Economics Commons^™

Money And Status: How Best To Incentivize Work, Pradeep Dubey, John Geanakoplos

Cowles Foundation Discussion Papers

Status is greatly valued in the real world, yet it has not received much attention from economic theorists. We examine how the owner of a firm can best combine money and status to get her employees to work hard for the least total cost. We find that she should motivate workers of low skill mostly by status and high skill mostly by money. Moreover, she should do so by using a small number of titles and wage levels. This often results in star wages to the elite performers and, more generally, in wage jumps for small increases in productivity. By …

Discounting The Distant Future, J. Doyne Farmer, John Geanakoplos, Jaume Masoliver, Miquel Montero

Cowles Foundation Discussion Papers

If the historical average annual real interest rate is m > 0, and if the world is stationary, should consumption in the distant future be discounted at the rate of m per year? Suppose the annual real interest rate r ( t ) reverts to m according to the Ornstein Uhlenbeck (OU) continuous time process dr ( t ) = α[ m – r ( t )] dt + kdw ( t ), where w is a standard Wiener process. Then we prove that the long run rate of interest is r ∞ = m – k 2 /2α 2 . …

Games With Money And Status: How Best To Incentivize Work, Pradeep Dubey, John Geanakoplos

Cowles Foundation Discussion Papers

Status is greatly valued in the real world, yet it has not received much attention from economic theorists. We examine how the owner of a firm can best combine money and status together to get his employees to work hard for the least total cost. We find that he should motivate workers of low skill mostly by status and high skill mostly by money. Moreover, he should do so by using a small number of titles and wage levels. This often results in star wages to the elite performers.

Dynamic Revenue Maximization: A Continuous Time Approach, Dirk Bergemann, Philipp Strack

Cowles Foundation Discussion Papers

We characterize the profit-maximizing mechanism for repeatedly selling a non-durable good in continuous time. The valuation of each agent is private information and changes over time. At the time of contracting every agent privately observes his initial type which influences the evolution of his valuation process. In the profit-maximizing mechanism the allocation is distorted in favor of agents with high initial types. We derive the optimal mechanism in closed form, which enables us to compare the distortion in various examples. The case where the valuation of the agents follows an arithmetic/geometric Brownian motion, Ornstein-Uhlenbeck process, or is derived from a …

Dynamic Revenue Maximization: A Continuous Time Approach, Dirk Bergemann, Philipp Strack

Cowles Foundation Discussion Papers

We characterize the profit-maximizing mechanism for repeatedly selling a non-durable good in continuous time. The valuation of each agent is private information and changes over time. At the time of contracting every agent privately observes his initial type which influences the evolution of his valuation process. In the profit-maximizing mechanism the allocation is distorted in favor of agents with high initial types. We derive the optimal mechanism in closed form, which enables us to compare the distortion in various examples. The case where the valuation of the agents follows an arithmetic/geometric Brownian motion, Ornstein-Uhlenbeck process, or is derived from a …

The Value Of A Private Education: Differential Returns And Selection On Observables, Anil Nathan, Sovita Hean, Ryan Elliot

Economics Department Working Papers

The academic value of a private education versus a public education is explored. This study first attempts to see whether there are differential returns to a private education based on ability level. It also intends to non-parametrically control for the selection on observables of the decision to attend private school. Using 8th graders from the National Educational Longitudinal Study of 1988, we find that the there is a positive effect on standardized math test scores using OLS. Based on quantile regression results, average students benefit most from a private education. Low-achieving and high-achieving students do not benefit as much. The …

Retirement Reversals And Health Insurance: The Potential Impact Of The Affordable Care Act, Joshua Congdon-Hohman

Economics Department Working Papers

This paper uses the longitudinal aspect of the Health and Retirement Study to explore the characteristics associated with reversals in retirement (referred to here as "unretirement"). Through the use of survival time analysis, this paper shows that health insurance status and its source are signi cant predictors of unretirement decisions. The relationship is important as the potential impacts of the Affordable Care Act are considered. By comparing the role of health insurance provision to the impact of financial "shocks", the analysis finds that insurance is equally important as other financial explanations for retirement reversals. The analysis also shows that health …

Resolution Of Bad Loan Problem: Bank-Level Evidence From A Low-Income Country, Abu S. Amin, Lucy Chernykh, Mahmood Osman Imam

WCBT Faculty Publications

How do banks resolve a severe bad loan problem in a capital-constrained, low income country when a government bailout is not an option? We address this question by examining new evidence of a sharp decline in bad loan ratios in a panel of domestic banks in Bangladesh. On the aggregate level, the share of nonperforming loans in this market has dropped six fold, from above 41% in 1999 to below 7% in 2010. Notably, this dramatic improvement did not involve the creation of any centralized asset management facilities but relied on the bank management and governance reforms. We find that …

Statement Of Concern, Heartland Workers Union, Office Of Latino/Latin American Studies (Ollas)

Latino/Latin American Studies Other Publications

The Heartland Workers Center (HWC) and the Office of Latino/Latin American Studies (OLLAS) have issued a statement of concern about the humanitarian crisis confronting refugee children from Central America. We support our local partner organizations in their work to address this crisis. Please feel free to distribute widely.

El Centro Laboral y OLLAS han publicado un documento sobre la crisis humanitaria afectando a miles de niños centroamericanos. Adáptela para sus tareas educativas y de incidencia política y distribuyan ampliamente.

Mexico Consensus Economic Forecast, Volume 17, Number 3, Thomas M. Fullerton Jr, Adam G. Walke

Departmental Papers (E & F)

No abstract provided.

Strategi Pengembangan Perluasan Akses Lembaga Keuangan: Studi Kasus Di Provinsi Bali, Agni Alam Awirya, Dhita Aditya Nugraha, Emy Meylita Haloho

Jurnal Ekonomi dan Pembangunan Indonesia

Expanding financial access is one among many ways in developing financial sector. This study analyzed the connection of communities characteristics to the access of financial institution which can be used in establishing the accurate development strategy of financial inclusion. This study used three approaches: descriptive analysis, factorial analysis, and path analysis based on questionnaires distributed to 600 respondents across Province of Bali. The result of the study shows that the most important factor in developing financial access is quality, especially the speed of transaction. Moreover, individual quality improvement in either education or wealth stimulates the utilization of branchless banking services.

Determinan Konvergensi Pendapatan Di Provinsi Sumatra Selatan, Rahma Nurhamidah, Atik Mar'atis Suhartini

Jurnal Ekonomi dan Pembangunan Indonesia

Discrepancy of income between regions in South Sumatera province which tend to increase indicating high inequality. This study aims to analyze income convergence year 2006-2012 with sigma convergence and beta conditional convergence. The result with FD GMM show the existence income convergence and require 22 years to decrease half inequality by involving human capital and physic capital, that show slow process the convergence. Long road with small contribution to GDP per capita, causing slow income convergence. Hence, human capital and physic capital that existing especially long road should be optimized to accelerate income convergence between regions in South Sumatra province.

Determinan Angka Partisipasi Sekolah Smp Di Jawa Barat, Khairunnisa Khairunnisa, Sri Hartoyo, Lukytawati Anggraeni

Jurnal Ekonomi dan Pembangunan Indonesia

West Java province's junior secondary school enrollment rate is still below the Millennium Development Goal of universal primary education by 2015. Panel data of 26 districts in West Java, Indonesia, was used to analyze the determinant factors of junior secondary school enrollment rate. The study shows that GRDP per capita and education level of the household head positively influence junior secondary enrollment rate, in contrast poverty rate and number of child labour had negative impact. This study suggests that government should increase local revenue to enable the people to have sufficient income for attending school, especially for the poor. The …

A Domino Effect From Fairness To Online Customer Loyalty, Tuyet Mai Nguyen, Phong Tuan Nham

DLSU Business & Economics Review

Distributive fairness, procedural fairness, and interactional fairness are often researched together in many previous studies. However, in order to explore the power of fairness, the second-order fairness needs to be created to find the way to customer loyalty. An online survey was developed and distributed in Vietnam. Seven hundred fifty-eight questionnaires were completed and analyzed using a two-step methodology (including confirmatory factor analysis and structural equation modeling). The results of the study showed that there is the domino effect to customer loyalty, which departs from fairness, with trust and customer satisfaction as two mediators.

The Philippine Cybercrime Prevention Act Of 2012: To Protect Or Destroy?, James Keith C. Heffron

DLSU Business & Economics Review

Relatively new breeds of technology-related felonies called “cybercrimes” have proven to be a bane to different sectors of society, especially to business. The glaring damaging effects that it has caused to different business industries cannot anymore be ignored. However, is the Philippines adequately protected? Are its present laws sufficient to tackle the prongs of this blight? On the contrary, are these laws too myopically focused on eliminating cybercrime that certain freedoms have been overlooked, or worse, compromised? The aim of this paper is to essentially give an overview of the current protection and its effects on our basic rights. A …

Affluent Populations And Their Effect On Biological Diversity Through The Consumption Of Meat, Electronics, And Motor Vehicles, Melody Flores

Honors College Theses

The human has caused a far greater impact on the planet's biodiversity than any other species in existence, due to the impact of population, afflluence, and technology. This thesis will argue the importance of biological diversity and how affluent populations are reducing biodiversity through the consumption of meat, electronics, and motor vehicles. Aldo Leopold's "The Land Ethic" and Herman Daly's "The Impossibility Theorem", among others, create a rubric evaluating human activities and provide alternative views on economic impossibilities. Consumption is reviewed from an ecocentric perspective, a holistic outlook placing emphasis on the ecosystem. The reader will become cognizant of their …

Estimating Dynamic Demand For Airlines, Diego Escobari

School of Economics and Finance Faculty Publications

This paper uses an original panel dataset with posted prices and sales to estimate a dynamic demand. We find that consumers become more price sensitive as time to departure nears which is consistent with having lower valuations. This result provides empirical support to a key theoretical implication in Deneckere and Peck (2012)—high-valuation consumers purchase earlier. We also find that the number of active consumers increases closer to departure.

Highlights

• We use an original dataset with posted prices and sales to estimate a dynamic demand.

• The estimates are consistent with agents forming expectations.

• We find that high-valuation consumers …

Job Creation Tax Credits: Still Worth Consideration?, Robert S. Chirinko, Daniel J. Wilson

Employment Research Newsletter

No abstract provided.

Modeling Solutions For Prevention Of Medicare Insolvency For The Baby Boomer Generation (Born 1946 - 1964), Gregory Thomas Scott

Health Services Research Dissertations

Medicare, a United States social insurance program operated by the United States federal government, began operating in a deficit in the year 2010. More funding was expended than revenue received for medical care, creating significant shortfalls for the Medicare Trust Fund. This study examined possible initiatives to describe Medicare funding related to issues as financial shortfalls utilizing mathematical modeling and simulation. The Park Conceptual Model is a framework created to identify internal and external changes that influence bankruptcies related to municipalities, and this Model served as the theoretical basis for this study.

The following study addressed insolvency as negative cash …

Prosociality And The Military, Alexander J. Field

Economics

In this paper, I consider a body of observational evidence not commonly studied by social scientists, namely the behavior of men and women (mostly men) in the military. I focus here on two issues: first the behavioral foundations for creating an effective military unit and second, evidence that infantrymen have historically been reluctant to fire on the enemy and how this reluctance has been overcome in the last half century through changes in military training. The evidence in each of these areas reinforces the appeal of the idea of cognitive modularity, the view that thought and behavior are influenced by …

The Interwar Housing Cycle In The Light Of 2001-2012: A Comparative Historical Approach, Alexander J. Field

Economics

The Financial crisis of 2008 to 2009 and the Great Recession it precipitated forced a rethinking among macroeconomists about the origin, prevention, and potential mitigation of such events. One of the conclusions emerging from a considered examination of the run-up to and the fallout from the events is the limitation of framing the policy issues solely in terms of whether Chairman Bernanke and the Federal Reserve System, as well as President Obama and the Congress, did the right thing when the crisis hit. Most observers believe that the response to the immediate crisis was correct in the sense that they …

Analisis Potensi Dan Kesenjangan Penerimaan Pajak Pertambahan Nilai Di Indonesia Tahun 2013, Rubino Sugana, Asrul Hidayat

Jurnal Ekonomi dan Pembangunan Indonesia

This study is conducted to develop a model that can be used to estimate the VAT revenue potential, tax gaps, and the impact of policy changes using the Input-Output Table. The amount of VAT revenue projection generated by this model is close to the VAT revenue realization. The result of this study shows that the VAT compliance rate is only around 53%. Improving VAT compliance rate would generate a higher impact on VAT revenue as compared with raising the VAT rate. On the other hand, removing all VAT exemptions, besides increasing the administrative burden, it could also reduce VAT revenue …

Decomposition Analysis Of Income Inequality In Eastern Visayas, Philippines, Moises Neil V. Seriño

DLSU Business & Economics Review

This study aimed to explore and decompose income inequality in Eastern Visayas, Philippines into the following factors: location (urban-rural), age, educational attainment, and sources of income using expenditure and income approach for 2000 and 2006. Inequality in the region remains high but tends to diminish mildly. Using decomposition analysis, results revealed that inequality is mostly explained by the within-group inequality component. When decomposing inequality by income source, results showed that total inequality is largely influenced by wage income while income from agricultural sector contributed the least share to total inequality. In addition, an increase in wage income will further aggravate …

The Final Verdict On Star?, John Yinger

Center for Policy Research

It’s Elementary is a series of essays on topics in education and education policy. The main focus is on education finance in New York State, but general research findings in education and education policy issues in several other states are also discussed. John Yinger, Professor of Economics and Public Administration at the Maxwell School, Syracuse University is the author of most of these essays, although a few are written by or co-authored with other scholars.

Treatment Effects With Unobserved Heterogeneity: A Set Identification Approach, Sung Jae Jun, Yoonseok Lee, Youngki Shin

Center for Policy Research

We propose the sharp identifiable bounds of the distribution functions of potential outcomes using a panel with fixed T. We allow for the possibility that the statistical randomization of treatment assignments is not achieved until unobserved heterogeneity is properly controlled for. We use certain stationarity assumptions to obtain the bounds. Dynamics in the treatment decisions is allowed as long as the stationarity assumptions are satisfied. In particular, we present an example where our assumptions are satisfied and the treatment decision of the present time may depend on the treatments and the observed outcomes of the past. As an empirical illustration …

Test Of Hypotheses In A Time Trend Panel Data Model With Serially Correlated Error Component Disturbances, Chihwa Kao, Badi H. Baltagi, Long Liu

Center for Policy Research

This paper studies test of hypotheses for the slope parameter in a linear time trend panel data model with serially correlated error component disturbances. We propose a test statistic that uses a bias corrected estimator of the serial correlation parameter. The proposed test statistic which is based on the corresponding fixed effects feasible generalized least squares (FE-FGLS) estimator of the slope parameter has the standard normal limiting distribution which is valid whether the remainder error is I(0) or I(1). This performs well in Monte Carlo experiments and is recommended.

Precarious Work Undermines Decent Work: The Unionized Hotel Workers’ Experience, Divina M. Edralin

DLSU Business & Economics Review

This paper determined the drivers and impact of precarious work on the hotel workers and their unions. Based on the proposition that precarious work undermines decent work, a descriptive study with the use of the survey method among 93 respondents from 12 unionized hotels was undertaken. Results showed that the main reason that drives the hotel management to resort to precarious work practices is to lower expenses or costs for salaries and benefits and increase profit. Precarious work has also significantly weakened the union as an organization since their membership continues to decline and their source of fund is reduced. …

Linking Property Rights And Capital Accumulation In The Philippines, Mark Anthony M. Velasco

DLSU Business & Economics Review

This study investigates the link between property rights and capital accumulation in the context of poverty alleviation in the Philippines. Property rights are represented by the provision of land titles to those informal settlers while capital accumulation is concretely manifested through access to credit. The study focuses on explaining how provisions of land titles to the poor affect their access to credit and therefore improvement in life conditions. A former community of informal settlers in the City of Taguig, Philippines was chosen in the study to shed evidence using a case study design. Remarkably, the results signify notable relationship between …

Converlogical Management Theory: Towards The Development Of The Communicative Competence Of An Organization, Marife C. Posadas

DLSU Business & Economics Review

Management practice has been evolving from a very rigid and behavioristic practice into something more flexible and humanistic. Critical Management Studies (CMS) is, partly, inspiring such move. In the same vein, I attempted to combine and “mutually animate” Management by Objective (MBO) popularized by great management guru Peter Drucker and the Theory of Communicative Action (TCA) by Jurgen Habermas. The result of which is a novel management theory called “Converlogical” (Conversational/Dialogical) Management Theory. I used concept analysis and deductive approach on various materials to build the theory. The whole MBO process was animated by embedding the validity claims of Habermas’ …

The Mediate Effect Of Employee Engagement On The Relationship Between Perceived Employer Branding And Discretionary Effort, Burawat Piyachat, Kuntonbutr Chanongkorn, Mechinda Panisa

DLSU Business & Economics Review

The purpose of this study is to test the relationships among employer branding, employee engagement, and discretionary effort via the effect of employee expectation. A survey was conducted with 1,349 current employees working in Thai petroleum industry. The results indicated that there were strong positive relationships between employer branding and employee engagement, employee engagement and discretionary effort, employer branding and discretionary effort, employer branding and employee expectation, and employee expectation and employee engagement. The results further indicated that there was a partial effect of employer branding on employee engagement through employee expectation, while there was also a partial effect of …