does grassroots democracy reduce income inequality in china abstract using village and household survey data collected from 48 villages of eight chinese provinces for the period 1986 2002 this paper studies how the introduction of village elections affects income distribution at the village level we estimate both a static fixed effect panel model and a dynamic panel model for the within village gini coefficient and take care of the endogeneity of the introduction of elections the dynamic panel model shows that having elections reduces the gini coefficient by 0 04 or 14 3 of the sample average we also find that elections tend to increase the income shares of poorer portions of the population further econometric analysis based on dynamic panel models shows that elections increase per capita public expenditures by 271 yuan but do not increase the level or progressiveness of net or total income transfer in a village therefore elections positive role in reducing income inequality is not played through more income redistribution but through more pro poor public investment

the distribution of income in china preface notes on the contributors introduction k griffin z renwei part 1 the distribution of income household income and its distribution a r khan k griffin c riskin z renwei three features of the distribution of income during the transition to reform z renwei part 2 income and wealth in rural china the determinants of household income in rural china a r khan the distribution of wealth in rural china t mckinley income distribution and poverty in rural china c riskin part 3 employment and human capital workers in china s rural industries j knight s lina why urban wages differ in china j knight s lina the determinants of educational attainment j knight l shi annex the 1988 household sample survey m eichen z ming index

dynamic animal economics market equilibrium dynamics of herd inventory management are derived for homogenous female populations short run supply is backward bending in response to permanent changes in demand and is rising in response to transitory changes in demand increasing inventories are associated with high and falling prices and decreasing inventories with low and rising prices but there is no market instability in this these unusual intertemporal substitution effects follow from both rational expectations and appropriately formulated cobweb models and go part of the way toward explaining hog and cattle inventory cycles

access to markets and rural poverty evidence from household consumption in china abstract this paper presents evidence on the effects of access to domestic and international markets on per capita consumption of households using data from rural china the econometric analysis uses alternative identification schemes to address the potential endogeneity of access to markets we use straight line distances to coastline and navigable river along with the topography of the intervening counties as sources of exogeneous variations we also use identification through heteroskedasticity which does not rely on standard exclusion restrictions the results from alternative identification schemes show that better access to both domestic and international markets has positive effects on per capita consumption the domestic market effect is significantly larger in magnitude and there is complementarity between the access to domestic and international markets

the effect of household wealth on fertiliser use in the presence of uncertainty abstractprevious studies of wealth effect on fertiliser use have produced mixed results on the direction of the impact our article looks at this issue from a different perspective by considering the presence of doubts such as about the true content or general effectiveness of fertiliser we show theoretically that there could be different responses between the high wealth and low wealth farmers we analyse also the wealth effect empirically using household panel data from the hebei province of china the results indicate that the direction of wealth effect does indeed change across the different levels of farmers wealth

a farm firm model of machinery investment decisions this article presents a multiperiod mixed integer programming mmip model of optimal machinery decisions infinite horizon valuation models of replacement and other investment situations are conceptualized in the context of a finite programming model dual properties of the mmip model are used to identify and value opportunity costs involved in investment decisions of farm machinery the interdependent nature of investment and production relationships necessary for solving these values emphasizes the importance of a holistic firm perspective in analyzing farm machinery investment strategies an empirical situation is used to demonstrate model application

population growth and savings in ldcs a survey article both population growth and savings have traditionally taken a certain place of pride among models of growth and development the purpose of this paper is to examine the literature concerning the hypothesis that the savings rate itself is a function of the population growth rate and this effect exacerbates the negative effect of population on economic growth the evidence is examined from three perspectives i macroeconomic effects of variations in the age structure of the population ii choice theoretic models of family decision making particularly the joint determination of fertility decisions and savings decisions and iii market level interactions of variables which determine individual decisions the paper concludes that both population growth and savings rates are inextricably tied up in the process of economic development there are many ways in which the two variables may interact but no generalizations can be safely made across countries

cattle cycles heterogeneous expectations and the age distribution of capital abstract this paper builds a dynamic forward looking model describing the approximate 10 year cattle cycle the theoretical model improves on existing models by 1 keeping track of the age distribution of the capital stock 2 allowing for heterogeneous expectations and 3 recognizing that cow calf operators make investment decisions on both the cow and calf margins the structural parameters are estimated with gmm techniques and used to produce impulse response functions which show that the model endogenously propagates shocks to produce 10 year cattle cycles without relying on shocks that hit every 10 years focusing solely on several major macroeconomic shocks i also show that the model is capable of matching the timing and amplitude of the u s cattle cycle

the tale of the tails canadian income inequality in the 1980s and 1990s we present new evidence on levels and trends in after tax income inequality in canada between 1980 and 2000 we argue that existing data sources may miss changes in the tails of the income distribution and that many of the changes in the income distribution have been in the tails for this reason we turn to an alternative source in particular we construct data on after tax and transfer income using census files augmented with predicted taxes based on information available from administrative tax data using these data we find that canadian after tax inequality levels are substantially higher than has been previously recognized primarily because income levels are lower at the bottom of the distribution than in commonly used survey data we also find larger long term increases in after tax income inequality and far more variability over the economic cycle this raises interesting questions about the role of the tax and transfer system in mitigating both trends and fluctuations in market income inequality les auteurs presentent de nouveaux resultats sur les niveaux et tendances de l inegalite des revenus apres impots au canada entre 1980 et 2000 on suggere que les donnees existantes peuvent avoir ignore des changements dans les extremites de cette distribution alors que le gros des changements y etait concentre pour cette raison les auteurs se sont tournes vers une autre source de donnees ils ont construit une base de donnees sur les revenus apres impots et les paiements de transfert en utilisant les donnees du recensement ainsi que des donnees additionnelles sur les impots prevus a partir de renseignements disponibles dans les dossiers administratifs on decouvre que les niveaux d inegalite des revenus apres impots sont beaucoup plus eleves que ce qu on a suggere jusqu ici d abord parce que les niveaux de revenus sont plus bas au pied de la distribution que ne le suggerent les donnees d enquetes on decouvre aussi un accroissement plus grand a long terme de l inegalite des revenus apres impots et une plus grande variabilite au cours du cycle economique voila qui souleve des questions interessantes a propos du role de la fiscalite et du systeme de paiements de transfert dans la modulation de la tendance et des fluctuations dans l inegalite des revenus du marche

investment demand when economic depreciation is stochastic the neoclassical model of investment by a risk neutral firm is generalized to include uncertainty about the rate of depreciation by replacing the deterministic capital accumulation identity with a stochastic variant ito s stochastic dynamic optimization is used to derive conditions for optimal investment a nondegenerate steady state distribution of the capital stock is shown to exist and is derived for the empirically important case of a normalized quadratic profit function and static price expectations it is demonstrated for this case that uncertainty about the rate of depreciation decreases the expected steady state capital stock and investment

rethinking inequality decomposition with evidence from rural china we examine inequality decompositions by income source and describe a general regression based approach for decomposing inequality the approach provides an efficient and flexible way to quantify the roles of variables like education and age in a multivariate context we illustrate the method using survey data from china the empirical results demonstrate how sharply different conclusions can emerge for different decomposition rules we explain how these differences reflect the treatment of equally distributed sources of income and we discuss implications for how results from inequality decomposition are interpreted a renewed interest in economic growth political economy and the distribution of income has again placed the economics of income inequality firmly on the academic research agenda relatively poor performances in latin america have been contrasted with success stories in east asia and recent evidence on the changing income distributions of emerging economic giants like china has

a nonlinear mixed integer multiperiod firm model abstract we formulate and test an advanced multiperiod model for strategic firm planning this has not been previously considered as a mixed integer nonlinear problem minlp our approach is to show the differences between a linear and a nonlinear mixed integer approach the key property of our model is the simplicity and efficiency of generating optimal firm strategies a cornerstone for managerial acceptance our purpose is to maximize the discounted value of net income and return on investment roi our model has been tested on some major finnish firms and it seems to give reliable results with the data of our sample firm for this paper optimal roi and optimal net income presuppose different strategies when optimizing roi the model balances between cash and fixed assets while optimizing net income results in an intensive investment program even if our sample firm is but one case the results are indicative of some fundamental principles governing managerial decision making

income inequality within and across counties in rural china 1988 and 1995 abstract using household data from samples covering 18 provinces in 1988 and 1995 income inequality within and between counties in rural china is assessed the approach enables us to aggregate average income and income inequality to the levels of provinces and the three regions comprising eastern central and western china most of income inequality in rural china in 1995 was found to be spatial and the uneven development of mean income across counties stood for most but not all of the rapid increase in income inequality mean income of the three regions diverged most forcefully

labor market participation of chinese agricultural households empirical evidence from zhejiang province abstract this work is devoted to the analysis of the different labor market participation regimes of chinese farm households over the reform process in the 1980s and 1990s using household data over the period 1986 2002 from the province zhejiang we apply a multinomial logit model to empirically examine household farm and regional characteristics affecting the probability that farmers participate in one of four alternative labor market regimes as generally accepted off farm participation is the dominant form of farm households labor market participation but rural households show additionally a significant impact on rural employment mainly linked with non agricultural household business results suggest that labor market decisions are significantly related to several family farm and village characteristics in particular we find education to be a key determinant of participation furthermore results point to a higher probability of female household members to take up off farm work

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

national wage trends and migration in a chinese village economy a micro level modeling approach based on a composite utility function china s economy is experiencing a regime shift away from a fully elastic supply of labor from a large pool of rural surplus labor and toward a situation of increasing labor scarcity and rising wage rates moreover faster wage increases in the regions of origin of many rural urban migrants are likely to affect the dynamics of inter regional migration these wage trends have implications at the local level in particular in a setting in which migration connects rural communities to the national labor market and in which migration is of high importance for the livelihoods of rural households taking a village perspective this article develops a village computable general equilibrium model to study local impacts of current wage trends in china as a central piece of the model the role of access to migration for household livelihoods is recognized access to migration is linked to household demographics and included in the model through a composite utility function that captures household preferences and disutilities associated with alternative off farm activities simulation results illustrate how households utility considerations affect migration responses to national wage changes statements about possible impacts on village level labor supply land use and agricultural production are made when migration wages and local off farm wages are simulated to increase an overall increase in household and village migration and a higher supply of labor to local off farm labor markets is accompanied by a contraction of farm production although land is reallocated between households with different migration responses total agricultural output declines

precautionary behavior migrant networks and household consumption decisions an empirical analysis using household panel data from rural china abstract we develop a test of precautionary behavior in the consumption decisions of rural agricultural households among surveyed households facing a median level of consumption risk 10 of savings can be attributed to a precautionary motive and this increases to 15 for households with consumption per capita below the poverty line we next use distant lags of local rainfall shocks uncorrelated with current consumption growth to identify the size of migrant networks outside the village and then present evidence that both poor and nonpoor households engage in less precautionary saving as the size of the village migrant network increases

principles of dynamic optimization in resource management abstract the type of resource problem amenable to static analysis is distinguished from that requiring dynamic analysis possibly due to the apparent complexity of optimal control theory methods often dynamic models have not been applied where they would be appropriate in this article dynamic programming arguments are used to derive optimality conditions directly and simply they are derived for a renewable resource such as a fishery but they have application to resource management in general the approach is illustrated by examples to the extraction of a depletable resource to feeding for weight gain and to applying fertilizer when some fertilizer carriers over from one crop season to another conditions for the optimal replacement of biological units are also considered

dynamic input demand functions and resource adjustment for us agriculture state evidence abstract the paper presents an econometric model of dynamic agricultural input demand functions that include research based technical change and autoregressive disturbances and fits the model to annual data for a set of state aggregates pooled over 1950 1982 the methodological approach is one of developing a theoretical foundation for a dynamic input demand system and accepting state aggreage behavior as approximated by nonlinear adjustment costs and long term profit maximization although other studies have largely ignored autocorrelation in dynamic input demand systems the results show shorter adjustment lags with autocorrelation than without dynamic input demand own price elasticities for the six input groups are inelastic and the demand functions possess significant cross price and research effects

the evolution of income inequality in rural china abstract in this article we analyze trends in income inequality and the distribution of income in rural china from 1987 to 1999 we find an uneven but long run increase in inequality in rural china and show that nearly half of the rural population was not much better off in 1999 than at the start of the period we rule out geography as the most important factor for explaining income differences and the increases that occurred over time much more important were growing differences between households living in the same village province or region we also find that access to nonagricultural incomes from local wage employment and family businesses contributes to inequality but that employment outside the county in which a household lives and accessed through temporary migration is relatively equalizing finally we document important strengths and weaknesses of the primary data set used for our analyses relative to other data sources available for study of inequality and poverty in rural china

measuring poverty in a growing world or measuring growth in a poor world the extent to which growth reduces global poverty has been disputed for 30 years although there are better data than ever before controversies are not resolved a major problem is that consumption measured from household surveys which is used to measure poverty grows less rapidly than consumption measured in national accounts in the world as a whole and in large countries particularly india china and the united states in consequence measured poverty has fallen less rapidly than appears warranted by measured growth in poor countries one plausible cause is that richer households are less likely to participate in surveys but growth in the national accounts is also upward biased and consumption in the national accounts contains large and rapidly growing items that are not consumed by the poor and not included in surveys so it is possible for consumption of the poor to grow less rapidly than national consumption without any increase in measured inequality current statistical procedures in poor

long run versus short run planning horizons and the rangeland stocking rate decision reduced future forage production diminished range condition and reduced animal performance have been major factors considered when setting rangeland stocking rates the relative economic importance of diminished current period animal performance versus intertemporal forage production impacts was investigated using a dynamic optimal control model the model is applied to yearling stocker production in eastern colorado results indicate that intertemporal grazing impacts to forage production are not that important reduced weight gain during the current period drives the economic stocking rate decision further ranchers have no economic incentive as profit maximizers to continually overgraze the range

investment and disinvestment principles with nonconstant prices and varying firm size applied to beef breeding herds variable beef breeding herd sizes are found to be optimal given cyclical beef prices traditional replacement theory does not allow variable firm size because unequal investment replacement and disinvestment culling rates are not possible if firm size changes cost of production per unit endogenously changes given a u shaped cost curve optimal investment and disinvestment rules for variable firm size are developed based upon the firm s cost curve and discounted net revenue flows for a finite rolling planning horizon current and future investment and disinvestment decisions are linked by their mutual effect on firm size and hence production cost per unit

animal health inputs endogenous risk general infrastructure technology adoption and industrialized animal agriculture abstract this paper develops a microeconomic model of concentrated animal feeding operations that admits roles for all of animal health inputs genetic profile choices and the pertaining economic infrastructure the basic model emphasizes how time on feed feed density and biosecurity choices interact as well as how these choices respond to i input prices and ii attributes regarding animal productivity parameters that might be influenced by policy choices such as animal welfare strictures and restraints on use of medication we show that ostensibly substituting inputs in protecting against animal health risks may in fact be complements and that the model s production choices come as a complementary package we then extend the model to endogenize the choice of animal genetics a finding is that innovations in general infrastructure encourage herd owners to choose more feed efficient but less hardy animals higher feed conversion efficiency then induces the use of denser feed rations accelerated finishing and greater levels of biosecurity actions at farm perimeters our theory provides a coherent framework for explaining associations among inputs and outcomes that are linked with confined animal agriculture it also explains how animal protein supply chain technology adoption and performance can differ according to a region s state of infrastructure why responses to a change in infrastructure may be large and why public sector efforts to reduce production risk may beget private sector effort to do so

ranking income distributions a large variety of policy questions involve choices between social states and a consequent ordering of the feasible alternatives when these social states are related to the levels of welfare experienced by individuals or households two central issues stand out in determining the relative desirability of different social outcomes one of these is the essentially positive exercise of achieving comparability between households with different characteristics such as composition or preferences operating in different environments for example facing different price structures the other concerns the normative judgments implicit in the evaluation of alternative allocations of resourcesthe emphasis placed on inequality between households and the extent to which greater inequality can be compensated by higher average living standards this paper focuses on the second of these issues and in doing so we abstract from the problem of household comparability by considering a population of n households identical in all respects except for their incomes the question of ordering social states then becomes one of ranking income distributions over a group of anonymous households or individuals borrowing the usual assumptions imposed on consumer preferences we may suppose that a social ordering of income distributions can be represented by a welfare function 2

firms timing of production with heterogeneous consumers i revisit endogenous timing in a quantity setting duopoly game in the basic model i show that given strong heterogeneity in consumers willingness to pay wtp and a moderately small consumer segment with low wtp sequential moving outcomes can appear in equilibrium with the follower enjoying second mover advantage owing to consumer heterogeneity in wtp there is a local property that a firm s aggressive behaviour may lead to a competitor responding more aggressively hence the sequential moves can restrict firms total outputs to avoid a price collapse and result in firms strategic choices that pareto dominate those under the simultaneous move i further generalize my results and show that although firms compete in quantity under some conditions of the demand function features of strategic complements can appear

the impact of income components on the distribution of family incomes attempts have recently been made to assign inequality contributions to various components of income this paper discusses the issues involved in such assignments and highlights the problems that follow from having a number of possible decomposition rules u s data on the distribution of family incomes are used to examine the relative influence of these income components and to evaluate empirically the performance of different decomposition rules a wide range of inequality contributions can be obtained even when restricted to only naturally derived decomposition rules some of the results are plainly absurd and serve to warn against the indiscriminate use of decomposition formulae without first investigating their properties

inequality and poverty economists tend to be quite egalitarian in their evaluation of social issues according to one survey 71 percent of american economists believe the distribution of income in the united states should be more equal and 81 percent feel that redistribution of income is a legitimate role for government support for these positions is even stronger among economists with academic affiliations and stronger still among economists with elite academic affiliations of course as economists we also have a healthy regard for economic efficiency we are concerned with the size of the economic pie as well as with its distribution borrowing from the title of alan blinder s recent book 1 economists can be characterized as having hard heads and soft hearts hardheaded in our emphasis on efficiency and soft hearted in our concern with equality the hard headed soft hearted approach is familiar to economists who argue that it is reasonable to sacrifice a bit of efficiency in return for greater equality in principle this position seems unobjectionable but i intend to argue that we may have gone too far in attempting to promote economic equality through government policies in taking this position i run the risk of being labeled hard hearted and perhaps soft headed as well an important part of my argument however is based on distinguishing between economic inequality within the large nonpoor part of the population and the poverty that afflicts a small portiop of our population i fav9r a role for government in helping the truly needy but i will attempt to show that extending that role to permit redistribution among the general population is often counterproductive

the population problem theory and evidence this study is concerned with the relationships among population growth poverty and environmental degradation with particular focus on the situation in developing countries the author rejects the concept of a general theory of fertility behavior in favor of an interpretation of these relationships which might be applicable to certain situations in the poorest parts of the indian subcontinent and sub saharan africa such situations include unacceptable risks of maternal death for poor illiterate women and a condemnation to extreme poverty in conditions of the deterioration of local resources and of the environment the author concludes that population growth rates are too high in certain specific areas and that an appropriate policy reaction to such conditions would be to try to change the options that men and women face so that their reasoned choice would be to lower their fertility

stochastic modeling of short term cattle operations rangeland productivity is influenced primarily by fluctuating rainfall precipitation which together with market price volatility determine the major sources of variability in profitability of rangeland cattle production much research in range science has dealt with long term planning based on annual management models cotner sharp burt stevens and godfrey karp and pope and fisher among others short run decisions such as stocking rate stocking density over a length of grazing season and optimal forage at the beginning end of the grazing season have been considered static through time this study emphasizes short run decisionmaking strategies to better understand complex cattle and forage management decisions within a grazing season dynamic programming dp is used to test the certainty equivalence ce property of these intertemporal decisions to allocate scarce resources under fluctuating conditions involved in cattle production the objectives of this study are threefold a to develop a model of forage livestock dynamics b to evaluate the effect of price fluctuations on cattle and forage management policies principally stocking density and c to incorporate risk into a sequential decision making process such as a yearling operation to test the ce property our study is focused on testing ce and its applications for risk management using a forward recursive dp process

property rights labour markets and efficiency in a transition economy the case of rural china we investigate the consequences of imperfect factor market development for farm efficiency in north china we estimate the extent to which an inverse relationship in farm productivity can be attributed to the administrative as opposed to market allocation of land combined with unevenly developed off farm opportunities using a new household survey we find considerable inefficiency in the use of labour this inefficiency is alleviated by external labour markets and to a limited degree by administrative reallocations the reallocations do not go far enough however which raises important questions about con straints on rental activity and property rights formation more generally jel classification q15 012

the problem of population and growth a review of the literature from malthus to contemporary models of endogenous population and endogenous growth abstract this paper deals with the evolution of the literature on the problem of population and growth from the classical period to the recent literature on endogenous growth and development the problem concerns two distinct issues 1 how to explain the observed covariation of the levels and rates of growth of per capita income and population size over time and space and 2 how to improve the human condition represented by these variables through an accommodating social policy the evolution of the literature we survey is reflected by the progressive treatment of key variables as endogenous rather than exogenous to the growth process it is also reflected by a shift from the historical concern about population explosion and its implications for growth to the more recent concern about the association between growth and population implosion in many developed countries

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty

investment and disinvestment principles with nonconstant prices and varying firm size applied to beef breeding herds comment optimal investment and disinvestment principles have received considerable attention in both general and agricultural economics for over two centuries notable are the works of faustmann samuelson 1937 hirschleifer burt and perrin which establish the basic replacement principle recently trapp presented a reformulation of this basic replacement principle by relaxing the assumptions of constant prices and firm size the purpose of this comment is to discuss a possible misinterpretation of the replacement principle underlying trapp s model specifically the link between trapp s article and previous literature is established with the hope of clarifying any misunderstandings of optimal investment principles trapp states that his equations 3 and 4 which are derived from the discrete time form of the net present value formula for a single asset constitute the appropriate addition and culling investment and disinvestment decision rules for a firm with nonconstant size trapp p 694 this formulation is analogous to perrin s equation 2 which maximizes the returns from an asset over a single rotation in contrast chavas kliebenstein and crenshaw present the asset replacement decision as an optimal control problem with an infinite planning horizon transversality conditions for optimal asset rotation as given in chavas kliebenstein and crenshaw s equation 12 correspond to perrin s equation 4 2 which maximizes the returns from an asset over an infinite horizon reid and bradford in an investigation of investment and disinvestment in farm machinery also derive optimal rotation criteria analogous to perrin s formulation thus it appears that an inconsistency exists in the journal associated with the appropriate replacement rule when expansion and contraction of an operation is endogenously determined should replacement rules be derived from an infinite horizon specification or from a single asset specification the merits of an investment decision must be based not only on earnings from the next production period but also on the rents which can be extracted from the firm s fixed factors failure to consider future assets in a replacement decision implies that changes in replacement costs have absolutely no effect on the optimal life of assets up to the point where it is no longer profitable to operate specifically maximizing over a single asset rotation corresponds to maximizing the internal rate of return of an investment decision with a discount rate quivalent to the internal rate of return samuelson 1976 the quantitative effects of considering only a single asset specification are minimal depending on the length of the asset rotation and the discount rate employed as the rotation length increases or a larger discount rate is employed representation of the optimal replacement rule will converge to perrin s equation 2 samuelson 1976 the turnpike theorem states that if the asset rotation is of sufficient length where the end of the horizon has o influence on period decisions the system then converges towards the von neumann path boussard too short a length may result in the system never converging toward the von neumann path alternatively if the salvage and acquisition values are equal at any point in time then the von neumann path will be reached at the beginning of the last period however in general asset replacement is costly and thus access to the von neumann path is not instantaneous the apparent inconsistent use of a single asset specification in contrast to basic replacement principles associated with an infinite horizon may be resolved by investigating the theoretical results in chavas and klemme employing an optimal control methodology with a finite planning horizon t a distinction among rules derived from alternative specifications is evident using perrin s terminology chavas and klemme generalize the replacement criteria for a system with multiple constraints

an opportunity cost view of fixed asset theory and the overproduction trap comment in a 1981 ajae article johnson and pasour criticize the works of edwards and glenn johnson 1972 and earlier publications for attributing persistent excess production in agriculture to an asset fixity theory which at its crux relies on divergences between asset acquisition costs and asset salvage values johnson and pasour mjp pinpoint their critique of edwards and johnson ej when they state p 3 the conclusion of fixed asset theory that excess resources are trapped in production can be traced directly to selection of acquisition prices of resources as a benchmark for equilibrium production but there is no reason to expect the opportunity cost of a resource once acquired to equal its historical acquisition price in his 1982 ajae reply to mjp glenn johnson contends that the ej formulation does contrary to the mjp assertion allocate resources on the basis of opportunity costs including the cases where opportunity cost is equal to current not historical acquisition cost or ourrent not historical salvage value the primary purpose of this paper is to discuss briefly how mjp s article is lacking in a key respect it ignores intertemporal opportunity costs of durable resources to achieve brevity and expositional clarity other aspects of differences between mjp and ej are avoided insofar as the specifics of this paper allows conventional resource adjustment theory is reviewed by mjp their equations 1 4 pp 1 2 stress is placed on the usual hypothesis that the equilibrium use of durable resources similar to nondurables occurs when each durable s value of marginal product just equals its marginal factor cost this equilibrium relation is hypothesized for a profit maximization firm to hold for each durable resource or asset in each production or planning period t but this engine of analysis while acceptable for nondurable resources lacks crucial detail for dealing with the multiperiodicity of durable resources essentially it is a monoperiodic engine or at best it is a sequential monoperiodic engine it avoids defining the time horizon the finite or infinite span of t hence it avoids a precise definition of the relevant set of investment disinvestment and production activities to be considered by the decision maker more specifically even if t can be limited to a finite number of periods s intertemporal opportunity costs associated with each durable resource are ignored assumed by implication to not exist or assumed to equal zero to paraphrase perrin who mjp acknowledge as having reviewed their paper these are the costs of postponing the earnings which will be forthcoming from the series of replacement or new investment durable assets for the currently owned or currently considered asset moreover if the appropriate span of t is infinite it becomes even more important not to ignore intertemporal opportunity costs this point was illustrated conceptually by perrin in his figure 1 p 61 when considering optimal investment disinvestment in and use of durables multiperiod models which explicitly account for time money relationships are judged by most economic analysts to be preferable to conventional static monoperiodic models wealth maximization becomes the norm as opposed to one period profit maximization present value equations which model flows of acquisition prices ensuing quasi rents and salvage values of durables or their derived first order marginal optimizing inequalities take over the role of simple static vmp mfc equalities in what follows the resource adjustment rule hypothesized by mjp is compared with the marginal rules derived by perrin rules and logic which are presented in various earlier and subsequent texts and other publications on capital investment equation 3 in mjp p 2 summarizes their durable resource adjustment rule as follows

looking beyond averages in the trade and poverty debate there has been much debate about how much poor people in developing countries gain from trade openness as one aspect of globalization the paper views the issue through both macro and micro empirical lenses the macro lens uses cross country comparisons and aggregate time series data the micro lens uses household level data combined with structural modeling of the impacts of specific trade reforms case studies are presented for china and morocco both the macro and micro approaches cast doubt on some widely heard generalizations from both sides of the globalization debate additionally the micro lens indicates considerable heterogeneity in the welfare impacts of trade openness with both gainers and losers among the poor a number of covariates of the individual gains are identified the results point to the importance of combining trade reforms with well designed social protection policies

reranking and pro poor growth decompositions for china and vietnam abstract reranking in the move from one income distribution to another makes it impossible to infer from changes in lorenz and generalised lorenz curves how income growth among those toward the bottom of the initial income distribution compares to that among those toward the top and whether there has been income growth among those who were initially poor decompositions allowing for reranking indicate that economic growth in china and vietnam has been better for households who were initially poor than changes in the lorenz and generalised lorenz curve and poverty growth curve would suggest

how serious is the neglect of intrahousehold inequality in this report the authors develop a framework for assessing the consequences of ignoring intrahousehold inequality in the measurement and analysis of poverty and inequality they apply this framework to data for the philippines and conclude that 1 the result of neglecting intrahousehold inequality will probably be considerable understatement of the levels of poverty and inequality with the philippine data measured levels of inequality and poverty were off 30 percent as a result of ignoring intrahousehold variation and 2 patterns of inequality revealed by household level data are somewhat different from patterns revealed by individual level data but the differences seem not to be dramatic to confirm these results the exercise should be repeated with data from other countries

income distribution in urban china during the period of economic reform and globalization this paper addresses three issues that are central to understanding the effects of the transition in china from central planning to a more market oriented economic system first what have been the consequences of the economic reforms for the distribution of income in urban areas second what has happened to the incidence of urban poverty third have government policies helped to diminish or accentuate urban poverty and inequality answers to these questions are based on a comparison of two national sample surveys conducted in 1988 and 1995

inequality and conservation on the local commons a theoretical exercise to analyse the effect of asset inequality on co operation within a group we consider a twoplayer nonco operative model of conservation of a common pool resource overexploitation by one user affects another s payoff by reducing the next period catch we give necessary and sufficient conditions such that conservation is a nash equilibrium and show that increasing inequality does not in general favour full conservation however once inequality is sufficiently great further inequality can raise efficiency thus the relationship between inequality and economic efficiency is u shaped finally we analyse the implications for conservation if players have earning opportunities outside the commons the daily livelihood of vast masses of the rural poor in many countries depends on the success with which common pool resources cprs such as forest resources grazing lands in shore fisheries and irrigation water are managed and on the environmental consequences of their management understanding the factors that lead to success or failure of community management of these resources is thus critical to rural development cpr management is a collective action dilemma a situation in which mutual cooperation is collectively rational for the group as a whole but individual cooperation is not necessarily individually rational for each member one factor that has not always been recognised as critical to the outcome of collective action dilemmas is heterogeneity among the resource users in this paper our attention will be largely restricted to a single but potent kind of heterogeneity inequality in asset ownership olson 1965 hypothesised that inequality might favour the provision of a public good

rising regional inequality in china fact or artifact summary china s local populations can be counted in two ways people with hukou household registration from each place and people actually residing in each place for most of the first three decades of the reform era the hukou count denominated per capita gdp figures output and living standards were overstated in coastal provinces and understated in the interior the distortion grew bigger as the non hukou migrants increased to over 100 million much of the apparent increase in inter provincial inequality is a statistical artifact caused by this distortion the recent switch to using the resident count to denominate gdp introduced new distortions

markets and inequality in rural china parallels with the past after 30 years of egalitarian rhetoric and collectivist practice the introduction of market reforms to rural china entailed obvious risks for policymakers increases in average income might not compensate for the inequality generated by market based income determination concern for this possibility may help explain the slow relaxation of administrative control over the allocation of resources like land in order to evaluate the effect of market reforms we could begin by comparing the current gini coefficient to that which prevailed during the collective era see louis putterman 1993 for early evidence yet this might tell us little about the specific impact of market organization on income determination government policies such as collective land ownership mobility restrictions and fertility limits cloud the picture furthermore industrialization though itself a product of the reforms has changed the basis upon which individuals earn income isolating a pure effect of market organization is a difficult but important task since many current chinese policies reflect an ambivalent attitude toward decentralized market based resource allocation we offer a few suggestions on issues that need to be considered as this evaluation proceeds by exploring current inequality in rural northeast china from the vantage point of the 1930 s we begin with the observation that the level of inequality is similar in 1995 and 1935 and moreover that most contemporary inequality exists within villages as was the case in the 1930 s we then focus on two institu

peasants procreation and pensions producers and consumers durable goods yielding a stream of benefits which are compared with a stream of costs births occur if the present value of the benefits exceeds the present value of the costs the theory has been used by malthusians to rationalize the casual observation that population growth rates increase during the early stages of economic development and then perhaps fall later on as

capital accumulation income distribution and endogenous fertility in an overlapping generations general equilibrium model abstract this paper studies the intertemporal relationships among population growth income distribution inter generational social mobility skill composition of the labor force and household income in an overlapping generations general equilibrium model that aggregates household decisions regarding fertility savings and investment in human capital of children it shows that as a consequence of endogenous fertility the equilibrium path attains steady state from the second generation income tax transfer child taxation and social security taxation policies that can be devised to affect these variables are also analyzed the model provides a structural explanation for the inverse household income child quantity and negative child quality quantity relationships that are observed in developing countries it also shows that group interests may hinder the emergence of perfect capital markets with private initiatives

old age pensions and fertility in rural areas of less developed countries some evidence from mexico this paper reviews the theoretical relationship between old age pensions and human fertility and offers preliminary evidence from mexico on the direction and magnitude of the effect on fertility of the introduction of a formal old age pension system the security motive is an untested but plausible hypothesis especially for rural areas where alternative methods for caring for the elderly if they exist are likely to be relatively risky and unprofitable a number of different effects can theoretically be expected following introduction of a system of old age pensions in such areas including a savings reduction effect and life cycle effects such as effects on the time phasing of labor force participation and of consumption and effects on family fragmentation and intergenerational transfers and on the sex composition of the labor force and the allocation of family resources between the sexes information costs uncertainties about various aspects of the social security system and the possibility of differences between desired and actual fertility must also be considered given the long list of possible effects and offsetting influences and uncertainties about the magnitudes of such effects the actual outcome can only be resolved empirically data on sugar cane workers who began to be covered by a social security system in 1963 in 34 contiguous rural municipalities in the papaloapan river basin in southeastern mexico were used to test the relationship a regression analysis of the determinants of change in the child woman ratios in the 34 municipalities from 1960 70 indicated among other findings that the proxy used for the influence of participation in an old age pension system had a significantly negative effect on fertility an increase in social security participation from 0 to 50 would appear to reduce the child woman ratio by more than 1 10 despite the simplicity of the testing procedure shortcomings in the available data and the possibility of specification bias the results indicate that the security motive may be important and requires further empirical and theoretical research

income inequality in the people s republic of china trends determinants and proposed remedies the issue of income inequality in the people s republic of china prc has attracted world wide attention leading to a sizable literature this paper attempts to provide a nonexhaustive literature review of the prc s inequality trends and determinants and suggested government interventions it discusses profiles of income inequality along three dimensions interhousehold disparity regional divides and urban rural gaps this is followed by an exploration of the driving forces behind rising inequality including the notorious hukou system policy biases location or geographic factors globalization and education finally the paper summarizes and proposes government interventions for containing or reducing income inequality in the prc important areas for future research are also suggested in the final section of the paper

optimal replacement policies for rejuvenated assets the faustmann samuelson solution for optimal asset rotation is extended to consider both asset rejuvenation and nonconstant prices a dynamic theoretical model is developed in terms of an optimal control problem with discontinuous control variables and numerical solution procedures are outlined the model is applied to layer hen replacement where hen rejuvenation by forced molting is a common industrial practice results indicate a sensitivity between the decision to rejuvenate or replace a hen and the egg price cycle suggesting a mixed rotation strategy

the decomposition of disturbances to national output of china the evidence of sectoral and regional shocks the chinese government has established policies to promote its industrial sectors and to develop coastal provinces since the late 1978 to investigate the extent and reason the output growth in china has been influenced by these policies an error component model is employed to decompose the importance of sectoral and regional shocks to variations in national output the results show that both sectoral specific shocks common across regions and regional specific shocks common across sectors are important in explaining the disturbance of national output in china specifically sectoral specific shocks consistently explain relatively more disturbance of chinese output than regional specific shocks do our empirical results are somewhat different from stockman 1988 and costello 1993 since they show almost equal explanatory power of sectoral and national shocks in accounting for national outputs in oecd countries

dynamics of beef cow herd size an inventory approach cow herd inventories are the primary determinant of beef supply the principal decisions determining inventories are studied in a dynamic framework short run and long run impacts of one time shocks in economic factors influencing culling and replacement decisions are estimated via simulations changes in economic factors have the greatest impact on younger members of the herd these changes have long term impacts on inventories through their influence on age dynamics impacts on age dynamics could influence the cattle cycle

asset based poverty transition and persistence in rural china this article tests empirically for transition and persistence of poverty in rural china based on the theory of asset based poverty traps it proposes an analytical framework mitigating the problem of endogenous switching between accumulation regimes and disentangling the true state dependence of poverty specifically a dynamic asset threshold separating households into downward and upward mobility regimes is identified after taking households unobserved characteristics and observed regime differentiated accumulation strategies into account the static analysis identifies causality running from settling into a downward mobility regime to the probability of poverty measured by consumption furthermore allowing for endogenous initial poverty status the dynamic analysis finds strong true state dependence in poverty households with the same characteristics are nearly twice as likely to be poor as if they had not previously switched to the accumulation regime assets below the dynamic threshold serve as a conduit through which poverty propagates itself factors that help to break this vicious circle are identified

impacts of migration on household production choices evidence from china abstractthe great migration from chinese farms to cities during the past several decades ranks among the most economically consequential of modern population movements we use a national sample of rice producing chinese households to examine the effects of that migration on agricultural production our assessment involves evaluating four alternative theories of labour market equilibrium in the framework of an expanded agricultural household model migration s farm production impacts appear to be slight not on account of farm labour market perfections or remittance financed technological improvements but by substituting a reduction in leisure and other low return activities for lost labour

modeling dynamic agricultural production response the case of swine production crop and livestock production processes are typically dynamic and involve growing biological assets which are eventually marketed this study presents a production model of biological growth based on a differential equation specification economic implications for optimal input use and optimal replacement policy are discussed in this context the approach is applied to the growing finishing phase of a swine production enterprise the results demonstrate that the knowledge of the growth function is crucial in evaluating dynamic production decisions

an econometric analysis of the old age security motive for childbearing a switching regression for birth interval lengths with endogenous switching is developed to test mead cains contention that parents fertility decisions arise from lexicographic preferences for old age security the model is estimated as a survival model using malaysian data assuming that contraceptors constitute the group of parents who have attained the minimal number of children with which they feel their old age support is secure strong support for cains concept of old age security as the principal interest of those parents who have not yet attained a sufficient number of children appears in these data however the income effect accompanying the provision of alternative means of old age support generates an ambiguous effect on subsequent fertility excerpt

urban income inequality in china revisited 1988 2002 abstract using newly available spatial price deflators this paper shows that inequality evaluations in the literature overstate the magnitude of inequality and inequality changes in china as well as the role played by regional differences in the recent inequality rise

urban rural gap and poverty traps in china a prefecture level analysis urban rural gap and regional inequality are long standing problems in china and result in considerable number of studies this article examines the dynamic behaviours of incomes for both urban and

on information and market dynamics the case of the u s beef market abstract the paper investigates the nature of dynamic prices and expectations in a competitive market the approach is applied to the u s beef market which exhibits cyclical patterns and significant biological lags in the production process beef price equations are estimated under different expectation regimes the empirical results indicate the presence of heterogeneous price expectations with a significant number of market participants neglecting information about the existence of a beef cycle

geographic poverty traps a micro model of consumption growth in rural china how important are neighbourhood endowments of physical and human capital in explaining diverging fortunes over time for otherwise identical households in a developing rural economy to answer this question we develop an estimable micro model of consumption growth allowing for constraints on factor mobility and externalities whereby geographic capital can influence the productivity of a household s own capital our statistical test has considerable power in detecting geographic effects given that we control for latent heterogeneity in measured consumption growth rates at the micro level we find robust evidence of geographic poverty traps in farm household panel data from post reform rural china our results strengthen the equity and efficiency case for public investment in lagging poor areas in this setting copyright 2002 john wiley sons ltd

village political economy land tenure insecurity and the rural to urban migration decision evidence from china this paper investigates the impact of land tenure insecurity on the migration decisions of china s rural residents a simple model first frames the relationship among these variables and the probability that a reallocation of land will occur in the following year after first demonstrating that a village leader s support for administrative land reallocation carries with it the risk of losing a future election the paper exploits election timing and village heterogeneity in lineage group composition and demographic change to identify the effect of land security in response to an expected land reallocation in the following year the probability that a rural resident migrates out of the county declines by 2 8 percentage points which accounts for 17 5 percent of the annual share of village residents aged 16 to 50 who worked as migrants during the period this finding underscores the potential importance of secure property rights for facilitating labor market integration and the movement of labor out of agriculture

credit constraints farm characteristics and the farm economy differential impacts on feeder cattle and beef cow inventories a recurrent topic in the macroeconomic literature is the financial accelerator the notion that informational asymmetries introduce inefficiencies to financial markets which amplify and propagate the effects of real or monetary shocks with the purpose of finding empirical evidence that is consistent with a financial accelerator operating in the cattle sector inventory investment models are estimated with an appended cash flow variable the inclusion of cash flow is motivated by the notion that investment by credit constrained farms should be sensitive to movements in internal funds results are consistent with the financial accelerator operating in the feeder cattle but not in the cow calf sector

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

a multivariate analysis of the distribution of individual s welfare in china what is the role of health many economists have argued that income is an inadequate indicator of welfare in this paper we conduct a multivariate analysis of the distribution of individual welfare in china at three selected time points 1991 1997 and 2006 instead of using income as the only welfare indicator as in most distributional analyses we explicitly consider the role of health in welfare distribution we adopt the naga and geoffard 2006 decomposition method by which we can decompose a bidimensional welfare inequality index into two univariate atkinson kolm sen indices that measure the inequalities in health and income and a third term that measures the contribution from the joint distribution of the two attributes to total inequality we show that the third term might be used as an alternative to the concentration index to measure the income related inequality in health

a stochastic asset replacement model for rejuvenated assets stochastic returns generated by a productive asset are investigated for the replacement problem with rejuvenation optimal replacement and rejuvenation conditions given collinearities among multiple outputs are considered for alternative levels of producer risk preference this methodology is applied to a laying hen replacement problem results indicate that risk averse producers should consider less rejuvenation and shorter rejuvenation production periods also replacement decisions should occur later in the year for peak production to coincide with high output prices

cleaning house new perspectives on households and economic development abstract this paper provides a critical review of the recent literature on households and economic development three related points are developed 1 household activities can be analyzed in economic terms particularly if these terms are broadly defined to encompass such factors as risk and uncertainty 2 significant differences between the economic position of men women and children within the patriarchal household mean that it cannot be treated as an undifferentiated unit of analysis 3 microeconomic analysis of the household must be situated within a larger structural analysis of gender and age based inequalities and their interaction with class structure and national position within the world capitalist system