modeling skewness with the linear stochastic plateau model to determine optimal nitrogen rates accurate modeling of skewness is needed to increase the actuarial fairness of crop insurance we test day s conjecture that crop yield skewness becomes negative as nitrogen rates increase and determine how well a linear response stochastic plateau lrsp production function matches the pattern of observed skewness using four long term nitrogen experiments stillwater wheat is consistent with day s conjecture but the skewness for lahoma and altus wheat yields as well as altus cotton yields are not the lrsp assumes normal random effects and can explain only a small part of observed skewness so a new lrsp with skew normal random effects is introduced which comes closer to explaining the observed skewness and should increase the accuracy of nitrogen rate recommendations negative skewness reduced optimal nitrogen rates and positive skewness increased optimal nitrogen rates

proper risk aversion on introduit et on etudie une condition comportementale significative sur les fonctions d utilite pour les richesses qui signifie qu une loterie indesirable ne peut jamais etre rendue desirable par la presence d une loterie indesirable independante

the great indian calorie debate explaining rising undernourishment during india s rapid economic growth abstract the prevalence of undernourishment in india the percent of people consuming insufficient calories to meet their energy requirements has been rising steadily since the mid 1980s paradoxically this period has been one of robust poverty reduction and rapid economic growth the reasons for the apparent reductions in calorie consumption underlying increased undernourishment have been the subject of intense debate both within india and internationally this paper critically reviews this debate finding that is has taken place outside of the context of india s recent nutrition and epidemiological transitions which appear to have brought with them increased not decreased food consumption the debate has also taken place under the unchallenged assumption that the data on which the conflicting trends are based collected as part of the country s household consumption and expenditure surveys hcess are reliable the paper provides supporting literature and empirical evidence that a probable key source of the calorie decline is incomplete collection of data on food consumed away from peoples homes which is widespread and rapidly increasing complete measurement of this food source in the hcess of all developing countries is vital for accurate measurement of both undernourishment and poverty and for resolving the indian calorie debate

methods of household consumption measurement through surveys experimental results from tanzania consumption expenditure has long been the preferred measure of household living standards however accurate measurement is a challenge and household expenditure surveys vary widely across many dimensions including the level of reporting the length of the reference period and the degree of commodity detail these variations occur both across countries and also over time within countries there is little current understanding of the implications of such changes for spatially and temporally consistent measurement of household consumption and poverty a field experiment in tanzania tests eight alternative methods to measure household consumption on a sample of 4 000 households there are significant differences between consumption reported by the benchmark personal diary and other diary and recall formats under reporting is particularly relevant in illiterate households and for urban respondents completing household diaries recall modules measure lower consumption than a personal diary with larger gaps among poorer households and households with more adult members variations in reporting accuracy by household characteristics are also discussed and differences in measured poverty as a result of survey design are explored the study concludes with recommendations for methods of survey based consumption measurement in low income countries

financial market innovation and security design an introduction abstract the article describes in the context of theory and practice this special issue of the journal of economic theory on financial market innovation and security design the main focus is on security design in incomplete financial markets possibly with asymmetrically informed traders we first survey the general equilibrium literature which emphasizes the spanning role of securities we then provide a unified framework encompassing the literature that employs a cara guassian setting to study the impact of financial innovation on risk sharing and information aggregation journal of economic literature classification numbers g10 d52

measuring global poverty why ppp methods matter abstract we present theory and evidence to suggest that in the context of analyzing global poverty the eks approach to estimating purchasing power parities yields more appropriate international comparison of real incomes than the geary khamis approach our analysis of the 1996 and 2005 international comparison project data confirms that the geary khamis approach substantially overstates the relative incomes of the world s poorest nations and this leads to misleading comparisons of poverty across regions and over time the eks index of real income is much closer to being a true index of economic welfare and is therefore preferred for assessment of global poverty

china s uneven progress against poverty while the incidence of extreme poverty in china fell dramatically over 1980 2001 progress was uneven over time and across provinces rural areas accounted for the bulk of the gains to the poor though migration to urban areas helped the pattern of growth mattered rural economic growth was far more important to national poverty reduction than urban economic growth agriculture played a far more important role than the secondary or tertiary sources of gross domestic product gdp rising inequality within the rural sector greatly slowed poverty reduction provinces starting with relatively high inequality saw slower progress against poverty due both to lower growth and a lower growth elasticity of poverty reduction taxation of farmers and inflation hurt the poor external trade had little short term impact

measuring poverty using qualitative perceptions of consumption adequacy we show that subjective poverty lines can be derived using simple qualitative assessments of perceived consumption adequacy based on a household survey we implement the method using survey data for jamaica and nepal respondents were asked whether their consumptions of food housing and clothing were adequate for their family s needs the implied poverty lines are robust to alternative methods of dealing with other components of expenditure the aggregate poverty rates accord quite closely with those based on independent objective poverty lines however there are notable differences in the geographic and demographic poverty profiles

mixed risk aversion abstract we analyze the class of increasing utility functions exhibiting all derivatives of alternating sign this property that we call mixed risk aversion is satisfied by the utility functions most commonly used in financial economics the utility functions displaying mixed risk aversion can be expressed as mixtures of exponential functions we characterize stochastic dominance and we find conditions for both mutual aggravation and mutual amelioration of risks when agents are mixed risk averse finally the analysis of the distribution function describing a mixed utility allows one to characterize the behaviour of its indexes of risk aversion and to discuss its implications for portfolio selection journal of economic literature classification numbers d81 g11

weakly relative poverty prevailing measures of relative poverty are unchanged when all incomes grow or contract by the same proportion this property stems from seemingly implausible assumptions about the disutility of relative deprivation and the cost of social inclusion the authors propose weakly relative lines that relax these assumptions on calibrating our measures to national poverty lines and survey data we find that half the population of the developing world in 2005 lived in poverty only half of whom were absolutely poor the total number of poor rose over 1981 to 2005 despite falling numbers of absolutely poor with sustained economic growth the incidence of relative poverty became less responsive to further growth the number of relatively poor rose just as the numbers of absolutely poor fell

heterogeneity and distributional form of farm level yields representing farm level crop yield heterogeneity and distributional form is critical for risk and crop insuranceresearch moststudieshaveusedcountydata understatingbothsystematicandrandomvariation comparison of systematic versus random intra county variation is lacking few studies compare the various distributional forms that have been proposed this study utilizes the extensive potential of government farm level crop insurance data results show that systematic intra county variation is surprisingly strong a newly applied reverse lognormal distribution is preferred when county wide variation is removed but the normal distribution fits surprisingly well in the crop insurance relevant percentiles when county wide variation is not removed representing and accounting for both spatial and temporal heterogeneity is a major problem in agricultural economics and policy analysis due to the fact that most data are aggregated to at least the county level e g gardner and kramer 1986 just and pope 1999 both systematic and random components of crop yields are major factors in intra county farm level heterogeneity that are critical for modeling risk producer behavior and crop insurance participation most studies have either used aggregate at least county level data or relied on relatively few farm level observations the former makes results primarily illustrative while the latter limits statistical significance this article characterizes intra county crop yield heterogeneity both spatially and temporally with the most extensive dataset utilized to date and evaluates a broader set of parametric distributional possibilities than previously

crop yield skewness under law of the minimum technology no satisfactory motivation has been forwarded in favor of any crop yield distribution including the normal this article explores the foundations of yield distributions for the law of the minimum resource constraint technology at the plot level of analysis with independent identical uniform resource availability distributions the yield skew is positive whereas it is negative whenever the distributions are normal simulations show how asymmetries in resource availabilities determine skewness it is suggested that a negative yield skew occurs whenever production is tightly controlled so that the left tails of some resources availabilities distributions are thin irrigation may increase yield skewness copyright 2009 oxford university press

are crop yields normally distributed the evidence for nonnormality of crop yields is reassessed three methodological problems are identified in typical yield distribution analyses i misspecification of the nonrandom components of yield distributions ii missreporting of statistical significance and iii use of aggregate timeseries ats data to represent farm level yield distributions one or more of these problems infect virtually all evidence against normality to date the positive contribution of the article is a set of principles that must be followed in any valid investigation of yield normality

repeated optional gambles and risk aversion we analyze in this paper the effect of age on the optimal dynamic strategy toward repeated independent gambles when deciding to accept or to reject a lottery that is offered today the gambler knows how many lotteries can yet be played in the future we first characterize the optimal dynamic strategy when future lotteries are identically distributed we show that the existence of future lotteries always increases the willingness to gamble today when the sequence of lotteries is independent but not identically distributed we show that this does not need to be true this analysis can be applied to the problem of investing in indivisible risky investment projects or to the problem of dynamic optimal insurance demand

poverty and household size the widely held view that larger families tend to be poorer in developing countries has influenced research and policy the scope for size economies in consumption cautions against this view we find that the correlation between poverty and size vanishes in pakistan when the size elasticity of the cost of living is about 0 6 this turns out to be the elasticity implied by a modified version of the food share method of setting scales by contrast some measures of child nutritional status indicate an elasticity of unity consideration of the weight attached to child versus adult welfare may help resolve the non robustness of demographic profiles of poverty excerpt

community comparisons and subjective well being in a divided society using a south african data set the paper poses six questions about the determinants of subjective well being much of the paper is concerned with the role of relative concepts we find that comparator income measured as average income of others in the local residential cluster enters the household s utility function positively but that income of more distant others others in the district or province enters negatively the ordered probit equations indicate that as well as comparator groups based on spatial proximity race based comparator groups are important in the racially divided south african society it is also found that relative income is more important to happiness at higher levels of absolute income potential explanations of these results and their implications are considered

the economic lives of the poor in what turned out to be a rhetorical master move the 1990 world development report from the world bank defined the extremely poor people of the world as those who are currently living on no more than 1 per day per person measured at the 1985 purchasing power parity ppp exchange rate in 1993 the poverty line was updated to 1 08 per person per day at the 1993 ppp exchange rate which is the line we use in this paper poverty lines have always existed indeed 1 per day was chosen in part because of its proximity to the poverty lines used by many poor countries 1 however the 1 a day poverty line has come to dominate the conversations about poverty to a remarkable extent

societal poverty a relative and relevant measure poverty lines are typically higher in richer countries and lower in poorer ones reflecting the relative nature of national assessments of who is considered poor in many high income countries poverty lines are explicitly relative set as a share of mean or median income despite systematic variation in how countries define poverty global poverty counts are based on fixed value lines to reflect national assessments of poverty in a global headcount of poverty this paper proposes a societal poverty line the proposed societal poverty line is derived from 699 harmonized national poverty lines and has an intercept of 1 per day and a relative gradient of 50 percent of median national income or consumption the societal poverty line is more closely aligned with national definitions of poverty than other proposed relative lines by this relative measure societal poverty has fallen steadily since 1990 but at a much slower pace than absolute extreme poverty

the value of pre decision side bets for utility maximizers if an alternative is attractive only at certain wealth levels of a decision maker typically above some critical level then there will be occasions when it is better to enter into an independent side bet prior to making a decision than to accept or reject the alternative outright

national food security assessment through the analysis of food consumption data from household consumption and expenditure surveys the case of brazil s pesquisa de orcamento familiares 2008 09 by analyzing the food consumption data from the 2008 09 pesquisa de orcamentos familiares in brazil we demonstrate that failing to account for food consumed for free at school may significantly distort the assessment of the distribution of food consumption among households and therefore the assessment of the extent of food insecurity in the country the results of our analysis enabled a revision of the fao estimate of the prevalence of undernourishment in brazil and provide useful suggestions for better design of food consumption modules to be included in household consumption and expenditure surveys hces additionally we identify areas for further research on food consumption data to improve national food security assessments

are crop yields normally distributed a reexamination this article demonstrates that normality test procedures that include individual detrending of short term panel data can severely reduce the power of normality tests and strongly bias normality tests in a type ii direction an alternative error component implicit detrending procedure is suggested that demonstrates higher power for the distributions examined both procedures are applied to a large data set with normality of yield residuals being rejected assuming normality is shown to reduce potential premium rates for a large number of producers in an existing crop insurance product

the developing world is poorer than we thought but no less successful in the fight against poverty a new data set on national poverty lines is combined with new price data and almost 700 household surveys to estimate absolute poverty measures for the developing world we find that 25 of the population lived in poverty in 2005 as judged by what poverty typically means in the world s poorest countries this is higher than past estimates substantial overall progress is still indicated the corresponding poverty rate was 52 in 1981 but progress was very uneven across regions the trends over time and regional profile are robust to various changes in methodology though precise counts are more sensitive

self rated economic welfare in russia abstract most of those russian adults who feel that they are poor are not classified as such in the poverty statistics and most of those who are classified as poor don t feel that way we study the determinants of peoples perceptions of their economic welfare in an unusually rich socioeconomic survey while income is a highly significant predictor subjective economic welfare is influenced by many other factors including health education employment assets relative income in the area of residence and expectations about future welfare insights are obtained into how objective data should be weighted in assessing economic welfare

an experiment on risk taking and evaluation periods does the period over which individuals evaluate outcomes influence their investment in risky assets results from this study show that the more frequently returns are evaluated the more risk averse investors will be the results are in line with the behavioral hypothesis of myopic loss aversion which assumes that people are myopic in evaluating outcomes over time and are more sensitive to losses than to gains the results have relevance for the equity premium puzzle and also for the marketing strategies of fund managers

food counts measuring food consumption and expenditures in household consumption and expenditure surveys this special issue presents new evidence on the impact of survey design choices on the quality and availability of data collected in household consumption and expenditure surveys hces the 13 studies in this issue analyze how different survey design options affect the quality of the data being collected and the implications for statistical inference and policy analysis the studies offer practical insights into survey design for national statistical offices and survey practitioners worldwide and also provide policymakers with improved tools and a better understanding of poverty food security and nutrition for effective policymaking

when financial work incentives pay for themselves evidence from a randomized social experiment for welfare recipients abstract this paper summarizes early findings from a social experiment that provided financial incentives for new welfare recipients to leave welfare and work full time the financial incentive was essentially a negative income tax with a requirement that people work at least 30 h week early results show that the financial incentive increased full time employment earnings and income and reduced poverty furthermore at the end of the period discussed in this paper the program was paying for itself through increased tax revenues

relative income effects on subjective well being in the cross section abstract recent work suggests that a person s subjective well being swb depends to a large degree on relative income focusing on the underlying identification this paper makes four contributions to this literature it describes the aggregation problem with past studies implements an estimation strategy to overcome this problem finds micro level evidence in support of the hypothesis that relative income does matter in individual assessments of swb and uses cross section estimates to replicate the aggregate time series the evidence further indicates that relative income effects may be smaller at low income levels the results are obtained from ordered probit techniques and the general social survey gss

the developing world s bulging but vulnerable middle class summary western notions of the middle class are of little obvious relevance to developing countries instead the middle class is identified here as those living above the median poverty line of developing countries even if still poor by rich country standards over 1990 2005 economic growth and global distributional shifts allowed an extra 1 2 billion people to join the developing world s middle class four fifths came from asia and half from china many of those in this new middle class remain fairly close to poverty only 100 million of the 1 2 billion would not be considered poor in any developing county economic growth typically came with an expanding middle class

why not consider that being absolutely poor is worse than being only relatively poor abstract no current strategy to measure income poverty is able to i account for both its absolute and relative aspects and ii always consider that an individual who is absolutely poor is poorer than another individual who is only relatively poor i propose a measure of income poverty satisfying i and ii unlike alternative proposals satisfying i a decrease in a poor individual s income never reduces this measure an application illustrates that the measure yields intuitive judgments about unequal growth experiences for which all absolute resp relative poverty measures systematically conclude that poverty has decreased resp increased

is more always better a survey on positional concerns abstract we use survey data to provide some empirical information about concerns regarding relative standing respondents chose between a world where they have more of a good than others and one where everyone s endowment of the good is higher but the respondent has less than others questions asked about education attractiveness and intelligence for one s child and oneself income vacation time approval and disapproval from a supervisor and papers to write half of the respondents preferred to have 50 less real income but high relative income concerns about position were strongest for attractiveness and supervisor s praise and weakest for vacation time

promise and pitfalls in the use of secondary data sets income inequality in oecd countries as a case study this paper examines the role of secondary data sets in empirical economic research taking the field of income distribution as a case study we illustrate problems faced by users of secondary statistics showing how both cross country comparisons and time series analysis can depend sensitively on the choice of data after describing the genealogy of secondary data sets on income inequality we consider the main methodological issues and discuss their implications for comparisons of income inequality across oecd countries and over time the lessons to be drawn for the construction and use of secondary data sets are summarized at the end of the paper

the distributional impacts of an energy boom in western canada in the energy rich region of western canada inequality rose over the past two decades while poverty declined begging the question of whether the recent energy boom was a contributing factor this study uses measures of inequality and poverty across local labor markets that vary in energy extraction intensity to identify these distributional impacts the evidence shows that overall the boom increased inequality and decreased poverty there are however a few notable cases where these relationships are reversed the significance and relative magnitude of growth across and between distributional segments were consistent with these findings

not your average job measuring farm labor in tanzania a good understanding of the constraints on agricultural growth in africa relies on the accurate measurement of smallholder labor yet serious weaknesses in these statistics persist the extent of bias in smallholder labor data is examined by conducting a randomized survey experiment among farming households in rural tanzania agricultural labor estimates obtained through weekly surveys are compared with the results of reporting in a single end of season recall survey the findings show strong evidence of recall bias people in traditional recall style modules report working up to four times as many hours per person plot relative to those reporting labor on a weekly basis if hours are aggregated to the household level however this discrepancy disappears a factor driven by the underreporting by recall households of people and plots active in agricultural work the evidence suggests that these competing forms of recall bias are driven not only by failures in memory but also by the mental burdens of reporting on highly variable agricultural work patterns to provide a typical estimate all things equal studies suffering from this bias would understate agricultural labor productivity

do poverty traps exist assessing the evidence why did per capita incomes not increase in burundi haiti and nicaragua countries one possible explanation is a poverty trap which can be understood as a set of self reinforcing mechanisms whereby countries start poor and remain poor poverty begets poverty so that current poverty is itself a direct cause of poverty in the future it implies that much poverty is needless in the sense that a different equilibrium is possible and also that one time policy efforts that break the poverty trap may have lasting effects the concept of a poverty trap at the level of national economies is related to and sometimes based on microeconomic foundations that argue for the existence of poverty traps at the household level the authors discuss behavioral poverty traps as a recent area of research for which the evidence is just starting to accumulate and geographic poverty traps as the most likely form of a trap the policy prescriptions that result are then quite different from the calls for a big push in aid or expansion of microfinance to allow people to overcome credit constraints

investigating the performance of different estimation techniques for crop yield data analysis in crop insurance applications we investigate the performance of the ordinary least squares ols m mm and the theil sen ts estimator for crop yield data analysis in crop insurance applications using monte carlo simulations more specifically the performance is assessed with respect to trend estimation prediction of future yield levels and the estimation of expected indemnity payments in agreement with earlier findings other estimators are found to be superior to ols in simple regression problems if yield distributions are outlier contaminated and heteroscedastic while this conclusion is also valid for subsequent applications such as yield prediction and the estimation of expected indemnity payments the difference between the considered estimators becomes less distinct for these applications we find particularly the m estimator to be a good compromise between high breakdown very robust estimators and the very efficient ols estimator because no regression technique dominates all others in all applications and scenarios for error term distributions our results underline that the choice of the estimation technique should be dependent on the purpose of the crop yield data analysis however alternative estimators such as m mm and ts estimator can reduce and bound the risk of unreliable or inefficient crop yield data analysis in crop insurance applications

you are what and where you eat capturing food away from home in welfare measures consumption of food away from home is rapidly growing across the developing world surprisingly the majority of household surveys around the world haven not kept up with its pace and still collect limited information on it the implications for poverty and inequality measurement are far from clear and the direction of the impact cannot be established a priori since consumption of food away from home affects both food consumption and the poverty line this paper exploits rich data on food away from home collected as part of the national household survey in peru shedding light to the extent to which welfare measures differ depending on whether they properly account for food away from home peru is a relevant context with the average peruvian household spending 28 percent of their food budget on food away from home by 2010 the analysis indicates that failure to account for the consumption of food away from home has important implications for poverty and inequality measures as well as the understanding of who the poor are first accounting for food away from home results in extreme poverty rates that are 18 percent higher and moderate poverty rates that are 16 percent lower these results are also consistent in fact more pronounced with poverty gap and severity measures second consumption inequality measured by the gini coefficient decreases by 1 3 points when food away from home is included a significant reduction finally inclusion of food away from home results in a reclassification of households from poor to non poor status and vice versa 20 percent of the poor are different when the analysis includes consumption of food away from home this effect is large enough that a standard poverty profile analysis results in significant differences between the poverty classification based on whether food away from home is included or not the differences cover many dimensions including demographics education and labor market characteristics taken together the results indicate that a serious rethinking of how to deal with the consumption of food away from home in measuring well being is urgently needed to properly estimate and understand poverty around the world

on technological change in crop yields technological changes in agriculture tend to alter the mass associated with segments or components of the yield distribution as opposed to simply shifting the entire distribution upwards we propose modeling crop yields using mixtures with embedded trend functions to account for potentially different rates of technological change in different components of the yield distribution by doing so we can test some interesting and previously untested hypotheses about the data generating process of yields for example 1 is the rate of technological change equivalent across components and 2 are the probabilities of components constant over time our results technological change is not equivalent across components and probabilities tend not to have changed significantly over time have implications for modeling yields we find estimated conditional yield densities are quite different when unique trend functions are embedded inside the mixture components versus estimating the same mixture with detrended data also we prove different rates of technological change in different components lead to nonconstant variance with respect to time i e heteroscedasticity we present two applications of the proposed yield model the first application considers climate determinants of component membership where our results are consistent with the literature for climate determinants of yields the second application compares the proposed yield model to usda s current rating methodology for area yield crop insurance contracts and finds the proposed model may lead to more accurate rates

dollar a day revisited the article presents the first major update of the international 1 a day poverty line proposed in world development report 1990 poverty for measuring absolute poverty by the standards of the world s poorest countries in a new and more representative data set of national poverty lines a marked economic gradient emerges only when consumption per person is above about 2 00 a day at 2005 purchasing power parity below this the average poverty line is 1 25 which is proposed as the new international poverty line the article tests the robustness of this line to alternative estimation methods and explains how it differs from the old 1 a day line

investment flexibility and the acceptance of risk abstract the hypothesis examined in this paper is that the greater the investor s flexibility the easier it is for him to change his portfolio depending on his results the more willing he will be to accept risks when the investor has no control on the size of the risky investment but can choose between one risky and one riskless asset this conjecture is shown to be correct however if there is more than one risky asset each period counterexamples demonstrate that flexibility rarely ensures greater risk taking for the standard portfolio problem in which investors are free to determine the size of their investment in a risky asset flexibility always raises the demand for the risky asset if constant relative risk aversion is less than unity but counterexamples can always be found when the constant relative risk aversion is larger than unity journal of economic literatureclassification numbers g11 d81 d84

global inequality when unequal countries create unequal people abstract current global inequality measures assume that national mean income does not matter to economic welfare at given household income as measured in surveys the paper questions that assumption on theoretical and empirical grounds and finds that prominent stylized facts about global inequality are not robust at one extreme theories of relative deprivation yield nationalistic measures whereby global inequality is average within country inequality which is rising however other theories and evidence point instead to the benefits of living in a richer country parameter values consistent with research on global subjective wellbeing imply higher inequality than prevailing measures though falling since 1990

what can new survey data tell us about recent changes in distribution and poverty it has been claimed that in recent times the poor have lost ground both relatively and absolutely even when average levels of living have risen this article tests that claim using household surveys for 67 developing and transitional economies over 1981 94 it finds that changes in inequality and polarization were uncorrelated with changes in average living standards distribution improved as often as it worsened in growing economies and negative growth was often more detrimental to distribution than positive growth overall there was a small decrease in absolute poverty although with diverse experiences across regions and countries almost always poverty fell with growth in average living standards and rose with contraction

ethnic inequality and poverty in malaysia since may 1969 part 2 poverty abstract over the last 50 years malaysia has seen one of the fastest rates of income poverty reduction in the world this came alongside falling overall income inequality due in large part to a national policy effort to address ethnic inequalities in the wake of tragic race riots in 1969 the first paper in the two part series examined various measures of ethnic inequality this second paper assesses the role that changes in between group inequality played in malaysia s success against poverty to address this question a new decomposition method is applied to survey data spanning 50 years the results indicate that ethnic redistribution helped reduce poverty but it was not as important as within group redistribution or mean income growth a pure ethnic redistribution effect is defined and isolated empirically sizable potential gains to the country s poor from ethnic redistribution are revealed in the 1970s suggesting that the early policy effort made sense the absolute gains have faded over time and are now small though the elasticity of national poverty to ethnic redistribution remains quite high

bayesian estimation of possibly similar yield densities implications for rating crop insurance contracts the agricultural act of 2014 solidified insurance as the cornerstone of u s agricultural policy the congressional budget office 2014 estimates that this act will increase spending on agricultural insurance programs by 5 7 billion to a total of 89 8 billion over the next decade in light of the sizable resources directed toward these programs accurate rating of insurance contracts is of the utmost importance to producers private insurance companies and the federal government unlike most forms of insurance agricultural insurance is plagued by a paucity of spatially correlated data a novel interpretation of bayesian model averaging is used to estimate a set of possibly similar densities that offers greater efficiency if the set of densities are similar while seemingly not losing any if the set of densities are dissimilar simulations indicate that finite sample performance in particular small sample performance is quite promising the proposed approach does not require knowledge of the form or extent of any possible similarities is relatively easy to implement admits correlated data and can be used with either parametric or nonparametric estimators we use the proposed approach to estimate u s crop insurance premium rates for area type programs and develop a test to evaluate its efficacy an out of sample game between private insurance companies and the federal government highlights the policy implications for a variety of crop state combinations consistent with the simulation results the performance of the proposed approach with respect to rating area type insurance in particular small sample performance remains quite promising

estimation of mixture models using cross validation optimization implications for crop yield distribution modeling a critical issue in identifying an appropriate characterization of crop yield distributions is that the best fitting distribution in an in sample framework is not necessarily the best choice out of sample this study provides a methodology for estimating flexible and efficient mixture models using cross validation that alleviates many of these associated model selection issues the method is illustrated in an application to the rating of group risk insurance products results indicate that nonparametric models often fit best in sample but are inefficient and consistently overstate true rates and vice versa for parametric models the proposed model provides unbiased rates and also has desirable efficiency properties

toward a normative theory of crop yield skewness while the preponderance of empirical studies point to negative crop yield skewness in a wide variety of contexts the literature provides few clear insights on why this is so the purpose of this paper is to make three points on the matter we show formally that statistical laws on aggregates do not suggest a normal yield distribution we explain that whenever the weather conditioned mean yield has diminishing marginal product then there is a disposition toward negative skewness in aggregate yields this is because a high marginal product in bad weather states stretches out the left tail of the yield distribution relative to that of the weather distribution turning to disaggregated yields we decompose unconditional skewness into weather conditioned skewness plus two other terms and study each in turn

on the measurement of poverty official statistics in the united states and the united kingdom show a rise in poverty between the 1970 s and the 1980 s but scepticism has been expressed with regard to these findings in particular the methods employed in the measurement of poverty have been the subject of criticism this paper re examines three basic issues in measuring poverty the choice of the poverty line the index of poverty and the relation between poverty and inequality one general theme running through the paper is that there is a diversity of judgments which enter the measurement of poverty and that it is necessary to recognize these explicitly in the procedures adopted there is likely to be disagreement about the choice of poverty line affecting both its level and its structure in this situation we may only be able to make comparisons and not to measure differences and the comparisons may lead only to a partial rather than a complete ordering the first section of the paper discusses the stochastic dominance conditions which allow such comparisons illustrating their application by reference to data for the united states the choice of poverty measure has been the subject of an extensive literature and a variety of measures have been proposed in the second section of the paper a different approach is suggested considering a class of measures satisfying certain general properties and seeking conditions under which all members of the class which includes many of those proposed give the same ranking those sceptical about measures of poverty often assert that poverty and inequality are being confounded the third section of the paper distinguishes four different viewpoints and relates them to theories of justice and views of social welfare

evaluation periods and asset prices in a market experiment we test whether the frequency of feedback information about the performance of an investment portfolio and the flexibility with which the investor can change it influence her risk attitude in markets in line with the prediction of myopic loss aversion benartzi and thaler 1995 we find that more information and more flexibility result in less risk taking market prices of risky assets are significantly higher if feedback frequency and decision flexibility are reduced this result supports the findings from individual decision making and shows that markets do not eliminate such behavior

global poverty estimates a sensitivity analysis summary current estimates of global poverty vary substantially across studies we undertake a sensitivity analysis to highlight the importance of methodological choices by measuring global poverty using different data sources parametric and nonparametric estimation methods and multiple poverty lines our results indicate that estimates of global poverty vary significantly when they are based alternately on data from household surveys versus national accounts but are relatively consistent across estimation methods the decline in poverty over the past decade is found to be robust across methodological choices

the impact of household food consumption data collection methods on poverty and inequality measures in niger this paper assesses the impact of three methodologies of food data collection on the welfare distribution and poverty and inequality measures in niger the first methodology is a 7 day recall period the second one is a usual month and the third one is a 7 day diary the paper finds that there is a difference in the distribution of welfare between on the one hand the two first methodologies 7 day recall and a usual month which give results close to each other and on the other hand the 7 day diary method when considering annual per capita consumption the 7 day diary lags the 7 day recall by 28 percent this gap is not only at the mean of the distribution it has been found at any level these differences lead to differences in poverty and inequality measures even when alternate poverty lines are used this study underscores the problem that many developing countries face when it comes to monitoring poverty indicators over time where different methodologies have been used over the years