corruption and the shadow economy one way or two way street this paper attempts to bring some resolution to the relation between corruption and the shadow economy while previous research focuses on the static relationship between the two we account for dynamics using a panel vector autoregression model and consider influences from the official economy and institutional quality using cross national panel data for 108 countries over the period 1984 2006 results show a bidirectional relationship with initial complementarity and substitution over time thus the nature of the two way street is shown to change over time and our consideration of dynamics reveals the complementarity substitution switch

alfred marshall lecture social capital as good culture to explain the extremely long term persistence more than 500 years of positive historical experiences of cooperation putnam 1993 we model the intergenerational transmission of priors about the trustworthiness of others we show that this transmission tends to be biased toward excessively conservative priors as a result societies can be trapped in a low trust equilibrium in this context a temporary shock to the return to trusting can have a permanent effect on the level of trust we validate the model by testing its predictions on the world values survey data and the german socio economic panel we also present some anecdotal evidence that these priors are reflected in novels that originate in different parts of the country jel 04 016 043 p16

measuring the hidden economy implications for econometric modelling in this paper i support using econometric techniques to measure the size of the hidden underground economy because such information is important for the construction of certain economic models and for empirical policy analysis generally detailed information on the output of the hidden economy is unavailable even where careful measures of the underground economy have been constructed usually these data are available only periodically important exceptions are the classic results of tanzi 1983 for the united states and bhattacharyya s 1990 series for the united kingdom in the case of the new zealand economy a time series of data on the hidden economy has been generated recently giles 1997a this provides the unusual opportunity to undertake econometric modelling in a way which takes account of such activity formally moreover we can examine the policy implications arising from the linkages between hidden output and various measured economic aggregates this abstract was borrowed from another version of this item

multivariate measures of well being and an analysis of inequality in the michigan data we demonstrate a multidimensional approach for combining several indicators of well being including the traditional money income indicators this methodology avoids the difficult and much criticized task of computing imputed incomes for such indicators as net worth and schooling inequality in the proposed composite measures is computed using relative inequality indexes that permit simple analysis of both the contribution of each welfare indicator and its factor components and within and between components of total inequality when the population is grouped by income levels age gender or any other criteria the analysis is performed on u s data using the michigan survey of income dynamics

the hidden economy as an unobserved variable abstract the technique of unobserved variables is used to estimate the relative size and development time of the hidden economy of oecd countries the burdens of taxation and regulations and the tax morality turn out to be statistically significant determinants at the end of the scandinavian and benc lux countries are expected to have a relatively large and japan and switzerland a relatively small hidden economy canada and the united states are rank in the middle the size of all hidden sectors is estimated to have increased in the period 1960 1973 relative to officially measured gnp

estimating the size of the shadow economy in spain a structural model with latent variables there has recently been a revival of international interest in measuring the size of the shadow economy the current study adopts an approach to the spanish case that is based on the theory of unobservable variables this methodology involves the estimation of structural models mimic which analyses a set of causes of the shadow economy while simultaneously taking into account its influence upon a series of indicators the proposed model permits the determination of a relative evolution over time of the size of the shadow economy which requires the calibration of the model with an exogenous estimation in order to obtain real values the exogenous estimation employed is that obtained by a monetary method based on a money demand function the results show a considerable shadow economy measuring between 8 and 18 8 of gdp in the period 1976 2002 and demonstrate that the shadow economy is significantly influenced by the tax burden the degree of regulation and unit labour costs a positive correlation is

slipping into and out of poverty the dynamics of spells this paper examines the dynamics of poverty previous analyses have examined either fluctuations in the male heads earnings or the frequency of poverty periods over a fixed time frame our approach depends on a definition of spells of poverty using this methodology we find that the majority of poor persons at any time are in the midst of a rather long spell of poverty the methodology also allows us to estimate that less than 40 percent of poverty spells begin because of a drop in the heads earnings while 60 percent of the spells end when the heads earnings increase thus researchers must focus on household formation decisions and on the behavior of secondary family members there has been a dramatic resurgence recently of discussion of the underclass the discussion is reminiscent of debates about poverty during the 1960s when the notions of a culture of poverty particularly as popularized by michael harrington s other america 1962 dominated both intellectual and policy thinking the idea of an underclass seems inconsistent however with much of the research on the dynamics of poverty during the 1970s that research using new longitudinal data seemed to show that the bulk of the poor were poor for only a few years the research also showed that the poor were a very heterogeneous group including a small minority of persistently poor the persistence of poverty is of interest both for understanding the phenomenon and for developing policy claims about dependency and separate life styles among the poor rest on assumptions about the long term nature of poverty questions

labor tax avoidance and its determinants the case of mafia firms in italy this paper develops two new measures of labor tax avoidance ltav based on social contribution expenses reported in financial statements and tests them and their determinants within a sample of 224 italian firms defined as legally registered mafia firms lmfs due to having been confiscated at some point by judicial authorities in relation to alleged connections with italian organized crime overall our results reveal that before confiscation lmfs engage more in ltav than lawful firms do whereas after confiscation there is no significant difference between both types of firm furthermore we find that several factors have a significant influence on the probability of engaging in such a practice this study can enhance further research on the effectiveness of our measures and on the determinants of ltav in other contexts and for other types of firms moreover these measures can be added to the other direct and indirect methods commonly employed to measure and detect undeclared work representing a primary means of ltav finally our study allows inferring conclusions on the relation between corporate social responsibility and tax avoidance suggesting that socially irresponsible firms such as lmfs are more likely to adopt this practice

strategic investment in merchant transmission the impact of capacity utilization rules abstract in this paper we look at the relative merits of two capacity utilization regimes in the merchant electricity transmission network must offer mo where the entire capacity installed has to be made available for transmission and non must offer nmo where some capacity could be withheld we look at two specific cases i demand for transmission varies across time and ii vertical integration is allowed between investors in transmission network and electricity generators in the case of time varying demand under mo we find that a monopolist may underinvest in transmission when compared to nmo although nmo may lead to more capacity withholding in the case of vertical integration we find that when the market power is with the generators of the exporting node without vertical integration no welfare enhancing merchant investment would occur neither under mo nor nmo further if the generators in the importing node have market power in case vertical integration is allowed mo is better than nmo finally we also argue that the incentive to collude among various transmission network investors is mitigated with mo in place

on measuring deprivation and the standard of living in a multidimensional framework on the basis of aggregate data in measuring social deprivation in a multidimensional framework ideally one should first measure each individual s overall deprivation and then aggregate the overall deprivation levels of all individuals however given only aggregate data one is often forced to measure social deprivation in terms of each attribute separately and then to aggregate them so as to get the overall social deprivation this paper shows that it is only under extremely stringent conditions that this procedure would always yield the same result as the conceptually sound procedure referred to earlier a similar difficulty also arises in measuring a society s standard of living

identifying deprivation profiles in spain a new approach usually an indirect approach for measuring deprivation or poverty is used with poverty lines however some studies have used a direct approach to measure deprivation or poverty the aim of this study is improving the identification of the poor people the central point of the concept of deprivation used is related to the opportunity to have or do something therefore deprivation means an inability to get the goods facilities and opportunities which are usual in the household environment since all of the needed variables are categorical the latent class model is used to solve this problem because it is the best model to achieve this objective

the earnings of male immigrants in england evidence from the quarterly lfs in this paper we estimate earnings functions for native born and foreign born white and non white males in the english labour market using data from the quarterly labour force survey our results highlight the importance of distinguishing between native born and foreign born males when investigating the labour market experience of ethnic minorities furthermore the earnings performance amongst white immigrants varies considerably

the provision of public goods under alternative electoral incentives politicians who care about the spoils of office may underprovide a public good because its benefits cannot be targeted to voters as easily as pork barrel spending we compare a winner take all system where all the spoils go to the winner to a proportional system where the spoils of office are split among candidates proportionally to their share of the vote in a winner take all system the public good is provided less often than in a proportional system when the public good is particularly desirable we then consider the electoral college system and show that it is particularly subject to this inefficiency

the slave trade and the origins of mistrust in africa in a recent study nunn 2008 examines the long term impacts of africa s slave trade he finds that the slave trade which occurred over a period of more than 400 years had a significant negative effect on long term economic development although the article arguably identifies a negative causal relationship between the slave trade and income today the analysis is unable to establish the exact causal mechanisms underlying this reduced form relationship in this article we examine one of the channels through which the slave trade may affect economic development today combining contemporary individual level survey data with historical data on slave shipments by ethnic group we ask whether the slave trade caused a culture of mistrust to develop within africa initially slaves were captured primarily through state organized raids and warfare but as the trade progressed the environment of ubiquitous insecurity caused individuals to turn on others including friends and family members and to kidnap trick and sell each other into slavery sigismund wilhelm koelle 1854 p e h hair 1965 charles piot 1996 we hypothesize that in this environment a culture of mistrust may have evolved which may persist to this day we show that current differences in trust levels within africa can be traced back to the transatlantic and indian ocean slave trades combining contemporary individual level survey data with historical data on slave shipments by ethnic group we find that individuals whose ancestors were heavily raided during the slave trade are less trusting today evidence from a variety of identification strategies suggests that the relationship is causal examining causal mechanisms we show that most of the impact of the slave trade is through factors that are internal to the individual such as cultural norms beliefs and values jel j15 n57 z13

inherited trust and growth this paper develops a new method to uncover the causal effect of trust on economic growth by focusing on the inherited component of trust and its time variation we show that inherited trust of descendants of us immigrants is sig nificantly influenced by the country of origin and the timing of arrival of their forebears we thus use the inherited trust of descendants of us immigrants as a time varying measure of inherited trust in their country of origin this strategy allows to identify the sizeable causal impact of inherited trust on worldwide growth during the twentieth century by controlling for country fixed effects jel n11 n12 n31 n32 o47 z13

reconsidering the european regulation of merchant transmission investment in light of the third energy package the role of dominant generators the regulation of merchant transmission investment mti has become an important issue in the eu electricity sector subsequent to the granting of authorizations by european authorities to five merchant projects britned estlink t heeast west cables norger and recently a merchant line connecting italy and austria the creation of a new agency for the cooperation of energy regulators acer at the eu level which has decision making powers on mti therefore presents a unique opportunity to question and re design the current european policy this paper shows that the recent decisions concerning mti may suffer a strong bias against dominant electricity generators while incumbent transmission system operators tsos or new entrant tsos are generally favored by national regulators and the european commission ec this strategy is misguided as it fails to recognize both the new incentives of generators to develop mti and the conflict of interest between the regulated and non regulated activities of incumbent tsos letting dominant generators undertake mti is indeed generally beneficial as long as potential abuses of dominance are mitigated to deter possible anti competitive effects we propose a new and feasible allocation of regulatory powers based on a clear demarcation between the market monitoring powers of acer and the antitrust powers of the ec 2011 elsevier ltd all rights reserved

optimal transmission planning under the mexican new electricity market abstract this paper addresses electricity transmission planning under the new industry and institutional structure of the mexican electricity market which has engaged in a deep reform process after decades of a state owned vertically integrated non competitive closed industry under this new structure characterized by a nodal pricing system and an independent system operator iso we analyze welfare optimal network expansion with two modeling strategies in a first model we propose the use of an incentive price cap mechanism to promote the expansion of mexican networks in a second model we study centrally planned grid expansion in mexico by an iso within a power flow model we carry out comparisons of these models which provide us with hints to evaluate the actual transmission planning process proposed by mexican authorities prodesen we obtain that the prodesen plan appears to be a convergent welfare optimal planning process

which dimensions of culture matter for long run growth we present empirical evidence that among a variety of cultural dimensions the individualism collectivism dimension based on hofstede s 2001 data is the most important and robustly significant effect of culture on long run growth other dimensions that have a significant effect albeit less robust are generally strongly correlated with individualism and convey similar information we found no significant or robust effect on growth from cultural dimensions that are independent from the individualism collectivism cleavage

a volatility based theory of fiscal union desirability abstract heterogeneous countries may rationally choose to form a currency union first and a fiscal union later we find and illustrate empirically for the emu countries reasonable volatility conditions under which this sequencing in the deepening process is indeed rationalizable changes in the distribution of expected income shocks require a reassignment of political weights to restore unanimous support for an added fiscal dimension the bargaining space depends on countries relative income size and cross correlation of shocks

the protestant fiscal ethic religious confession and euro skepticism in germany during the european sovereign debt crisis most countries that ran into fiscal trouble had catholic majorities whereas countries with protestant majorities were able to avoid fiscal problems we find that christian conservative members of the german parliament from constituencies with higher shares of protestants were more likely to vote against a third bailout for greece survey data show that views on the euro differ between german protestants and non protestants at the individual level too among protestants concerns about the euro have compared to non protestants increased during the crisis we show that this increase in concern is linked to a reduction of protestants subjective well being we use the timing of survey interviews and news events in 2011 to account for the endogeneity of euro concerns emphasis on moral hazard concerns in protestant theology may thus still shape economic preferences jel d72 e00 i31 z12

how did the great recession affect gender disparity in europe an analysis by a multidimensional deprivation approach this paper analyses how the great recession affected the gender disparity in material and social deprivation in europe we propose multidimensional non monetary indexes of absolute and relative i

iso net surplus collection and allocation in wholesale power markets under lmp this study uses five bus and 30 bus test cases to explore iso net surplus congestion rent collections and allocations in wholesale power markets with grid congestion managed by locational marginal prices lmps price sensitivity of demand and generator learning capabilities are taken as experimental treatment factors a key finding is that conditions resulting in greater generator capacity withholding hence higher and more volatile lmps also result in greater iso net surplus collections that can be substantial in size a key conclusion is that iso net surplus collections should be used pro actively to mitigate the conditions encouraging generator capacity withholding and hence high and volatile lmps rather than to provide ex post support for lmp payment offsets and lmp volatility risk hedging as is currently the norm

poverty and the distribution of material hardship public concern with poverty derives in large part from the assumption that low income families cannot afford necessities yet official poverty statistics focus on measuring income not on measuring material hardship two surveys of chicago residents measure whether families could afford food housing and medical care a family s official income to needs ratio explained 24 percent of the variance in the amount of material hardship it reported adjustments for family size age health noncash benefits home ownership and access to credit explain another 15 percent variations in permanent income explain almost none of the remaining variance in hardship among families with the same official income toneeds ratio material hardship varies by age family size and composition

shadow economy and unemployment rate in u s a is there a structural relationship an empirical analysis this article aims to estimate the size of the us shadow economy se using a structural equation approach and to evaluate if a structural relationship exists between the se and the unemployment rate ur in the united states the size of the se is estimated to be decreasing over the last two decades we corroborate the existence of a structural relationship between the se and the ur by using a simple theoretical model furthermore we extend the okun s law to estimate the structural relationship between growth rate of official gdp se and ur our results indicate a significant positive relationship between the se and the ur

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

redistributive politics and economic efficiency the political process often compensates the losers from technical change or international competition in an economically inefficient way namely by subsidizing or protecting declining industries instead of encouraging the movement of resources to other more productive uses we find that a dynamic inconsistency in the game of redistributive politics contributes to this outcome to achieve economically efficient outcomes it is necessary that those making economically inefficient choices not be given offsetting transfers but the political process distributes income on the basis of political characteristics which are in general different from the economic characteristics that are rewarded by the market we identify circumstances in which the inefficient choosers have desirable political characteristics and are therefore immune from threats of having to face the economic consequences of their choices

smuggling around the world evidence from a structural equation model this article uses a multiple indicators multiple causes mimic model to analyse the determinants of smuggling the analysis reveals that higher corruption and a lower rule of law encourage smuggling tariffs and trade restrictions are important push factors while a higher black market premium bmp discourages smugglers based on the mimic estimates we calculate an index of smuggling which provides a ranking for 54 countries we find that smuggling is rampant in cameroon pakistan and kenya while it is least prevalent in switzerland finland and sweden

the underground economy in spain an alternative to unemployment this paper analyses the factors which determine whether an individual works in the formal sector in the informal sector or remains unemployed in the spanish labour market we highlight the implications of high unemployment on an individual s decision to work in the underground economy we postulate that an individual decides or is chosen whether to work in the formal sector or not in a first stage and if not in a second stage decides whether to work in the underground sector or to remain unemployed we estimate a bivariate probit model which controls for selectivity bias in the second stage the result indicates on the one hand that heads of household who benefit more from social security provisions obtained in formal sector jobs are more likely to work in such sector than others besides demand restrictions seem to operate as well individuals with higher education have easier access to the formal sector on the other hand among those who do not work in the formal sector the probability of wor

decentralization and the shadow economy oates meets allingham sandmo this article studies the impact of decentralization on the shadow economy we argue that decentralization may decrease the size of the shadow economy mainly through two transmission channels 1 decentralization enhancing public sector efficiency efficiency effect and 2 decentralization reducing the distance between bureaucrats and economic agents which increases the probability of detection of shadow economic activities deterrence effect using various measures of fiscal political and government employment decentralization in a cross section of countries we find the deterrence effect to be of more importance the deterrence effect is stronger the lower the degree of institutional quality we find no robust evidence of the efficiency effect

multidimensional approaches to poverty measurement an empirical analysis of poverty in belgium france germany italy and spain based on the european panel this article has three goals first we wish to compare three multidimensional approaches to poverty and check to what extent they identify the same households as poor second we aim at better understanding the determinants of poverty by estimating logit regressions with five categories of explanatory variables size of the household age of the head of the household her gender marital status and status at work third we introduce a decomposition procedure proposed recently in the literature the so called shapley decomposition in order to determine the exact marginal impact of each of the categories of explanatory variables our empirical analysis is based on data made available by the european community household panel echp we used its third wave and selected five countries belgium france germany italy and spain

what is the value of the option to defer an investment in transmission expansion planning an estimation using real options abstract in deregulated markets transmission expansion planning tep is usually performed by a central network planner seeking to maximize social welfare in doing that the network planner commonly follows a traditional project valuation considering a discounted cash flow dcf methodology although incorporating uncertainty and reliability considerations accordingly once the optimal transmission expansion plan is determined the network planner frequently auctions the needed investments obligating the investor to execute the expansion in the fixed inflexible terms defined in the bidding process a key problem is that dcf does not take into account the responses of the planner when uncertainties are resolved because dcf evaluates the project with the information available today in tep managerial flexibility may be valuable because optimal decisions may change over time with the release of new information transmission investors may want to defer or expand according to such information the aim of this article is to estimate the value of adding some flexibility in tep through real options in particular by means of using a real option approach with binomial trees we study the benefits for a social network planner of having the option to defer some transmission investments our results suggest that incorporating flexibility in tep may increase social welfare

shadow economies size causes and consequences using various methods the size of the shadow economy in 76 developing transition and oecd countries is estimated average size varies from 12 percent of gdp for oecd countries to 23 percent for transition countries and 39 percent for developing countries increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy especially in oecd countries according to some findings corruption has a positive impact on the size of the shadow economy and a growing shadow economy has a negative effect on official gdp growth

the shadow economy as an equilibrium outcome abstract we construct a dynamic general equilibrium model of tax evasion where agents choose to report some of their income unreported income requires using a payment method that avoids recordkeeping in some markets cash trade using cash to avoid taxes is the shadow economy in our model we then calibrate our model using money interest rate and gdp data to back out the size of the shadow economy for a sample of countries and compare our measures to traditional reduced form estimates

identifying the effect of unemployment on crime abstract in this paper we analyze the relationship between unemployment and crime using u s state data we estimate the effect of unemployment on the rates of seven felony offenses we control extensively for state level demographic and economic factors and estimate specifications that include state specific time trends state effects and year effects in addition we use prime defense contracts and a state specific measure of exposure to oil shocks as instruments for unemployment rates we find significantly positive effects of unemployment on property crime rates that are stable across model specifications our estimates suggest that a substantial portion of the decline in property crime rates during the 1990s is attributable to the decline in the unemployment rate the evidence for violent crime is considerably weaker however a closer analysis of the violent crime of rape yields some evidence that the employment prospects of males are weakly related to state rape rates

the role of social capital in financial development to identify the effect of social capital on financial development we exploit social capital differences within italy in high social capital areas households are more likely to use checks invest less in cash and more in stock have higher access to institutional credit and make less use of informal credit the effect of social capital is stronger where legal enforcement is weaker and among less educated people these results are not driven by omitted environmental variables since we show that the behavior of movers is still affected by the level of social capital of the province where they were born

uses and abuses of estimates of the underground economy ered valuable by at least a part of society narcotics production and distribution prostitution gambling these activities can be large in some countries and should be counted in the national accounts of all countries although they rarely are their omission affects the comparability of data across countries the incomes generated by illegal activities are rarely taxed many other activities such as those associated with the subsistence or informal sectors are estimated rather than measured and are generally not taxed because of the low value they generate to those who engage in them in conclusion there are many reasons beside the ones discussed in this paper why the measurements of national output may not be complete about two decades ago a few economists became convinced that many normal economic activities that should be measured and taxed were taking place underground or in the shadow thus presumably escaping the attention of the statistical offices of the tax authorities and more generally of the government regulators some of these economists also claimed that like alice in wonderland these hidden activities were growing in a ridiculous fashion see gutmann 1977 and feige 1979 by the late 1970s the role of government had grown enormously so that the level of taxation and the tax rates had risen sharply and regulations had proliferated in many countries see tanzi and schuknecht 1997 these developments had created strong incentives for individuals and enterprises to go underground to avoid taxes and regulatory restrictions thus a good case could be made that what came to be called the underground economy was a phenomenon to worry about newspaper articles were ready to accept the

the economic value of transmission lines and the implications for planning models abstract many connections between economic efficiency regulation the environment and energy markets are evident in the planning for transmission upgrades in an electricity network transmission owners have to make decisions about investing in new assets while facing uncertainty in the generation plans regulatory and environmental constraints and current system endowments in this paper we demonstrate an analytical method for determining the economic value of individual transmission lines in a meshed network by calculating the total welfare effects for the system while many regulators believe that traditional congestion rents provide the correct incentives for investing in transmission upgrades we show that the uncertainty in system conditions breaks down this paradigm the analysis uses an existing security constrained optimal power flow scopf model and a test network to demonstrate how the method can be used to determine the welfare effects of changing the capacity of selected transmission lines the results show that a substantial portion of the economic benefits for an individual line may come from maintaining system reliability when equipment failures occur furthermore these benefits can change dramatically when inherently intermittent sources of renewable generation are added to a network and the changes in benefits are not captured effectively by changes in the expected congestion rents

currency demand and the growth of the underground economy in canada 1991 1995 the extent to which the recent introduction of a value added tax in canada contributed to the growth of the underground economy remains controversial if underground economy growth led to increased currency holdings and shifted the currency demand function forecasts for the period after the introduction of the tax should tend to underestimate currency holdings using a cointegration based error correction mechanism in vector autoregression models currency demand is estimated using quarterly data for 1968 1990 and dynamic forecasts are made for 1991 1995 on average currency demand is underpredicted but by a small amount the results are consistent with an increase in the underground economy of between 0 01 and 0 3 of gdp as a result of the new tax if changes in marginal direct tax rates are considered the underground economy may have grown between 0 1 and 0 7 of gdp in 1991 1995

cultural differences and institutional integration if citizens of different countries belonging to an economic union adhere to different and deeply rooted cultural norms when these countries interact they may find it impossible to agree on efficient policies especially in hard times political leaders are bound to follow policies that do not violate their country s cultural norms this paper provides a simple positive theory and a compelling case study of the euro area crisis to highlight the importance of cultural clashes when economies integrate we also provide a normative argument about the desirability of institutional integration a political union with a common enforcement agency is the more beneficial the greater is cultural diversity in an economic union

unemployment and the shadow economy abstractcurrent research links the shadow economy se and the unemployment rate either indirectly or by means of a preliminary estimate this article establishes and empirically implements a methodology for estimating the size of the se as a direct function of the tax and unemployment rates this link is found to be extremely relevant in countries with high unemployment rates such as greece and spain and less relevant in countries with moderate unemployment rates such as germany and italy unemployment s contribution to the se is shown to be significant especially in the years following the economic downturn of 2008 the calculation of the variance and distribution of these estimates is another significant contribution the common criticism that se estimates are unreliable is addressed by calculating the variance and the distribution of the estimates and the large size of the se in greece and spain is once again confirmed

the effect of robust growth on poverty a nonlinear analysis previous research has shown that economic growth should help to reduce the rate of poverty however a number of recent studies have found that the economic expansion of the 1980s had no statistically significant effect on aggregate poverty it is shown that both a threshold regression and a fourier approximation provide a better empirical model of poverty than the standard linear model it is noteworthy that the nonlinear specifications show a large and significant effect on poverty of the 1980s expansion

multidimensional housing deprivation indices with application to spain the main aim of this article is to define a multidimensional housing deprivation index and identify the main determining characteristics of this phenomenon using spain as reference a latent variable model is used in order to overcome some of the traditional difficulties encountered in multidimensional deprivation studies the construction of a latent structure model has allowed a set of partial housing deprivation indices to be grouped together under a single index it has also enabled each individual to be assigned to a different class depending on the level and type of deprivation results show that the vector of observed variables having hot running water heating a leaky roof damp walls or floor rot in window frames and floors and overcrowding and the correlations among such variables can be explained by a single latent variable there are also specific characteristics that differentiate the population affected by housing deprivation

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

impact of the regulatory framework for transmission investments on the cost of renewable energy in the eu abstract under the current regulatory frame in the eu transmission planning is done at the national level to maximize national welfare rather than european welfare in this paper we develop a competitive equilibrium model that calculates the impact of this imperfect regulatory framework on the cost of renewable energy we apply the model to a power system with two interconnected zones and find that the impact is case specific but significant we also find that the negative impact of national transmission planning on the cost of renewable energy is more significant in a state of the world in which member states trade renewable energy but that this negative effect is much smaller than the positive effect of renewable energy trade between member states we conclude that the imperfect regulatory framework for transmission investment is a significant cost for renewable energy in the eu but that it should not stop member states from trading renewable energy

robust multidimensional poverty comparisons we demonstrate how to make poverty comparisons using multidimensional indicators of well being showing in particular how to check whether the comparisons are robust to aggregation procedures and to the choice of multidimensional poverty lines in contrast to earlier work our methodology applies equally well to what can be defined as union intersection or intermediate approaches to dealing with multidimensional indicators of well being to make this procedure of some practical usefulness the paper also derives the sampling distribution of various multidimensional poverty estimators including estimators of the critical poverty frontiers outside which multidimensional poverty comparisons can no longer be deemed ethically robust the results are illustrated using data from a number of developing countries

impact of intermittent non conventional renewable generation in the costs of the chilean main power system abstract chile has recently approved a law aiming a target for electricity generation with non conventional renewable energy ncre of 20 by year 2025 it is anticipated that most of this ncre generation will be provided by intermittent energy sources wind and solar photovoltaic pv the economic consequences of intermittent ncre penetration in the chilean central interconnected system sic are assessed the ncre penetration is simulated with a 10 year horizon 2017 2027 considering four scenarios of ncre penetration 10 15 20 and 30 of total generation the authors model the hydro thermal operation of the power system and analyze spot prices total operation costs and capacity factors results show that the average spot price in the sic when having an optimal minimum cost generation mix is 89 7 us mwh as intermittent ncre penetration increases some thermal base load units capacity factors change producing an increase in the generation cost additional transmission capacity is also needed elevating the total cost the average incremental cost of integrating intermittent ncre generation is 65 8 us mwh when increasing ncre penetration from 10 to 30 the effect of fossil fuel price fluctuation is also addressed two policy guidance elements are presented intermittency should be reduced by diversifying the renewable portfolio and penetration costs of intermittent ncre generation have to be incorporated into their investment or operation costs

poverty and social exclusion two sides of the same coin or dynamically interrelated processes there is growing interest in the analysis and measurement of social exclusion to complement the static and dynamic literature on income poverty on theoretical grounds social exclusion and income poverty are seen as different processes but with closely interrelated dynamics however our empirical understanding of the way these two processes dynamically interact at the individual level is still very limited to shed some light on the issue we use a dynamic bivariate probit model controlling for unobserved heterogeneity and wooldridge 2005 type initial conditions both the first and second order markov dynamics are examined we estimate the model using the italian sample of the european community household panel echp waves 1 8 and find a sizable extent of state dependence in both poverty and social exclusion moreover there are dynamic cross effects implying that poverty and social exclusion are mutually reinforcing social policies aimed at eradicating poverty and avoiding individuals social

a welfare analysis of electricity transmission planning in germany we analyze the electricity transmission planning process in germany netzentwicklungsplan which separates transmission expansion decisions from generation dispatch we employ an economic modeling approach to analyze two different network planning settings in the first setting there is no trade off between transmission network development and generation dispatch as is currently the case in germany a second setting alternatively allows for such a trade off and thus represents a welfare superior way of transmission network planning applications with the two model variants are carried out for the german electricity system in 2035 the results illustrate overinvestment in transmission capacity and decreased welfare associated with the netzentwicklungsplan

climbing out of poverty falling back in low income stability in spain the study of the probability of entering or escaping a low income spell is not sufficient to fully describe a household s experience in deprivation if poverty spells are recurrent in time the persistency of poverty for a given household is not completely described unless the household s likelihood of a fall back into deprivation shortly after exit is considered it is found that by combining the re entry equation results with those of the exit equation one can discuss in a comprehensive way which household characteristics promote welfare stability or instability and poverty persistence or transience results indicate that one third of households who manage to leave poverty in spain return to it shortly after exit this upward income mobility if maintained for a year appears to enable a state of non poverty for a lengthy period better educated households and households with a spouse are more stable in their income level also the point reached in the income distribution after a jump out of poverty

review of grid tie micro generation systems without energy storage towards a new approach to sustainable hybrid energy systems linked to energy efficiency abstract this paper reviews the literature on the subject albeit approaching hybrid micro generation power systems from a systems thinking st and cybernetics standpoint viewing them as dynamically complex adaptive systems cas coupled with and supplying to a set of homes termed a sustainable block in a rural setting here homeostatic regulation hr and control play a vital role in reaching efficient equilibrium towards reconciling power supply and demand response management unlike most of the work reviewed in the literature the focus here is on supervisory control of grid connected micro generation systems without energy storage aiming towards building energy efficiency thriftiness and sustainability in energy consumption building on homeostatic control hc principles first introduced by f c schweppe in 1979 the paper explores the concepts of sustainability and sustainable hybrid energy systems shes applied to micro generation focusing on operational aspects rather than on socio economic environmental or regulatory ones a concrete theoretical model for building a shes is presented for a proposed grid connected renewable microgrid the model seeks to reconcile power supply and demand towards efficient equilibrium homeostasis proposing reward based criteria for controlling renewable electricity supply and consumption in rural communities in chile discussion and recommendations are also offered stating that energy sustainability es is essentially a systems issue and one where es is first and foremost a structural organizational and operational property which is in the very nature of the system itself it is built into it rather than explained by exogenous factors

composite indices of physical quality of life basic needs fulfilment and income a principal component representation abstract in the context of international comparisons the multivariate method of principal components is suggested for computing composite indices of economic development that capture per capita income basic needs fulfilment and other possible indicators of well being the method is conceptually appealing easy to apply and seems promising in several directions two illustrative applications are given one develops a composite index based on the three pqli constituents and per capita gnp for 147 countries in the other a composite index of basic needs fulfilment is first computed for 82 countries and then a more inclusive measure that also takes account of per capita gnp is derived

transmission and generation investment in electricity markets the effects of market splitting and network fee regimes abstract we propose an equilibrium model that allows to analyze the long run impact of the electricity market design on transmission line expansion by the regulator and investment in generation capacity by private firms in liberalized electricity markets the model incorporates investment decisions of the transmission system operator and private firms in expectation of an energy only market and cost based redispatch in different specifications we consider the cases of one vs multiple price zones market splitting and analyze different approaches to recover network cost in particular lump sum generation capacity based and energy based fees in order to compare the outcomes of our multilevel market model with a first best benchmark we also solve the corresponding integrated planner problem using two test networks we illustrate that energy only markets can lead to suboptimal locational decisions for generation capacity and thus imply excessive network expansion market splitting heals these problems only partially these results are valid for all considered types of network tariffs although investment slightly differs across those regimes

sustainable transmission planning in imperfectly competitive electricity industries balancing economic and environmental outcomes abstract we explore the role of a transmission system operator tso that builds a transmission line to accommodate renewable energy in order to lower emissions as required by government policy in contrast to central planning a tso in a deregulated electricity industry can only indirectly influence outcomes through its choice of the transmission line capacity via a bi level model we show that this results in less transmission capacity and with limited emissions control in a perfectly competitive industry vis a vis a benchmark centrally planned system a carbon charge on industry that fully accounts for the cost of pollution damage leads to a perfect alignment of incentives and maximised social welfare only under perfect competition by contrast a carbon charge may actually lower social welfare under a cournot oligopoly as the resulting reduction in consumption facilitates the further exercise of market power

do generation firms in restructured electricity markets have incentives to support social welfare improving transmission investments this paper examines the incentives that generation firms have in restructured electricity markets for supporting long term transmission investments in particular we study whether generation firms which arguably play a dominant role in the restructured electricity markets have the incentives to fund or support incremental social welfare improving transmission investments we examine this question in a two node network and explore how such incentives are affected by the ownership of financial transmission rights ftrs by generation firms in the analyzed two node network we show both i that the net exporter generation firm has the correct incentives to increase the transmission capacity incrementally up to a certain level and ii that although a policy that allocates ftrs to the net exporter generation firm can be desirable from a social point of view such a policy would dilute the net importer generation firm s incentives to support transmission expansion moreover if all ftrs were allocated or auctioned off to the net exporter generation firm then it is possible to increase both consumer surplus and social welfare while keeping the net exporter generation firm revenue neutral

climbing out of poverty falling back in measuring the persistence of poverty over multiple spells this paper investigates the persistence of poverty over individuals life times using a hazard rate approach that accounts for multiple spells of poverty and incorporates spell duration individual and household characteristics and unobserved heterogeneity the findings highlight the importance of considering multiple spells in an analysis of poverty persistence with half of those who end poverty spells returning to poverty within four years accounting for multiple spells shows that approximately 50 percent of blacks and 30 percent of whites falling into poverty in some year will have family income below the poverty line in five or more of the next ten years

presidential address institutions and culture how and why does distant political and economic history shape the functioning of current institutions this paper argues that individual values and convictions about the scope of application of norms of good conduct provide the missing link evidence from a variety of sources points to two main findings first individual values consistent with generalized as opposed to limited morality are widespread in societies that were ruled by non despotic political institutions in the distant past second well functioning institutions are often observed in countries or regions where individual values are consistent with generalized morality and under different identifying assumptions this suggests a causal effect from values to institutional outcomes the paper ends with a discussion of the implications for future research jel a10 d7 e00

policy implications of new data on income mobility the existence of income mobility may moderate concerns about growing inequalities especially if income mobility has increased however the evidence for rising mobility is equivocal and its extent is not enough to offset the growth of cross sectional inequality there is a case for greater concern for and different policies towards those persistently or recurrently poor than those only temporarily poor but the data analysed here suggest that the bulk of low income observations come from the first two categories analysis of income mobility may help understand why people s incomes follow different trajectories and how policy might affect this

an econometric method of estimating the hidden economy united kingdom 1960 1984 estimates and tests in this paper a method of estimating the unrecorded part of the gnp based on a modified reset procedure applied to a currency demand equation is proposed the model passes all standard diagnostic tests and the estimates of the unrecorded economy provide plausible answers when used as a proxy for the tax evaded income the method is easily applicable to most countries with minor modifications copyright 1990 by royal economic society

the effects of irregular markets on macroeconomic policy some estimates for belgium abstract the paper aims at evaluating the efficiency of traditional keynesian demand or neo classical income policies in the presence of an irregular sector the analysis is applied to the belgian economy for which it is shown that the objectives of increasing output and employment and reducing the importance of the irregular economy will often lead to conflicting policy prescriptions in addition keynesian multipliers may be lowered by as much as 40 though the irregular market only represents some 10 to 15 of total activity