effects of economic shocks on children s employment and schooling in brazil abstract this paper uses longitudinal employment survey data to analyze the impact of household economic shocks on the schooling and employment transitions of young people in metropolitan brazil the paper uses data on over 100 000 children ages 10 16 from brazil s monthly employment survey pme from 1982 to 1999 taking advantage of the rotating panels in the pme we compare households in which the male household head becomes unemployed during a four month period with households in which the head is continuously employed probit regressions indicate that an unemployment shock significantly increases the probability that a child enters the labor force drops out of school and fails to advance in school the effects can be large implying increases of as much as 50 in the probability of entering employment for 16 year old girls in contrast shocks occurring after the school year do not have significant effects suggesting that these results are not due to unobserved characteristics of households that experience unemployment shocks the results suggest that some households are not able to absorb short run economic shocks with negative consequences for children

averting behavior in the presence of public spillovers household control of nuisance pests this paper empirically imple ments an averting behavior model for gypsy moth control explicitly recognizing the joint pri vate and public spillover motivations for con trol the results demonstrate that averting be havior models can capture complex behavioral influences suggesting that such models can be extended beyond health related applications the model yields a reduced form parameter which cannot be identified using actual behavior data alone a method combining models of ac tual behavior and contingent behavior is piro posed as a way to directly measure the produc tion and preference effects jel q23

models for referendum data the structure of discrete choice models for contingent valuation abstract in 1979 bishop and heberlein introduced an appealing variant of the contingent valuation method which required only yes or no responses hanemann developed a utility theoretic interpretation of the yes no responses which has helped popularize the approach recently cameron has offered another interpretation also utility theoretic which she argues is more general than the hanemann random utility model this paper compares the deterministic models suggested by hanemann and cameron showing them to be dual to each other it shows that correct specification of either function must exclude endogenous variables such as quantity demanded it also demonstrates that using utility theoretic models allows one to compare travel cost models and contigent valuation models on the basis of their implied behavior not on the unobservable surplus or variation measure

does child labor decline with improving economic status between 1993 and 1997 child labor in vietnam declined by nearly 30 percent while the country s gdp grew by nearly 9 percent per year on average using a simple nonparametric decomposition i investigate the relationship between improvements in per capita expenditure and child labor with a panel data set that spans this episode of growth in vietnam improvements in per capita expenditure can explain 80 percent of the decline in child labor that occurs in households whose expenditures improve enough to move out of poverty this finding suggests a previously undocumented role for economic growth in the amelioration of child labor

child labor and agricultural shocks this paper examines the relationship between household income shocks and child labor in particular we investigate the extent to which transitory income shocks lead to increases in child labor and whether household asset holdings mitigate the effects of these shocks using data from a household panel survey in tanzania we find that both relationships are significant we investigate mechanisms that could account for these results including buffer stocks and borrowing

a note on defensive expenditures harmonised law diverse results in the context of many environmental hazards there is scope for self defence by victims multiple equilibria arise in a model of bilateral precaution under a regime of strict but incompletely enforced environmental liability this means that the same system of environmental law instigated in two economies may lead to very different outcomes it impacts upon policy analysis in a variety of ways and provides a channel for cultural factors to matter we explore the positive and normative effects of subsidising self defence

combining contingent valuation and travel cost data for the valuation of non market goods the travel cost method tcm has long been used to infer the economic value of nonmarket resources and public goods more recently contingent valuation cvm survey methods have gained popularity for eliciting these values here cvm survey responses are combined with tcm data on actual market behavior to estimate jointly both the parameters of the underlying utility function and its corresponding ordinary demand function this is a prototypical empirical example of a new modeling strategy variants of which should prove useful in many applications especially where reliance on a single valuation method is undesirable

conditional cash transfers schooling and child labor micro simulating brazil s bolsa escola program a growing number of developing economies are providing cash transfers to poor people that require certain behaviors on their part such as attending school or regularly visiting health care facilities a simple ex ante methodology is proposed for evaluating such programs and used to assess the bolsa escola program in brazil the results suggest that about 60 percent of poor 10 to 15 year olds not in school enroll in response to the program the program reduces the incidence of poverty by only a little more than one percentage point however and the gini coefficient falls just half a point results are better for measures more sensitive to the bottom of the distribution but the effect is never large

commodity storage valuation a linear optimization based on traded instruments a valuation methodology for commodity storage facilities is proposed this model utilizes traded instruments to replicate the fundamental derivative components of commodity storage facilities the methodology is robust to different commodities physical characteristics and markets for valuing these types of assets two examples using the u s natural gas markets are presented

efficient mechanisms for access to storage when competition in gas markets is imperfect abstract scarce storage capacity and distortions in access to storage can lead to market foreclosure in liberalized gas markets we consider rules currently adopted in europe for storage allocation and discuss efficient rationing mechanisms as based on the value of storage when other flexibility inputs are partially available we initially analyze productive efficiency issues without explicitly considering vertical restraints we then assume imperfect competition in the downstream market for gas supplies given the availability of storage capacity upstream and analyze strategic behavior in a two stage model in this framework we compare regulated storage tariffs coupled with a centralized rationing mechanism with storage auctions finally we consider the allocation of storage that arises from welfare maximization by a benevolent social planner we find that it is usually optimal to maximize the amount of storage capacity allocated to new entrants in liberalized gas markets storage auctions deviate from the optimal mechanism but still afford greater efficiency than do rules that allocate storage capacity independently of its value furthermore storage allocation appears to be a powerful mechanism with which to improve competition and efficiency in gas markets

the economics of child labor if child labor as a mass phenomenon occurs not because of parental selfishness but because of the parents concern for the household s survival the popular argument for banning child labor loses much of its force however this assumption about parental decision making coupled with the assumption of substitutability in production between child and adult labor could result in multiple equilibria in the labor market with one equilibrium where children work and another where adult wage is high and children do not work the paper establishes this result and discusses its policy implications copyright 1998 by american economic association

child labor and schooling responses to anticipated income in south africa abstract forward looking unconstrained households make child labor and schooling decisions considering their permanent income and weighing the relative returns to child time in various potential activities the timing of anticipated changes in income should have no effect on child labor and schooling in a setting where households can borrow against permanent income however this study documents large increases in schooling attendance and declines in total hours worked when black south african families become eligible for fully anticipatable social pension income as an explanation the data are most consistent with liquidity constraints for black elder males forcing rural families into less schooling for boys than they would choose absent the constraint perhaps because of schooling costs

evaluating the economic cost of natural gas strategic storage restrictions the european commission wants to implement a single market for gas one of the components of this market is a regulated provision for security of supply which consists of rules for the implementation and use of a given reserve stock of gas we investigate the impact of this policy on the profitability of a storage operator using data from denmark and italy keeping storage capacity constant the costs of the strategic stock are around 20 of the value of the storage market for denmark and 16 for italy this cost is due to the inability to extract arbitrage profits from the captive stock furthermore the strategic storage restriction induces behavior that would virtually never be replicated by a private storage operator in an unconstrained market in particular in the first 6 months of the year when unconstrained firms empty their reservoirs much faster suggesting the strategic restriction is unnecessarily distorting the market c 2010 published by elsevier b v less

measuring welfare changes in settings with imposed quantities abstract an intuitively attractive money metric utility measure is developed which is applicable in settings where individuals receive fixed quantities of one or more goods one use of this measure is in cost benefit analyses of imposed quantity changes the approximate measures typically used are shown to be subject to relatively large approximation errors however techniques are presented which can always be used to numerically evaluate the exact welfare measure provided that one knows the uncompensated demand function s or marginal willingness to pay function s of individuals

optimal commodity trading with a capacitated storage asset this paper considers the so called warehouse problem with both space and injection withdrawal capacity limits this is a foundational problem in the merchant management of assets for the storage of commodities such as energy sources and natural resources when the commodity spot price evolves according to an exogenous markov process this work shows that the optimal inventory trading policy of a risk neutral merchant is characterized by two stage and spot price dependent basestock targets under some assumptions these targets are monotone in the spot price and partition the available inventory and spot price space in each stage into three regions where it is respectively optimal to buy and inject do nothing and withdraw and sell in some cases of practical importance one can easily compute the optimal basestock targets the structure of the optimal policy is nontrivial because in each stage the merchant s qualification of high selling and low buying commodity prices in general depends on the merchant s inventory availability this is a consequence of the interplay between the capacity and space limits of the storage asset and brings to light the nontrivial nature of the interface between trading and operations a computational analysis based on natural gas data shows that mismanaging this interface can yield significant value losses moreover adapting the merchant s optimal trading policy to the spot price stochastic evolution has substantial value this value can be almost entirely generated by reacting to the unfolding of price uncertainty that is by sequentially reoptimizing a model that ignores this source of uncertainty

state dependence serial correlation and heterogeneity in intertemporal labor force participation of married women a dynamic search framework is developed to analyze the intertemporal labor force participation behavior of married women using longitudinal data to allow for a rich dynamic structure the sensitivity to alternative distributional assumptions is evaluated using linear probability and probit models the dynamic probit models are estimated using maximum simulated likelihood msl estimation to overcome the computational difficulties inherent in maximum likelihood estimation of models with nontrivial error structures the results find that participation decisions are characterized by significant state dependence unobserved heterogeneity and negative serial correlation in the error component the hypothesis that fertility decisions are exogenous to women s participation decisions is rejected when dynamics are ignored however there is no evidence against this hypothesis in dynamic model specifications women s participation response is stronger to permanent than current nonlabor income reflecting unobserved taste factors

willingness to pay for ozone control inferences from the demand for medical care abstract the paper applies a discrete choice version of the household production approach to the valuation of nonmarket goods willingness to pay for tropospheric ozone control is estimated using medical care demand under assumptions of input necessity and weak complementarity in example calculations individuals living in high ozone areas are willing to pay over 170 annually for an environment in which ozone concentrations never exceed 12 pphm willingness to pay figures are two to four times larger than medical expense savings caused by the same ozone reductions estimates obtained are compared with results of previous studies and proposed ozone control measures are discussed

school subsidies for the poor evaluating the mexican progresa poverty program abstract this paper evaluates how the progresa program which provides poor mothers in rural mexico with education grants has affected enrollment poor children who reside in communities randomly selected to participate in the initial phase of the progresa are compared to those who reside in other control communities pre program comparisons check the randomized design and double difference estimators of the program s effect on the treated are calculated by grade and sex probit models are also estimated for the probability that a child is enrolled controlling for additional characteristics of the child their parents local schools and community and for sample attrition to evaluate the sensitivity of the program estimates these estimates of program short run effects on enrollment are extrapolated to the lifetime schooling and the earnings of adults to approximate the internal rate of return on the public schooling subsidies as they increase expected private wages

gas storage valuation applying numerically constructed recombining trees abstract the liberalization of european natural gas markets forces market participants to base their decisions on market prices for owners and operators of natural gas storage facilities it is therefore necessary to take market prices into account for their decisions in this framework this paper provides a new approach for the valuation of natural gas storage facilities using stochastic dynamic programming on multinomial recombining trees the optimal storage strategy and value are determined for this we i estimate the deterministic and random impacts on natural gas prices ii simulate gas prices considering the results of the first step iii construct numerically the recombining tree using the simulation results iv determine the optimal storage strategy and value besides the determination of the optimal storage value and operation schedule the value quantiles are calculated via the quantiles relevant risk measures like value at risk and conditional value at risk are determined

household use of agricultural chemicals for soil pest management and own labor for yard work in spite of its potential health and environmental risks and contribution to agribusiness the use of agricultural chemicals for yard care has not been well studied in our discrete continuous choice model estimated with data from a national survey a household chooses how much money if any to initially spend on types of agricultural chemicals and applicators and how much time to subsequently spend on other yard work households in big cities or with large gardens are more likely to use organic chemicals the probability that a household chooses a mix of do it yourself and hired applications of synthetic chemicals increases with income age and the presence of preschoolers among households that apply only synthetic chemicals without hired help those with young children with higher incomes in big cities and with male heads spend more on the chemicals the time that such households spend on other yard work increases with expenditures on the chemicals cancellation of a pesticide registration might create an extra private cost for households with young children even though the ban might reduce external costs

bond pricing and the term structure of interest rates a discrete time approximation this paper studies the binomial approximation to the continuous trading term structure model of heath jarrow and morton 1987 the discrete time approximation makes the original methodology accessible to a wider audience and provides a computational proce dure necessary for calculating the contingent claim values derived in the continuous time paper this paper also extends and generalizes ho and lee s 1986 model to include multiple random shocks to the forward rate process and to include an analysis of continu ous time limits the generalization provides insights into the limitations of the existing empirical implementation of ho and lee s model

risk financial markets and human capital in a developing country this paper explores the link between financial market incompleteness and human capital accumulation we examine how child school attendance responds to seasonal fluctuations in the income of agrarian households using panel data from rural india to pinpoint market imperfections we study responses to aggregate and idiosyncratic as well as to anticipated and unanticipated income shocks our main finding is that seasonal fluctuations in school attendance are a form of self insurance but one which does not result in a substantial loss of human capital on average

does child labour displace schooling evidence on behavioral responses to an enrollment subsidy this brief summarizes the results of a gender impact evaluation study entitled does child labour displace schooling evidence on behavioral responses to an enrollment subsidy conducted between 1995 and 1996 in bangladesh the study observed that the subsidy increases schooling but its effect on child labour is ambiguous the subsidy increased schooling by far more than it reduced child labour substitution effects helped protect current incomes from the higher school attendance induced by the subsidy substitution effects helped protect current incomes from the higher school attendance induced by the subsidy the reduction in the incidence of child labour by boys girls represents about one quarter eighth of the increase in their school enrollment rate

household income and child schooling in vietnam the stronger are the associations between household income and child schooling the lower is intergenerational social mobility and the less equal is opportunity this study estimates the associations between household income and children s school success in vietnam the estimates indicate that these associations are considerable this article also investigates some ways in which policies relate to household incomes school fees are progressive but school fees are only about one third of what households pay directly to schools and are a much smaller proportion of a household s total school related expenditures total household expenditures paid directly to schools increase with household income less proportionately than do school fees alone so the overall structure of such payments is less progressive than is the structure of school fees because school enrollment is positively related to household income moreover the structure of school fees is less progressive for the entire population than for the selected subset that has children enrolled in school further the two school quality measures that have the strongest positive association with children s school success are much more available to higher income households meaning that higher income households have greater school expenditures in part because they are obtaining higher quality schooling and not because charges for the same quality schooling are progressive across income classes

education in a crisis abstract the year 1998 saw the onset of a major economic and financial crisis in indonesia gdp fell by 12 that year the effect on education of the next generation is examined on average household spending on education declined most dramatically among the poorest households spending reductions were particularly marked in poor households with more young children while there was a tendency to protect education spending in poor households with more older children the evidence on school enrollments mirrors these findings poor households apparently sought to protect investments in the schooling of older children at the expense of the education of younger children

construct validity of dichotomous and polychotomous choice contingent valuation questions in this note we conduct construct validity tests for dichotomous choice dc and polychotomous choice pc contingent valuation questions contrary to previous results we find that dc and pc estimates of willingness to pay are theoretically valid convergent valid and similar in terms of statistical precision similar to previous results pc respondents are less sensitive to information than dc respondents we conclude that dc and pc valuation questions are construct valid for this study sequential pc valuation questions could be used in studies where obtaining information about the certainty or intensity of respondent preferences would be useful

sri lanka can conditional cash transfer programs serve as safety nets in keeping children at school and from working when exposed to shocks this brief summarizes the results of a gender impact evaluation study can conditional cash transfer cct programs serve as safety nets in keeping children at school and from working when exposed to shocks conducted the program started in 1997 and still exists today in sri lanka the study observed that income shocks on poor households are known to induce parents to take their children out of school and send them to work when other risk coping instruments are insufficient cct programs where the condition is on school attendance have been shown to be effective in increasing educational achievements and reducing child work shocks are highly prevalent and children have irregular periods of school enrollment children who are taken out of school are less likely to re enroll