Revistas electrónicas

TÍTULO:

Ecological Economics

NÚMERO:

Vol. 62 No. 1 April 2007

DIRECCIÓN ELECTRONICA:

http://www.sciencedirect.com/science/journal/09218009

Este vínculo es el único para entrar a la base de datos Science Direct. Para ver el número de revista al que se hace referencia en este boletín, selecciónelo en el menú del lado izquierdo. En este sitio usted encontrará la versión íntegra de los artículos en formato HTML y Acrobat (PDF)

NOTAS:

ABSTRACTS

Giorgos Kallis. When is it coevolution?

This paper evaluates the differences between Norgaard's and Winder et al.'s approach to socio–environmental coevolution. Winder et al. emphasize the evolutionary dynamics of coevolutionary change. These were omnipresent in Norgaard's work but they have not been adequately explored by other ecological economists. I argue that Winder et al.'s definition of coevolution is in essence the same as Norgaard's and that their real differences are, how they see coevolution applied and how far they are willing to draw a priori a line between evolutionary and non-evolutionary socio–environmental dynamics. My thesis is that at this stage a more open approach to evolutionary dynamics and coevolution a la Norgaard is a wiser strategy than Winder et al.'s narrower approach.

Angeliki N. Menegaki, Nick Hanley and Konstantinos P. Tsagarakis. The social acceptability and valuation of recycled water in Crete: A study of consumers' and farmers' attitudes.

This paper investigates the Willingness to Use (WTU) and Willingness to Pay (WTP) for recycled water in agriculture. We report results from surveys of farmers and consumers on the island of Crete, Greece. Crete is suffering from an increasingly severe water shortage coupled with declining groundwater supplies, therefore the wider use of recycled water is an important policy priority. We have investigated WTU and WTP for two crops with two different levels of water treatment. The mean WTP for 1 cm3 of recycled water was 0.15€ for the irrigation of both olive trees and tomato crops, namely 55% of the fresh water price. The mean WTP for olive oil produced from olive trees irrigated with recycled water was 2.65€, namely 88% of its current market price. We have found that both attitudinal factors, such as environmental awareness and economic factors, such as freshwater prices and incomes, are significant in explaining the WTU and WTP for recycled water and products produced using it, but that important differences exist between farmers and consumers.

MunkhDalai A. Zhang. Elles Borjigin and Huiping Zhang.Mongolian nomadic culture and ecological culture: On the ecological reconstruction in the agro-pastoral mosaic zone in Northern China

After analyzing the grassland environmental characteristics and nomads vs. agrarian land use styles and their ecological and environmental influences in the arid and semiarid agro-pastoral mosaic zone in northern China, it was concluded that Mongolian nomadic culture is more close to the basic principles of the ecological culture in the modern sense. Mongolian nomadic culture has advantages over agrarian culture in ecology and environmental care, sustainable utilization of grasslands, and in sustainable human social economic development in the region. Generally speaking nomadic culture prevents desertification; whereas, agrarian culture facilitates desertification. Confliction between nomadic protection and agrarian destruction of grassland ecosystem is essentially focused on the problem of regional and even global ecological safety. Obviously, protection of ecological safety should be given priority because human social and economic existence, as well as development depend on and are decided by the vulnerable ecological safety in the arid and semiarid areas. Therefore expansion of cropping into the fragile ecosystem of arid lands was unfortunate. The long term sustainable management of these grassland ecosystems could benefit from reversal of policies that are exacerbating the problems of land degradation, and from the adoption of land use practices that have been successfully applied for centuries by Mongolian herders. Protection of grasslands and nomadic culture is far more important or even vital to the subsistence and sustainability of human and all other beings, compared to the protection of agrarian lifestyle and land cultivation. Protection of ecologic safety is protecting the premise and fundamental bases of economic and social development in the area. It is important to derive the rational elements of nomadic culture in construction of ecological culture, and in the ecological reconstruction in northern China. Based on analyzing and reasoning in line with the quintessence of nomadic culture summarized, some proposals on ecological reconstruction in the area are presented.

André Grimaud and Frederic Tournemaine. Why can an environmental policy tax promote growth through the channel of education?.

This paper examines the implications of an environmental policy for growth performances. We develop a model where growth is driven by human capital accumulation. Firms invest in research to develop new technologies to reduce their pollution emissions and education is treated as product which not only enhances the productivity of individuals but also enters in their preferences. We find that a tighter environmental policy can promote growth. The reason is that a higher tax on pollution drives the prices of goods whose production is polluting up. This, in turn, enhances the willingness of individuals to acquire education.

Karen Turner, Manfred Lenzen, Thomas Wiedmann and John Barrett.
Examining the global environmental impact of regional consumption activities — Part 1: A technical note on combining input–output and ecological footprint analysis.

In recent years there have been a number of attempts to develop a more comprehensive approach to the issue of measuring resource use and/or pollution generation embodied in trade flows, including contributions that combine input–output techniques and Ecological Footprint analysis. In this two-part paper we describe how to enumerate the resource and/or pollution content of inter-regional and inter-national trade flows (Part 1) and we present a literature review of recent methodological and empirical developments (Part 2). It is straightforward in principle to extend the basic input–output approach to capture international trade flows. However, in practice, problems of data availability and compatibility, and of computability of extended input–output matrices, mean that simplifying assumptions are generally applied, but with the implications of these assumptions often not made fully explicit. What appears to be absent from previous applications is an account of the analytical method by which Ecological Footprints should ideally be estimated in an international input–output accounting analysis. This allows an explicit analysis of the problems that prevent the application of the full method and identification of the most appropriate short-cut methods in a transparent way. The objective of this paper is to provide such an account.

Hilde Karine Wam and Ole Hofstad. Taking timber browsing damage into account: A density dependant matrix model for the optimal harvest of moose in Scandinavia.

At present there is a growing optimism in commercializing the moose hunting in Scandinavia. We developed a deterministic, dynamic bio-economic model to examine the optimal management of land with both moose and timber as potential sources of income. We show that most forest owners should target their moose commerce towards increased quality of the hunt rather than quantity. Due to the inherent complexity of moose: forest interactions we ran the model for a wide array of parameter values to check its sensitivity. Although it was the combined production of timber and moose that gave the highest net value in all run scenarios, timber was the major source of income (69% or more). The main single-factors favouring moose over timber was: low timber productivity of the soil and high moose prices in the market. Also factor synergies can strongly increase the relative value of moose. Our model may serve as a decision tool for choosing the economically optimal moose levels in populations with no across-border migration. It highlights the following need for further studies: I. Quantifying the relationship between browse availability (forest state, moose density) and moose condition (weights, fecundity). II. Quantifying the relationship between browse availability and timber browsing damage.

Timo Kuosmanen and Mika Kortelainen. Valuing environmental factors in cost–benefit analysis using data envelopment analysis.

Environmental cost–benefit analysis (ECBA) is used for the social evaluation of investment projects and policies that involve significant environmental impacts. Economic valuation of environmental impacts forms one of the critical steps of ECBA. We develop a new method for this purpose, which does not require price estimation for environmental impacts using stated or revealed preference methods. Our approach is based on data envelopment analysis (DEA), which is modified to ECBA by using absolute shadow prices instead of relative prices. We also discuss how the method can be used for sensitive analysis in ECBA. We illustrate the method by means of a hypothetical numerical example.

Ioanna Mouratiadou and Dominic Moran. Mapping public participation in the Water Framework Directive: A case study of the Pinios River Basin, Greece.

The EU Water Framework Directive requires the involvement and participation of stakeholders and the public, and considers full cost recovery for water services for enhancing the sustainability of water resource management. The Directive is non prescriptive as to how public participation should be operationalised in practice, and Member States appear to be adopting different participatory practices. This study explores the issue of public participation in the context of the Pinios River Basin in Greece, a pilot area for the WFD implementation. The study uses Fuzzy Cognitive Mapping, a form of qualitative modeling linked to stakeholders' perceptions. Fuzzy Cognitive Mapping has been used to elicit stakeholder and public perceptions on the current state and pressures on water resources and the acceptability of applying economic principles in water resource management. Based on these perceptions, different water management policy options have been simulated in order to explore their potential effects on the water resources and the economy of the area. The study outlines public and stakeholder perceptions on the application of full cost recovery for water services and offers a perspective on the potential contribution of Fuzzy Cognitive Mapping in participatory river basin management.

Dominique Finon and Yannick Perez. The social efficiency of instruments of promotion of renewable energies: A transaction-cost perspective.

This paper compares the social efficiency of the regulatory instruments used to promote renewable energy sources in electricity generation, taking into consideration their role in promoting the preservation of collective goods. They are based on a purchase obligation and act either by price (feed-in tariffs) or by quantity (bidding for new RES-E capacities; RES-E quotas). From the Public Economics perspective, the two instruments are distinct in terms of cost-efficacy and market incentives in a world of imperfect information. Exchangeable quotas of green certificates are preferred because this instrument allows better control over consumer costs and whilst retaining market incentives. Transaction cost economics (TCE) contributes to the assessment of these instruments, by introducing RES-E investment safeguard as a major determinant of social efficiency, and the instruments' conformity to its institutional environment as a determinant of its viability. In light of this additional consideration, the arrangements between RES-E producers and obligated buyers inherent in each instrument are in fact quite similar—either long-term contracting or vertical integration. We compare and assess RES-E price- and quantity-instruments on several dimensions from both the public economics and TCE perspectives: control of the cost for consumers, safeguards of RES-E investments, adaptability of the instrument in order to preserve its stability in the long run, market incentive intensity, and conformity with the new market regime of electricity industry. It shows neither instruments offer an optimal solution in each of these dimensions. The government will thus select an instrument in accordance with the relative importance of its objectives.

Brendan Fisher and Treg Christopher. Poverty and biodiversity: Measuring the overlap of human poverty and the biodiversity hotspots.

In an effort to prioritize conservation efforts, scientists have developed the concept of biodiversity hotspots. Since most hotspots occur in countries where poverty is widespread, the success of conservation efforts depends upon the recognition that poverty can be a significant constraint on conservation, and at the same time conservation is an important component to the alleviation of long-term poverty. In this paper we present five key socio-economic poverty indicators (access to water, undernourishment, potential population pressure, number living below poverty line and debt service) and integrate them with an ecologically based hotspots analysis in order to illustrate magnitude of the overlap between biological conservation and poverty. The analysis here suggests that the overlap between severe, multifaceted poverty and key areas of global biodiversity is great and needs to be acknowledged. Understanding the magnitude of overlap and interactions among poverty, conservation and macroeconomic processes is crucial for identifying illusive, yet possible, win–win solutions.

Kantelhardt, Simon.Steven I. Higgins, Jochen. Scheiter and Jan Boerner. Sustainable management of extensively managed savanna rangelands.

Classic rangeland theory advocates stocking rangelands at relatively low and constant levels. This theory has been labelled inappropriate for savanna rangelands, because savannas are strongly influenced by stochastic processes. Opportunistic strategies that force animal numbers to track available forage have been proposed as an alternative management paradigm. However, no studies have examined whether these opportunistic strategies are sustainable or optimal. We developed a simulation model of a savanna rangeland to identify optimal, sustainable strategies for the management of extensive rangelands. We optimised the utility of agents who are motivated by economic, production or ecological factors under both deterministic and stochastic conditions. In all cases we found that it was optimal to manage the system conservatively and not opportunistically. Moreover, it was optimal to manage more conservatively under stochastic conditions. Key elements of the conservative strategy were to stock at low levels and to use fire to control tree abundance and thereby maintain the system in a grass dominated state. We conclude that opportunistic strategies of range management although intuitively appealing are not optimal.

Sabina L. Shaikh, Lili Sun and G. Cornelis van Kooten.. Treating respondent uncertainty in contingent valuation: A comparison of empirical treatments.

This research examines the impact of uncertainty on contingent valuation responses using (1) a survey of Canadian landowners about willingness to accept compensation for converting cropland to forestry and (2) a survey of Swedish residents about willingness to pay for forest conservation. Five approaches from the literature for incorporating respondent uncertainty are used and compared to the traditional random utility model with assumed certainty. The results indicate that incorporating uncertainty has the potential to increase fit, but could introduce additional variance. While some methods for uncertainty can be an improvement over traditional approaches, it is imperative to exercise caution when making systematic judgments about the effect of uncertainty on contingent valuation responses.

Anne Borge Johannesen. Protected areas, wildlife conservation, and local welfare.

The establishment and expansion of protected areas in Africa have been motivated by the aspiration of increased wildlife abundance. However, during the past decades, this practice has been subject to a massive debate. While some claim that protected areas have failed in preserving African wildlife, others claim that existing protected areas are successful. This paper adds to this debate by presenting a bio-economic analysis of protected area expansion. The model considers a hunter-agrarian community located on the border of a protected area. An expansion of the protected area means less land for agricultural cultivation and hunting. Depending on the economic conditions of these activities, the model demonstrates that protected area expansion may reduce the degree of wildlife conservation. In addition, it may reduce the welfare of the local people.

Li Hong, Zhang Pei Dong. He Chunyu and Wang Gang. Evaluating the effects of embodied energy in international trade on ecological footprint in China.

Based on sub-sectoral level of economy and detailed traded items, embodied energy (EE) in international trade flow in China is estimated during 1996–2004, and the effects of EE on sustainability are quantified by using one of the most popular indicators—Ecological footprint (EF). A framework of EF method, which is more relevant to realism of specific country, is proposed in this paper. The results show that China is a net importer of EE during the period covered by this study except for the year from 1997 to 1999. Imported, Exported and Net imported EE tends to increase sharply along time series. Net imported energy would increase 38% and energy consumption would increase 2.8% in 2004 if EE were taken into account. Footprintenergy is the most important part of EF components and is significantly affected by EE, and the effects of EE on EF are similar to that of Footprintenergy. Footprintenergy, EF and ecological deficit of 2004 will be underestimated about 2.92%, 1.36%, 2.83%, res pectively, if EE is not taken into the national energy budget. Continuous increase of EF and ecological deficit along time series indicates that China is moving away from sustainability. 1.47 times Chinese territories are accurately occupied by China in 1996 while 1.71 times in 2004. Obviously unsustainability procedure of China is accelerated by EE. The contribution of EE to EF and ecological deficit is small in absolute terms expressed in per capita, but the effects on whole nation are huge if the population of China multiplies them. To curb the increase of EF and ecological deficit and to achieve the goal of sustainability, some policy and measures are also proposed.

Steven Van Passel, Frank Nevens, Erik Mathijs and Guido. Van uylenbroeck.Measuring farm sustainability and explaining differences in sustainable efficiency.

A major objective of European agricultural policy is to have a sustainable and efficient farming sector that is applying environmentally-friendly production methods. Policy makers aim to combine a strong economic performance and a sustainable use of natural resources. Therefore, it is important to measure and to assess farm sustainability. For a large dataset of Flemish dairy farms, a valuation method that is based on the concept of opportunity costs is used to calculate and analyze differences among the sample farms with respect to the creation of “sustainable value”. But more important than measuring the creation of sustainable value is to analyze differences in sustainable efficiency. Therefore, sustainable efficiency measures are calculated and differences in sustainable efficiency are explained. Using panel data, an effect model captures the determinants of sustainable efficiency of the studied farms. The empirical model shows that, in general, larger farms have a higher sustainable efficiency. Also farmer's age and dependency on support payments proved to be determining characteristics for observed differences in sustainable efficiency.

J.O. Ares. Systems valuing of natural capital and investment in extensive pastoral systems: Lessons from the Patagonian case

In Patagonian (Argentina) wool production systems, historical performance records, observed landscape changes, and long-term demographic modeling of sheep flocks, indicate that non-sustainable ecological and economic dynamics have developed during recent decades. In order to elucidate possible causes of these trends, a dynamic model of the wool production system including basic ecological and economic feedback mechanisms was applied to the analysis of alternative investment policies. The values of the various components (ewes, forage, soil) of natural capital (NC) involved in the production systems were estimated in this study through a systemic approach and their losses during wool production cycles were incorporated in their financial analysis. Our results indicate that external investment in increasing the ewe stocks (a common practice in these systems) is not sustainable in time unless a simultaneous external investment in forage NC is performed. More specifically, external investment to increase in 20% the ewe stocks would be expected to generate positive net cash flows during 6-8 years, if due account is taken from the losses of NC produced. Successive investments of the same sort would generate increasingly shorter periods of positive cash flows or even negative results after 15-25 years. Re-investment of a fraction of the net revenues obtained through wool sales in the reposition of forage resources also proves to be a non-sustainable policy.

Kumudini Abeysuriya, Cynthia Mitchell and Stuart White. Can corporate social responsibility resolve the sanitation question in developing Asian countries?.

The existing state of sanitation in developing Asian countries fails to deliver a level of service that is adequate for meeting the human right to a standard of living consistent with dignity and health, or for sustaining the capacity for future generations to have access to clean water resources and healthy ecosystems. We argue that translating the current neo-centralised technologies and institutional arrangements mainstreamed by industrialised countries would not resolve the problem in the context of developing countries. Instead it is necessary to ‘leap frog’ to the emerging technological and institutional arrangements that are responsive to current needs and contexts and to potential risks. The sustainability focus and often decentralised technologies of this emergent stage in sanitation present many opportunities for new actors to enter the urban sanitation industry. At the same time, there are many barriers to entry, particularly from the perspective of conventional business management focused on increasing shareholder value.

Juan M. Hernández and Carmelo J. León. The interactions between natural and physical capitals in the tourist lifecycle model.

This paper presents a model of the interactions between natural resources and physical capital in the evolution of a tourist destination. The projected trajectory of the number of tourists approaches the classical lifecycle pattern. The post-stagnation phase is analyzed within the model, obtaining different patterns which depend on the impacts of physical capital on both demand and environmental degradation. The magnitudes of these impacts are determined by the type of tourism. An empirical application to the case of the tourist industry in the Canary Islands (Spain) is presented, showing that the model can represent the general characteristics of the post-stagnation phase of a tourist destination.

Paulo Augusto Lourenço Dias Nunes. Economics of environmental conservation.

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Raluca Iorgulescu Polimeni and John M. Polimeni. The physical foundation of economics.

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Gjalt Huppes and Masanobu Ishikawa. Sustainability evaluation: Diverging routes recombined?. Pages 199-200

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International Conference on Wetland Restoration and Ecological Engineering Nanjing, China May 28 – June 2, 2007

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TÍTULO:

European Economic Review

NÚMERO:

Vol. 51 No. 3 April 2007

DIRECCIÓN ELECTRONICA:

http://www.sciencedirect.com/science/journal/00142921

NOTAS:

Este vínculo es el único para entrar a la base de datos Science Direct. Para ver el número de revista al que se hace referencia en este boletín, selecciónelo en el menú del lado izquierdo.En este sitio usted encontrará la versión íntegra de los artículos en formato HTML y Acrobat (PDF)

ABSTRACTS

Editorial Board • EDITORIAL BOARD

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Sandra Eickmeier. Business cycle transmission from the US to Germany—A structural factor approach.

This paper investigates the transmission of US macroeconomic shocks to Germany using a large-dimensional structural dynamic factor model. This framework allows us to investigate many transmission channels simultaneously, including “new” channels such as stock markets, foreign direct investment, bank lending and the confidence channel. We find that US shocks affect the US and Germany largely symmetrically. Trade seems to be the most relevant transmission channel. Monetary policy reactions to strong price movements seem to play a role as well. No clear conclusion can be drawn yet on the role of financial markets and the confidence channel. Negative domestic influences apparently more than offset positive US influences in the German economy between 1995 and 2000, but the US recession in 2001 appeared to be the main culprit in the German slump.

Charles Bellemare. A life-cycle model of outmigration and economic assimilation of immigrants in Germany.

This paper estimates a forward-looking life-cycle model of outmigration and labor force participation. The estimated model is used to evaluate the impact of enforcing a maximum stay duration for newly admitted immigrants on labor force participation and outmigration. Restricting the migration duration is found to have little effect on the labor force participation of skilled immigrants, and a negative effect on that of unskilled immigrants. Restricting the migration duration is also found to encourage the departure of unskilled and unsuccessful immigrants before the maximum duration is reached. These results are obtained by estimating the model with data that contain no information on outmigration decisions. It is shown that the assumption of a continuous state variable affecting attrition only through outmigration allows the probability of outmigration to be identified from the panel attrition. This probability can then be estimated using standard dynamic programming techniques. The migration durations so estimated are found to differ substantially from those estimated under the assumption that immigrants are myopic decision makers.

Øivind A. Nilsen, Kjell G. Salvanes and Fabio . Schiantarelli Employment changes, the structure of adjustment costs, and plant size.

In this paper, we analyze the pattern of employment adjustment using a rich panel of Norwegian plants. The data suggest that the frequency of episodes of zero net employment changes is inversely related to plant size. We develop and estimate a simple “q” model of labor demand, allowing for the presence of fixed, linear and quadratic components of adjustment costs. The econometric evidence supports the existence of purely fixed components, unrelated to plant size. As a result, the range of inaction is wider for smaller plants. The quadratic component of costs is also always important. In most specifications fixed costs are higher for employment contractions. The quadratic component is higher during employment contractions compared to expansions for small plants, while this is not true for larger plants.

Vivian Lei, Steven Tucker and Filip Vesely. Foreign aid and weakest-link international public goods: An experimental study.

In this paper, we investigate efficiency differences between income and in-kind transfers as distribution mechanisms of foreign aid to weakest-link international public goods in a laboratory environment. We find that if there is relatively small difference in country size, then income transfers seem to provide a higher provision of the international public good, and thus higher overall welfare level than that of in-kind transfers. However, if there is a large disparity in country size, then in-kind transfers appear to provide a higher level of IPG provision and higher accompanying global welfare.

Giorgio Bellettini and Carlotta Berti Ceroni. Income distribution, borrowing constraints and redistributive policies.

This paper sheds light on the relationship between income inequality and redistributive policies and provides possible guidance in the specification of empirical tests of such a relationship. We model a two-period economy where capital markets are imperfect and agents vote over the level of taxation to finance redistributive policies that enhance future productivity. In this context, we show that the pivotal voter is not necessarily the agent (class) with median income. In particular, the poor, who are more likely to be liquidity constrained, may form a coalition with the rich and vote for low redistribution. The effects of an increase in income inequality on the level of redistribution turn out to depend on whether the increase in inequality is concentrated among the poor or the middle class. Empirical results from a panel of 22 OECD countries provide preliminary evidence consistent with our main theoretical implications.

Roman Inderst and Christian Wey. Buyer power and supplier incentives.

This paper analyzes the origins and welfare consequences of buyer power. We show that if suppliers are capacity constrained or have strictly convex costs, there are two different channels through which large buyers can obtain more favorable terms from their suppliers. In particular, we show how the presence of large buyers can then erode the value of suppliers’ outside option. Somewhat surprisingly, we show how this can induce suppliers to undertake strategies that lead to higher output and potentially higher welfare.

Peter Egger, Mario Larch and Michael Pfaffermayr. On the welfare effects of trade and investment liberalization.

Using a three-factor knowledge- and physical capital model of trade and multinational activity, we consider a set of policy experiments to assess the welfare effects of trade and investment liberalization in general equilibrium. Specifically, we address the question of whether and under which circumstances a single versus a combined trade/investment liberalization strategy or a unilateral versus a bilateral policy change is preferable from a single country's and the world's point of view. The focus of this paper is to look at three relevant questions. First, when is investment liberalization beneficial and when is it harmful for a single economy or the whole world? Second, is pure investment liberalization a welfare maximizing strategy? Third, when is either kind of liberalization (trade, investment, or both) welfare improving and when neither of them?

Carlos E. da Costa and Lucas J. Maestri. The risk properties of human capital and the design of government policies.

Whether human capital increases or decreases earnings uncertainty is an open question from an empirical standpoint. Yet, most policy prescriptions regarding human capital formation are based on models that impose riskiness on this human capital investment. In this paper we extend the dynamic Mirrlees taxation framework to include investments in human capital and derive prescriptions that are robust to the risk characteristics of human capital. Savings should be discouraged, human capital investments encouraged and both types of investment driven to an efficient level from an aggregate perspective. These prescriptions are also robust to whether investments are individually observed or not.

Lex Borghans and Bas ter Weel. The diffusion of computers and the distribution of wages.

When the costs are decreasing workers adopt technology at the point where the costs equal the increased productivity. Output per worker increases immediately, while productivity benefits increase only gradually if costs continue to fall. As a result, workers in computer-adopting labor market groups experience an immediate fall in wages due to increased supply. On the other hand, adopting workers experience wage increases with some delay. This model explains why increased computer use does not immediately lead to higher wage inequality. More specifically, the results of the model are shown to be consistent with the question why within-group wage inequality among skilled workers as a result of computer technology adoption in the United States increased in the 1970s, while between-group wage inequality and within-group wage inequality among the unskilled did not start to increase until the 1980s. The model also predicts that the more compressed German wage structure leads to a lagged diffusion of computer technology along with smaller changes in wage inequality. Our empirical analysis suggests that this is consistent with the actual developments in Germany since the 1980s. Finally, the theoretical predictions seem to be of the right magnitude to explain the empirical quantities observed in the data.

Laurens Cherchye, C.A. Knox Lovell, Wim Moesen and Tom Van Puyenbroeck.One market, one number? A composite indicator assessment of EU internal market dynamics

We consider the lack of consensus about an appropriate theoretical framework linking sub-indicators as a defining characteristic of composite indicators. This intrinsic feature implies uncertainties about the appropriate normalization and aggregation of the raw data. The two are related: index theory offers some valuable guidelines about their connection. Yet these do not fully solve the basic problem of expert disagreement. We embed such (residual) disagreement in the aggregation method itself. Specifically, we apply an impartial benefit-of-the-doubt weighting procedure, where weight restrictions incorporate the available information on experts’ opinions. We apply this procedure to the dynamic performance assessment of EU Internal Market effects, thereby highlighting its capacity to disaggregate member states’ observed performance shifts into changes relative to benchmarks and performance changes of the benchmarks (i.e. catching up versus genuine progress). Our results indicate that the latter factor is more important in explaining the observed progress.

Announcement: Silvaplana 2007

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TÍTULO:

Food Policy

NÚMERO:

Vol. 32 No.2 April 2007

DIRECCIÓN ELECTRONICA:

http://www.sciencedirect.com/science/journal/03069192

NOTAS:

En este sitio usted encontrará la versión íntegra de los artículos en formato Acrobat (PDF)

ABSTRACTS

Marvin T. Batte, Neal H. Hooker, Timothy C. Haab and Jeremy Beaverson. Putting their money where their mouths are: Consumer willingness to pay for multi-ingredient, processed organic food products.

In response to dramatically increasing adoption in consumer markets, the National Organic Program (NOP) initiated novel labeling standards for food products in the US in 2002. This program is a particularly relevant standardization effort for multi-ingredient processed foods. Rather than a simple binary message (organic or not), gradations of organic content are now codified. No existing published study evaluates consumer willingness to pay or motivation to purchase in response to such a rich organic label. This article presents evidence of the impact of the NOP through analysis of data collected in seven central Ohio, USA grocery stores. Results suggest that consumers are willing to pay premium prices for organic foods, even those with less than 100% organic ingredients. The magnitudes of WTP premia varied significantly among consumer groups, suggesting that targeted marketing may be effective for organic merchandisers.

Azucena Gracia, Maria Loureiro and Jr., Rodolfo M. Nayga. Do consumers perceive benefits from the implementation of a EU mandatory nutritional labelling program?.

This paper examines consumers’ knowledge about nutritional labels (i.e., nutritional panel), use of nutritional labels, and perceived benefits from a mandatory nutritional labeling program. Using data from a pilot study conducted in a Spanish city and a three-equation multivariate probit model, our results suggest that individuals who suffer some health problems related to food intake are more knowledgeable about nutritional labels. Further, those who are more knowledgeable about nutritional labels are more likely to use nutritional labels, and nutritional label users are more likely to consider mandatory nutritional labeling as beneficial. Perceived usefulness of the information provided by nutritional labels as well as the amount of presented information affect consumer perceptions about whether or not mandatory nutritional labeling would be beneficial.

Nigel D. Poole, Laura Marti´nez-Carrasco Marti´nez and Fernando Vidal Giménez. Quality perceptions under evolving information conditions: Implications for diet, health and consumer satisfaction.

Consumers’ perception of, and satisfaction with, fruit quality is an important issue for both public policy and commercial reasons. However, because of information problems, consumers cannot easily choose fruits of a quality most likely to satisfy their preferences and health needs. The research reported here employed an experimental auction method to test perceptions of fruit quality by evaluating the willingness to pay (WTP) of consumers for five different varieties of soft citrus under three different information conditions: visual inspection of the fruit before peeling; visual inspection after peeling; and after consumption. Significant differences were found in valuations of the different varieties as consumers gained information. Conclusions are drawn about the value of the methodology and the results themselves, and implications are inferred for policy and for growers and traders. It is argued that product information should be oriented not just towards nutritional education but also towards increasing the pleasure of healthy eating.

David J. Spielman. Pro-poor agricultural biotechnology: Can the international research system deliver the goods?

While global investment in agricultural research by the private sector is increasing with growth in developing country markets and the emergence of new technologies, complementary public sector investment is stagnating or declining in many developing countries. This review argues that the changing roles of the public and private sectors in generating new scientific knowledge may adversely affect the diffusion of explicitly pro-poor technologies—technologies that are simultaneously yield-enhancing and poverty-reducing. Comparing historical evidence from the Green Revolution with recent evidence from the emerging era of agricultural biotechnology, this review argues that a more pluralistic international system for agricultural research will be more responsive to poverty only if the strategic leadership role of the public sector is strengthened, certain research functions are reallocated to the private sector, and new policy and organizational mechanisms are used to stimulate pro-poor research in and for developing-country agriculture.

Xinshen Diao and Alejandro Nin Pratt. Growth options and poverty reduction in Ethiopia – An economy-wide model analysis.

This study focuses on which agricultural subsectors are important in Ethiopia’s economic growth and poverty reduction and what kind of agricultural and nonagricultural growth is needed to achieve the millennium development goal of halving the incidence of poverty by 2015. A spatially disaggregated, economy-wide model was developed, enabling the analysis of growth and poverty reduction linkages at national and regional levels using national household surveys, agricultural sample surveys, geographic information systems, and other national and regional data. The study reveals that agriculture can play a central role in decreasing poverty and increasing growth in Ethiopia. Within the agriculture, growth in cereals and other staple crops should receive priority. Agricultural growth also requires concurrent investments in roads and other market conditions. At the subnational level, similar growth rates within agricultural subsectors have different effects on poverty, necessitating regionally based strategies for growth and poverty reduction.

Meat marketing in Burkin. Faso after the devaluation of the FCFA: Insights into the functioning of informal market systems.

The strategies that participants in informal African markets adopt in response to shocks have rarely been analysed, yet these can provide important insights into how such markets function. Policy advice often seeks to modernise trading practices within such markets so as to improve efficiency. However, efforts to improve efficiency could have undesirable consequences if the current functioning of the markets is inadequately understood. In Burkina Faso, the FCFA devaluation in 1994 led to increasing livestock exports and a subsequent meat shortage on the domestic market. Based on market statistics from Burkina Faso and household interviews, the study investigates the status of meat consumption before and up to four years after the devaluation. Results indicate that the price increase for cattle was only transmitted to consumers after a time lag. Meat is more frequently sold in little heaps than on a weight basis. Lower per-kg prices of smaller size heaps imply an income gain for poorer consumers. Butchers use all edible body parts in addition to the carcass (i.e. head, hoofs, intestines) to buffer price fluctuations and to cope with the consumers’ notion of a fixed nominal price. This suggests that butchers and their clients are embedded in networks of what [S. Plattner, 1989. Economic behavior in markets. In: Plattner S. (Ed.), Economic anthropology, Stanford, pp. 209–222.] called equilibrating economic relations, which are favoured by the perishable nature of meat. Selling live animals or meat by weight is often considered as a measure to increase transparency within informal markets. However, the introduction of formalized or standardized marketing measures alone, without lowering the transaction costs of other components of the value chain, risks undermining the equilibrating social relationships that play an important role particularly for the poorer market actors, and thereby disadvantaging vulnerable

Norbert Hirschauer and Oliver Musshoff. A game-theoretic approach to behavioral food risks: The case of grain producers

Food risks may be caused by malpractice of suppliers who exploit the fact that their production processes and resulting product properties cannot be directly observed by buyers. The probability of malpractice increases with the profits that can be earned through opportunistic behavior. In this paper, we develop a moral hazard model for the empirical analyses of behavioral risks. It accounts for the essential fact that incomplete inspection and tracing increase the profitability of rule-breaking behavior, and that monitoring, tracing and sanctioning are costly. Using the model, we first demonstrate how to design efficient contracts in various situations. In a case study, we then analyze farmers’ incentives with regard to the minimum waiting period after fungicide use. Data are gathered in interviews with three large-scale German farmers and a grain dealer. We find that, while their perception of parameters varies widely, high temptations for rule-breaking arise in some cases. We conclude that empirical moral hazard analyses have significant potential to shed light on behavioral risks.

Mairi Jay. The political economy of a productivist agriculture: New Zealand dairy discourses.

The New Zealand dairy industry faces political and commercial pressure to improve its environmental performance on the one hand while maintaining economic efficiency and commercial competitiveness in a global marketplace on the other. The growing scale and intensity of dairy production have caused significant cumulative environmental impacts. The industry response to political pressures for improved environmental performance has involved a narrow focus on water quality and pasture management. It is consistent with an approach which seeks to maintain size and industrial leverage in the face of global trade competition. This paper explores the productivist constructions of environmental management by the New Zealand dairy industry in the context of global economic competition and notes an alternative response inspired by an ethic of sustainability. It suggests that despite global pressures of economic competition, it is possible to incorporate non-material values into farm management provided these are recognised and rewarded.

TÍTULO:

Journal of Environmental Economics and Management

NÚMERO:

Vol. 53, No. 2 March 2007

DIRECCIÓN ELECTRONICA:

http://www.sciencedirect.com/science/journal/00950696

NOTAS:

En este sitio usted encontrará la versión íntegra de los artículos en formato Acrobat (PDF)

ABSTRACTS

Jennifer Alix-Garcia. A spatial analysis of common property deforestation.

This paper develops and tests a theory of common property deforestation over space. The model examines both the spatial distribution of forest loss and the total amount of deforestation within a given community, showing how these outcomes are jointly determined. The model equations are estimated in a four-step process using data from 318 Mexican common properties. In contrast to previous deforestation theories, this paper shows that the allocation of deforestation across space is dependent upon both the absolute and relative quality and location of each hectare of land in the same community and on the overall deforestation decision of the community. Simultaneously, total deforestation depends upon the value of deforested land, which is determined by its physical attributes, as well as the characteristics of the community that affect its collective choice problem. Smaller group size, higher secondary education, and greater inequality correspond to lower deforestation.

Jay P. Shimshack, Michael B. Ward and Timothy K.M. Beatty. Mercury advisories: Information, education, and fish consumption.

This paper examines responses to a US national FDA advisory that urged at-risk individuals to limit store-bought fish consumption due to the dangers of methyl-mercury. We investigate consumer response using both parametric and nonparametric methods. Some targeted consumers significantly reduced canned fish purchases as a result of the advisory, suggesting that information-based policies can achieve the issuing agency's goals. Education and newspaper readership were important determinants of response, suggesting that information acquisition and assimilation are key factors for risk avoidance. While some groups reduced consumption as a result of the advisory, we do not find a response among the relatively large group of at-risk households which met neither the education nor readership criteria. The advisory also had unintended spillover effects; some consumers not considered at-risk reduced consumption in response to the advisory.

Martina Vidovic and Neha Khanna. Can voluntary pollution prevention programs fulfill their promises? Further evidence from the EPA's 33/50 Program.

We examine incentives for firm participation in the EPA's 33/50 Program and the impact of this Program on firm emissions. We use a sample of manufacturing firms from 19 industry groups that were invited to participate in the Program in 1991. We find that while the Program may have attracted some of the most polluting firms, the decline in emissions observed between 1991 and 1995 was the result of an independent trend rather than a direct consequence of the Program as argued by an earlier study published in this Journal.

James J. Murphy and John K. Stranlund. A laboratory investigation of compliance behavior under tradable emissions rights: Implications for targeted enforcement.

This paper uses laboratory experiments to test theoretical predictions concerning compliance behavior in competitive emissions trading programs. We test the hypotheses that both the violations of competitive risk neutral firms and the marginal effectiveness of increased enforcement across firms are independent of differences in their benefits from emissions (abatement costs) and their initial permit allocations. This conclusion suggests that regulators have no conceptual justification for targeting their enforcement effort based on firm-level characteristics. Consistent with theory, we find that violations were independent of parametric differences in emissions benefits. However, subjects who were predicted to buy permits tended to have higher violation levels than those who were predicted to be sellers. Nevertheless, we find no evidence that the marginal effectiveness of enforcement depends on any firm-specific characteristic. We also examine the determinants of compliance behavior under fixed emissions standards. As expected, we find significant differences between compliance behavior under fixed standards and emissions trading programs.

Geir B. Asheim, Wolfgang Buchholz, John M. Hartwick. Tapan Mitra and Cees Withagen. Constant savings rates and quasi-arithmetic population growth under exhaustible resource constraints.

In the Dasgupta–Heal–Solow–Stiglitz (DHSS) model of capital accumulation and resource depletion we show the following equivalence: if an efficient path has constant (gross and net of population growth) savings rates, then population growth must be quasi-arithmetic and the path is a maximin or a classical utilitarian optimum. Conversely, if a path is optimal according to maximin or classical utilitarianism (with constant elasticity of marginal utility) under quasi-arithmetic population growth, then the (gross and net of population growth) savings rates converge asymptotically to constants.

Christopher Timmins and Jennifer Murdock. A revealed preference approach to the measurement of congestion in travel cost models.

Travel cost models are regularly used to determine the value of recreational sites or particular site characteristics, yet congestion, a key site attribute, is often excluded from such analyses. One reason for this omission is that congestion is determined in equilibrium by the process of individuals sorting across sites and thus presents significant endogeneity problems. This paper illustrates this source of endogeneity, describes how previous research has dealt with it using stated preference techniques, and describes an instrumental variables approach to address it in a revealed preference context. We demonstrate that failing to address the endogeneity of congestion leads one to dramatically understate its costs. We apply our technique to the valuation of a large recreational fishing site in Wisconsin (Lake Winnebago) which, if eliminated, would induce significant re-sorting of anglers amongst remaining sites. Ignoring congestion leads to an understatement of the lake's value by more than 50%.

Klaus Moeltner, Kevin J. Boyle and Robert W. Paterson. Meta-analysis and benefit transfer for resource valuation-addressing classical challenges with Bayesian modeling.

The use of meta-regression models based on existing studies to estimate the value of resources at a new policy site has become a popular alternative to collecting original data in recent years. There are two prevalent dilemmas associated with classical meta-regression models: The difference in the available set of regressors across source studies and the treatment of methodological explanatory variables in the construction of benefit transfer functions. In this study we illustrate how these issues can be addressed efficiently within a Bayesian meta-regression framework. We find that the Bayesian model, in contrast to its classical counterpart, can estimate a relatively large set of parameters, including indicators of unobserved study heterogeneity, with reasonable accuracy even when the underlying meta-sample is small. The incorporation of information from regressor-deficient source data in the specification of Bayesian priors leads to a better model fit and tighter welfare estimates for Benefit Transfer in our application of freshwater angling.

Hein Roelfsema. Strategic delegation of nvironmental policy making.

A common claim is that nations should cooperate in environmental policy making. However, there is little empirical support that non-cooperative decision making results in too low environmental standards and taxes. We develop a theoretical model and show that if the median voter cares sufficiently for the environment, he has an incentive to delegate policy making to a politician that cares more for the environment than himself. By doing so, he mitigates the risks of a ‘race to the bottom’ in environmental taxes.

Udo Ebert. Revealed preference and household production.

The paper deals with the possibilities of recovering the underlying preference ordering from observed behavior when nonmarket goods are employed in household production. The problem is relevant for the evaluation of environmental goods and for the measurement of welfare in environmental policy. It is shown that preferences can be recovered if and only if a corresponding (mixed) demand system can be integrated. This system can be derived from observable behavior and the household production functions imposed. The conditions for its integrability are presented and can be checked. Therefore the approach suggested is operational and allows to decide whether the behavior observed and the household production functions chosen (as maintained hypothesis) are consistent. This result is important since the evaluation of nonmarket goods in this framework crucially depends on the choice of the household production functions.

TÍTULO:

Journal of Macroeconomics

NÚMERO:

Vol. 29, No. 1 March 2007

DIRECCIÓN ELECTRONICA:

NOTAS:

En este sitio usted encontrará la versión íntegra de los artículos en formato Acrobat (PDF)

ABSTRACTS

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David Demery and Nigel W. Duck. The theory of rational expectations and the interpretation of macroeconomic data.

This paper develops a model of expectations formation in which agents rationally choose to condition their expectations on a limited information set, in particular on information that they are likely to acquire freely as they participate in economic activity. The model offers an explanation for a number of empirical macroeconomic puzzles including the heterogeneity of expectations of inflation, and the sluggishness, excess sensitivity, excess smoothness and perversity of the reaction of macroeconomic variables to shocks.

Nathan S. Balke and Mark A. Wynne. The relative price effects of monetary shocks.

We document the response of the individual components of the Producer Price Index (PPI) to commonly used measures of monetary shocks, and show that these responses are at variance with many widely used models of monetary nonneutrality. Monetary shocks are shown to have large relative price effects, resulting in an increase in the dispersion of the cross-section distribution of prices. Furthermore, in response to a contractionary (expansionary) monetary shock, a substantial number of prices tend to rise (fall). Most existing models of monetary nonneutrality are incapable of replicating these types of relative price responses.

Hasan Bakhshi, Hashmat Khan, Pablo Burriel-Llombart and Barbara Rudolfo. The New Keynesian Phillips curve under trend inflation and strategic complementarity.

This paper shows that for standard calibration of the [Calvo, G., 1983. Staggered prices in a utility-maximizing framework. Journal of Monetary Economics 12, 983–998] model of price stickiness and under strategic complementarity, the optimal price is only defined for trend inflation rates of under 5.5%. This threshold is much lower than previously recognized, and below the average inflation rate in several industrialized countries. Furthermore, over the range for which the optimal price is defined, the slope of the New Keynesian Phillips curve is decreasing in trend inflation. That contradicts the stylized fact that the Phillips curve is flatter in low-inflation environments. Allowing the Calvo price signal to vary with trend inflation can help avoid these implications.

Noriyoshi Hemmi, Ken Tabata and Koichi Futagami. The long-term care problem, precautionary saving, and economic growth.

This paper examines the interaction between decisions about financing after-retirement health shocks and precautionary saving motives, and how this interaction affects economic development. We show that at low levels of income, individuals choose not to save to finance the cost of after-retirement health shocks. However, once individuals become sufficiently rich, they do choose to save to finance the cost of these shocks. This change in individual saving behavior may give rise to multiple steady state equilibria.

Stéphane Pallage and Christian Zimmermann. Buying out child labor.

In this paper we view child labor as a negative externality exerted by some poor countries on richer nations. We inquire into the feasibility of international transfers as a way of addressing this externality. We build a two-country growth model with human capital and child labor. We then calibrate our model to the United States and a poor country, solve it numerically and provide a quantitative description of the minimum transfers necessary to induce the poor to give up child labor. We then check their sustainability from the point of view of the rich.

Kevin Dowd. Too good to be true? The (In)credibility of the UK inflation fan charts.

This paper presents some simple methods to estimate the probability that realized inflation will breach a given inflation target range over a specified period, based on the Bank of England’s RPIX inflation forecasting model and the Monetary Policy Committee’s forecasts of the parameters on which this model is built. Illustrative results for plausible target ranges over the period up to 04Q1 indicate that these probabilities are low, if not very low, and strongly suggest that the Bank’s model over-estimates inflation risk.

Luiz Renato Lima and Zhijie Xiao. Do shocks last forever? Local persistency in economic time series

While it is recognized that many macroeconomic time series are highly persistent over certain range, less persistent results are also found around very long horizons, indicating the existence of local or temporary persistency. In this paper, we study locally persistent behavior in economic time series. A test for stationarity against locally persistent alternative is proposed. Asymptotic analysis of the test statistic are provided under both the null and the alternative hypothesis of local persistency. Monte Carlo experiment is conducted to study the power and size of the test. An empirical application reveals that many US economic variables may exhibit local persistency.

David R. Stockman. Sunspots in a cash-in-advance model: A quantitative assessment

Does consideration of sunspot equilibria in the cash-in-advance model help the model match key features in the US macroeconomic data? One can use the cash-in-advance model to generate predictions of macro time series via an equilibrium of the model. However, when restricted to minimum state variable stationary rational expectations equilibria, the model’s predictions do not match the data well. There is a large a growing literature that demonstrates that this model may exhibit a much larger class of equilibria including stationary sunspot equilibria. Does expanding the predictive content of the CIA model by considering this larger set of equilibria help the model match the US data? In this paper, sunspot equilibria under both a money growth rule and an interest rate feedback rule are quantitatively explored to answer this question.

Youngwan Goo and Hyun Park.Economic growth and convergence with international differences in technology.

In the two-country world economy, this paper considers that factor markets are not perfectly competitive and technology changes endogenously. We analyze how differences in technology affect dynamic comparative advantages and thereby economic growth. The factor price equalization and the relative degree of input substitutions determine dynamics of comparative advantages and thereby resource competition in the factor markets. Both with and without the factor price equalization for input markets, critical values of a CES-index for the long-run R&D and consumption growth are derived. We show that competitiveness in the final good market stimulates economics growth, but excessive resource competition in the input and R&D markets can have a detrimental effect on economic growth. In particular, when the latter dominates the former, the trade liberalization does not necessarily stimulate economic growth. We also show the different convergence property for the R&D and consumption sectors: convergence of R&D and divergence of consumption.

Sergey Slobodyan. Indeterminacy and stability in a modified Romer model.

This paper studies dynamical properties of an extension of the well known Romer model of endogenous growth, introduced by [Benhabib, J., Perli, R., Xie, D., 1994. Monopolistic competition, indeterminacy and growth. Ricerche Economiche 48, 279–298]. This model differs from the Romer model by introducing complementarity of intermediate capital goods. It allows indeterminate steady state for relatively mild degrees of the complementarity. We derive necessary and sufficient conditions for the steady state to be interior and strictly positive, which extend those discussed in Benhabib et al. (1994). We show that Hopf bifurcation to the absolutely stable steady state is impossible and the steady state is determinate if the model parameter values belong to a certain set. For the set of parameter values that allows indeterminacy, we demonstrate possibility of the Hopf bifurcation using both analytical and numerical approaches. The indeterminate steady state can undergo Hopf bifurcation for a wide range of parameter values.

Keiichiro Kobayashi. Forbearance impedes confidence recovery

The finding that countries that take a slow approach to reform during a financial crisis run into problems of persistent stagnation is usually explained as follows: forbearance policy (i.e., an implicit subsidy to inefficient sectors) distorts resource allocation, causing a supply shortage of resources to the productive sectors. I propose another explanation: forbearance impedes the recovery of confidence that is lost during a financial crisis. If confidence is restored through Bayesian learning by economic agents based on observations of government actions, then the inaction of the government (forbearance) impedes Bayesian learning. The model shows that forbearance policy delays economic recovery.

Monica Paiella. Does wealth affect consumption? Evidence for Italy

This paper analyzes the dynamics of Italian households’ net worth over the 1990s and assesses the strength of the wealth effects on consumption, using as a benchmark the United States. Overall, wealth effects in Italy appear to be small and unlikely to be direct. Financial wealth effects have been small because Italian households are not large scale owners of financial assets, even though their marginal propensity to consume out of financial wealth lies close to that reported for the US. By contrast, housing market effects have been small, despite widespread homeownership, because the marginal propensity to consume out of real assets is very low.

Deepak K. Sinha. Market clearing with some neo-Keynesian features

The dynamics of a closed, constant returns, multimarket, monopolistically competitive economy in market clearing equilibrium are examined under two triggers for change: the advent of a new technology and a change in relative prices of inputs. Both warrant costly adjustment in input quantities. Equilibrium in capital markets results in relative price rigidity within markets. In markets characterized by lower cost of capital, agents do not adopt the new technology. In other markets they do. Only three specifications of adjustment cost are feasible and the shortest time path of output is S-shaped with a cyclical component. The pattern of co-movement of variables is broadly consistent with the stylized facts.

TÍTULO:

The Quarterly Review of Economics and Finance

NÚMERO:

Vol. 47 No.1 March 2007

DIRECCIÓN ELECTRONICA:

NOTAS:

En este sitio usted encontrará la versión íntegra de los artículos en formato Acrobat (PDF)

ABSTRACTS

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Ho-don Yan. Does capital mobility finance or cause a current account imbalance?.

Using the Granger non-causality test, we find that the current account mostly Granger-causes the financial account of developed countries. For emerging market economies, however, the causality turns the other way around, although in the short run, depending upon the policy response imposed by each individual country toward the capital flows, there might be mixed results regarding the causality between the current account and the financial account. The financial account, as implied by its name, serves to finance the current account imbalance of developed countries, while capital mobility could push the current account into a state of imbalance in the case of emerging market economies. In addition, the causal results between the components of the financial account and the current account show that each component has different causal relationships with the current account. This means that countries without a sophisticated and sound financial system to channel funds to the proper location should exercise caution and not abruptly remove their restrictions on capital mobility. The pace and sequence of financial account liberalization should be heeded as well.

A. Giannett. The short term predictive ability of earnings-price ratios: The recent evidence (1994–2003).

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In this paper, I study the short-term predictive ability of earnings price ratios for the S&P 500 index from 94Q3 to 02Q4. Overall, I establish that both earnings price ratios levels and changes were effective in predicting index returns. However, I also uncover that this predictive effectiveness was quite volatile over the period. This finding may be interpreted either in a rational risk premium or an investor sentiment hypothesis. To examine the economic value of market timing using earnings price ratios, I implement both unconstrained and constrained trading strategies and uncover that, while market timing ability was the exclusive source of profits for the unconstrained strategies, positive market exposure accounted for a substantial portion of constrained strategies profits.

Klaus Fischer and Nabil Khoury. The impact of ethical ratings on Canadian security performance: Portfolio management and corporate governance implications.

One approach that is gaining in popularity among portfolio managers uses ethical ratings, published by specialized research organizations, to screen securities for portfolio selection. Portfolio managers can thus gain a better understanding of the phenomenon and adopt a better and more consistent approach to ethical investment. By the same token, board of directors can measure the impact of their ethical policies on the market performance of the stock of their company. This paper provides new evidence about the impact of ethical ratings published in Canada on the risk-adjusted returns of the securities concerned, within the framework of a multi-factor Capital Asset Pricing Model, and gives an interpretation of the results from the perspective of portfolio composition and of corporate governance.

James E. McNulty, Joel T. Harper and Anita K. Pennathur. Financial intermediation and the rule of law in the transitional economies of Central and Eastern Europe.

We explore the level of intermediation in the 17 (out of 29) transitional economies of the former Soviet Union and Central and Eastern Europe for which data are available. We find that, ceteris paribus, the levels of financial intermediation relative to GDP are between 21 and 28 percentage points below our sample of developing countries. In addition, we find that the former Soviet countries have lower levels of intermediation than the non-Soviet Eastern European transitional economies. We document that rule of law and legal enforcement increase intermediation and conclude that economic growth in these countries will be more constrained because such growth is more difficult to achieve without a developed banking system.

Anton Miglo. Debt-equity choice as a signal of earnings profile over time

This paper analyzes debt-equity choice for financing a two-stage investment when a firm's insiders have private information about the firm's expected earnings. When private information is one-dimensional (for example when short-term earnings are common knowledge while long-term earnings are private information) a separating equilibrium does not exist. When private information is two-dimensional a separating equilibrium may exist where firms with a higher rate of earnings growth issue debt and firms with a lower rate of earnings growth issue equity. This provides new insights into the issue of different kinds of securities by different types of firms under asymmetric information as well as the link between debt-equity choice and operating performance.

Sessions and Nikolaos Tsitsianis. Pecuniary and non-pecuniary aspects of self-employment survival.

We examine the factors that determine self-employment duration in Britain, paying particular attention to self-reported job satisfaction variables and non-pecuniary aspects of self-employment. Based on spell data from the British Household Panel Study, we estimate single-risk and competing-risks hazard models, separately for males and females. Our results show that job satisfaction is indeed a strong predictor of self-employment exit, even after controlling for standard economic and demographic variables. When five domain job satisfaction measures are used, we find that pay, job security and initiative are the three aspects of self-employment most valued by the self-employed themselves. Gender differences regarding the determinants of self-employment survival and exit destination states are also evident.

Unyong Pyo and Howard E. Thompson. Bond prices in a debt priority structure with absolute priority rule deviation.

We study the value of senior and junior bonds with random default and absolute priority rule violation and propose a simple approach to value risky bonds with varying parameters for the violation. Recognizing the sources of violation from equity contribution and value loss from challenges by junior bonds, we specify sharing rules among various claimants to the firm value and obtain the credit spreads of both senior and junior bonds from simulation. We find that the impact of one parameter on credit spreads depends on other parameters and those other parameters have to be considered simultaneously to price corporate bonds.

Yin-Feng Gau and Mingshu Hua. Intraday exchange rate volatility: ARCH, news and seasonality effects

This paper examines how the calendar seasonality in terms of intraday New Taiwan dollar/U.S. dollar (NTD/USD) exchange rate volatility is impacted by public news arrivals and the unexpected volume shocks. Incorporating counts of Taiwan and the U.S news releases, unexpected volume of trading, and explicit time-of-day seasonality into the framework of GARCH model, we find that the pronounced periodicity of intraday volatility can be partly captured by the augmented model, whereas the spikes of volatility at the market closing and at the opening of the afternoon trading session are not successfully explained by time-of-day factors, public news, unexpected volume of trading, and lagged squared return innovations.

V.T. Alaganar and Ramaprasad Bhar. Empirical properties of currency risk in country index portfolios.

We test the first- and second-order effects of exchange rates on World Equity Benchmark Series (WEBS). WEBS are a relatively recent asset class traded in the U.S., which tracks international equities corresponding to the Morgan Stanley Capital International (MSCI) indices closely. We also test the asymmetric effect of currency movement on WEBS using a variant of the GARCH-M methodology. This aspect has not been documented in the finance literature in the context of international equities. With the help of Sign and Size Bias Tests, we find that past exchange rate changes as well as its volatility has a significant bearing on WEBS return. However, most WEBS returns do not carry a significant risk premium for its own volatility. One plausible explanation is that WEBS volatility mostly incorporates the diversifiable risk for the U.S. investors. Our empirical results provide evidence as to where the phenomena, such as momentum, persistence, and reversal are present in this asset class.

Mark Montgomery and Katharine Anderson. Best laid plans: Gender and the MBA completion rates of GMAT registrants.

Evidence suggests that while women are more likely to go to college than men, they are less likely to go to graduate school. Moreover, in fields like science and engineering, women who do pursue advanced degrees are less likely than men to complete them. This paper compares MBA completion rates for women and men who registered to take the Graduate Management Admission Test (GMAT). We find that female test registrants are about 30% less likely than men to complete the MBA. This difference in completion rates seems only partly due to gender disparity in family responsibilities.

Ihsan Isik and M. Kabir Hassan. Erratum to “Financial disruption and bank productivity: The 1994 experience of Turkish banks”: [The Quarterly Review of Economics and Finance 43 (2003) 291–320].

Turkey experienced a severe financial crisis in 1994 that resulted in a record level of contraction in its economy and banking. Employing a non-parametric approach, we measured the efficiency and productivity of the Turkish banking sector between 1992 and 1996. We also decomposed the productivity growth into its mutually exclusive and exhaustive components (technological change and efficiency change) to understand the impact of the crisis on different aspects of bank productivity. Our results suggest that there was a substantial productivity loss (17%) in 1994, which was mainly attributable to technical regress (10%) rather than efficiency decrease (7%). We also examined the effect of the crisis on different groups of banks operating in Turkey. We found that while foreign banks suffered the most from the crisis, public banks apparently passed through the crisis unharmed. State banks’ relative immunity could be explained with their respectively low open positions in foreign exchange in the advent of the crisis and with their relative soundness and safety in the event of the crisis. We also explored the relationship between bank size, productivity and crisis. Our results indicate that even though the crisis affected all sizes of banks dramatically, its adverse impact on small banks was overwhelming. However, measures undertaken by the government and banks’ own efforts seem to have helped the financial sector recover and attain its pre-crisis productivity and efficiency levels within the following 2 years.

TÍTULO:

Research Policy

NÚMERO:

Vol.36 No. 3 April 2007

DIRECCIÓN ELECTRONICA:

NOTAS:

En este sitio usted encontrará la versión íntegra de los artículos en formato Acrobat (PDF)

ABSTRACTS

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Mario Calderini, Chiara Franzoni and Andrea Vezzulli. If star scientists do not patent: The effect of productivity, basicness and impact on the decision to patent in the academic world.

We run an Event History Analysis on a sample of Italian researchers in the field of Materials Science, aiming at understanding how the characteristics of the research trajectories followed by scientists in academia affect their opportunities to do development of industrial applications. Results of our estimates suggest that all measures of academic performances have a dual effect, although different in magnitude. Scientists that are moving along applied research trajectories find it easier to produce industrial applications than their colleagues engaged in the quest for very fundamental understanding. We interpret our results by suggesting that, for the former, more academic research results in more exploitable results, hence in more chances to patent; for the latter, more academic research makes it just more unlikely that they will find the time to produce industrial applications. Similar results apply for the low versus high research impact.

Anet Weterings and Sierdjan Koster. Inheriting knowledge and sustaining relationships: What stimulates the innovative performance of small software firms in the Netherlands?.

Previous studies showed that firms established by experienced founders have higher survival rates and employment growth, but the potential effect of pre-entry experiences on innovation remains unclear. Using an original dataset, we examine the effect of founder's experiences, the relationship with the founder's previous employer and spatial proximity to the previous workplace on the innovative performance of small software firms in the Netherlands. Apart from entrepreneurial experiences, the results suggest no effect of pre-entry experiences. Continued contacts with the founder's previous employer appear to limit the firm's innovative performance, but firms do benefit from being established near the previous workplace.

Ellen H.M. Moors and Jan Faber. Orphan drugs: Unmet societal need for non-profitable privately supplied new products

Due to the severity of rare diseases, the societal need for biopharmaceutical treatments for these diseases is high, despite low numbers of patients. Therefore, we investigated the barriers currently hindering the willingness to develop orphan drugs in the Netherlands. To this end, a robust, small sample, exploratory analysis of Dutch multi-actor development of orphan drugs was performed. Various factors that were expected to stimulate the adoption of orphan drug development were found to be important barriers. Concerted actions of producers, users, and especially regulators are necessary to overcome these barriers, but the prerequisite of a shared problem definition is lacking.

Xiaohui Liu and Trevor Buck. Innovation performance and channels for international technology spillovers: Evidence from Chinese high-tech industries.

This paper empirically investigates the impact of different channels for international technology spillover on the innovation performance of Chinese high-tech industries, using panel data analysis. We report that learning-by-exporting (and importing) promotes innovation in Chinese indigenous firms. Foreign R&D activities by multinational enterprises in a host country significantly affect the innovation performance of domestic firms only when absorptive ability is taken into account. The findings indicate that both international technology spillover sources and indigenous efforts jointly determine the innovation performance of Chinese high-tech sectors.

Rachel Bocquet, Olivier Brossard and Mareva Sabatier. Complementarities in organizational design and the diffusion of information technologies: An empirical analysis.

We use a specially designed survey on French firms located in Haute-Savoie to provide empirical evidence suggesting that Information and Communication Technologies adoption is not only influenced by the traditional factors of technology diffusion but also by complementarity effects between strategies, organization and information technologies. The data collected permitted several advances. Firstly, we could study authentic ICT while the recent literature has mainly focused on computer capital stocks or automation tools. Secondly, we constructed measures of the determinants put forward by the models of technology diffusion. Thirdly, we studied three kinds of practices: organizational and strategic practices, technological choices.

Reinhard Haupt, Martin Kloyer and Marcus Lange.Patent indicators for the technology life cycle development.

Investments in a technology have to consider its current life cycle stage. The widespread approach of studying technology life cycles by measuring patent activity indices, especially patent applications, raises a practical problem: it requires the survey of all applications and applicants on a technological field. On the basis of an empirical study on pacemaker technology the paper identifies several patent indices as appropriate life cycle stage indicators which do not require the survey of the complete patent activity.

TyFrank W. Geels and Johan.Schotpology of sociotechnical transition pathways.

Contributing to debates about transitions and system changes, this article has two aims. First, it uses criticisms on the multi-level perspective as stepping stones for further conceptual refinements. Second, it develops a typology of four transition pathways: transformation, reconfiguration, technological substitution, and de-alignment and re-alignment. These pathways differ in combinations of timing and nature of multi-level interactions. They are illustrated with historical examples.

Nicoletta Corrocher, Franco Malerba and Fabio Montobbio. Schumpeterian patterns of innovative activity in the ICT field.

This paper studies the patterns of innovation in the ICT field using patents and patent citations. It provides an original methodology to identify ICT applications using patent abstracts and selecting the most frequent sequential triples of words without any a priori selection of keywords. This paper shows that the set of IPC classes related to ICT is broader than the one usually considered.

Moreover, our results show that ICT applications can be distinguished into two main groups in terms of growth and structure of innovative activities, technological pervasiveness, and knowledge sources. High opportunity ICT applications are characterised by high growth of patenting activity, high rate of entry of new innovators and high concentration of technological activity across firms. They also display a diversified knowledge base in terms of technological domains and actors involved. Conversely, low opportunity ICT applications are characterised by a lower growth and by a lower concentration of innovative activities across firms, as well as by a lower rate of entry of new innovators. Innovations in these ICT applications show less diversified knowledge sources and a higher degree of internal knowledge base.

TÍTULO:

NÚMERO:

Vol. 18 No.1 March 2007

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Willi Semmler and Marvin Ofori. On poverty traps, thresholds and take-offs

Recent studies on economic growth focus on persistent inequality across countries. In this paper we study mechanisms that may give rise to such persistent inequality. We consider countries that accumulate capital in order to increase the per capita income in the long run. We show that the long-run growth dynamics of those countries can generate a twin-peak distribution of per capita income. The twin-peak distribution is caused by (1) locally increasing returns to scale and (2) capital market constraints. These two forces give rise to a twin-peaked distribution of per capita income in the long run. In our model investment decisions are separated from consumption decisions and we thus do not have to consider preferences. Empirical evidence in support of a twin-peak distribution of per capita income is provided.

Is Stephanie Seguino more mobility good?: Firm mobility and the low wage–low productivity trap

This paper explores the possibility that unregulated FDI flows are causally implicated in the decline in labor productivity growth in semi-industrialized economies. These effects are hypothesized to operate through the negative impact of firm mobility on worker bargaining power and thus wages. Downward pressure on wages can reduce the pressure on firms to raise productivity in defense of profits, contributing to a low wage-low productivity trap. This paper presents empirical evidence, based on panel data fixed effects and GMM estimation for 37 semi-industrialized economies that supports the causal link between increased firm mobility and lower wages, as well as slower productivity growth over the period 1970–2000.

Benjamin N. Dennis and Talan B. Iscan. Productivity growth and agricultural out-migration in the United States.

In the 20th century U.S., the average annual decline in the relative farm share of employment was 3.6%. Despite this rapid reallocation of labor, a large wage gap persisted between the farm and non-farm sectors that declined only slowly over time. We develop a model of farm out-migration with three driving forces: (i) absolute farm productivity growth in conjunction with subsistence food consumption, (ii) relative farm productivity growth in conjunction with a low elasticity of substitution between farm and non-farm goods, and (iii) endogenously declining wage gaps. Quantitative features of the model accord well with the U.S. experience during this period.

Amitava K. Dutt and Jaime Ros. Aggregate demand shocks and economic growth.

The traditional view of growth and fluctuations implies that aggregate demand shocks result in only transitory departures from trend or “normal” output, which is determined exclusively by aggregate supply factors. Using a simple dynamic framework for a less-developed economy, a series of models is developed to show that aggregate demand can have a permanent effect on economic growth. It is shown that even if the economy converges to some “normal” path, this path itself may be altered by large demand shocks, due to increasing returns and hysteresis effects in labor markets and balance of payments constraints. It is also shown that the economy may not converge to its “normal” path, in which case fiscal and monetary policy will have long-term effects on output and growth.

Larry Karp and Thierry Pau.Indeterminacy with environmental and labor dynamics

We study the joint dynamics of labor reallocation and environmental change when workers have rational expectations and incur migration costs. We emphasize the relation between parameter values and the area of state space in which indeterminacy of equilibria can occur. Unlike the one-dimensional model in which the wage differential adjusts instantaneously, here the measure of the region of indeterminacy is not monotonic in the cost of adjustment.

Daniele Besomi. Mentor Bouniatian on cycles and equilibrium.

Although Mentor Bouniatian's theory of the business cycle is no longer referred to, it used to be often cited for its emphasis on time-lags (wherein he anticipated Aftalion) and for its early use of the acceleration principle. There are, moreover, additional elements of interest: he identified the conditions for a moving equilibrium, with some traits similar to the so-called ‘Harrod-Domar model’, he introduced the exogenous/endogenous distinction in business cycle theory, he was among the pioneers of the idea that growth cannot be dissociated from cycles and crises, and he discussed aspects of the ‘fallacy of composition’ problem.

This paper examines these features of Bouniatian's theory of cycles and crises (as well as some frankly unsuccessful ones), both in terms of their relationships with contemporary developments in this area of research and in terms of their internal logic and methodology and their role in Bouniatian's analytical construction. As an upshot it is argued that although Bouniatian attempted to couch his theory in terms of the marginalist toolbox, his views on cycles ranges were more akin to the tradition of heretics, for he thought of crises not as a temporary deviations from equilibrium but perceived instead equilibrium as a temporary state of affairs in a world where overcapitalization is the norm rather than an exception.

TÍTULO:

World Development

NÚMERO:

Vol. 35 No.3 March 2007

DIRECCIÓN ELECTRONICA:

http://www.sciencedirect.com/science/journal/0305750X

NOTAS:

En este sitio usted encontrará la versión íntegra de los artículos en formato HTML y Acrobat (PDF).

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Mauricio Mesquita Moreir. Fear of China: Is There a Future for Manufacturing in Latin America?.

China’s emergence has raised pointed questions about the future of manufacturing in Latin America. This paper looks at this challenge and its implications. It begins by asking: Does manufacturing still matter for Latin America? It argues that the region cannot afford to turn its back to a well-proven road to development. It then moves on to show that endowments, productivity, scale and the government’s role, all work together to make China a formidable competitor. The importance of this challenge is confirmed by an analysis of the trade data, which suggests a small impact so far, but a disquieting trend.

Roberto Alvarez. Explaining Export Success: Firm Characteristics and Spillover Effects.

In this paper, we analyze empirically the determinants of export performance for Chilean manufacturing plants. We are particularly interested in investigating the factors that determine success in the exporting process by distinguishing between firms as non-exporters, sporadic exporters, and permanent exporters. Our findings show that initial firm characteristics such as labor skills and technological innovation are positively associated with exporting, but these same factors are unable to explain why some firms export permanently. In addition, our evidence suggests that previous export experience, multinational spillovers, and an increase in productivity positively contribute to the probability of becoming a permanent exporter.

Ana S.Q. Liberato and Dana Fennell. Gender and Well-being in the Dominican Republic: The Impact of Free Trade Zone Employment and Female Headship.

This paper examines the influence of gender and free trade zone employment on health. Results from logistic regression analysis provide mixed evidence of significant effects. Findings show the combined negative effects of gender and free trade zone employment on hospitalization, and the negative effects of free trade zone employment on declaring health problems. Findings also demonstrate the positive effects of gender on the usage of preventive medicine, and the positive effects of free trade zone employment on coverage through social security. Demographic factors linked to health include household location, household labor, age, and education.

Nuno Crespo and Maria Paula Fontoura. Determinant Factors of FDI Spillovers – What Do We Really Know?.

The evaluation of aggregate FDI spillovers to domestic firms has yielded mixed results. However, analysis has recently taken a step forward with the evaluation of the factors determining the existence, dimension, and sign of FDI spillovers. We survey the arguments that support these factors and the empirical evidence already produced. FDI spillovers depend on many factors, frequently with an undetermined effect. The absorptive capacities of domestic firms and regions are preconditions for incorporating the benefits of these FDI externalities. Regarding the remaining factors, the results show contrary effects or, in some cases, are still insufficient to draw reliable conclusions.

Jorge Niosi and Susan E. Reid. Biotechnology and Nanotechnology: Science-based Enabling Technologies as Windows of Opportunity for LDCs? .

In this paper, two relatively new science-based technologies—biotechnology and nanotechnology—are assessed to determine whether they provide windows of opportunity to less developed countries (LDCs) for catch up. By examining international patent and firm foundation trends in both industries, we found that Brazil, China, and India have jumped into these two potential catching up technologies. The paper turns to a discussion of the approaches to overcoming entry barriers that have been successful in this context and also describes why only a few countries are currently in a position to take advantage of them to facilitate catching up.

FoSimon Feenyreign Aid and Fiscal Governance in Melanesia.

Recent research suggests that foreign aid is effective at spurring economic growth in recipient countries but its effectiveness is likely to depend upon a number of factors. Arguably, the most important factor determining aid effectiveness is how recipient governments mediate foreign aid inflows. This paper investigates this issue for the Melanesian countries of Fiji, Papua New Guinea, the Solomon Islands, and Vanuatu for the period 1989–2002. Results suggest that foreign aid has led to increases in developmental expenditures and to falls in tax revenues and borrowing. Results also suggest a very different response to aid grants versus loans.

Cosmas Milton Obote Ochieng. Development through Positive Deviance and its Implications for Economic Policy Making and Public Administration in Africa: The Case of Kenyan Agricultural Development, 1930–2005.

Positive internal innovation has long been a central element of African agricultural development, even if modern efforts to stimulate technical, institutional, and policy innovations in African agriculture have tended to look outwards. This paper examines the role of positive deviance in Kenyan agriculture over the last 75 years to cast doubt on the alleged authoritative sources of policy advice and mandates from the outside. Positive deviance and appreciative inquiry are suggested as organizing frameworks for identifying and amplifying the generation and uptake of internal African innovations.

Travis J. Lybbert. Bayesian Herders: Updating of Rainfall Beliefs in Response to External Forecasts

Temporal climate risk weighs heavily on many of the world’s poor. Model-based climate forecasts could benefit such populations, provided recipients use forecast information to update climate expectations. We test whether pastoralists in southern Ethiopia and northern Kenya update their expectations in response to forecast information. The minority of herders who received these climate forecasts updated their expectations for below normal rainfall, but not for above normal rainfall. This revealed preoccupation with downside risk highlights the potential value of better climate forecasts in averting drought-related losses, but realizing any welfare gains requires that recipients strategically react to these updated expectations.

Seth R. Gitter and Bradford L. Barham. Credit, Natural Disasters, Coffee, and Educational Attainment in Rural Honduras.

This paper exploits a two-stage estimation approach to examine the impact on secondary school attainment in rural Honduras of four key variables affecting household choices: wealth, credit access, crop choice, and shocks. The first stage estimates the probability that a household is credit constrained, while the second estimates secondary school educational attainment of appropriately aged children. The second stage includes variables for crop selection and household wealth shocks from Hurricane Mitch in addition to other characteristics of the child, household, and community that can influence educational attainment. Credit-constrained households have lower educational attainment and are more likely to be adversely affected by negative shocks.

John Gibson, Sandra Barns, Michael Cameron, Steven Lim, Frank Scrimgeour and John Tressler. The Value of Statistical Life and the Economics of Landmine Clearance in Developing Countries

This paper presents estimates of the value of statistical life (VSL) in rural Thailand using the contingent-valuation (CV) method. These estimates are applied to an economic analysis of landmine clearance. The estimated VSL of US$250 000 suggests that the value of lives saved from landmine clearance is at least an order of magnitude greater than the values used in existing studies.

WoBryan Maddoxrlds Apart? Ethnographic Reflections on “Effective Literacy” and Intrahousehold Externalities

The model of effective literacy developed by Basu and Foster [Basu, K., & Foster, J. (1998). On measuring literacy. Economic Journal 108, 1733–1749] argued that there are benefits to nonliterate people in belonging to a household with at least one literate member. Their measure of proximate illiteracy sought to capture such gains as an alternative to the conventional literacy “rate”. The model has since been refined, extended, and applied in a number of contexts. This paper examines how ethnographic research might further inform the concept. The literature on effective literacy has largely focused on intrahousehold externalities. Drawing on ethnographic examples from Bangladesh, the paper illustrates such externalities. It also argues following Basu and Foster [Basu, K., & Foster, J. (1998). On measuring literacy. Economic Journal 108, 1733–1749], that the analysis of proximate illiteracy can be extended to examine interhousehold sharing, and the significance of close networks of friend and kin.

Ans Kolk, Rob Van Tulder and Bart Westdijk. Corrigendum to “Poverty Alleviation as Business Strategy? Evaluating Commitments of Frontrunner Multinational Corporations” [World Development 34 (2006) 789–801].

In the debate on how to combat poverty, the positive role of MNCs is frequently mentioned nowadays, although doubts and criticism remain. Facing this societal debate, MNCs feel the pressure to formulate a position. This paper analyzes MNCs’ policies on their poverty-alleviating potential. “Frontrunner” MNCs turn out not to be very outspoken, especially not on those issues that have the largest potential to help alleviate poverty. Placed in the context of other MNCs’ behavior, a sector-coordinated morality seems important, which means that a meso approach to poverty alleviation needs to complement the current global (macro) and individual company (micro) focus.