forest monitoring. Our research develops a spatially explicit, agent-based model (ABM) of timber extraction in a Congo Basin forest concession to investigate the potential conservation impact of more effective monitoring. We modeled the building of access roads, and logging of legal timber and illegal timber, where illegal timber may be interpreted broadly to include prohibited species, smaller trees, or trees in areas …

Happiness And Time Preference: The Effect Of Positive Affect In A Random-Assignment Experiment, John Ifcher, Homa Zarghamee

Economics

We conduct a random-assignment experiment to investigate whether positive affect impacts time preference, where time preference denotes a preference for present over future utility. Our result indicates that, compared to neutral affect, mild positive affect significantly reduces time preference over money. This result is robust to various specification checks, and alternative interpretations of the result are considered. Our result has implications for the effect of happiness on time preference and the role of emotions in economic decision making, in general. Finally, we reconfirm the ubiquity of time preference and start to explore its determinants. (JEL D12, D83, I31)

Maternal Smoking As A Predictor Of Infant Health, Gabrielle Dibella

Economics

No abstract provided.

Vertex Centralities In Input-Output Networks Reveal The Structure Of Modern Economies, Florian Blochl, Fabian J. Theis, Fernando Vega-Redondo, Eric O'N. Fisher

Economics

Input-output tables describe the flows of goods and services between the sectors of an economy. These tables can be interpreted as weighted directed networks. At the usual level of aggregation, they contain nodes with strong self-loops and are almost completely connected. We derive two measures of node centrality that are well suited for such networks. Both are based on random walks and have interpretations as the propagation of supply shocks through the economy. Random walk centrality reveals the vertices most immediately affected by a shock. Counting betweenness identifies the nodes where a shock lingers longest. The two measures differ in …

Heckscher–Ohlin Theory When Countries Have Different Technologies, Eric O'N. Fisher

Economics

Rethinking the foundations of Heckscher–Ohlin theory when countries have different technologies, this paper shows how to make the proper adjustments for international productivity differences. The central tool is a factor conversion matrix that computes the local factor content of foreign Rybczynski effects. Factor-specific productivities are a special case of these more general linear relationships.

Empirical Foundations For The Resurrection Of Heckscher–Ohlin Theory, Peter Egger, Kathryn G. Marshall, Eric O'N. Fisher

Economics

We decompose the factor content of trade into Heckscher–Ohlin–Vanek trade and Ricardian trade. We measure factor content using only the United States' technology and also as Leontief advocated, using the local technology. In either case, differences in endowments are quite important in explaining the factor content of trade. If one uses raw estimated coefficients as a means of comparison, differences in endowments are ten times as important as differences in technology.

Introduction To Heckscher-Ohlin Theory: A Modern Approach, Eric O'N. Fisher

Economics

No abstract provided.

Emigrant Effects On Bilateral Trade: Reexamining The Immigrant-Trade Link From The Home Country Perspective, Roger White, Bedassa Tadesse

Economics

A voluminous literature examines the immigrant-trade link. Available studies evaluate the link largely from the host country perspective and generally indicate that immigrants exert positive influences on trade between their host and home countries. Few studies, however, explore the effects of emigrants on trade. Using data representing the stocks of emigrants from 131 home countries that resided in 110 host countries during the year 2005, we examine the immigrant/emigrant-trade link from both the home country perspective and the host country perspective. Doing so, we provide the first comprehensive estimates of pro-trade emigrant effects for each home country in our study.

The Structure Of The American Economy, Eric O'N. Fisher, Kathryn G. Marshall

Economics

We explore the relationship between input–output accounts and the national revenue function. The generalized inverse of an economy’s technology matrix carries information relating changes in endowments with changes in outputs; its transpose relates output prices and factor prices. Our primary theoretical contribution is to derive an economy’s revenue function for an arbitrary Leontief technology. Our main empirical contribution is to compute the national revenue function for the American economy in 2003 and to describe its properties. We implement our ideas using two different models: one where all factors are mobile and another with sector-specific capital.

Why Does Tobacco-Control Spending Vary So Much Across States?, Michael L. Marlow

Economics

Although tobacco-control spending is considered an essential component of comprehensive programmes aimed at lowering smoking, substantial variation exists across states. This article examines if variation is systematically related to cross-state differences in smoking prevalence, holding other factors constant that are expected to influence spending. An econometric model is estimated which considers effects of tobacco-settlement revenues, income, unemployment, political party of the governor, state debt and smoking prevalence on tobacco-control spending in all states during 2000--2007. Estimations control for the possibility that spending and smoking prevalence are co-determined to clearly determine the causal link from prevalence to spending. Spending variation is …

Identifiability Of The Misspecified Split Hazard Models, Sanjiv Jaggia

Economics

Unlike standard models, a split population hazard model allows the exit probability to be less than one. Although conceptually attractive, split models are prone to identification problems. In the reduced form estimation of the hazard function, the influence of split may not be distinguishable from that of neglected heterogeneity. For illustration, I use Monte Carlo simulations to highlight the problem of interpreting the structural parameters of the split Weibull and the Weibull-gamma models.

The Happiness Of Single Mothers After Welfare Reform, John Ifcher

Economics

U.S. welfare and tax policies targeting single mothers were transformed over a decade ago. What was the impact on single mothers' happiness? Using data from the General Social Survey, difference in difference estimators are calculated. The results appear to indicate that the package of welfare and tax policy changes increased happiness. The results are largely consistent across three comparison groups and robust to various specification checks. This research nicely complements the literature by examining the impact of the welfare and tax policy changes on a novel outcome measure, self-reported happiness.

A'S From Zzzz's? The Causal Effect Of School Start Time On The Academic Achievement Of Adolescents, Scott E. Carrell, Teny Maghakian, James E. West

Economics

Recent sleep research finds that many adolescents are sleep-deprived because of both early school start times and changing sleep patterns during the teen years. This study identifies the causal effect of school start time on academic achievement by using two policy changes in the daily schedule at the US Air Force Academy along with the randomized placement of freshman students to courses and instructors. Results show that starting the school day 50 minutes later has a significant positive effect on student achievement, which is roughly equivalent to raising teacher quality by one standard deviation. (JEL I23, J13)

Dim Delobsom, Michael Kevane

Economics

Delobsom, Dim (1897-1940), Burkinan author, canton chief, and civil servant, was born in Sao village, about 60 kilometers northwest of Ouagadougou, in the Mossi region of the presentday country of Burkina Faso. His mother was Datoumi Yaare, from the village of Kaonghin; and his father, Gueta Wagdogo, was the son of Yiougo, the naba (Mossi chief) of Sao. Naba Yiougo supported Mogho Naba Wobgo (Boukary Koutu), the principal king of the four Mossi kingdoms, against a rebelling vassal, the naba ofLalle. In 1896, Mogho Naba Wobgo supported Gueta Wagdogo to attain the chieftaincy (whereupon he assumed the name "Naba Piiga") …

Second-Best Tax Policy And Natural Resource Management In Growing Economies, Steven P. Cassou, Arantza Gorostiaga, María José Gutiérrez, Stephen F. Hamilton

Economics

This paper investigates the exploitation of environmental resources in a growing economy within a second-best fiscal policy framework. Agents derive utility from two types of consumption goods — one which relies on an environmental input and one which does not — as well as from leisure and from environmental amenity values. Property rights for the environmental resource are potentially incomplete. We connect second best policy to essential components of utility by considering the elasticity of substitution among each of the four utility arguments. The results illustrate potentially important relationships between environmental amenity values and leisure. When amenity values are complementary …

So2 Policy And Input Substitution Under Spatial Monopoly, Shelby Gerking, Stephen F. Hamilton

Economics

Following the U.S. Clean Air Act Amendments of 1990, electric utilities dramatically increased their utilization of low-sulfur coal from the Powder River Basin (PRB). Recent studies indicate that railroads hauling PRB coal exercise a substantial degree of market power and that relative price changes in the mining and transportation sectors were contributing factors to the observed pattern of input substitution. This paper asks the related question: To what extent does more stringent SO2 policy stimulate input substitution from high-sulfur coal to low-sulfur coal when railroads hauling low-sulfur coal exercise spatial monopoly power? The question underpins the effectiveness of incentive-based environmental …

General Assistance Recipients And Welfare-To-Work Programs: Evidence From New York City, John Ifcher

Economics

General Assistance (GA) programs are virtually unstudied. Yet, GA programs serve an economically vulnerable, non-trivial population that should be of interest. To begin to address this shortcoming, two welfare-to-work programs, in which GA recipients participated, are studied. Using a quasi-experimental approach, the effect of each program on welfare use and employment is estimated. The results indicate that each program significantly increased welfare exits and that the second program significantly increased employment (employment data was unavailable for the first program).

Is The Export-Led-Growth Hypothesis, Valid For Egypt? A Time Series Approach, Nagwa Khashaba, Abdelhamid Mahboub, William Latham, Mostafa Aboelsoud

Economics

This research addresses important empirical questions regarding the relationship between Egyptian exports and Egyptian economic growth by extending the Dirtsakis’s model (Dritsakis, 2004, p. 1834) with the addition of the labor force into the model. The hypothesis to be tested is, does export expansion cause economic growth in Egypt? In other words, is the Export-Led-Growth (ELG) hypothesis valid for Egypt?

This study analyzes the issue of ELG hypothesis in Egypt using the VAR analysis, quarterly time-series data over the period 1991:q1-2009:q4. The results tend to favor the effectiveness and validity of the ELG hypothesis for Egypt.

The Effects Of Refugee And Non-Refugee Immigrants On Us Trade With Their Home Countries, Roger White, Bedassa Tadesse

Economics

Employing data on US immigrants and trade with 59 home countries for the years 1996–2001, we compare the extent to which refugee and nonrefugee immigrants affect US trade with their home countries and provide the first evidence of variation in the US immigrant–trade relationship across immigrant types. We also consider the abilities of refugee and non-refugee immigrants to offset the trade-inhibiting influence of cultural distance. Our results show that while immigrants, in general, exert positive influences on US imports from – and exports to – their home countries, the influence of refugee immigrants is quite minimal when compared with that …

The Procyclical Behavior Of Total Factor Productivity In The United States, 1890-2004, Alexander J. Field

Economics

Between 1890 and 2004 total factor productivity (TFP) growth in the United States has been strongly procyclical, while labor productivity growth has been mildly so. This article argues that these results are not simply a statistical artifact, as Mathew Shapiro and others have argued. Procyclicality resulted principally from demand shocks interacting with capital services which are relatively invariant over the cycle. This account contrasts with explanations emphasizing labor hoarding as well as those offered by the real business cycle (RBC) program, in which TFP shocks (deviations from trend) are themselves the cause of cycles.