balanced and unbalanced growth abstract a model is developed that shows how two sectors or regions interact out of steady state through product labor and capital markets and how if the former interaction dominates the growth of one sector pulls along the growth of the other while if the latter interactions dominate one sector or region booms while the other declines it is then shown why liberalization of foreign trade should lead to a transition from a lower to a higher steady state growth rate and why during the course of this transition growth might initially be even slower than before liberalization

the impact of local predatory lending laws on the flow of subprime credit abstract local authorities in north carolina and subsequently in at least 23 other states have enacted laws intending to reduce predatory and abusive lending while there is substantial variation in the laws they typically extend the coverage of the federal home ownership and equity protection act hoepa by including home purchase and open end mortgage credit by lowering annual percentage rate apr and fees and points triggers and by prohibiting or restricting the use of balloon payments and prepayment penalties empirical results show that the typical local predatory lending law tends to reduce rejections while having little impact on the flow application and origination of credit however the strength of the law measured by the extent of market coverage and the extent of prohibitions can have strong impacts on both the flow of credit and rejections

applying contingent valuation in china to measure the total economic value of restoring ecosystem services in ejina region abstract this paper reports an attempt to apply the contingent valuation method cvm in rural china the cvm was used to obtain estimates of willingness to pay for restoring ejina ecosystem services in our survey we used a payment card format and a 12 page survey booklet with maps depicting the reasons why ejina ecosystem deteriorated the means by which ecosystem services could be restored from their current level we used an in person interview along with the survey booklet we employed a parametric model to estimate the benefits of restoring ejina ecosystem results from 700 in person interviews indicate that households would pay an average of 19 37 rmb per year with 20 78 per household for the main river area and 16 41 per household for the rest of hei basin the aggregate benefit to residents of the hei basin is 8 84 million annually for 20 years taking into account an environmental discount rate calculated by using respondent s equivalent utility between periodical payments and lump sum payments the present value of aggregate benefit of restoring ejina ecosystem is 55 33 million these results suggest that the general public in hei valley would be willing to pay to restore the ejina ecosystem although this amount is substantially less than the estimated costs of restoration

mortgage redlining race risk and demand charges that geographical redlining is widely practiced by mortgage lenders and is associated with racial discrimination have received much attention however empirical research in this area has yet to document a convincing answer to the question of whether redlining even exists much of the previous research in this area has suffered from failure to account for variations in risk and or failure to adequately control for geographical differences in demand this study addresses these problems in an effort to determine whether the disparity in the flow of mortgage credit can be explained by differences in risk and demand the u s mortgage market is operationally efficient with long term mortgage loans made to highly leveraged borrowers at very thin spreads above the lender s cost of funds there has long been controversy however with respect to considerations of equity legislation on this issue began with the fair housing act of 1968 followed by the equal credit opportunity act of 1974 and the home mortgage disclosure act of 1975 hmda it is now over 15 years since passage of the community reinvestment act of 1977 cra this legislation was designed to assure that banks meet the credit needs of neighborhoods in their service areas in recent years much attention in the administration of the cra has been devoted to the issue of racial discrimination in mortgage lending questions still remain as to whether the decisions of mortgage lenders are influenced by the race of the loan applicant or on the racial composition of his neighborhood redlining is the refusal of lenders to make mortgage loans in certain areas regardless of the creditworthiness of the individual loan applicant many studies claim to verify the existence of racially based mortgage redlining the earliest studies were generally carried out by community groups and were rather crudely done for a summary of such studies see benston 1981 several studies appear in professional literature for example see bradbury case and dunham 1989 and hutchinson ostas and reed 1977 from a public policy standpoint these findings if valid would indicate a need for additional regulation to ensure social equality additionally the existence of redlining in the absence of structural defects in the market would conflict

mortgage lending in boston interpreting hmda data the home mortgage disclosure act was enacted to monitor minority and low income access to the mortgage market the data collected for this purpose show that minorities are more than twice as likely to be denied a mortgage as whites yet variables correlated with both race and creditworthiness were omitted from these data making any conclusion about race s role in mortgage lending impossible the federal reserve bank of boston collected additional variables important to the mortgage lending decision and found that race continued to play an important though significantly diminished role in the decision to grant a mortgage copyright 1996 by american economic association

on the robustness of racial discrimination findings in mortgage lending studies that mortgage lenders have complex underwriting standards often differing legitimately from one lender to another implies that any statistical model estimated to approximate these standards for use in fair lending determinations must be misspecified exploration of the sensitivity of disparate treatment findings from such statistical models is thus imperative we contribute to this goal this article examines whether the conclusions from several bank specific studies undertaken by the office of the comptroller of the currency are robust to changes in the link function adopted to model the probability of loan approval and to the approach used to approximate the finite sample null distribution for the disparate treatment hypothesis test our evidence of discrimination findings that are reasonably robust to the range of examined link functions suggests that regulators and researchers can be reasonably comfortable with their current use of the logit link based on several features of our results we

universal health insurance in the clinton plan coverage as a tax financed public good the financing arrangements embodied in the clinton health reform plan involve some important differences in the way in which public goods are usually financed the subsidies to small low wage firms mandated to provide benefits distort markets in both labor and products and offer incentives for the creation of small firms in addition the financing scheme implicitly envisions a head tax on families at modest income levels but offers a possible rationale for it nevertheless the main reason for many of the financing features appears to be an attempt to hold down the apparent budgetary cost of universal coverage

rural electrification in the developing world abstract rural electrification does not cause development electricity is a derived demand occurring only when an area has reached a certain economic level this has important consequences for the choice of areas for electrification rural electrification subsidies are generally excessive and tariffs need to be greatly increased renewable energy sources should be analysed on the same technical and economic basis as conventional supply systems particular care is required when considering photovoltaic systems for pre electrification community management may provide a means of electricity supply for some villages but the key questions are likely to be institutional and managerial rather than technical

analysis of the energy access improvement and its socio economic impacts in rural areas of developing countries abstract access to modern energy is one of the most basic requirements for development in rural areas of developing countries there are a large number of people who do not have access to lpg and depend on traditional biomass such as wood crop and dung for cooking in addition energy has numerous and complex links with poverty reduction therefore it is important to estimate the impacts of energy access improvement on socio economic situation in the rural areas of developing countries quantitatively this study focuses on socio economic impacts of cooking demand through changes in stoves adopted by the rural households we have developed an energy economic model of rural areas in india to analyze the links between energy income and health hazard applying both opportunity cost for using fuelwood and exposure to resipirable suspended particulate matter rspm as a result of the analysis there is a positive relation between the opportunity cost and the average rspm exposure of women in the rural areas following to increase in the opportunity cost that is income the cost of an improved wood stove becomes relatively lower first than that of a traditional wood stove and then a gas stove attains price competitiveness it is achieved that the average rspm exposure is below the who and japanese criteria for suspended particulate matter spm 190 and 100 g m3 at the opportunity cost of us 9 and 15 gj respectively

community based electric micro grids can contribute to rural development evidence from kenya summary in this paper we clarify the mechanisms through which rural electrification can contribute to rural development through a detailed case study analysis of a community based electric micro grid in rural kenya we demonstrate that access to electricity enables the use of electric equipment and tools by small and micro enterprises resulting in significant improvement in productivity per worker 100 200 depending on the task at hand and in a corresponding growth in income levels in the order of 20 70 depending on the product made access to electricity simultaneously enables and improves the delivery of social and business services from a wide range of village level infrastructure e g schools markets and water pumps while improving the productivity of agricultural activities we find that increased productivity and growth in revenues within the context of better delivery of social and business support services contribute to achieving higher social and economic benefits for rural communities we also demonstrate that when local electricity users have an ability to charge and enforce cost reflective tariffs and when electricity consumption is closely linked to productive uses that generate incomes cost recovery is feasible 2008 elsevier ltd all rights reserved

credit rationing in the u s mortgage market evidence from variation in fha market shares abstract this paper examines the nature of mortgage credit rationing across geographic markets and time particular attention is paid to the response of conventional mortgage supply to higher risk conditions associated with regional recessions we develop a series of four indirect tests based on the spatial variation of the fha share of mortgages both endorsements and applications as well as fha and conventional rejection rates results of these four tests indicate that conventional mortgage underwriting criteria do not become more flexible and may even become more demanding when local economic conditions deteriorate this result indicates the use of non price credit rationing in the mortgage market and suggests a special role for fha insured mortgages as a mechanism for maintaining mortgage credit supply in declining housing markets

what constitutes evidence of discrimination in lending we analyze a simple model of bank lending in order to ascertain what can be inferred from relative denial and default rates about lending discrimination we show that if minority applicants are of lower average creditworthiness than majority applicants then contrary to a popular argument a uniform nondiscriminatory credit policy cannot simultaneously produce i higher denial rates for minority applicants and ii equal default rates for minority and majority applicants moreover we show that equality of denial or default rates always implies discrimination in particular equal denial default rates imply discrimination against majority minority applicants is there discrimination in the bank lending market this question has recently attracted attention in the popular press and from federal regulators this interest was spurred by a 1992 boston federal reserve bank study which concludes that minorities are discriminated against in the home mortgage market 1 the study finds that minority applicants in the boston area are sixty percent more likely to be denied a mortgage loan than whites even after controlling for such factors as debt burdens loan to value ratios income and credit histories not surprisingly this conclusion has been controversial critics of the boston fed study have argued that the methodology used by the fed is flawed a representative example is macey 1994 who

race redlining and automobile insurance prices following g becker s 1993 suggestion that tests for discrimination should attempt to infer whether profits differ for products sold to minorities and nonminorities this article tests the hypothesis that racial discrimination affects market prices of auto insurance in missouri compared with tests for discrimination in lending markets the authors results are less susceptible to bias from omitted variables controlling for available demographic and coverage related factors they do not find that loss ratios at the zip code level are negatively related to percent minority population this finding is inconsistent with the hypothesis that racial discrimination increases premiums relative to expected claim costs for minorities copyright 1998 by university of chicago press

evidence of discrimination in lending an extension we generalize the model of ferguson and peters 1995 to allow for unequal recovery rates in the event of default by majority borrowers versus minority borrowers this simple extension has two direct implications i a uniform credit policy as defined by ferguson and peters entails cross subsidization across groups and ii it is possible for a profit maximizing and therefore economically nondiscriminatory lending policy to generate lower average default rates among minority borrowers than among majority borrowers in a recent issue of this journal ferguson and peters 1995 f p hereafter derive the striking theoretical result that if differences in average credit quality explain differences in denial rates between minority and nonminority applicants then equal default rates between minority and nonminority borrowers imply discrimination against the minority population p 741 their study illustrates the important role of formal analysis in characterizing the types of conclusions that policymakers can and should draw from available empirical evidence the f p study focuses on the case where the information set includes denial and default rates in this note we extend the analysis to include information about the lender s recovery rates in instances of default with this extension two additional findings emerge when average recovery rates among defaulting majority borrowers differ from those of defaulting minority borrowers first a uniform credit policy as defined by f p entails cross subsidization across groups second it is possible for a profit maximizing and therefore economically nondiscriminatory lending policy to generate lower average default rates among minority borrowers than among majority borrowers these results demonstrate that policymakers and regulatory agencies must consider recovery rates in order to understand whether a particular pattern of default rates may imply discriminatory lending behavior this analysis extends in a natural way that of f p who call for future research to

welfare impacts of rural electrification a panel data analysis from vietnam abstract most past studies on the development impact of rural electrification have relied on cross sectional surveys comparing households with and without electricity this study tests the validity of the perceived correlation between welfare outcomes and rural electrification and quantifies electricity s benefits on the basis of sound econometric techniques that control for endogeneity bias the study used panel surveys conducted in rural vietnam in 2002 and 2005 covering some 1 120 households in 41 communes by 2005 all surveyed communes had connected to the grid and four fifths of their households had a connection the econometric estimations suggest grid electrification s positive effects on both household income and expenditure and education we find differential returns to electricity for commune and household level connection the former generates externality benefiting the poor more than the rich farm more than nonfarm income and girls over boys for schooling outcome conversely the latter

starting point bias in dichotomous choice valuation with follow up questioning abstract follow up questions are frequently used to improve the efficiency of dichotomous choice contingent valuation questionnaires however a number of authors e g 12 16 have noted a significant difference between the wtp distributions implied by initial and follow up question responses this paper investigates starting point bias as one explanation for the phenomenon we develop a model of starting point bias in the context of dichotomous choice questioning with follow up using a monte carlo simulation to illustrate the potential bias imparted to wtp estimates an application is provided based on data from a cv study in northcentral iowa

gender discrimination in microfinance some evidence from uganda abstractmicrofinance literature has proved the existence of gender discriminatory practices against women in some specific contexts discrimination is often explored from the access side loans approved or denied following agier and szafarz 2013 we deviate from this practice and use the variable loan size considering up to four loans for each client drawing on data from a microfinance programme in uganda we find no evidence of gender discrimination against women clients even though our results show that the loan size is influenced by personal characteristics and that women in contrast to men are rewarded according to their credit history

willingness to pay for renewable energy evidence from a contingent valuation survey in kenya a modern form of energy in particular electricity for household use is an important vehicle in alleviating poverty in developing countries however access and costs of connecting to this service for most poor in these countries is inconceivable policies promoting electricity connection in rural areas are known to be beneficial in improving the socio economic and health well being for households this paper examines willingness to pay wtp for rural electrification connection in kisumu district kenya using the contingent valuation method cvm a nonparametric and a parametric model are employed to estimate wtp values for two electricity products grid electricity ge and photovoltaic pv electricity the results indicate that respondents are willing to pay more for ge services than pv and households favoured monthly connection payments over a lump sum amount some of the policies suggested in this paper include subsidizing the connection costs for both sources of electricity adjusting the payment periods and restructuring the market ownership of providing rural electricity services

using contingent behavior analysis to measure benefits from rural electrification in developing countries an example from rwanda hundreds of millions of people in sub saharan africa do not have access to electricity and will not receive it from national grids in the next few decades electricity makes up an important component of rural development and so increasing access can have positive socioeconomic benefits in this study we use contingent behavior analysis to quantify the potential benefits of electricity in rural rwandan villages which currently do not have electricity the proposed method allows for calculation of net benefits as well as electricity bills we find that even relatively poor isolated households would pay for electricity though amounts vary across households and this affects the financial viability of electrification common uses for electricity include lighting battery charging and agricultural processing despite heterogeneity opportunities exist to improve rural economic welfare through increased electricity access

learning to lend for off grid solar power policy lessons from world bank loans to india indonesia and sri lanka abstract the world bank has sought to advance the diffusion of solar photovoltaic pv technology for off grid applications in the developing world as these systems are fundamentally different to centralised power stations and conventional rural electrification the world bank has been learning how best to lend for such technology this study seeks to highlight the lessons learnt from the world bank s first loans for off grid pv to india indonesia and sri lanka it uses lifetime cost analysis to justify continued intervention in this sector and it draws on theories of innovation diffusion to guide analysis and ultimately policy recommendations because of the special role of entrepreneurial start up companies in the rural pv sector the paper also uses a company cash flow model to demonstrate the efficacy of various supply side policies finally the study concludes with a checklist of policy lessons and a consideration of the role of the international finance corporation in this sector

the effects of rural electrification on employment new evidence from south africa this paper estimates the impact of electrification on employment growth by analyzing south africa s mass roll out of electricity to rural households using several new data sources and two different identification strategies an instrumental variables strategy and a fixed effects approach i find that electrification significantly raises female employment within five years this new infrastructure appears to increase hours of work for men and women while reducing female wages and increasing male earnings several pieces of evidence suggest that household electrification raises employment by releasing women from home production and enabling microenterprises migration behavior may also be affected jel h54 l94

credit card redlining abstract this paper evaluates the presence of racial disparities in the issuance of consumer credit using a database of credit histories i link location based information on race with individual credit files after controlling for place specific factors such as housing vacancy rates and general population demographics i find qualitatively large differences in the amount of credit offered to similarly qualified applicants living in black versus white areas high data quality allows distinguishing between issuer provision supply and utilization of credit demand additional estimates using information on payday lending provide support for idea that issuers condition lending on location

contingent valuation from dubious to hopeless abstract approximately 20 years ago peter diamond and i wrote an article for this journal analyzing contingent valuation methods at that time peter s view was that contingent valuation was hopele

competition small business financing and discrimination evidence from a new survey we analyze credit applications loan denials and interest rates paid by small businesses across owner gender race and ethnicity in addition we examine data from owners who said they did not apply for credit because they believed that their applications would have been turned down after controlling for a rich set of explanatory variables including personal and business credit histories substantial differences in denial rates between firms owned by african americans and white males remain moreover consistent with becker s classic theories 1957 we find evidence that increases in competition in the firm s local banking market reduces these differences

nobel lecture the economic way of looking at behavior an important step in extending the traditional theory of individual rational choice to analyze social issues beyond those usually considered by economists is to incorporate into the theory a much richer class of attitudes preferences and calculations while this approach to behavior builds on an expanded theory of individual choice it is not mainly concerned with individuals it uses theory at the micro level as a powerful tool to derive implications at the group or macro level the lecture describes the approach and illustrates it with examples drawn from my past and current work

choice experiment study on the willingness to pay to improve electricity services abstract modern forms of energy are an important vehicle towards poverty alleviation in rural areas of developing countries most developing countries households rely heavily on wood fuel which impacts on their health and socio economic status to ease such a dependency other modern forms of energy namely electricity need to be provided however the quality of the electricity service namely reliability is an important factor in reducing this dependency this paper discusses a choice experiment valuation study conducted among electrified rural households located in kisumu kenya in which the willingness to pay wtp to avoid power outages or blackouts was estimated a mixed logit estimation was applied to identify the various socio economic and demographic characteristics which determine preferences in reducing power outages among a household s users in conclusion several of the socio economic and demographic characteristics outlined in this paper were identified and can assist service differentiation to accommodate the diverse households preferences towards the improvement of the electricity service