a joint product analysis of the adoption of modern cereal varieties in developing countries semi dwarf wheat varieties have been slow to diffuse in some regions despite their superior grain yield we analyze varietal differences in yields of the joint products of grain and straw the decision to adopt new varieties and nitrogen demand the low straw yield of semi dwarf varieties under low input conditions is shown to be a plausible explanation for their slow adoption in some regions first generation modern varieties induced a large increase in the derived demand for nitrogen but subsequent varietal development appears to have had little impact on nitrogen demand

new tests of qalys when health varies over time this paper performs new tests of the qaly model when health varies over time our tests do not involve confounding assumptions and are robust to violations of expected utility the results support the use of qalys at the aggregate level i e in economic evaluations of health care at the individual level there is less support for qalys the individual data are however largely consistent with a more general qaly type model that remains tractable for applications

poverty productivity and production environment a review of the evidence abstract this paper reviews the state of knowledge about the key issues needing to be understood to satisfactorily resolve a long standing debate within the consultative group for international agricultural research cgiar system the debate revolves around the effects on various populations particularly the poor of different allocations of research effort between marginal and favoured production environments this paper specifically focuses on what is known about the geographical distribution of the rural poor across agro ecological zones and over time variations in the income generating activities including non agricultural activities engaged in by the poor are examined and the ways in which specific technology packages affect the economic well being of different types of households both directly and indirectly

sustaining growth in agriculture a quantitative review of agricultural research investments abstract growth in agriculture depends on many things but one of the most important is investment in agricultural research decision making in the agricultural research policy area can only be aided by access to better information this article overviews a recent endeavor to move policy dialogue beyond merely qualitative impressions towards a process that is underpinned with new and cogent data the data used have been assembled at isnar in a manner designed to make comparisons both over time and between countries more valid than has been the case in the past the comparisons thus possible reveal considerable diversity both between countries and between broad regional aggregations also illuminated here are issues related to the commodity orientation capital and labor intensity and size and scope of particular national programs

money income prices and interest rates including data from the 1980s sharply weakens the postwar time series evidence indicating significant relationships between money however defined and nominal income or between money and either real income or prices separately focusing on data from 1970 onward destroys this evidence altogether evidence indicating cointegration of real income and real money balances with due allowance for the effect of interest rates also deteriorates when the sample extends through the 1980s a positive finding is that the spread between the commercial paper rate and the treasury bill rate consistently contains highly significant information about future movements in real income copyright 1992 by american economic association

tests of utility independence when health varies over time in the conventional quality adjusted life year qaly model people s preferences are assumed to satisfy utility independence when health varies over time utility independence implies that the value attached to a health state is independent of the health state that arise before or after it two separate studies were conducted involving a total of 155 respondents in study one we conducted five tests of utility independence using a standard gamble question three of the tests of utility independence were repeated in study two after randomisation was introduced in order to take account of possible ordering effects utility independence holds in the majority of cases examined here and so our work generally supports the use of utility independence to derive more tractable models

new markets and technological change for the traditional cereals in semiarid sub saharan africa the malian case during the last three decades in sub saharan africa development and research resources have concentrated on the higher rainfall and irrigated regions especially on export crops and the principal food crops grown there there has been much less concern and investment in semiarid regions without irrigation another negative factor has been the lack of public policy concern with the profitability of the basic food crops with good weather prices collapse with bad weather governments and ngos dispense food crops as food aid or at subsidized prices this article documents the importance of the demand side to facilitate diffusion of new technologies for the basic food commodities of semiarid regions the traditional cereals with farm programming models aggregated into a sector model the combination of technological change and demand shifts for sorghum are evaluated in one semiarid region where the traditional cereals are concentrated it focuses on combining policies to increase the prices farmers receive after introduction of technologies that use higher input levels it also compares benefits of a strategy that focuses on yield and demand increases for a traditional cereal of the semiarid region sorghum with two alternative strategies for the higher rainfall zone

modern varieties productivity and sustainability recent experience and emerging challenges abstract the contribution of modern varieties of cereal crops to increased productivity in the postgreen revolution period is reviewed and the future role of hybrids and biotechnology discussed particular emphasis is given to the ways in which modern varieties may contribute to input efficiency and sustainability finally economic and institutional issues in restructuring plant breeding programs for the most efficient use of resources in both the public and private sectors and at the national and international levels are analyzed

stability of the money demand function in asian developing countries previous studies that estimated the money demand function in asian developing countries either employed traditional estimation techniques or recently popularized cointegration technique while the first group suffers from spurious regression problems the second group interpreted their finding of cointegration as a sign of stability of estimated parameters this study after incorporating the cusum and cusumsq tests into cointegration analysis shows that in some asian countries even though real m1 or m2 monetary aggregates are cointegrated with their determinants the estimated parameters are unstable

the demand for m1 in the u s a 1960 1988 estimated u s m1 demand functions appear unstable regularly breaking down over 1960 1988 e g missing money great velocity decline m1 explosion we propose a money demand function whose arguments include inflation real income long term bond yield and risk t bill interest rates and learning curve weighted yields on newly introduced instruments in m1 and non transactions m2 the model is estimated in dynamic error correction form it is constant and with an equation standard error of 0 4 variance dominates most previous models estimating alternative specifications explains earlier breakdowns showing the model s distinctive features to be important in accounting for the data

stochastic trends and economic fluctuations are business cycles mainly the result of permanent shocks to productivity this paper uses a long run restriction implied by a large class of real business cycle models identifying permanent productivity shocks as shocks to the common stochastic trend in output consumption and investment to provide new evidence on this question econometric tests indicate that this common stochastic trend cointegration implication is consistent with postwar u s data however in systems with nominal variables the estimates of this common stochastic trend indicate that permanent productivity shocks typically explain less than half of the business cycle variability in output consumption and investment copyright 1991 by american economic association

the validity of qalys under non expected utility this paper examines applications of non expected utility in the health domain the most widely used utility model in health economics the time linear qaly model assumes i separability of quality of life and life duration and ii linearity of the utility for life duration we perform new tests which are robust to violations of expected utility of these two assumptions the data support separability but show that the utility for life duration is concave rather than linear the finding of concave utility may not be surprising in itself the contribution of this paper is to demonstrate this empirically without being invalidated by violations of expected utility it has by now been widely recognised that expected utility is not valid as a descriptive theory of decision under uncertainty the descriptive violations of expected utility have led to the emergence of several non expected utility theories the increasing importance of non expected utility makes it necessary to reassess applications that were previously based on expected utility examples of such reassessments include karni and safra 1989 crawford 1990 and dekel et al 1991 for game theory machina 1995 and wakker et al 1997 for insurance theory and cubitt and sugden 1998 for the evolution of preferences see starmer 2000 for a review the present paper examines applications of non expected utility in the health domain we focus on the main utility model in health economics the quality adjusted life years qaly model and present new theoretical foundations for and empirical tests of this model under non expected utility qalys provide a simple way to combine the two dimensions of health life duration and health status into a single utility index they are intuitively appealing which facilitates communication to policy makers and analytically tractable which explains their widespread use in practical studies a disadvantage of qalys is that they only represent individual preferences over health under strong assumptions if these assumptions do not hold then the use of qalys may lead to incorrect policy recommendations to gain insight into the validity of qalys it is necessary to assess the restrictiveness of the assumptions that the qaly model imposes in the most common version of the qaly model the time linear qaly model the utility of the health outcome of spending t years in health state q is equal to tv g where v is a utility function over health states that is in the time linear qaly model the utility for duration is linear it is well known that under expected utility linearity of utility implies risk neutrality as it turns out risk neutrality with

a semi separable utility function for health profiles under expected utility the individual preferences over lotteries on health profiles can be represented either by a multiplicative utility function when mutual utility independence is claimed or an additive one known as qaly when it is claimed additive independence in this paper we impose a weaker condition i e utility independence with respect to the initial health states of an individual decision maker initial independence and we derive a semi separable utility function in addition we assess its parameters by a standard gamble procedure our results could be useful in cost utility analysis for carrying out health care program evaluations

cointegration and structural change an application to the u s demand for money wankeun oh i perform the cointegration tests for the trivariate model of real monetary aggregates real personal income and short term interest rate i find the existence of a long run relationship among these three variables to check the stability of a long run money demand relationship i implement a rank constancy test and cusum test the test results show that real mi is relatively more stable than other aggregates but structural change occurred during the 1970s and early 1980s this is consistent with prior research on money demand jel e41 i introduction incorporating structural change when performing tests on the properties of stochastic processes is important because structural breaks may cause misspecification problems most tests of structural change consider the stability of the parameters over time tests for structural breaks and parameter stability have been studied extensively a partial list includes chow 1966 brown et al 1975 harvey and collier 1977 king 1987 ploberger et al 1989 in the context of unit root processes perron 1989 showed that the presence of a one time change in the level or slope of the trend function can severely distort the results of unit root tests and it is natural to ask how structural change can distort the results of cointegration tests 1 traditional tests of parameter stability ask if the parameters of the model are constant in contrast quintos 1993 proposed a test for stability of the long run relationship s in a cointegrating regression the test is based on johansen s 1988 framework and the test statistic is simply the weighted sum of the likelihood ratio test as given in johansen 1988 quintos s rank test is very different from the traditional cusum and chow tests for parameter stability because her rank test checks for stability of the cointegrating relationship between variables in other words the rank test checks whether cointegration holds for the full period the traditional cusum and chow tests assume that cointegration holds for the full period or does not hold for the full period and tests simply whether the cointegration vector changes for example if there is cointegration from 1960 1990 between revenues and expenditures with cointegrating vector 1 1 then the cusum and chow tests check whether the cointegra ting vector 1 1 is stable throughout the period the rank constancy test checks whether the cointegration rank is stable throughout the period not whether the cointegrating vector is stable at 1 1 in other words the rank test will check whether for example there is cointegration from 1960 1980 and no cointegration from 1980 onward the chow and cusum tests are not designed to check for this the structural stability of money demand relationships has been the issue of a substantial number of empirical studies 2 in general structural stability means stability of the underlying behavioral equations 3 this term includes parameter stability and stability of functional form friedman s 1990 research on the money demand function assumes that a long run equilibrium relationship exists between real money balances real income or real wealth and the opportunity cost of holding real money balances recently there has been strong evidence of cointegration between real income real money balances and a nominal interest rate for instance engle and granger 1987 dickey et al 1991 hafer and jansen 1991 hoffman and rasche 1991 mehra 1993 miller 1991 fischer and nicoletti 1993 and baba et al 1992 report on cointegration among variables in u s aggregate money demand jain and moon 1994 report on cointegration in u s sectoral money demand yashiv 1994 and engsted 1993 on money demand in a high inflation country and hoffman et al 1995 report on international money demand comparison this article asks if long run money demand relationship is stable and if so for which measure of money is it stable over time

long run income and interest elasticities of money demand in the united states econometric techniques designed to accommodate nonstationary data are used to reexamine the stability of interest and income elasticities of money demand in the united states estimates based on postwar monthly data reveal a stable relationship between m1 velocity and various measures of interest rates that proxy the opportunity cost of holding money balances tests for the existence of cointegration and methods used to estimate the income and interest elasticities are based on procedures prescribed by soren johansen 1988 corresponding error correction estimates offer insight as to the dynamics of the process that maintains the equilibrium relation between velocity and interest rates copyright 1991 by mit press

multiattribute utility theory without expected utility foundations methods for determining the form of utilities are needed for the implementation of utility theory in specific decisions an important step forward was achieved when utility theorists characterized useful parametric families of utilities and simplifying decompositions of multiattribute utilities the standard development of these results is based on expected utility theory which is now known to be descriptively invalid the empirical violations of expected utility impair the credibility of utility assessments this paper shows however that parametric and multiattribute utility results are robust against the major violations of expected utility they retain their validity under nonexpected utility theories that have been developed to account for actual choice behavior to be precise characterizations of parametric and multiattribute representations are extended to rank dependent utility state dependent utility choquet expected utility and prospect theory

returns to investment in less favored areas in developing countries a synthesis of evidence and implications for africa abstract a large proportion of world s population lives in marginal or less favored areas these areas are of home to the poorest segment of the population particularly in rural areas in the past government has targeted their resources mostly to the high potential or irrigated areas these investments have generated rapid growth in agricultural production for example the so called green revolution in south and southeast asia in the 1970s and 1980s which in turn has helped to alleviate rural and urban poverty however as investments continue to increase in these favored areas their marginal returns have begun to decline and environmental problems are emerging evidence shows that it is in the marginal areas or less favored areas where many investments may have higher returns today these investments may have even larger impacts on poverty reduction and environmental protection as poor people are increasingly concentrated in the marginal areas where natural resources have already been severely degraded this study synthesizes some recent studies from india and china on the relative returns to investments in favored and less favored areas and presents some preliminary evidence from uganda and offers some policy implications for africa on how governments and international donors can reprioritize their investment portfolio in order to achieve multiple goals of growth poverty reduction and environmental protection

economic policies and demand for money evidence from canada this study identifies canadian fiscal and monetary policy regime changes that could influence the services of money it is argued that if these policy regime changes were not incorporated in the estimation of demand for real balances the resulting estimate would be biased and unstable using canadian monthly data for the january 1975 to june 2001 period the paper estimates a standard demand for money m1 function with and without these policy regime changes it was found the demand for money in canada is stable over the short and long run periods when these policy regime changes are incorporated and the estimated coefficients have correct signs

the reincarnation of keynesian economics this paper discusses the reemergence of keynesian economics during the past decade it highlights the substantial differences between new keynesian economics and the convictions of early keynesians in particular it points out that new keynesians have adopted many views that were once considered monetarist or classical it concludes that the term keynesian may have outlived its usefulness this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

short run money demand abstract the conventional wisdom holds that the short run demand for money is unstable this paper challenges the conventional view by finding a stable demand for m1 in u s data from 1959 through 1993 the approach follows previous work in interpreting long run money demand as a cointegrating relation and it uses goldfeld s partial adjustment model to interpret short run dynamics the key innovation is the choice of the interest rate in the money demand function most previous work uses a short term market rate but this paper uses the average return on near monies the savings accounts and money market mutual funds that are close substitutes for m1 this choice helps rationalize the behavior of money demand in particular the increase in the volatility of velocity after 1980 is explained by increased volatility in the returns on near monies

a theory of anticipated utility abstract a new theory of cardinal utility with an associated set of axioms is presented it is a generalization of the von neumann morgenstern expected utility theory which permits the analysis of phenomena associated with the distortion of subjective probability

research for marginal environments are we underinvested abstract evidence is presented to show that adoption of modern wheat varieties in rainfed marginal environments of the developing world has lagged substantially compared to adoption in favoured well watered areas possible reasons for this lag are discussed and a simple congruency model is used to examine the case for shifting research resources from favoured to marginal environments with particular reference to wheat breeding application of the model to resource allocation in wheat research at the international level and for india a major wheat producing country suggests that the proportion of research resources invested in marginal environments has been adequate or even a bit high relative to the share of the value of wheat produced in these environments taking into account both efficiency and equity criteria

linking technical change to research effort an examination of aggregation and spillovers effects we used a disaggregate approach to examine investment efficiency of wheat breeding research in india india s total research effort comprizes 20 research programs spread across 50 experiment stations a technology spillover matrix was constructed for both potential and actual spillovers spillovers and free riding were dominant characteristics of technical change during the period studied although the aggregate rate of return to wheat improvement research in india was estimated to be 55 eight programs were found to have earned a negative rate of return when spillins were taken into account research output is concentrated on a few strong programs the two strongest programs generated 75 of all the technical change benefits even though they claimed just 22 of research resources these two programs include a significant degree of overlap while on the other hand many farmers were not reached by any of the programs 56 and 78 of rainfed and durum area respectively in 1990 was still sown with pre 1976 varieties 2001 elsevier science b v all rights reserved

life cycle preferences over consumption and health when is cost effectiveness analysis equivalent to cost benefit analysis this paper studies life cycle preferences over consumption and health status we show that cost effectiveness analysis is consistent with cost benefit analysis if the lifetime utility function is additive over time multiplicative in the utility of consumption and the utility of health status and if the utility of consumption is constant over time we derive the conditions under which the lifetime utility function takes this form both under expected utility theory and under rank dependent utility theory which is currently the most important nonexpected utility theory if cost effectiveness analysis is consistent with cost benefit analysis it is possible to derive tractable expressions for the willingness to pay for quality adjusted life years qalys the willingness to pay for qalys depends on wealth remaining life expectancy health status and the possibilities for intertemporal substitution of consumption

the demand for broad money in the uk does credit matter empirical work based on portfolio theories of the demand for money traditionally treat the quantity of money demanded as the outcome of a decision to allocate a fixed amount of wealth by contrast this paper argues that people commonly hold money at the same time that they borrow thus changes in gross wealth will cause changes in the quantity of money people wish to hold this suggests that empirical work in the demand for broad money should pay attention to the cost of credit we estimate the demand for broad money in the uk 1969q1 1994q4 using the recently developed time series techniques of dols and fpls our findings show that the cost of credit variables are important determinants of the demand for real m4 in the uk in contrast to the recent empirical literature our results provide strong evidence for the hypothesis that interest rates have a short and long term causal impact on real money demand in the uk

eliciting von neumann morgenstern utilities when probabilities are distorted or unknown this paper proposes a new method the gamble tradeoff method for eliciting utilities in decision under risk or uncertainty the elicitation of utilities to be used in the expected utility criterion turns out to be possible even if probabilities are ambiguous or unknown a disadvantage of the tradeoff method is that a few more questions usually must be asked to clients also the lotteries that are needed are somewhat more complex than in the certainty equivalent method or in the probability equivalent method the major advantage of the tradeoff method is its robustness against probability distortions and misconceptions which constitute a major cause of violations of expected utility and generate inconsistencies in utility elicitation thus the tradeoff method retains full validity under prospect theory rank dependent utility and the combination of the two i e cumulative prospect theory the tradeoff method is tested for monetary outcomes and for outcomes describing life duration we find higher risk aversion for life duration but the tradeoff method elicits similar curvature of utility apparently the higher risk aversion for life duration is due to more pronounced deviations from expected utility

the stability of long run money demand in five industrial countries abstract this study provides strong evidence for the stability of long run demand functions for narrowly defined money m1 in five industrial countries u s japan canada u k and west germany using post war quarterly data evidence of stability is examined using two different estimation techniques and through a formal test of parameter constancy designed specifically for cointegrating vectors in the majority of these countries the key to stability is the imposition of a unitary long run income elasticity that is rarely rejected by the data

monetary shocks in the g 6 countries is there a puzzle les auteurs cherchent a clarifier la dynamique du mecanisme de transmission de la politique monetaire l identification des chocs de politique monetaire est au coeur de ce genre d analyse divers chercheurs ont reussi recemment a isoler de tels chocs en imposant des restrictions de suridentification a des modeles vectoriels autoregressifs var

a simple preference foundation of cumulative prospect theory with power utility most empirical studies of rank dependent utility and cumulative prospect theory have assumed power utility functions both for gains and for losses as it turns out a remarkably simple preference foundation is possible for such models tail independence a weakening of comonotonic independence which underlies all rank dependent models together with constant proportional risk aversion suffice in the presence of common assumptions weak ordering continuity and first stochastic dominance to imply these models thus sign dependence the different treatment of gains and losses and the separation of decision weights and utility are obtained free of charge

lessons on monetary policy from the 1980s t he half decade running from mid 1982 to mid 1987 was a pretty good era for u s monetary policy as these things go a sharp easing of policy beginning some time around midyear 1982 helped set in motion a recovery from the most severe business downturn the united states had experienced since the 1930s a downturn that tight monetary policy earlier on had deliberately brought about in order to slow the alarming acceleration of prices the recovery that ensued developed into a sustained expansion that continued without interruption through the end of 1987 thereby setting a new record for the longest recorded business expansion in u s peacetime experience a fiscal policy based on unprecedentedly large and continually growing structural budget deficits was a major factor underlying this record length expansion but at least monetary policy did not stand in the way just as importantly the severe 1981 82 recession served its intended purpose of substantially restoring price stability and even after five years of expansion inflation remained modest by recent historical standards at least as judged by these outcomes for the standard objectives of macroeconomic policy u s monetary policy was a distinct success during these years economists hoping to say something useful about monetary policy have had a tougher time the quantitative relationships connecting income and price movements to the growth of familiar monetary aggregates including especially the m1 measure of the money stock that had been the chief focus of monetary policy during 1979 82 utterly fell apart during this period moreover the collapse of these long standing

financial innovation and monetary control the economic conjuncture of the 1970s and 1980s was extremely disturbed with high and volatile inflation interest and exchange rates this led the monetary authorities of most western coun tries to adopt monetary targets as a financial discipline to constrain inflationary pressures but this same conjuncture also encouraged the process of financial innovation which subsequently eroded the stability of the links between certain monetary aggregates and nominal incomes which had provided the empirical basis for such targetry thus in his recent book financial in novations and the money supply podolski 1986 argues that