rational household labor supply traditionally household behavior is derived from the maximization of a unique utility function in this paper we propose an alternative approach in which the household is modeled as a two member collectivity taking pareto efficient decisions the consequences of this assumption are analyzed in a three good model in which only total consumption and each member s labor supply are observable if the agents are assumed egoistic i e they are only concerned with their own leisure and consumption it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint if alternatively agents are altruistic restrictions obtain in the nonparametric context useful interpretation stems from the comparison with the characterization of aggregate demand for a private good economy

collective labor supply a single equation model and some evidence from french data in chiappori s 1988 collective model of labor supply hours of work are supposed flexible in many countries however male labor supply does not vary much in that case the husband s labor supply is no longer informative about the household decision process and individual preferences to identify structural components of the model additional information is needed we thus consider an approach in which the wife s labor supply is expressed as a function of the household demand for one specific good we demonstrate that the main properties of chiappori s initial model are preserved and apply our results on french data

intra household allocation of time and money across siblings abstract how work and consumption are allocated within the family has important consequences for the welfare of individual household members using data on time use and assignable goods for individual siblings across india peru ethiopia and vietnam aged 5 17 i show that there is substantial within sibling variation in leisure as well as consumption allocations i then test whether there is evidence for favoritism in the joint allocation of leisure and consumption toward a particular gender i find that boys with a younger sister have substantially more relative leisure compared to girls with a younger sister in all four countries consumption allocations are relatively higher for older siblings of mixed gender sibling pairs irrespective of the sex of the child i reject that favoritism in consumption equals favoritism in leisure in three of the four countries finally i show suggestive evidence on the role of reward and preferences for allocations of time and money in the household

does the bush administration s climate policy mean climate protection abstract the paper analyzes the two major components of the bush administration s climate policy namely an emission intensity target and a technology strategy the question is whether those components will generate net emission reductions that will contribute to the stabilization of the greenhouse gas concentration at a safe level in the long run it comes out that the bush administration climate policy does not guarantee any meaningful contribution to climate protection the lenient emission intensity target set by the administration will most likely allow near term emissions to grow in the long run the bush administration places a big bet on future climate friendly technological breakthroughs to cost effectively compensate for the current and near term net emission increases but the outcomes of those technological developments are uncertain in terms of emission reduction potential cost and timing the way towards enhanced climate protection will most likely not come from the policies of the current administration but rather from the growing concern about the climate issue in congress and at the state corporate and civil society levels these combined forces may raise the playing field at the federal level in the near future

revealed preference analysis of non cooperative household consumption we develop a revealed preference approach to analyse non unitary household consumption behaviour that is not cooperative or pareto efficient we derive global necessary and sufficient conditions for data consistency with the model we show that the conditions can be verified by means of relatively straightforward mixed integer programming methods which is particularly attractive in view of empirical analysis our framework extends to tests for separate spheres and joint contribution to public goods an application to data drawn from the russia longitudinal monitoring survey demonstrates the empirical relevance of the non cooperative consumption model

rationalization of market demand on finite domains the hypothesis that individuals behave as utility maximizers is the basis of the microeconomic theory of demand this hypothesis however is not observable and therefore its content and strength have to be evaluated through its implications for the properties of demand functions the implications for the properties of individual demand functions have been well known for some time but it is only recently that substantial work on the features of aggregate behavior has been undertaken in 1972 sonnenschein 6 conjectured that walras law homogeneity of degree zero in prices and boundedness from below characterize market excess demand functions i e functions defined on a set of normalized price vectors a succession of papers by sonnenschein 7 mantel 4 debreu 11 and mc fadden et al 3 established such a result in a variety of precise formulations after these conributions it could be said that the structure of excess demand functions was well understood an analogous problem concerning the decomposition of market demand functions i e functions defined on a set of price income vectors was also posed by sonnenschein 8 by means of a simple example he showed that when the income distribution is constant it is not possible in general to decompose functions that satisfy the balance and zero homogeneity conditions if we require postivity of individual demands he also conjectured that abstracting from restrictions which follow from the positivity of individual demand any function satisfying the two previously mentioned conditions can be decomposed into a finite number of individual demand functions derived from utility maximization and sharing market income in some fixed proportion a proof of the conjecture for the case of two commodities was also provided

a novel index of macroeconomic uncertainty for turkey based on google trends abstract this paper aims to measure the level of economic and financial uncertainty in turkey the measure used is based on an internet search based strategy and develops the turkish economic and financial uncertainty index tefui based on the real time monthly google trends data for the period from january 2004 to december 2018 our illustration suggests that tefui performs significantly well to predict various indicators of the turkish economy as well as global uncertainty to check the relative performance of the measure we also contrast our index which uses turkey economy specific words and phrases with an index generated for another country e g the u s based on correlation analysis and a comprehensive var analysis our results suggest tefui successfully capture uncertainty in turkey

do voters vote ideologically abstract in this paper we address the following question to what extent is the hypothesis that voters vote ideologically i e they always vote for the candidate who is ideologically closest to them testable or falsifiable we show that using data only on how individuals vote in a single election the hypothesis that voters vote ideologically is irrefutable regardless of the number of candidates competing in the election on the other hand using data on how the same individuals vote in multiple elections the hypothesis that voters vote ideologically is potentially falsifiable and we provide general conditions under which the hypothesis can be tested

self enforcing exchange among generations implications for consumption and mobility abstract a three generation olg model with one directional altruism and two directional intra family transfers is presented adults invest in their children s education and make transfers to their elderly parents however due to lack of altruism adults with high earnings do not share consumption equally with their elderly parents but spend a larger share of their earnings on own consumption and on their children s education this allows the model to be consistent with three empirical observations that are difficult to reconcile with traditional altruistic frameworks of intergenerational social interactions and mobility i consumption is not perfectly shared between members of an extended family ii consumption is not equally persistent over the lifecycle as across generations and iii the intergenerational persistence of earnings is particularly high at the top end of the earnings distribution

the maximal generic number of pure nash equilibria abstract for finite pure strategy setss1 snife s s1 snis the set of pure strategy nash equilibria for an open set of payoffs vectors then e s maxi si there is an open set of payoff vectors for which there are s maxi si pure nash equilibria journal of economic literature classification number c72

intergenerational transfers in philippine rice villages gender differences in traditional inheritance customs abstract this paper examines education land and nonland asset transfers from parents to children in five rice villages in the philippines a model with family fixed effects explains transfers better than either individual heterogeneity or observed parent and child characteristics without family fixed effects families facing different land constraints exhibit significantly different patterns of educational investment in children in a subsample with completed inheritance daughters receive less education land and total inheritance but are compensated with nonland assets parents also exhibit preferential behavior towards children of the same gender daughters of better educated mothers receive more land nonland assets and total inheritance better educated fathers give land preferentially to sons but favor daughters in education

risk and precautionary saving in two person households the existing literature on precautionary saving is based almost entirely on the assumption that the household acts as if it consisted of a single individual decision taker in reality saving decisions are typically taken by two person households this paper examines the implications of this observation for the existence of precautionary saving and shows that the assumption that the individual utility functions satisfy the conditions for precautionary saving to exist can imply that the household exhibits precautionary saving but only under strong assumptions on the type of risk change being considered

the macro and asset pricing implications of rising italian uncertainty evidence from a novel news based macroeconomic policy uncertainty index abstract we develop a new monthly and daily index of economic policy uncertainty for italy based on articles from the sole 24 ore a popular italian business daily newspaper var investigations document that an unexpected rise in the sole 24 ore news based epu index epu24 has mild effects on the real economic activity cross sectional asset pricing tests then show that both monthly and daily epu24 shocks command a positive risk premium a standard event study finally indicates the presence of statistically significant positive cumulative abnormal returns cars in the energy sector following different categories of policy related events negative and significant cars in the financial sector are instead found to be generated by international related events and political elections

control and ownership of assets within rural ethiopian households this article investigates how the control and devolution of productive assets are allocated among husband and wife theory predicts that bargaining power within marriage depends on the division of assets upon divorce and on control over assets during marriage using detailed household data from rural ethiopia we show that assets brought to marriage ownership of assets control within marriage and disposition upon death or divorce are only partly related productive resources are controlled by the household head disposition upon death or divorce only loosely depends on individual ownership during marriage but control is associated with larger claims upon divorce assets brought into marriage have little impact on disposition upon death but matter in case of divorce

endogenous gender power household labor supply and the demographic transition abstract we present a microeconomic model of the household in which there exists no difference in spousal preferences but childrearing is more time costly for women bargaining between the wife and the husband forms the basis of household decisions marital bargaining power is determined according to the incomes of the spouses which in turn help to determine their reservation utility levels outside the marriage the endogeneity of bargaining power introduces a non cooperative element to the couples decision making problem because both the husbands and the wives take into account how their pre marital education decisions affect their marital power and the share they extract from household resources in the future the model predicts that wives invest more than is pareto efficient in their education in order to increase their bargaining power in marriage as a consequence couples have fewer children and consume more when exogenous structural changes lead women to invest more in education a corollary of the model is that empowering women directly through social reforms such as a lower gender wage gap leads to lower fertility and higher spousal consumption and leisure

revealed preference tests of the cournot model the aim of this paper is to develop revealed preference tests for cournot equilibrium the tests are akin to the widely used revealed preference tests for consumption but have to take into account the presence of strategic interaction in a game theoretic setting the tests take the form of linear programs the solutions to which also allow us to recover cost information on the firms to check that these nonparametric tests are sufficiently discriminating to reject real data we apply them to the market for crude oil publication abstract

prices versus quantities in a second best setting the choice between taxes and tradable permits has been independently analysed by two distinct research traditions the first proceeds from weitzman s partial equilibrium sto chastic model and concludes that a tax should be preferred if the marginal abatement cost curve is steeper than the marginal environmental benefit curve the second utilises deter ministic general equilibrium models with pre existing distortionary taxes it concludes that non revenue raising instruments e g grandfathered tradable permits are costlier than rev enue raising ones e g a tax on every unit of pollution or auctioned permits to build a bridge between these two traditions we introduce in weitzman s model a positive cost of public funds due to pre existing distortionary taxes the tax admits a greater comparative advantage over the permits as compared to weitzman s classical result then we assume that the regulated industry blocks any proposal that poses it too high an expected burden this may require a transfer to firms in the form of freely allocated permits or lump sum tax rebate it turns out that if this acceptability constraint is binding then the comparative advantage of taxes over permits is still reinforced quantitatively even if the marginal benefit function is 50 more steeply sloped than the marginal cost function the price instrument should be preferred we also compare the expected net benefit of these two instruments to a contingent instrument which leads to the ex post optimum the superiority of the contingent instrument over the quantity one is higher than in first best

correlated uncertainty and policy instrument choice abstract for two decades environmental economists have generally maintained that benefit uncertainty is irrelevant for choosing between price and quantity instruments but that cost uncertainty matters with the identity of the efficient instrument depending upon the relative slopes of the marginal benefit and cost functions but in the presence of simultaneous correlated uncertainty such policy instrument recommendations may be inappropriate with plausible values of relevant parameters the conventional identification of a price instrument will be reversed to favor instead a quantity instrument the opposite reversal from the choice of a quantity instrument to a price instrument seems less likely to occur

household bargaining and the design of couples income taxation this paper studies the design of couples income taxation when consumption and labor supply decisions within the couple are made by maximizing a weighted sum of the spouses utilities bargaining weights are given but specific to each couple information structure and labor supply decisions follow the mirrleesian tradition however while the household s total consumption is publicly observable the consumption levels of the individual spouses are not observable with a utilitarian social welfare function we show that the expression for a spouses marginal income tax rate includes a pigouvian paternalistic and an incentive term the pigouvian term favors a marginal subsidy tax for the high weight low weight spouse whose labor supply otherwise tends to be too low high the sign and the magnitude of the incentive term depends on the weight structure across couples in some cases both terms have the same sign and imply a positive marginal tax for the low weight spouse who may be female and a negative one for the high weight spouse possibly the male this is at odds with the traditional boskin and sheshinski results our conclusions can easily be generalized to more egalitarian welfare functions finally we present numerical simulations based on a calibrated specification of our model the calculations confirm that the male spouse may well have the lower and possibly even negative marginal tax rate

optimal intensity targets for greenhouse gas emissions trading under uncertainty uncertainty is an obstacle for commitments under cap and trade schemes for emission permits we assess how well intensity targets where each country s permit allocation is indexed to its future realized gdp can cope with uncertainties in international greenhouse emissions trading we present some empirical foundations for intensity targets and derive a simple rule for the optimal degree of indexation to gdp using an 18 region simulation model of a cooperative global cap and trade treaty in 2020 under multiple uncertainties and endogenous commitments we show that optimal intensity targets could reduce the cost of uncertainty and achieve significant increases in global abatement the optimal degree of indexation to gdp would vary greatly between countries including super indexation in some advanced countries and partial indexation for most developing countries standard intensity targets with one to one indexation would also improve the overall outcome but to a lesser degree and not in all individual cases although target indexation is no magic wand for a future global climate treaty gains from reduced cost uncertainty and the potential for more stringent environmental commitments could justify the increased complexity and other potential downsides of intensity targets

opening the black box of intra household decision making theory and non parametric empirical tests of general collective consumption models we provide revealed preference tests of general collective consumption models that account for public consumption and externalities within the household we further propose a novel approach to model special cases of this model which imply alternative assumptions regarding the sharing rule our application uses the panel data from the russia longitudinal monitoring survey we find that the general model together with a large class of special cases cannot be rejected by contrast we do reject the standard unitary model since our tests are entirely nonparametric this provides strong evidence in favor of models focusing on intrahousehold decision making

stoking the fires co2 emissions and economic growth abstract we examine the relationship between economic development and carbon dioxide emissions a greenhouse gas central to global warming predictions estimates derived from global panel data suggest a diminishing marginal propensity to emit mpe carbon dioxide as gdp per capita rises despite this global carbon dioxide emissions growth will continue at 1 8 percent per annum for the foreseeable future a result that is not sensitive to average output growth instead emissions growth continues because output and population will grow most rapidly in lower income nations with high mpes this latter feature emphasizes the distributional consequences of policies to reduce emissions

child labor school attendance and intrahousehold gender bias in brazil an extensive survey data set of brazilian households is used to test whether intrahousehold gender bias affects the decisions of mothers and fathers to send their sons and daughters to work and to school an intrahousehold allocation model is examined in which fathers and mothers may affect the education investment and the child labor participation of their sons and daughters differently because of differences in parental preferences or differences in how additional schooling affects son s and daughter s acquisition of human capital brazilian household survey data for 1998 are used to estimate the impact of each parent s education on the labor market participation and school attendance of their sons and daughters for labor market participation the father s education has a greater negative impact than the mother s education on the labor status of sons the father s education also has a greater impact on son s labor status than on daughter s for schooling decisions the mother s education has a greater positive impact than the father s education on daughter s school attendance but fathers have a greater positive impact on sons school attendance than on daughter s

how ambitious are china and india s emissions intensity targets abstract several developing economies have announced carbon emissions targets for 2020 as part of the negotiating process for a post kyoto climate policy regime china and india s commitments are framed as reductions in the emissions intensity of the economy by 40 45 and 20 25 respectively between 2005 and 2020 how feasible are the proposed reductions in emissions intensity for china and india and how do they compare with the targeted reductions in the us and the eu in this paper we use a stochastic frontier model of energy intensity to decompose energy intensity into the effects of input and output mix climate and a residual technology variable we use the model to produce emissions projections for china and india under a number of scenarios regarding the pace of technological change and changes in the share of non fossil energy we find that china is likely to need to adopt ambitious carbon mitigation policies in order to achieve its stated target and that its targeted reductions in emissions intensity are on par with those implicit in the us and eu targets india s target is less ambitious and might be met with only limited or even no dedicated mitigation policies

recovering individual preferences for non market goods a collective travel cost model traditional recreation demand models do not make a distinction between a household and an individual as the reference decision making unit thus assuming that a family maximizes a single utility function even if the family consists of different individuals such models ignore the possibility of family members divergent preferences for non market goods this study proposes a novel approach the collective travel cost model ctcm to eliciting individual preferences for a non market good such as a recreation site by using revealed preference data this approach accounts for the intra household resource allocation and the role of each household member s preferences we show that the collective travel cost model can be applied to estimating a recreation demand model that yields individual welfare estimates appropriate for policy analysis of non market goods such as the willingness to pay to access a recreation site we find that how resources are distributed within the household reflects significant differences in welfare measures

domestic violence and divorce law when divorce threats become credible the cost of divorce influences the bargaining position of spouses and thus their behavior within the marriage this study takes advantage of a major and unexpected reduction in divorce costs in spain to estimate the causal effects on domestic violence results suggest a 30 decline in spousal conflict as a consequence of the reform spousal violence is found to have decreased among couples who remained married after the modification in the law which suggests an important role for changes in bargaining within the marriage when divorce becomes a more credible cheaper option

the saving behaviour of a two person household the facts that wives are typically younger than their husbands and that women typically live longer than men imply that wives may have more incentive to save for old age than do husbands a theoretical model of the determination of household saving and portfolio choice is introduced which takes into account differences in preferences for saving the most important result is that the level and the composition portfolio of saving and the time path of consumption are dependent on the distribution of income within the household women typically live longer than men and wives are typically younger than their husbands these two facts imply that preferences about saving for old age in married households with forward looking members may differ between husband and wife this paper presents a theoretical analysis of saving and portfolio behaviour if the members of the household have differ ent preferences over future consumption as compared to current consump tion the analysis stands in contrast to unitary models of household intertemporal allocation which assume that the household has a single utility function thus this paper is a contribution in a novel context to the burgeoning literature on intra household decision making the base case analysis is for a simple two person husband and wife1 two period model in which there is only one asset saving it is assumed that because of the two facts given at the start of the introductory paragraph the husband discounts the future more than the wife in section ii the implications of a non cooperative decision making process for the base case are derived see ulph 1988 for a non cooperative model of demand and

implications of spillover effects within the family for medical cost effectiveness analysis medical cost effectiveness analyses traditionally treat patients as isolated individuals and neglect the effects of improvement in patients health on the welfare of their family members we use a model based on a family utility function with altruistic linkages to show that there can be direct and indirect effects on the welfare of all family members we focus specially on a model of how the spillover effects to the spouse in a two person family might affect choice of treatments for prostate cancer we then test the predictions of this model by analyzing treatment choices of prostate cancer patients using the linked seer medicare database we find that our results are consistent with the model s predictions we conclude that cost effectiveness analyses may better reflect the full costs and benefits of medical interventions if they incorporate these family effects however concerns about equity present a dilemma for the practice of cea from the societal perspective

ghg emissions control and monetary policy this paper examines the optimal environmental and monetary policy mix in a new keynesian model embodying pollutant emissions abatement technology and environmental damage the optimal response of the economy to productivity shocks is shown to depend crucially on the instruments policy makers have available the intensity of the distortions they have to address i e imperfect competition costly price adjustment and negative environmental externality and the way they interact

environmental policy and macroeconomic dynamics in a new keynesian model this paper studies the dynamic behavior of an economy under different environmental policy regimes in a new keynesian model with nominal and real uncertainty we find the following results i an emissions cap policy is likely to dampen macroeconomic fluctuations ii staggered price adjustment alters significantly the performance of the environmental policy regime put in place iii the optimal environmental policy response to shocks is strongly influenced by the degree to which prices adjust and by the monetary policy reaction

permit trading and credit trading a comparison of cap based and rate based emissions trading under perfect and imperfect competition this paper compares emissions trading based on a cap on total emissions permit trading and on relative standards per unit of output credit trading two types of market structure are considered perfect competition and cournot oligopoly we find that output abatement costs and the number of firms are higher under credit trading allowing trade between permit trading and credit trading sectors may increase welfare with perfect competition permit trading always leads to higher welfare than credit trading with imperfect competition credit trading may outperform permit trading environmental policy can lead to exit but also to entry of firms entry and exit have a profound impact on the performance of the schemes especially under imperfect competition we find that it may be impossible to implement certain levels of total industry emissions under credit trading several levels of the relative standard can achieve the same total level of emissions

extended families and child well being studies of household behavior have established the distribution of resources among household members predicts spending and savings patterns however there is a paucity of evidence on the relationship between the well being of individual family members and the distribution of resources within an extended family including non co resident family members given the central role the family plays in many models of economic behavior this is an important gap in the literature using rich longitudinal survey data from the indonesia family life survey ifls evidence is presented on the relationship between three measures of health and education related human capital of children and the distribution of resources among extended family members ifls is ideally suited for this research since the survey collects detailed information about income and wealth from both coresident and non co resident family members the empirical model is founded on a natural extension of the collective model of household decision making chiappori 1988 1992 to the extended family the model is particularly appealing in this context because it places few restrictions on preferences of individual family members and does not specify a specific bargaining mechanism that underlies negotiations the collective model yields empirical tests of whether the behavior of family members is pareto efficient a special case of the model allows all family members to be completely altruistic which is observationally equivalent to a unitary model of family behavior that special case is rejected by the data however the restrictions of the efficient model are not rejected indicating that non co resident family members are able to co ordinate allocation decisions with respect to child human capital investments in such a way as to make no family member better off without another member being worse off

causal relationship between energy consumption and gdp revisited the case of korea 1970 1999 abstract causal relationship between energy consumption and economic growth is investigated applying a multivariate model of capital labor energy and gdp usual btu energy aggregate is substituted with a divisia aggregate in an attempt to mitigate aggregation bias to test for granger causality in the presence of cointegration among the variables we employ a vector error correction model rather than a vector autoregressive model empirical results for korea over the period 1970 1999 suggest a long run bidirectional causal relationship between energy and gdp and short run unidirectional causality running from energy to gdp the source of causation in the long run is found to be the error correction terms in both directions

game theory via revealed preferences we investigate equilibrium notions in game theory from the revealed preference approach for extensive game forms with complete information we derive a set of independent necessary and sufficient conditions for the observed outcomes to be rationalized by subgame perfect nash equilibrium journal of economic literature classification numbers c72 c92

output based allocations in pollution markets with uncertainty and self selection we study pollution permit markets in which a fraction of permits are allocated to firms based on their output output based allocations which are receiving increasing attention in the design of carbon markets around the world e g europe california new zealand are shown to be optimal under demand and supply volatility despite the output distortions they may create in a market that covers multiple sectors the optimal design combines auctioned permits with output based allocations that are specific to each sector and increasing in its volatility when firms are better informed about the latter or must self select the regulator resort to some free i e lump sum allocations to sort firms out numerical exercises illustrate the policy relevance of our results the gains from considering output based allocations can be substantial

us climate policy a critical assessment of intensity standards intensity standards have gained substantial momentum as a regulatory instrument in us climate policy energy intensive and trade exposed industries are traditionally opposed to initiatives for domestic carbon pricing as they are particularly vulnerable to competitiveness losses and refer to counterproductive emission leakage in a unilateral climate policy context this has led to policy proposals where intensity standards on energy and carbon might at least in part substitute for explicit carbon pricing via taxes or emission allowances in this paper we study the economic efficiency properties of intensity standards as an instrument of unilateral climate policy we first develop a theoretical partial equilibrium framework and show that standards can have an ambiguous effect on carbon leakage we then use an applied computable general equilibrium model of the global economy to gain quantitative insights into the effects of intensity standards for the case of the us our numerical results show that intensity standards may rather increase than decrease carbon leakage moreover standards can lead to considerable welfare losses compared to uniform emission taxing the tradability of standards across industries is a mechanism that can reduce these negative effects

on emissions trading and market structure cap and trade versus intensity standards this paper examines the interdependence between imperfect competition and emissions trading we particularly analyze the long run equilibrium in a two sector clean and dirty model with cournot competition among firms who face a fixed cost of production the clean sector is defined as the sector with the highest long run cost margin on emissions we compare the welfare implications of a cap and trade scheme with an emissions trading scheme based on relative intensity standards it is shown that a firm s long run equilibrium output in the clean or dirty sector does not depend on the emissions trading format but only depends on the fixed cost of producing in the respective sector intensity standards can result in clean firms selling allowances to dirty firms or dirty firms selling to clean firms the former outcome yields higher welfare it is demonstrated that cap and trade outperforms the intensity based trading scheme in terms of long run welfare with free entry and exit with intensity standards the size of the clean sector is too large

labour supply welfare rankings and the measurement of inequality abstract this paper presents an analysis of inequality using utility based measures of welfare derived from different approaches to modelling household labour supplies the almost ideal demand system specification of preferences is selected for the estimation of a neoclassical household model and of individual decision models which incorporate different assumptions concerning the intra household distribution of income using the rosen 1976 tax perception methodology the study also explores the implications of a model which does not constrain time at home to leisure welfare rankings and inequality measures defined on equivalent income are compared for each type of model the analysis uses australian unit record data on 3 352 households drawn from the australian bureau of statistics 1981 82 income and housing sample survey file the results indicate the sensitivity of welfare orderings and inequality measures to the choice of decision model and to the specification of lump sum transfers between family members a comparative study of equivalent incomes and selected money income variables also illustrates the limitations of observed household and individual incomes as welfare indicators for the analysis of inequality and for policy design

international equity and differentiation in global warming policy ne of the major obstacles to reaching a comprehensive agreement on global warming is the setting of greenhouse gas emission reduction targets for individual countries long standing tensions between industrialized and developing countries have raised the issue of equity in burden sharing moreover individual industrialized nations have pleaded special circumstances and have sought differentiation in their obligations this paper analyzes alternative rules for distributing tradable carbon dioxide emissions permits a non linear programming model which distinguishes between allocation based and outcome based rules is used to analyze the relative welfare outcomes the model is applied to the world body of nations and yields several important policy implications

emissions trading systems with cap adjustments abstract emissions trading systems etss with fixed caps lack provisions to address systematic imbalances in the supply and demand of permits due to changes in the state of the regulated economy we propose a mechanism which adjusts the allocation of permits based on the current bank of permits the mechanism spans the spectrum between a pure quantity instrument and a pure price instrument we solve the firms emissions control problem and obtain an explicit dependency between the key policy stringency parameter the adjustment rate and the firms abatement and trading strategies we present an analytical tool for selecting the optimal adjustment rate under both risk neutrality and risk aversion which provides an analytical basis for the regulator s choice of a responsive ets policy

a cost effective approach to attracting low income countries to international emissions trading theory and experiments the cost effectiveness of the kyotoprotocol and any similar non global treatywould be enhanced by attracting additionalcountries to international emissions tradingand achieving this as soon as possible incontrast to what is heard in most of thedebate such an enlargement is here taken to beattained with the new participants atleast to begin with being fullycompensated this paper focuses on twoforms of compensation that can be used toattract poor countries to participate inemissions trading the theoretical aswell as experimental evidence suggests that ifpoor countries are more risk averse than richcountries partial compensation in terms offinancial transfers is more cost effective thanrelying solely on compensation in kind emission quotas as has been the case so far using money for partial compensation would alsoreduce the risk for hot air allocations andthe ensuing political obstacles tocost effectiveness that such allocations tendto create

combining price and quantity controls to mitigate global climate change abstract uncertainty about compliance costs causes otherwise equivalent price and quantity controls to behave differently and leads to divergent welfare consequences although most of the debate on global climate change policy has focused on quantity controls due to their political appeal this paper argues that price controls are more efficient simulations based on a stochastic computable general equilibrium model indicate that the expected welfare gain from the optimal price policy is five times higher than the expected gain from the optimal quantity policy an alternative hybrid policy combines both the political appeal of quantity controls with the efficiency of prices using an initial distribution of tradeable permits to set a quantitative target but allowing additional permits to be purchased at a fixed trigger price even sub optimal hybrid policies offer dramatic efficiency improvements over otherwise standard quantity controls for example a 50 trigger price per ton of carbon converts the 3 trillion expected loss associated with a simple 1990 emission target to a 150 billion gain these results suggest that a hybrid policy is an attractive alternative to either a pure price or quantity system

how important is intra household risk sharing for savings and labor supply abstract while it is recognized that the family is a risk sharing institution little is known about the quantitative effects of this source of insurance on savings and labor supply in this paper we present a model where workers females and males are subject to idiosyncratic employment risk and where capital markets are incomplete a household is formed by a female and a male who decide on consumption savings and labor supplies in a calibrated version of our model we find that intra household risk sharing has its largest impact among wealth poor households while the wealth rich use mainly savings to smooth consumption across unemployment spells wealth poor households rely on spousal labor supply for instance for low wealth households average hours worked by wives of unemployed husbands are 8 higher than those worked by wives of employed husbands this response in wives hours makes up 9 of lost family income we also study consumption losses upon an unemployment spell precautionary savings and the crowding out effects of the public unemployment insurance program on the extent of risk sharing within the household

optimal investment and uncertainty on china s carbon emission abatement abstract to realize environmentally sustainable development of the economy china has decided to cut carbon dioxide emissions per unit of gdp by 40 to 45 percent by 2020 compared with the level in 2005 based on china s emission abatement target this paper first analyzes enterprises emission reduction pathways in practical production processes and then develops a framework to derive the magnitude of investment required in each pathway in order to achieve the designated target at the minimal cost under the framework it is found that in the absence of policy guidance individual enterprises emission reduction investments deviate from the optimal level to correct the distortion an alternative option is provided meanwhile to ensure achievement of the emission reduction target a stochastic model is introduced to measure the uncertainty arising from emission abatement investment the results show that an appropriate emission abatement ratio can reduce the systemic risk of emission abatement finally a simulation is given to demonstrate the results derived from the stochastic model

sharing rule identification for general collective consumption models we propose a method to identify bounds i e set identi cation on the shar ing rule for a general collective household consumption model unlike the eects of distribution factors it is well known that the level of the sharing rule cannot be uniquely identi ed without strong assumptions on preferences across households of dierent compositions our new results show that though not point identi ed without these assumptions narrow bounds on the sharing rule can be obtained we get these bounds by applying revealed preference restrictions implied by the collective model to the household s continuous aggregate demand functions we obtain informative bounds even if nothing is known about whether each good is public private or assignable within the household though having such infor mation tightens the bounds we apply our method to us 1999 2009 psid data this application obtains tight sharing rule bounds that yield useful conclusions regarding the eects of income and wages on intrahousehold resource sharing and on the prevalence of individual as opposed to household level poverty

spending time and money within the household we consider both theoretically and empirically the allocation of time and money within the household the research question is whether a married person who enjoys more leisure than their partner also receives more consumption which seems to indicate the outcome of power within the household or receives less consumption which seems to indicate differing intrahousehold preferences we develop a simple parametric structural model with household production that is tested on survey data we find that relative wages have an impact on power for leisure this effect is dominated by a conventional wage effect in which the partner who has the higher wage takes less leisure

emissions in the platinum age the implications of rapid development for climate change mitigation rapid global economic growth centred in asia but now spread across the world is driving rapid greenhouse gas emissions growth making earlier projections unrealistic this paper develops new illustrative business as usual projections for carbon dioxide co2 from fossil fuels and other sources and for non co2 greenhouse gases making adjustments to 2007 world energy outlook projections to reflect more fully recent trends we project annual emissions by 2030 to be almost double current volumes 11 per cent higher than in the most pessimistic scenario developed by the intergovernmental panel on climate change ipcc and at a level reached only in 2050 in the business as usual scenario used by the stern review this has major implications for the global approach to climate change mitigation the required effort is much larger than implicit in the ipcc data informing the current international climate negotiations large cuts in developed country emissions will be required and significant deviations from baselines will be required in developing countries by 2020 it is hard to see how the required cuts could be achieved without all major developing as well as developed countries adopting economy wide policies

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

the effect of transfers on household expenditure patterns and poverty in south africa abstract this paper uses household level unit record data from south africa to examine the behavioural and welfare impacts of private and public transfers we allow for joint endogeneity of resource variables and the expenditure shares our results show that crowding out of private transfers as a result of the introduction of public pensions holds only for poor households and not for the non poor both private transfers and public pensions significantly reduce poverty but private transfers have a larger impact on expenditure patterns the results also reject the hypothesis of income pooling underlying the conventional unitary model by finding that the marginal impact on expenditures are different for public pension received private transfer received and other resources flowing into the household the principal conclusions are robust to changes in specification

learning from a piece of pie we investigate the empirical content of the nash solution to two player bargaining games the bargaining environment is described by a set of variables that may affect agents preferences over the agreement sharing the status quo outcome or both the outcomes i e whether an agreement is reached and if so the individual shares and the environment including the size of the pie are known but neither are the agents utilities nor their threat points we consider both a deterministic version of the model in which the econometrician observes the shares as deterministic functions of the variables under consideration and a stochastic one in which because of latent disturbances only the joint distribution of incomes and outcomes is recorded we show that in the most general framework any outcome can be rationalized as a nash solution however even mild exclusion restrictions generate strong implications that can be used to test the nash bargaining assumption stronger conditions further allow to recover the underlying structure of the bargaining and in particular the cardinal representation of individual preferences in the absence of uncertainty an implication of this finding is that empirical works entailing nash bargaining could and should use much more general and robust versions than they usually do copyright 2012 oxford university press

tax versus trading and efficient revenue recycling as issues for greenhouse gas abatement abstract we give empirical welfare results for global greenhouse gas emission abatement using the first multi party model to include both tax versus trading under uncertainties and revenue recycling including multiple independent parties greatly reduces the welfare advantage of an emissions tax over emissions permit trading in handling abatement cost uncertainties from that shown by existing single party literature but a previously ignored and much bigger advantage of a tax from better handling uncertainties in business as usual emissions greatly boosts the overall tax versus trading advantage yet the degree to which each mechanism is used to raise and recycle revenue efficiently by lowering distortionary taxes rather than recycle revenue as lump sums or not raise revenue by giving tax thresholds or free permits may in turn dominate any tax versus trading advantage choosing the best greenhouse abatement mechanism should thus consider the issues of tax versus trading and efficient revenue recycling together

married with children a collective labor supply model with detailed time use and intrahousehold expenditure information we propose a collective labor supply model with household production that generalizes an original model of blundell chiappori and meghir 2005 in our model adults individual preferences not only depend on own leisure and individual private consumption of market goods they also depend on the consumption of domestic goods which are produced by combining goods bought on the market with individuals time we apply our model to new and unique data on dutch couples with children the data contains detailed information about the spouses time use and the intrahousehold allocation of all expenditures our application uses a novel estimation strategy that builds upon the familiar two stage allocation representation of the collective model we obtain interesting and plausible empirical results spouses preferences depend on the consumption of domestically produced goods including children s welfare in addition pareto weights depend on variables like the individual wages and the share in the household s nonlabor income finally and perhaps surprisingly we do not nd evidence that mothers care more for their children than fathers this paper draws on data of the liss panel of centerdata special thanks go to marika de bruijne and arthur van soest who helped to construct the questionnaire and to guillaume schollier

parental wealth and adult children s welfare in marriage abstract many studies find that parental resources importantly determine children s human capital schooling returns and earnings the collective household approach suggests that in addition parental resources of marital partners may importantly affect resource distributions within marriage this paper presents empirical results consistent with this framework they suggest that parental wealth continues to play roles in augmenting welfare of children into adulthood beyond provision of human capital in early life cycle stages or direct financial aid during adulthood and that actual transfers from parents to adult children do not fully measure influences of parental wealth on behaviors and welfare of adult children

google it up a google trends based uncertainty index for the united states and australia we develop uncertainty indices for the united states and australia based on freely accessible real time google trends data our google trends uncertainty gtu indices are found to be positively correlated to a variety of alternative proxies for uncertainty available for these two countries var investigations document an economically and statistically significant contribution to unemployment dynamics by gtu shocks in the united states in contrast the contribution of gtu shocks to unemployment dynamics in australia is found to be much milder and substantially lower than that of monetary policy shocks

it s raining men hallelujah the long run consequences of male biased sex ratios we document the short and long run effects of male biased sex ratios we exploit a natural historical experiment where large numbers of male convicts and far fewer female convicts were sent to australia in the 18th and 19th centuries in areas with more male biased sex ratios women were historically more likely to get married and less likely to work outside the home in these areas today both men and women continue to have more conservative attitudes towards women working and women work fewer hours outside the home while these women enjoy more leisure they are also less likely to work in high ranking occupations we demonstrate that the consequences of uneven sex ratios on cultural attitudes labour supply decisions and occupational choices can persist in the long run well after sex ratios are back to the natural rate we document the roles of vertical cultural transmission and marriage homogamy in sustaining this cultural persistence

economic well being and poverty among the elderly an analysis based on a collective consumption model we apply the collective consumption model of browning chiappori and lewbel 2006 to analyse economic well being and poverty among the elderly the model focuses on individual preferences a consumption technology that captures the economies of scale of living in a couple and a sharing rule that governs the intra household allocation of resources the model is applied to a time series of dutch consumption expenditure surveys our empirical results indicate substantial economies of scale and a wife s share that is increasing in total expenditures we further calculated poverty rates by means of the collective consumption model collective poverty rates of widows and widowers turn out to be slightly lower than traditional ones based on a standard equivalence scale poverty among women men in elderly couples however seems to be heavily underestimated overestimated by the traditional approach finally we analysed the impact of becoming a widow er based on cross sectional evidence we nd that the drop increase in material well being following the husband s death is substantial for women in high low expenditure couples for men the picture is reversed

unilateral regulation of bilateral trade in greenhouse gas emission permits this paper considers the coordination of domestic markets for tradable emission permits where countries determine their own emission reduction targets using a two country model linking such schemes is beneficial to both countries but may cause the exporting country to decrease its emission reduction target and export more permits this in turn would not only reduce the costs for both countries as less emissions have to be reduced but it also lowers the environmental benefits of the importing country one price instrument tariff and two quantity instruments discount quota to prevent the exporting country from issuing more permits are examined each instrument restricts trade and alters the terms of trade for the two countries the importing country and regulator prefers an import tariff and an import quota to a carbon discount if the exporting country releases additional permits the importing country should not try to keep total emissions constant as that would be ineffective and maybe even counterproductive instead the importing country should aim to keep the total import constant this would impose costs on the exporting country that are independent of the policy instrument an import quota would be the cheapest option for the importing country an import quota would also stress the idea of supplementary of the flexible mechanism as it increases the share of emissions reduced domestically compliance and liability issues constrain the market further however both the importing and the exporting country would prefer that the permit seller is liable in case of non compliance as sellers liability would less constrain the market

on the testable implications of collective choice theories we analyze collective choices in game forms from a revealed preference viewpoint we call the joint choice behavior of n agents nash respectively pareto rationalizable if there exist n preferences over the conceivable joint actions such that the joint actions selected from each game form coincide with the nash equilibria respectively the pareto optima of the corresponding game in the two agent case we show that every deterministic joint behavior which is nash rationalizable is also pareto rationalizable the converse is false we further identify general necessary and sufficient conditions for nash rationalizability of an n agent joint choice behavior we also define and characterize partial versions of the nash and pareto rationalizability requirements journal of economic literature classification numbers c72 c92

gender of children bargaining power and intrahousehold resource allocation in china abstract based on the prevalent son preference in china this paper proposes a new measure of relative bargaining power within the household using data from china health and nutrition survey we show that a woman with a first born son has a 3 9 percentage points greater role in household decision making than a woman with a first born daughter having a first born son improves the mother s nutrition intakes and reduces her likelihood of being underweight while thinking of these impacts as being channeled through intrahousehold bargaining power we cannot fully rule out other possible direct effects of a first born son on the outcomes

revisiting the case for intensity targets better incentives and less uncertainty for developing countries abstract in the debate on post kyoto global climate policy intensity targets which set a maximum amount of emissions per gdp figure as prominent alternative to kyoto style absolute emission targets especially for developing countries this paper re examines the case for intensity targets by critically assessing several of its properties namely i reduction of cost uncertainty ii reduction of hot air iii compatibility with international emissions trading iv incentive to decouple carbon emissions and economic output decarbonization and v use as a substitute for banking borrowing relying on simple analytical models it is shown that the effect on cost uncertainty is ambiguous and depends on parameter values and that the same holds for the risk of hot air that the intensity target distorts international emissions trading that despite potential asymmetries in the choice of abatement technology between absolute and intensity target the incentive for a lasting transformation of the energy system is not necessarily stronger under the latter and finally that only a well working intensity target could substitute banking borrowing to some extent but also vice versa overall the results suggest that due to the increased complexity and the potentially only modest benefits of an intensity target absolute targets remain a robust choice for a cautious policy maker

marital matching economies of scale and intrahousehold allocations we propose a novel nonparametric method to empirically identify economies of scale in multiperson household consumption we assume consumption technologies that define the public and private nature

intra family distribution of paid work time this article analyses the intra family distribution of paid work time in five european countries france germany italy spain and the uk to that end we formulate a collective model which allows us to characterize the efficient labour supply decisions of each spouse this two equation model is then simultaneously estimated by using national panel data drawn from the european community household panel echp 1994 2001 empirical results clearly show that in all sample countries the labour supply of wives is affected by own wages household and own nonlabour incomes and the number of children whereas evidence for husbands differs across countries

canadian contributions to family economics canadian scholars have made substantial contributions to the relatively new field of family economics these include new models of how men and women match in marriage markets and of how decisions are made in multi person households several were early contributors to the literature on married women s labour supply and labour supply in a family context and helped to develop empirical methods in this area a particular focus has been on the impacts of policy relevant parameters such childcare costs on family labour supply and child well being new work on child development the impact of early life conditions and the processes of intergenerational transmission also highlight the importance of family context in determining economic well being

copenhagen commitments and implications a comparative analysis of india and china abstract dynamic targets have been long advocated as a participatory tool for developing countries in climate change mitigation copenhagen commitments of india and china resume this trend after the unsuccessful attempt of argentina a decade ago however linear intensity targets are prone to hot air problems or non compliance risks intensity targets of india and china are analyzed using their elasticity parameters the relationship of these parameters to the structural nature of emissions and gdp profiles has been demonstrated and a method of comparing the probability indices of target achievement has been formulated in this paper showing a lower probability for china compared to india similarly a method of defining stringency factor for linear targets has been suggested and stringency factors evaluated for india 40 and china 90 which shows the relative stability of india s targets this paper evaluates an energy gdp emissions index eye index to indicate the extent of coupling decoupling of economic growth from emissions the three indices developed in this paper namely elasticity parameter stringency factor and eye index can be effectively used to analyze the economy emissions relationships for policy making and target setting

reassessing the environmental kuznets curve for co2 emissions a robustness exercise the number of studies seeking to empirically characterize the reduced form relationship between a country economic growth and the quantity of pollutants produced in the process has recently increased significantly in several cases researchers have found evidence pointing to an inverted u benvironmental kuznetsq curve in the case of co2 however the evidence is at best mixed in this paper we reconsider that evidence by assessing how robust it is when the analysis is conducted in a different parametric setup and when using alternative emissions data from the international energy agency relative to the literature our contribution can be viewed as a robustness exercise in these two respects the econometric results lead to two conclusions firstly published evidence on the ekc does not appear to depend upon the source of the data at least as far as carbon dioxide is concerned secondly when an alternative functional form is employed there is evidence of an inverted u pattern for the group of oecd countries with reasonable turning point regardless of the data set employed not so for non oecd countries as the ekc is basically increasing slowly concave according to the iea data and more bellshaped in the case of cdiac data d 2005 elsevier b v all rights reserved

the relationship between energy consumption energy prices and economic growth time series evidence from asian developing countries this paper estimates the causal relationships between energy consumption and income for india indonesia the philippines and thailand using cointegration and error correction modelling techniques the results indicate that in the short run unidirectional granger causality runs from energy to income for india and indonesia while bidirectional granger causality runs from energy to income for thailand and the philippines in the case of thailand and the philippines energy income and prices are mutually causal the study results do not support the view that energy and income are neutral with respect to each other with the exception of indonesia and india where neutrality is observed in the short run c 2000 elsevier science b v all rights reserved jel classifications c22 q43 q48

consume now or later time inconsistency collective choice and revealed preference this paper develops a revealed preference methodology for exploring whether time inconsistencies in household choice are the product of nonstationarities at the individual level or the result of individual heterogeneity and renegotiation within the collective unit an empirical application to household level microdata highlights that an explicit recognition of the collective nature of choice allows the vast majority of household behaviour to be rationalised by theory that assumes preference stationarity at the individual level for our particular short panel data set simply permitting limited intrahousehold heterogeneity in time preferences allows the choices of 98 4 of the sample to be rationalised by a model that assumes exponential discounting at the individual level we also find that couples characterized by lower divergence in spousal discount rates are older more likely to have children and wealthier which we take as indications of experiencing higher match quality

analysis of variability and correlation in long term economic growth rates quantifying the uncertainty in future climate change is an important input into policy decisions two important sources of uncertainty are economic growth and technological change which in turn contribute to uncertainty in future emissions in this paper we focus on uncertainty in one type of technical change productivity growth estimates of uncertainty in future growth must necessarily include expert judgment since the future will not necessarily look like the past but previous uncertainty studies have taken expert judgments based on annual national growth rates and applied them to models with regional aggregations and multi year time steps and often have made crude assumptions about the correlation between regions this paper analyzes data on the variability and covariability of historical economic productivity growth rates and investigates the effect of spatial and temporal aggregation on variance the results are intended to inform participants in expert elicitation exercises on future economic growth uncertainty

income and outcomes a structural model of intrahousehold allocation there is evidence from several sources that one cannot treat many person households as a single decision maker if this is the case then factors such as the relative incomes of the household members may affect the final allocation decisions made by the household we develop a method of identifying how incomes affect outcomes given conventional family expenditure data the basic assumption we make is that household decision processes lead to efficient outcomes we apply our method to a sample of canadian couples with no children we find that the final allocations of expenditures on each partner depend significantly on their relative incomes and ages and on the level of lifetime wealth

using performance indicators to reduce cost uncertainty of china s co2 mitigation goals goals on absolute emissions and intensity play key roles in co2 mitigation however like cap and trade policies with price uncertainty they suffer from significant uncertainty in abatement costs this article examines whether an indicator could be established to complement co2 mitigation goals and help reduce cost uncertainty with a particular focus on china performance indicators on co2 emissions per unit of energy consumption could satisfy three criteria compared with the mitigation goals i they are more closely associated with active mitigation efforts and ii their baselines have more stable projections from historical trajectories iii their abatement costs are generally higher than other mitigation methods particularly energy efficiency and conservation performance indicators could be used in the following way if a co2 goal on absolute emissions or intensity is attained the performance indicator should still reach a lower threshold as a cost floor if the goal cannot be attained an upper performance threshold should be achieved as a cost ceiling the narrower cost uncertainty may encourage wider and greater mitigation efforts

every random choice rule is backwards induction rationalizable abstract motivated by the literature on random choice and in particular the random utility models we extend the analysis in bossert and sprumont 2013 to include the possibility that players exhibit stochastic preferences over alternatives we prove that every random choice rule is backwards induction rationalizable

do two earner households base their choice of residential location on both incomes this article focuses on the role of individual incomes in the residential location decisions of two earner households conventional studies often treat households as a black box and describe them by a single utility function the article raises the question is the household utility paradigm an adequate framework for understanding the location decisions of two earner households it tests an implication of the household utility paradigm the income pooling hypothesis for location decisions the results provide evidence for rejecting the hypothesis among childless families but fail to provide evidence for rejecting it when children are present the results raise the need to address intrahousehold dynamics in modelling location decisions