measurement of welfare applications to australia abstract this paper is concerned with the measurement of welfare which takes into account both the size and distribution of income an alternative approach to measuring welfare which captures the sense of envy felt by individuals when they compare their incomes with each other is considered this methodology is then used to analyse the extent and nature of welfare in australia the main objective of the empirical investigation is to measure the direct impact of australian personal taxes and government cash transfers on the distribution of economic welfare by the size of income and by other household characteristics the household expenditure survey 1975 1976 forms the basis of the present study

tracking poverty over time in the absence of comparable consumption data following the endorsement by the international community of the millennium development goals mdg there has been an increasing demand for practical methods for steadily tracking poverty an economically intuitive and inexpensive methodology is explored for doing so in the absence of regular comparable data on household consumption the minimum data requirements for this methodology are the availability of a household budget survey and a series of surveys with a comparable set of asset data also contained in the budget survey this method is illustrated using a series of demographic and health surveys for kenya

a decomposition analysis of the trend in uk income inequality post war britain has experienced a number of dramatic demographic and social changes that have undoubtedly influenced the distribution of income there has been a rise in the number of pensioners whose incomes are relatively low a considerable increase in the number of young and old households living on their own and a remarkable expansion in the proportion of working wives the potential importance of these structural changes suggests that their impact on the income distribution needs to be examined systematically before any attempt can be made to interpret the observed trend in overall income inequality adequately the method usually adopted for this purpose attempts to create a comparable time series of distributions based on the structural characteristics pertaining in one particular year for example if we wished to investigate the effect of shifts in the age structure of the population this approach would disaggregate the distribution in one year tl and estimate what the distribution would have been like if the age structure had been the same as that observed in some other year to on the assumption that other distributional characteristics such as ageincome differentials and inequality within age groups remain invariant to this demographic change the comparison between the actual distribution at t1 and the constructed distribution at t1 with to s age structure is taken to indicate the impact of changes in the age structure over the period concerned this comparison can be presented in terms of quantile shares summary measures of inequality or the entire lorenz curves this approach known as shift share analysis or standardising the inequality series see semple i975 love and wolfson i976 dinwiddy and reed i977 royal commission i977 rowley and henderson i978 macleod and horner i980 is perfectly adequate for simple and straightforward structural changes when several changes are occurring simultaneously however it becomes difficult to identify the contribution of the individual factors and to assess their relative importance to the overall trend in inequality furthermore the combined impact of several structural influences will not in general sum up to the inequality change requiring explanation the purpose of this paper is to propose an alternative method of analysing

local labour control regimes uneven development and the social regulation of production jonas a e g 1996 local labour control regimes uneven development and the social regulation of production reg studies 30 323 338 the apparent demise of fordist consensus seeking institutions of labour regulation raises questions concerning which if any forms of labour market governance will dominate localities in the future without providing the answers for these questions this paper addresses at a theoretical level the social need for capital to foster reciprocities between places of production and sites of consumption and labour reproduction in local labour markets this need emerges from a contradiction between on the one hand capital s abstract interest in the global exchange of labour power and on the other hand the concrete interest of particular capitals in the local context of that exchange a local labour control regime amounts to a stable local institutional framework for accumulation and labour regulation constructed around local labour market reciprocities different factions

multivariate measures of well being and an analysis of inequality in the michigan data we demonstrate a multidimensional approach for combining several indicators of well being including the traditional money income indicators this methodology avoids the difficult and much criticized task of computing imputed incomes for such indicators as net worth and schooling inequality in the proposed composite measures is computed using relative inequality indexes that permit simple analysis of both the contribution of each welfare indicator and its factor components and within and between components of total inequality when the population is grouped by income levels age gender or any other criteria the analysis is performed on u s data using the michigan survey of income dynamics

estimating quarterly poverty rates using labor force surveys a primer the paper shows how labor force surveys can be used effectively to estimate poverty rates using household expenditure surveys and cross survey imputation methods with only two rounds of household expenditure survey data for morocco 2001 and 2007 the paper estimates quarterly poverty rates for the period 2001 2010 by imputing household expenditures into the labor force surveys the results are encouraging the methodology is able to accurately reproduce official poverty statistics by combining current labor force surveys with previous period household expenditure surveys and vice versa although the focus is on head count poverty the method can be applied to any welfare indicator that is a function of household income or expenditure such as the poverty gap or the gini index of inequality the newly produced time series of poverty rates can help researchers and policy makers to a study the determinants of poverty reduction or use poverty as an explanatory factor in cross section and panel models b forecast poverty rates based on a time series model fitted to the data and c explore the linkages between labor market conditions and poverty and simulate the effects of policy reforms or economic shocks this is a promising research agenda that can expand significantly the tool kit of the welfare economist

the gini multi decomposition and the role of gini s transvariation application to partial trade liberalization in the philippines this article proposes a unified technique of the gini decomposition the gini multi decomposition is a combination of the income source decomposition and the subgroup decomposition this technique is applied on reference situation and simulated scenarios for partial trade liberalisation in philippines and is extended to different orderings to capture a wide range of between group indicators we simulate variations in income source distributions for seven educational groups in the philippines in order to measure the inequality variations between a reference situation and a post simulation one with positive externalities due to public expenditures on the private sector productivity

a new index of income inequality the b measure abstract this paper presents a new measure of income inequality that allows more weight to be given to inequality in the lower end of the income graduation the measure is non parametric and based only on the underlying lorenz curve

non parametric tests of consumer behaviour the neoclassical model of consumer behaviour postulates that a consumer s choice behaviour can be described as deriving from utility maximization subject to a budget constraint one is then naturally led to ask what this model implies about observed behaviour this question has been addressed from two quite distinct approaches the first approach originating in the work of slutsky 1915 and antonelli 1886 derives necessary and sufficient conditions involving the derivatives of the demand functions the second approach originating in the work of samuelson 1938 1947 1948 derives algebraic conditions on the demand functions implied by maximizing behaviour

the meaning and measurement of income mobility abstract income mobility may be seen as arising from two sources i the transfer of income among individuals with total income held constant and ii a change in the total amount of income available in this paper we propose several sensible properties defining the concept of income mobility and show that an easily applicable measure of mobility is uniquely implied by these properties we also show that the resulting measure is additively decomposable into the two sources listed above namely mobility due to the transfer of income within a given structure and mobility due to economic growth or contraction finally these results are compared and contrasted with other mobility concepts and measures in the literature journal of economic literature classification numbers d31 d63

stages of the recruitment process and the referrer s performance effect although the existing theory predicts that a referral s chances of being hired increase with the job performance of the referrer no empirical evidence is available to support this claim to address this discrepancy we decompose the recruitment process into objective selection subjective selection and self selection and theorize that the likelihood of passing a particular recruitment stage increases with the performance of the referrer under objective selection and self selection but remains undetermined at a stage of subjective selection our analysis of unique comprehensive data on online recruitment of sales agents in a virtual call center supports these arguments the effectiveness of personnel as a recruitment channel varies with the type of the recruitment stage and performance of the referrer when the firm evaluates candidates by an objective criterion the advantage of a referral increases with the performance of his or her referrer those referred by relatively high performing workers are significantly better than the applicants who learned about the job from internet ads when job candidates self select into the next stage of the online application process the referral of any agent is more likely to continue than a nonreferral and this likelihood increases with the performance of the referrer on a subjective stage the outcome is contingent on the intricacies of the recruitment process in our case an applicant s chances of being hired increase with the performance of his or her referrer because the firm rejects the referrals of low performing workers at a higher rate than it does nonreferrals while it treats equally the referrals of high performing workers and nonreferrals the study s contributions to the literature on social networks in labor markets are discussed

a matrix approach to the gini index decomposition by subgroup and by income source the literature offers two main ways of decomposing the gini index decomposition by population subgroup and by income source this article proposes merging the two decomposition dimensions by suggesting a matrix formula for the gini index which permits the simultaneous decomposition by subgroup and by income source using this multi decomposition one can investigate the role of the interaction between the subgroup and the source components in determining the overall inequality we apply the methodology to sample data on italian household incomes collected in 2008

true measures of gdp and convergence widely used purchasing power parity comparisons of per capita gdp are not true quantity indexes and are subject to systematic substitution bins this bias may distort measurement of convergence and divergence extending varian s nonparametric construction of a true index gives the set of true indexes including the new ideal afriat index these indexes are utility consistent and independent of arbitrary reference price vectors we establish bounds on the dispersion of true multilateral indexes hence bounds on convergence international price indexes understate both true gdp dispersion and where prices are converging over time the rate of true quantity convergence

demand systems with and without errors revealed preference theory assumes that each consumer has demands that are rational meaning that they arise from the maximization of his or her own utility function in contrast econometric or statistical demand models assume that each consumer s demands equal a rational systematic component derived from a common utility function plus an individual specific additive error term this paper reconciles these differences by providing necessary and sufficient conditions for rationality of statistical demand models given individual consumer rationality

using repeated cross sections to explore movements into and out of poverty movements in and out of poverty are of core interest to both policymakers and economists yet the panel data needed to analyze such movements are rare in this paper the authors build on the methodology used to construct poverty maps to show how repeated cross sections of household survey data can allow inferences to be made about movements in and out of poverty they illustrate that the method permits the estimation of bounds on mobility and provide non parametric and parametric approaches to obtaining these bounds they test how well the method works on data sets for vietnam and indonesia where we are able to compare our method to true panel estimates the results are sufficiently encouraging to offer the prospect of some limited basic insights into mobility and poverty duration in settings where historically it was judged that the data necessary for such analysis were unavailable

measuring the economic affluence between populations of income receivers this article introduces and discusses a new measure of the relative economic affluence rea between income distributions with different means the rea measure d is applied to the u s white and black household income distributions of 1967 and 1979 the measure d shows that the rea of the white households with respect to the black households decreased from 1967 to 1979 this conclusion contrasts with those obtained by applications of distance or quasi distance functions it is shown in this study that rea measures and distance functions address different and relevant issues an rea measure deals with the relation more affluent than and defines a partial strict ordering over the set of pairs of income distributions that is the relation is asymmetric and transitive whereas a distance function accounts for the dissimilarity between distributions without imposing an ordering relation and hence fulfills the symmetry property

when winners feel like losers evidence from an energy subsidy reform in 2011 the government of el salvador implemented a reform to the gas subsidy that increased the welfare of households in all but the top two deciles of the income distribution however the reform turned out to be rather unpopular especially among winners this paper relies on ad hoc household surveys conducted before the implementation and in the following two and a half years to test which factors help explain the puzzle the analysis uses probit and logit models to show that misinformation a negativity bias by which people with limited information inferred negative consequences mistrust of the government s ability to implement the policy and political priors explain most of the un satisfaction before implementation perceptions improved gradually and significantly so over time when the subsidy reception induced households to update their initial priors although political biases remained significant throughout the entire period the results suggest several implications with respect to policy reforms in cases where agents have limited information

a note on different approaches to index number theory the central question in a recent paper by j peter neary 2004 concerning real incomes and the penn world tables is what exactly do the numbers mean this question is important because these data are widely used in empirical research more generally index number data including indicators of inflation and economic growth are used so extensively in research throughout the profession that it indeed seems helpful to understand what they actually indicate in the literature two approaches to index numbers are distinguished the axiomatic approach and the economic approach in this note we would like to discuss the way in which these two approaches differ and how that affects what the numbers mean in neary s paper the difference is described as one between an approach that does and an approach that does not assume that quantities arise from optimizing behavior this is in line with a tradition in index number theory that can be traced back to ragnar frisch 1936 we will argue that a more accurate description is that the difference lies in whether or not optimizing agents or representative consumers are assumed to optimize the same utility function it is exactly this distinction that sets the differ ent limitations of both approaches for constructing a meaningful indicator of real income those limitations will be described in some detail and being aware of them is helpful for assessing the value of results from both the axiomatic and the economic approach they also suggest ways in which the two approaches may be complementary for constructing meaningful index numbers introducing the geary allen international accounts gaia system neary combines taking the economic approach with judging the resulting indices in view of some axioms we think that this makes his paper a suitable point of departure for the discussion of how the two approaches handle differences in relative prices on the one hand and differences in preferences on the other

to each the same and to each his own a proposal to measure responsibility sensitive income inequality this paper deals with the question of how to incorporate modern responsibility catering egalitarianism into economic theory on the measurement of income inequality i present a particular axiomatic expression of the main aspects of such egalitarianism then to measure offensive inequality separately i construct a norm or reference income distribution based upon the axiomatic model to replace the perfectly equal income distribution that is used as norm by all common inequality measures i defend the use of a particular measure of distributional change to determine the degree of offensive inequality and apply the method to belgian income data

why do some occupations pay more than others social closure and earnings inequality in the united states1 this article elaborates and evaluates the neo weberian notion of social closure to investigate positional inequality in the united states it argues that social and legal barriers around occupations raise the rewards of their members by restricting the labor supply enhancing diffuse demand channeling demand or signaling a particular quality of service hypotheses derived from the closure perspective are evaluated using new data that map five institutionalized closure devices licensing educational credentialing voluntary certification association representation and unionization onto 488 occupations results from multilevel models demonstrate that closure practices particularly those that generate tangible restrictions on the labor supply shape the contemporary structure of occupational earnings returns to these strategies vary across occupations but are not tightly linked to the complexity of the occupation s knowledge base if suitably elaborated closure theory thus offers a promising complemen

club convergence and inter regional inequality in mexico 1940 2015 in this paper we analyse the convergence patterns in inter regional inequality and income per capita for the mexican states over the period 1940 2015 to that end we apply a time series approach

the use of diversity analysis to assess the relative influence of factors affecting the income distribution this article uses diversity measures based on quadratic entropy to analyze the relative effects of factors such as age sex and education on the income distribution in particular sex appears to be as important as education in explaining the overall income inequality in the data collected by the u s bureau of the census an advantage of the diversity measures is that they possess a decomposition of the total inequality into between group and within group components moreover analogs of partial association enable one to study the effects of several factors by using several measures our inferences are shown to be robust

interdistributional income inequality incomplete moments are used to characterize income inequality and provide the basis for interdistributional lorenz curves four measures of interdistributional inequality are considered and seen to be related to an interdistributional welfare interpretation based upon these measures there has been a significant secular decline in interdistributional inequality between blacks and whites over the past 30 years

the apples and oranges theorem for price indices the question is whether or not there is a generally meaningful way to compute price indices i explore the duality between price and quantity indices and present an impossibility result that is analogous to the one for quantity indices

is predicted data a viable alternative to real data it is costly to collect the household and individual level data that underlies official estimates of poverty and health for this reason developing countries often do not have the budget to update their estimates of poverty and health regularly even though these estimates are most needed there one way to reduce the financial burden is to substitute some of the real data with predicted data an approach referred to as double sampling collects the expensive outcome variable for a sub sample only while collecting the covariates used for prediction for the full sample the objective of this study is to determine if this would indeed allow for realizing meaningful reductions in financial costs while preserving statistical precision the study does this using analytical calculations that allow for considering a wide range of parameter values that are plausible to real applications the benefits of using double sampling are found to be modest there are circumstances for which the gains can be more substantial but the study conjectures that these denote the exceptions rather than the rule the recommendation is to rely on real data whenever there is a need for new data and use the prediction estimator to leverage existing data

equity and efficiency consequences of unemployment insurance reform in canada the importance of sensitivity analyses this paper conducts an evaluation of the equity and efficiency consequences of proposals for the reform of the canadian unemployment insurance program the sensitivity of results to the measure of welfare chosen and to the model employed to simulate individual behavioral responses is illustrated copyright 1991 by the london school of economics and political science