preference based vs market based discrimination implications for gender differentials in child labor and schooling abstract this paper studies the effects of son preference by parents and earnings function bias on child labor and schooling in a model in which parents are altruistic it finds that son preference leads to gender differential in child labor with female children working more than male children but it does not lead to gender differential in schooling except when the bequest constraints are binding on the other hand the earnings function bias results in gender differential in both child labor and schooling dowry and marriage expenses can lead to inefficiently low level of schooling and high level of child labor son preference magnifies gender differential in child labor and schooling in the presence of dowry and marriage expenses

operating flexibility global manufacturing and the option value of a multinational network the multinational corporation is a network of activities located in different countries the value of this network derives from the opportunity to benefit from uncertainty through the coordination of subsidiaries which are geographically dispersed we model this coordination as the operating flexibility to shift production between two manufacturing plants located in different countries a stochastic dynamic programming model treats explicitly this flexibility as equivalent to owning an option the value of which is dependent upon the real exchange rate the model is extended to analyze hysteresis effects and within country growth options we show that the management of across border coordination has led to changes in the heuristic rules used for performance evaluation and transfer pricing

random yield supply chain with a yield dependent secondary market abstract this paper considers a simple supply chain with one supplier and one retailer where the supplier s production is subject to random yield and the retailer faces uncertain demand there exists a secondary market for acquiring or disposing products by the supplier we study both the centralized and decentralized systems in the decentralized system a no risk sharing contract and a risk sharing minimum commitment contract are analyzed the supply chain with the risk sharing contract is further analyzed with a constant secondary market price and a yield dependent secondary market price we present both the supplier s and the retailer s optimal strategies and provide insights for managers when making decisions under random yield risk and demand uncertainty we find that the secondary market generally has a positive impact on supply chain performance and the actual effect of random yield risk on the supply chain performance depends on cost parameters and supply chain contract settings under certain conditions reducing yield randomness may weaken the double marginalization effect and improve the chain performance from the numerical study we also show that there exists an optimal commitment level for the supply chain

on the integration of production and financial hedging decisions in global markets we study the integrated operational and financial hedging decisions faced by a global firm who sells to both home and foreign markets production occurs either at a single facility located in one of the markets or at two facilities one in each market the company has to invest in capacity before the selling season starts when the demand in both markets and the currency exchange rate are uncertain the currency exchange rate risk can be hedged by delaying allocation of the capacity to specific markets until both the currency and demand uncertainties are resolved and or by buying financial option contracts on the currency exchange rate when capacity commitment is made a mean variance utility function is used to model the firm s risk aversion in decision making we derive the joint optimal capacity and financial option decision and analyze the impact of the delayed allocation option and the financial options on capacity commitment and the firm s performance we show that the firm s financial hedging strategy ties closely to and can have both quantitative and qualitative impact on the firm s operational strategy the use or lack of use of financial hedges can go beyond affecting the magnitude of capacity levels by altering global supply chain structural choices such as the desired location and number of production facilities to be employed to meet global demand

perishable inventory theory a review this paper reviews the relevant literature on the problem of determining suitable ordering policies for both fixed life perishable inventory and inventory subject to continuous exponential decay we consider both deterministic and stochastic demand for single and multiple products both optimal and sub optimal order policies are discussed in addition a brief review of the application of these models to blood bank management is included the review concludes with a discussion of some of the interesting open research questions in the area

international diffusion of technology industrial development and technological leapfrogging abstract this paper anlyzes how the international diffusion of technology fits historically within the overall process of spurts of industrialization and what lessons can be learned by the present industrializing countries in the context of the microelectronics revolution a review of some of the most important contributions to the technology diffusion literature and their relevance to structural theories of industrial development of economic growth is presented in the first part of the paper a discussion of international diffusion especially historical changes in technological leaderships follows the paper concludes with a consideration of the implications of diffusion analysis for industrializing countries and argues that the developing countries potential for technological leapfrogging into microelectronics has never been higher

joint pricing and procurement of fashion products in the existence of clearance markets abstract this paper focuses on the joint pricing and procurement of fashion products in the existence of clearance markets it is assumed that the expected regular season demand is a linear decreasing function of the price and the end of period excess inventory is sold at a known discounted price in a clearance market where the demand is a random variable that follows a general distribution it is shown that the expected profit function is unimodal and the optimal procurement quantity and price can be found from the first order conditions existence of a clearance market increases the profit price and the procurement quantity in order to prove this the optimal procurement and pricing policy of a price setting retailer who does not have a clearance market is provided as opposed to the literature it is shown that the expected profit function of this problem is unimodal as well a numerical study demonstrating the magnitude of the increase in profit procurement quantity and price is reported

premature de industrialisation theory evidence and policy recommendations in the mexican case the main consequences of premature de industrialisation are a slowdown in the rate of economic growth and the deferral of economic development despite having adopted a successful export led growth strategy since the early 1980s these two phenomena have characterised the mexican economy during the past three decades in this article i investigate whether premature de industrialisation has been a major contributor to mexico s economic stagnation and attempt to identify which factors have been driving it the results confirm the hypothesis of premature de industrialisation and suggest that the evolution of income capital accumulation labour manufacturing productivity trade openness and the exchange rate provide an explanation for this process i also suggest a set of alternative policy measures aimed at returning the mexican economy to the path of growth and development

global production planning under exchange rate uncertainty motivated by an aggregate production planning problem in an actual global manufacturing network we examine the impact of exchange rate uncertainty on the choice of optimal production policies when the allocation decision can be deferred until the realization of exchange rates this leads to the formulation of the problem as a two stage recourse program whose optimal policy structure features two forms of flexibility denoted as operational hedging 1 production hedging where the firm deliberately produces less than the total demand and 2 allocation hedging where due to unfavorable exchange rates some markets are not served despite having unused production our characterization of the optimal policy structure leads to an economic valuation of production and allocation hedging we show that the prevalence of production hedging is moderated by the degree of correlation between exchange rates a comprehensive examination under the following four generalized settings provides the depth scope and relevancy that our proposed operational hedges play to facilitate aggregate planning 1 multiple periods 2 demand uncertainty 3 price setting or monopolistic pricing and 4 price setting under demand uncertainty we show that production and allocation hedging are robust for these generalizations and should be integrated into the overall aggregate planning strategy of a global manufacturing firm

the seven main stylized facts of the mexican economy since trade liberalization and nafta in mexico a remarkably dynamic expansion of exports has been associated with a surprisingly poor overall growth performance moreover this collapse of the export multiplier took place in a context of both massive inflows of foreign direct investment and unrestricted market access to the us the first two items on all developing countries growth agenda today therefore the study of mexico is an ideal scenario within which to assess the impact of the new development model on growth and catching up copyright 2005 oxford university press

schooling search and spouse selection testing economic theories of marriage and household behavior the implications of the economic theories of marriage and of household fertility behavior are tested in a framework in which educational investment marital search and marital matches are responsive to marriage market conditions and the personal traits of individual agents some of which are unobserved by the econometrician implications are also derived and tested for the effects of longevity attractiveness preferences and labor and marriage market conditions on schooling marriage age and spouse choice the empirical results indicate that inattention to heterogeneity and martial selection leads to a false rejection of the economic theory of marriage but to a false acceptance of the value of time fertility hypothesis

standardised capital stock estimates in latin america a 1950 94 update capital stock estimates are used extensively in many areas of economic research in spite of both theoretical and practical difficulties with respect to their use estimation and meaning the lack of comparable capital stock estimates in latin america has hindered analysis of economic development in the region and comparisons with other developed and developing countries standardised gross and net fixed capital stock estimates for the 1950 94 period are presented for seven latin american countries argentina brazil chile colombia ecuador mexico and venezuela the methodology employed is the perpetual inventory method which estimates capital stocks as a weighted sum of past investment flows several methodological issues are discussed especially depreciation and service life estimation capital stocks have been disaggregated in machinery and equipment non residential and residential structures with services lives of 15 40 and 50 years respectively copyright 2000 by oxford university press

investments in schooling in two generations in pre revolutionary nicaragua the roles of family background and school supply abstract family background and school supply underlie the demand and supply for schooling but are usually ignored in empirical estimates these considerations are investigated for two generations in nicaragua using unique data on adult sisters and their offspring to identify inter versus intrafamilial effects and to control for unobserved family background the results suggest that the standard interpretations are misleading 1 unobserved family background and school supply factors are important in schooling determination 2 omission of these factors leads to overestimates of impacts of parental schooling and family size 3 both parental schooling and family size primarily represent unobserved family background and school supply in standard estimates

birth order and the intrahousehold allocation of time and education this paper develops a model of intrahousehold allocation with endogenous fertility which captures the relationship between birth order and investment in children it shows that a birth order effect in intrahouse hold allocation can arise even without assumptions about parental preferences for specific birth orders of children or genetic endowments varying by birth order the important contribution is that fertility is treated as endogenous a possibility that other models of intrahousehold allocation have ignored the implications of the model are that children with higher birth orders that is who are born later have an advantage over siblings with lower birth orders and that parents who are inequality averse will not have more than one child the model furthermore shows that not taking account of the endogeneity of fertility when analyzing intrahousehold allocation may seriously bias the results the effects of a child s birth order on its human capital accumulation are analyzed using a longitudinal

impact of microfinance on schooling evidence from poor rural households in bolivia summary channels for the influence of microfinance programs on a rural household s demand for schooling are identified income growth risk management child labor demand gender empowerment and parent information within a random utility framework a model of household consumption investment in education and borrowing suggests determinants at the individual household and regional levels of the probability of schooling gaps using data from two surveys of households of clients of microfinance organizations in bolivia regression models examine determinants of schooling gaps inferences about otherwise positive microfinance impacts identify potential negative effects of increased child labor demand which challenge usual assumptions and pose dilemmas for policymakers

the effect of large order quantities on expected profit in the single period model abstract the classical assumption in the single period model is that excess inventory is discounted and sold at the end of the period however the effects of large order quantities which may result in excess inventory remaining until the discount stage on the following period s demand is not considered for many products such as ski equipment and clothing customers buying large quantities of these products at the discount stage may reduce their demand for the same type of product in the next period thus having large amount of inventory to discount at the end of the period may lead to a reduction in next period s demand and therefore may reduce profit this paper investigates the effect of large order quantities on expected profit in the single period model the paper also provides an algorithm for identifying the new optimal order quantity for the problem under explicit consideration of the spell over effect of over estimating demand

the newsvendor problem in a global market optimal centralized and decentralized control policies for a two market stochastic inventory system the global markets of today offer to the style goods producer more selling opportunities and pose new challenges in production planning and coordination from a production management standpoint the opportunity to exploit the difference in timing of the selling season of geographically dispersed markets for style goods is important for improving the firm s profitability in this paper we examine the above issue with an insightful model of a producer of style goods selling the goods to two markets a primary and a secondary market with nonoverlapping selling seasons we refer to this problem as the global newsvendor problem for the above two market stochastic inventory systems we first develop optimal centralized control policies then we demonstrate the suboptimality of decentralized production control policies with the production centers at each market treated as independent profit centers and a constant transfer price being used to coordinate their production we propose as an effective alternative a decentralized production control structure with a nonlinear pricing scheme for production coordination among centers administered through an intermediate organizational unit in our modeling we explicitly consider the effects of exchange rate uncertainty on the production planning decisions

fairness concepts and the intrahousehold allocation of resources abstract how do parents allocate scarce resources among their children while much research has focused on investment strategies parents preferences for equity may also play a role in the household allocation of resources while the studies that incorporate equity define it in limited terms in this paper several fairness concepts are applied to the problem of intrahousehold distribution comparing food allocations and health outcomes across fairness concepts indicates that each concept results in a different allocation of food and a different health outcome the implications of this result for empirical studies of intrahousehold distribution and policy interventions are discussed

the effect of sibling sex composition on women s education and earnings this paper documents the impact of siblings on the education of men and women born in the united states between 1920 and 1965 we examine the effect of the number and sex composition of a boy or girl s siblings on that child s educational attainment we find that throughout the century women s educational choices have been systematically affected by the sex composition of her siblings and that men s choices have not women raised only with brothers have received on average significantly more education than women raised with any sisters controlling for household size since sibling sex composition affects women s educational attainment and plausibly may be unrelated to other determinants of earnings it may provide a useful instrument for education in earnings functions for women our results suggest that standard estimates significantly underestimate the return to schooling for women

endogenous altruism theory and evidence from chinese twins this paper studies the endogenous formation of intersibling altruism the theory suggests that parental incentive to foster children s fraternal love is positively related to efficiency gains from

strategic investments trading and pricing under forecast updating this paper considers two independent firms that invest in resources such as capacity or inventory based on imperfect market forecasts as time progresses and new information becomes available the firms update their forecasts and have the option to trade their resources the trade contract is determined as the bargaining equilibrium or alternatively as the price equilibrium assuming a fairly general form of the profit functions we characterize the nash equilibrium investment levels which are first best under the price equilibrium trade contract but not under the bargaining equilibrium trade contract to gain additional insights we then focus on firms that face stochastic demand functions with constant price elasticity and have contingent pricing power assuming a general forecast evolution process we characterize the impact of the option to trade and the firms cooperation on equilibrium investments expected prices profits and consumer surplus finally to study the main driving forces of trading we employ a well established and empirically tested forecast updating model in which the forecast evolution process follows a two dimensional geometric brownian motion under this model we prove that the equilibrium investments expected prices profits and consumer surplus are nondecreasing in the quality and timing of forecast revisions in market variability and in foreign exchange volatility but are nonincreasing in market correlation

decentralizing cross functional decisions coordination through internal markets a firm faces many problems that are inherently cross functional to solve them successfully requires the coordinated actions of many functional representatives acting in a decentralized setting functional managers however respond to their own individual incentives and may consequently fail to maximize the overall profits of the firm we examine this issue in a setting in which the output of early actions limits the range of later actions and we propose an incentive scheme that allows the system to be successfully decentralized our mechanism is based on linear transfer prices for the intermediate output that are implemented through an internal market a market maker buys the output from one function and sells it to another she is not obliged to sell at the same price at which she bought and may set prices solely to provide incentives we illustrate the flexibility of the scheme by applying it to several models in the operations management literature

nutrition health birth order and seasonality intrahousehold allocation among children in rural india abstract nutrients available to children are determined largely by intrahousehold allocations there are a number of reasons why birth order may affect these allocations a model is developed to estimate critical parameters of parental preferences regarding the allocation of nutrients among their children latent variable estimates for rural south india indicate that parental preferences have productivity equity tradeoffs and parents favor older children the productivity equity tradeoff however is much less for the lean season therefore when food is scarcest parents follow more closely a pure investment strategy exposing their more vulnerable children to greater malnutrition tisk

effects of a sibship extension to foster children on children s school enrolment a sibling rivalry analysis for indonesia in this paper we question whether and how the sibship extension to foster children a common practice in many developing countries affects children s school enrolment status based on indonesian data we show that children s school enrolment increases with the number of foster grandchildren in their sibship given that grandchildren fostering is associated with positive transfers from biological to host parents this result reflects either a release of liquidity constraints in the host household or the uncommon preferences of host grandparents conversely the proportion of other foster children in a sibship does not have any effect the latter result s explanation depends on the reason children other than grandchildren are fostered

land inheritance and schooling in matrilineal societies evidence from sumatra abstract this paper explores statistically the implications of the shift from communal to individualized tenure on the distribution of land and schooling between sons and daughters in matrilineal societies based on a sumatra case study the inheritance system is evolving from a strictly matrilineal system to a more egalitarian system in which sons and daughters inherit the type of land which is more intensive in their respective work effort while gender bias is either non existent or small in land inheritance daughters tend to be disadvantaged with respect to schooling the gender gap in schooling however appears to be closing for the generation of younger children

alimony rights and intrahousehold allocation of resources evidence from brazil can family policy affect well being of individuals without altering the resources available to their families this article examines the extension of alimony rights and obligations to cohabiting couples in brazil for women in intact relationships alimony rights upon dissolution should improve outside options strengthening their negotiating positions and increasing their influence over intrahousehold allocation of resources robust econometric evidence indicates that more decision power in the hands of women impacts hours worked by female adults and investments in the education of children this suggests that family policy and models of family decision making should take intrahousehold heterogeneity of preferences into account

an optimal production inventory model for deteriorating items with multiple market demand the global markets of today offer more selling opportunities to the deteriorating items manufacturers but also pose new challenges in production and inventory planning from a production management standpoint opportunities to exploit the difference in the timing of the selling season between geographically dispersed markets for deteriorating items are important to improving a firm s profitability in this paper we examined the above issue with an insightful production inventory model of a deteriorating items manufacturer selling goods to multiple markets with different selling seasons we also provided a solution procedure to find the optimal replenishment schedule for raw materials and the optimal production plan for finished products a numerical example was then used to illustrate the model and the solution procedure finally sensitivity analysis of the optimal solution with respect to major parameters was carried out

educational choice families and young people s earnings this paper presents two optimizing models of educational choice discusses issues of identification estimates earnings equations in the context of these models and presents conditions under which we can test one against the other the estimates indicate that education is endogenous for young people s earnings creating a downward bias in estimated returns from education that assume exogeneity identification and estimation relies on family background information from a special sample from the british household panel study 1991 95 which matches mothers and their young adult children our estimates favor a family model over an individual model and they suggest that parents allocate resources to education to compensate for differences in their children s earnings endowments

assessing the impact of a school subsidy program in mexico using a social experiment to validate a dynamic behavioral model of child schooling and fertility this paper uses data from a randomized social experiment in mexico to estimate and validate a dynamic behavioral model of parental decisions about fertility and child schooling to evaluate the effects of the progresa school subsidy program and to perform a variety of counterfactual experiments of policy alternatives our method of validation estimates the model without using post program data and then compares the model s predictions about program impacts to the experimental impact estimates the results show that the model s predicted program impacts track the experimental results our analysis of counterfactual policies reveals an alternative subsidy schedule that would induce a greater impact on average school attainment at similar cost to the existing program

the family inheritance and the intergenerational transmission of inequality unequal inheritance of material wealth is commonly considered a major cause of inequality in consumption however theoretical models of the intergenerational transmission of inequality by becker blinder and ishikawa imply that unequal inheritance may either increase or reduce consumption inequality differences in inherited wealth resulting from unequal parental incomes increase inequality in recipients consumption however unequal bequests caused by differences among families in the endowed ability of children or the costs of producing human capital are equalizing empirical results confirm these predictions the inheritance received by children is inversely related to both children s income and parental education thus bequests are compensatory in that ceteris paribus low income children inherit more than their advantaged contemporaries

specialization and competition in marriage models abstract i present a marriage model that includes pre marital investments in human capital individuals expect the future role specialization in marriage the specialization effect but at the same time before marriage individuals have the incentive to invest in order to make themselves more attractive the competition effect the interaction of two effects generates multiple equilibria no equilibria are ex ante efficient when the benefits of role specialization exist the competition effect is a source of coordination failure in the match formation this result stands in contrast to those of other models in which the competition effect leads to efficiency in some equilibrium

ordering and pricing decisions in a two echelon supply chain with asymmetric demand information abstract this article examines coordinated decisions in a decentralized supply chain that consists of one supplier and one retailer and faces random demand of a single product with a short life cycle we consider a setting where the retailer has accurate demand information while the supplier does not such a problem with asymmetric demand information can be viewed as an extension of the newsboy problem in which both the supplier and the retailer possess the same demand information combining the mechanism of sharing demand information and that of quantity discount and return policy enables us to develop three coordinated models in contrast with the basic and uncoordinated model we are able to show the ordinal relationship among the retailer s optimal order quantities in these four models under a general form of random demand and compare the supply chain profits and conduct sensitivity analysis analytically in four models under uniform random demand we also provide numerical results under normal random demand that bear a resemblance to those under uniform random demand

the newsvendor problem review and directions for future research in this paper we review the contributions to date for analyzing the newsvendor problem our focus is on examining the specific extensions for analyzing this problem in the context of modeling customer demand supplier costs and the buyer risk profile more specifically we analyze the impact of market price marketing effort and stocking quantity on customer demand how supplier prices can serve as a coordination mechanism in a supply chain setting integrating alternative supplier pricing policies within the newsvendor framework and how the buyer s risk profile moderates the newsvendor order quantity decision for each of these areas we summarize the current literature and develop extensions finally we also propose directions for future research

investments time preferences and public transfers paid to women abstract the literature suggests that men and women may have different preferences this paper exploits a social experiment in which women in treatment households were given a large public cash transfer progresa in an effort to disentangle the effect of additional income in the household from the effect of changing the distribution of income within the household the impact of progresa income on savings and investments decisions is compared with all other income sources after taking into account participation in the program additional money in the hands of women is spent on small livestock which are traditionally managed and cared for by women improved nutrition and child goods particularly clothing among single headed households progresa income is not treated differently from other income direct evidence on intertemporal preferences gathered in the mexican family life survey indicates that women are more patient than men when thinking about the future taken together the results suggest t

early health shocks intra household resource allocation and child outcomes an open question in the literature is whether families compensate or reinforce the impact of child health shocks discussions usually focus on one dimension of child investment this paper examines multiple dimensions using household survey data on chinese child twins whose average age is 11 we find that compared with a twin sibling who did not suffer from negative early health shocks at ages 0 3 the other twin sibling who did suffer negative health shocks received rmb 305 more in terms of health investments but received rmb 182 less in terms of educational investments in the 12 months prior to the survey in terms of financial transfers over all dimensions of investment the family acts as a net equalizer in response to early health shocks for children we estimate a human capital production function and establish that for this sample early health shocks negatively affect child human capital including health education and socioemotional skills compensating investments in health as measured by bmi reduce the adverse effects of health shocks by 50 but exacerbate the adverse impact of shocks on educational attainment by 30

optimal ordering decisions with uncertain cost and demand forecast updating we determine the optimal ordering policy for a retailer who has two instants to order a seasonal product from a manufacturer prior to a single selling season while the demand is uncertain the retailer can improve the forecast by utilizing the market signals observed between the first and second instants however because of the nature of the manufacturing environment the unit cost at the second instant is uncertain and could be higher or lower than the unit cost at the first instant to determine the profit maximizing ordering strategies at both instants the retailer has to evaluate the trade off between a more accurate forecast and a potentially higher unit cost at the second instant we present a nested newsvendor model for determining the optimal order quantity at each instant and characterize the conditions under which it is optimal for the retailer to delay its order until the second instant

bringing income distribution in from the cold the title of this presidential address is chosen to highlight the way in which the subject of income distribution has in the past been marginalised for much of this century it has been very much out in the cold there are signs that in the 1990s it is being welcomed back and i shall be referring to recent research but i would like to use this occasion to give further impetus to the re incorporation of income distribution into the main body of economic analysis this abstract was borrowed from another version of this item

market opportunities genetic endowments and intrafamily resource distribution child survival in rural india the authors examine how intrafamily resource allocations respond to changes in economic conditions and to genetic differences in children by estimating the determinants of variations in the sex specific survival differentials of rural indian children based on standard census and household survey data they explore in particular the hypothesis that such differences are related to the relative returns to survival with households selectively allocating resources to children in response to variation in sex differences in their expected earnings opportunities as adults data are from the 1961 census and a 1971 household survey excerpt

do parents favor boys in an optimizing model of parental allocation systematic differences in human capital investments betwen the sexes may originate in at least 3 ways 1 parents may respond to expected gender wage differentials 2 parents may respond to systematic differences by gender in the price of human capital investments 3 parental preferences may favor girls or boys in the sense that they value identical outcomes at the same cost more highly for one sex than for the other this paper analyzes the role of parental preferences in general and unequal concern in particular in the allocation of human capital investments among children the authors generalize their earlier model of the human capital investments among children to incorporate the possibility that the returns to such investments may include not only the childs own ecpected earnings but also the expected earnings of his or her spouse thus the model assumes that parents may value returns that accrue trough the marriage market as well as through education the relevant returns to education may include marrying a spouse with higher expected earnings the empirical analysis indicates that gender wage differentials like endowment differentials are mildly reinforced by the parental allocation of human capital investments marriage market outcomes are significant determinants of the allocation of human capital investments among children there is no evidence that parental preferences favor boys this study shows that parental preferences either exhibit equal concern or slightly favor gils

what you don t know can hurt you or at least mislead you family behaviors unobserved heterogeneities and the determinants and impacts of human resources over the life cycle what one does not know in the form of unobserved heterogeneity can mislead one in empirical estimates a simple model of intrahousehold allocations illustrates the possible importance of unobserved factors such as abilities in determining human resources and their impacts the author reviews over forty years of studies primarily from latin america and the caribbean but also from elsewhere to illustrate the substantial empirical importance of unobserved heterogeneity with regard to preferences and intrahousehold allocations schooling returns school quality early life nutrition and program evaluation