common property rights as an endogenous response to risk in recent years considerable progress has been made in improving our understanding of rural institutions including property rights e g binswanger and rosenzweig on close inspection property rights often turn out to be multidimensional and complex bailey migot adholla et al despite the widely acknowledged advantages of private property rights regimes numerous authors have demonstrated the resiliency and surprising pervasiveness of common property rights bromley and chavas ciracy wantrup and bishop ostrom although variations in weather in general and rainfall in particular have often been recognized as important sources of production risk and thereby as important determinants of property rights almost all the attention has been directed to intertemporal variability virtually neglected have been the local spatial variability of rainfall and hence such important issues as a the extent to which the production risks of rural production covary from one local community to another b the behavioral and institutional adaptations to such environmental conditions and c implications for public policy several factors would seem to have contributed to the neglect of such issues a in the more heavily studied temperate and relatively humid zones of the world the local variability of rainfall is relatively small huff and shipp hutchison jackson johnson and dart mcconkey nicholaichuk and cutforth b there is a dearth of data from a multiplicity of weather stations in arid r gions c intertemporal variations of rainfall have been of greater interest than interregional ones and d because drought induced agricultural production shortfalls are generally associated with price increases price risk tends to offset production risk thereby lowering the overall importance of weather related risk for farm incomes however there is strong evidence from various arid and semiarid regions asars of the world that the local variability of rainfall is considerably greater than in the more temperate and humid areas thompson and wilson sharon 1972 1974 1979 1981 giovinetto 1972 1974 jackson such studies also show a that studies based on annual rainfall greatly understate the magnitude and impact of such variability over the relevant productive season of the year b that intertemporal and local variability tend to be rather highly correlated and c that in the more arid of asars rainfall may be insufficient for agriculture implying that only animal husbandry might be viable in such situations price changes are unlikely to offset production changes indeed in drought conditions animal herders are often forced to sell off their animals at low and falling prices distress sales implying that production and price risk are likely to compound rather than offset each other therefore income risk is bound to be considerably more important in the drier asars moreover with neither insurance nor credit markets accessible to asar residents for reasons identified by binswanger and rosenzweig the sharp terms of trade deterioration associated with drought often give rise to severe exchange entitlement failure and famine explaining why herders are especially prominent among those suffering from famine sen jeffrey nugent is a professor of economics at the university of southern california los angeles nicolas sanchez is an associate professor of economics college of the holy cross worcester massachusetts

collective labor supply and household production this paper emphasises the importance of incorporating household production into the collective model of the household and considers how and to what extent the results of chiappori 1992 can be extended to this case this abstract was borrowed from another version of this item

individual versus joint taxation in models with household production in a recent paper piggott and whalley 1996 challenge the conventional wisdom that says that the individual rather than the household should be the unit of taxation and argue instead for joint taxation their point of departure is a point well taken the literature on which this wisdom is based in particular boskin and sheshinski 1983 ignores the existence of household production the general argument is a nice one in the theory of the second best in the absence of taxation of market wage income the marginal rates of technical substitution between primary and secondary labor in market and in household production would be equal to each other and the marginal rate of substitution between the market and household good would be equal to the marginal rate of transformation between them thus achieving pareto efficiency introduction of income taxation leads to a distortion of the relation between the marginal rate of substitution and the marginal rate of transformation which is the focus of concern in the literature 2 and given the differing econo

an equilibrium model of the business cycle with household production and fiscal policy the authors estimate a dynamic general equilibrium model of the u s economy that includes an explicit household production sector and stochastic fiscal variables they use their estimates to investigate two issues first the authors analyze how well the model accounts for aggregate fluctuations they find that household production has a significant impact and reject a nested specification in which changes in the home production technology do not matter for market variables second the authors study the effects of some simple fiscal policy experiments and show that the model generates different predictions for the effects of tax changes than similar models without home production copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

women on welfare a macroeconomic analysis look at the dramatic change in family structure that has occurred recently illustrated in figure 1 in the united states 23 percent of children lived with an unwed mother in 1998 compared with only 8 percent in 1960 1 of this 15 percentage point increase about 6 percentage points are due to a rise in the rate of divorce the remaining 9 percentage points arise from an increase in out of wedlock births why care about this change in the structure of families the lot of children living with a single mother is bleak about 70 percent of those children in a family with a never married mother were living near or below the poverty level in 1995 the corresponding figure for children being raised by a divorced mother was 45 percent associated with the increase in number of single mothers has been a rise in the percentage of the population on welfare in 1960 only 1 7 percent of the population was on afdc aid to families with dependent children while in 1995 about 5 2 percent were most mothers who received afdc were single 71 percent were in 1993 also afdc mothers tended to have more children 2 6 on average vs 2 1 for the population as a whole in 1993 it is interesting to note that there is evidence suggesting that more entrances into and exits out of welfare are connected with a shift in family structure rather than with a change in employment status for instance of the first time entrances into welfare during 1983 1991 about 21 percent were associated with an out of wedlock birth 23 percent were connected with a divorce or separation and 21 percent were linked with a reduction in the mother s work hours last real afdc benefits rose by about 70 percent between 1945 and 1977 they were about 25 percent higher in 1995 than in 1945 could this have contributed to the rise in single motherhood the task here is to outline a general equilibrium model in which at any point in time some individuals will marry others will divorce and yet others will choose to have out of wedlock births while the model is still prototypical in nature it will be shown how such a framework can be used to address public policy questions in particular the impact of welfare on family structure and the well being of the economy

equivalent expenditure functions and expenditure dependent equivalence scales abstract this paper presents and investigates a new class of equivalent expenditure functions that is a generalization of the one that corresponds to exact independent of base equivalence scales it provides less restrictive household demands especially for children s goods and has associated equivalence scales that may depend on expenditure we show that under certain conditions equivalent expenditure functions and the associated expenditure dependent equivalence scales can be uniquely estimated from demand data we estimate them using canadian data and find that the resulting scales are both plausible and expenditure dependent the estimated equivalence scales for households with children decline significantly as expenditure increases

risk management in gathering economies abstract this article extends the literature on the interplay of environmental risk and welfare into the setting of coastal fisheries gathering it reviews the sources of covariate and idiosyncratic production risk creating income shocks to gatherers and discusses the institutions that best mediate shocks across different settings we rely upon a principal agent framework between larva gathering agents employed by boat owning principals who supply seed to shrimp farms two datasets from a central american fishery are used to test the hypotheses concerning contractual performance across environments which contract provides the highest mean income and variation depends upon the underlying production catch data in the farm production records dataset with strong catch trends a simplified relative payments contract would perform better in reducing income risk in locations of stronger covariate shocks but at the price of significantly lower mean earnings for gatherers in areas of idiosyncratic shocks su

identification and estimation of a class of household production models we consider a class of household production models characterized by a dichotomy property in these models the amount of time spent on household production does not depend on the household utility function conditional on household members having a paid job we analyse the non parametric identifiability of the production function and the so called jointness function a function describing which part of household production time is counted as pure leisure it is shown that the models are identified in the two adult case but not in the single adult case we present an empirical application to swedish time allocation data the estimates satisfy regularity conditions that were violated in previous studies and pass various specification tests for this data set we find that male and female home production time are q substitutes copyright c 2003 john wiley sons ltd

ownership and control in mexico s community forestry sector abstract ownership and control are rarely synonymous this article examines the factors motivating mexican agrarian communities with forests to participate and invest in timber production activities an opportunity that has opened in the past 20 years due to changes in mexican forestry policy we propose that contractual difficulties with downstream production services and buyers led community members to forward integrate into the wood production industry to enjoy greater benefits from production an incomplete contracting model frames our analysis while original community level data from oaxaca mexico serves as the basis for empirical quantification using measures of specificity of investments uncertainty multiple uses of the forest and managerial and labor expertise it is found that communities with higher levels of human social and resource capital endowments are more likely to integrate forward into timber processing activities

on risk transactions and economic development in the semiarid tropics recent interest in the institutions and production relations of tropical agriculture seem to hold promise for increased collaboration between economists and anthropologists in efforts to explain existing patterns of production and socioeconomic interaction this focus on customs and on the more formal institutional arrangements is encouraging given the continuing concern for food production in much of the semiarid tropics two recent papers are particularly germane to this growing literature h p binswanger and m r rosenzweig have offered a foundation for addressing the production relations in agriculture with a general focus on conditions in south asia more recently binswanger and j mcintire provide an explanation for the major institutions and customary features of production relations in three agroclimatic subzones of the land abundant tropics that have simple technology and high transport costs 2 they also offer predictions of how these institutions and features might change in response to the opening up of subsistence economies and to population growth our approach here is consistent with this recent work in several respects first it is explanatory in that we offer possible explanations for observed behavior in the land abundant tropics where agriculture is a mixture of cropping and livestock management second it is predictive in that we draw on economic theory to hypothesize likely changes in behavior in the face of institutional change finally it is offered in the interest of stimulating a concern for the institutional preconditions of economic development by such preconditions we have in mind the institutional arrangements that can stimulate the economic development process in particular we focus on the role of transactions in the economy we do not believe that there is anything intrinsically undesirable about transactions that are restricted to a circle of family and acquaintances on the contrary such transactions play an important

labour supply household production and intra family welfare distribution abstract this paper demonstrates the importance in conceptual and empirical terms of incorporating household production in models of labour supply to avoid misleading results concerning the intra family distribution of income and behavioural responses to economic policy

poverty and famines an essay on entitlement and deprivation this book focuses on the causes of starvation in general and famines in particular the traditional analysis of famines is shown to be fundamentally defective and the author develops an alternative analysis

institutional inequality and tax incidence abstract this paper analyses the effects of taxation when inequality is not innate a theory of institutional inequality is presented which employs a trade model with circular production and the theory of clubs inequality is introduced by constraints on entry into sectors and local groups within sectors individual time is treated as a fixed factor of production and work and leisure are re defined the analysis suggests that when inequality is institutional and government policy does not alter the mechanisms by which institutions translate the distribution of power into the distribution of income a redistribution of income by conventional tax transfer schemes may not always be feasible

children and household economic behavior this paper looks at some of the methodological issues that arise in modeling the effects of children on household behavior and presents some estimates for selected areas for our purposes household behavior will be taken to refer to household decisions on labor supply the allocation of expenditure to different periods and the decision as to what to do with the difference between income and expenditure i shall be concerned mainly with the effects of dependent children and i restrict attention largely to western societies excerpt

home production meets time to build an innovation in this paper is to introduce a time to build technology for the production of market capital into a model with home production our main finding is that the two anomalies that have plagued all household production models the positive correlation between business and household investment and household investment s leading business investment over the business cycle are resolved when time to build is added

nonmarket household time and the cost of children raising children demands a considerable amount of parental time obliging working parents either to reduce their leisure time further or to buy childcare services in the market parents may face additional opportunity costs upon deciding to participate in the labor market but these are difficult to measure using a survey instrument in belgium and germany we estimate the income compensation needed to maintain family well being when adults work versus when they do not enter the labor market in both countries we find that full time working parents face extra child costs and require higher labor market participation compensation compared with childless adults

the hazards of small firms in southern africa small enterprises are a ubiquitous feature of the economies of many developing countries this study is the first to examine the duration of their survival using economic theory and modern econometric techniques using data sets from surveys conducted in four southern african countries i estimate a proportional hazards model describing the closure rates of a sample of approximately 21 000 firms there is an inverse relationship between enterprise growth rates and the closure hazard the sector where it operates influences the hazard as does its location in some countries female headed firms are at a survival disadvantage compared to their male counterparts

approximate optimality of aboriginal property rights in contrast to the relatively rich literature enlightened by many cases on property rights in modern societies the corresponding literature by economists on aboriginal societies is peremptory and uninformed by interdisciplinary studies this relatively brief literature is enlightened by only a few case studies and concrete examples both the analysis and its credibility can be improved by more use of relevant data covering a wider variety of cases this article undertakes such an endeavor using the observations of anthropologists of the diverse set of rights customs and practices of over fifty aboriginal peoples the cases considered here include peoples who used their group territories for hunting and fishing for gathering wild roots fruit vegetables and invertebrates and sometimes for primitive horticulture among the studied groups one observes almost all conceivable structures of rights the study of aboriginals can make especially clear the advantages of one type of property right over another because in most cases these people lived at the margin of subsistence in more developed societies departures from optimality mean lower living standards and lower growth rates luxuries these societies can afford by contrast in societies near the margin of subsistence with populations under malthusian control such departures had harsher effects which one would expect to see reflected in the surviving societies unsound rights structures generally implied lower population size and perhaps the disappearance of the society where the balance of advantage and disadvantage between alternative institutions was reasonably close however more than one could be found one therefore expects the data on aboriginals to provide relatively direct evidence on the structure of an optimal system of property

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

the identification of fixed costs from consumer behavior some household expenditures such as those for subsistence or basic needs are fixed using the methodology of equivalence scales we develop a model in which differences in fixed costs of characteristics across households can be identified from household behavior equivalent expenditure for a household is the expenditure needed to bring a reference household such as a single childless adult to the level of well being of household members the equivalence scale for the household is the ratio of expenditure to equivalent expenditure only two types of equivalent expenditure functions are used in practice those in which the ratio of household expenditure and equivalent expenditure is independent of expenditure and those in which their difference is independent of expenditure we propose a class of equivalent expenditure functions that allows for differences in fixed costs and generalizes both relationships using canadian consumer demand microdata we estimate equivalent expenditure functions and equiva

using theory for measurement an analysis of the cyclical behavior of home production abstract a significant amount of economic activity takes place within the home unfortunately it is difficult to assess the cyclical properties of home production because the available data are too sporadic using a real business cycle rbc model we construct quarterly data on three variables that are unobservable at a quarterly frequency hours worked in the home sector hours spent in leisure and the consumption of home produced goods three results emerge leisure is countercyclical while nonmarket hours are acyclical hours spent in home production have declined significantly since the 1970s fluctuations in market output are a good measure of fluctuations in individual utility as long as home and market consumption are either extreme complements or extreme substitutes in the production of utility

home production with endogenous growth abstract benhabib et al 1991 and greenwood and hercowitz 1991 demonstrate that general equilibrium beckerian home production models that incorporate separate technology shocks to the home and market production functions are able to explain either the comovements in employment across consumption and investment sectors of the economy or the comovement in output across market and home investment sectors but not both simultaneously this paper demonstrates that these comovements can be resolved by introducing endogenous growth into the model while retaining only a single technology shock to market production the additional margin for allocating time between formal training and market activities is sufficient to bring about the observed positive comovements in employment and output across sectors