how do people cope with natural disasters evidence from the great hanshin awaji kobe earthquake in 1995 this paper investigates the coping strategies employed by victims of the great hanshin awaji kobe earthquake in 1995 using a unique household data set we show that households that held a large amount of collateralizable assets before the catastrophe and were free from a binding borrowing constraint were able to maintain their consumption levels by borrowing in contrast households subject to a binding borrowing constraint before the disaster were unable to borrow to cope with the losses inflicted by the earthquake on the other hand both types of households relied on private transfers depending on the extent of the damage

booms busts and babies health we study the relationship between the unemployment rate at the time of a baby s conception and parental characteristics parental behaviors and babies health babies conceived in times of high unemployment have a reduced incidence of low and very low birth weight fewer congenital malformations and lower post neonatal mortality these health improvements are attributable both to selection changes in the type of mothers that conceive during recessions and to improvements in health behavior during recessions black mothers tend to be higher socio economic status as measured by education and marital status in times of high unemployment whereas white mothers are less educated

ill health savings and portfolio choices in developing economies abstract this paper examines the effect of adult health on the savings and portfolio decisions of rural pakistani households it also tests whether such effects result because ill health affects income and the rates of return on specific assets by so doing it provides evidence on the sensitivity of savings to income changes and to interest rates i find that expectations of future ill health increase overall savings but reduce investments in productive assets thereby forging a link between health and poverty i also find that the number of males in a household condition the impact of the ill health of any given individual on savings outcomes

an empirical investigation of rationing constraints in rural credit markets in india abstract the literature on rural credit markets has generally assumed that households are rationed in their access to subsidized formal credit the validity of this assumption depends on the level of effective demand for formal credit in turn a function of the demand for credit and its availability from informal sources this paper estimates the demand and the sector specific costs of credit and hence the extent of formal sector rationing through an analysis of household participation in both the formal and the informal credit sectors the results show that the extent of rationing is considerably less than what is conventionally assumed

gender differences in the allocation of assets in retirement savings plans in 1995 40 percent of working men and 32 percent of working women were covered by a defined contribution dc plan a distinguishing characteristic of these plans is that workers can generally choose how their assets are invested using data from the 1992 and 1995 surveys of consumer finances scf this paper examines whether workers differ systematically by gender in the allocation of assets in dc plans previous researchers have reported that many workers tend to invest their retirement assets too conservatively and in particular that women are less likely than men to invest in risky assets such as stocks in the presence of an equity premium a lower propensity by women to invest in stocks could translate into large differences in the accumulation of financial wealth for retirement we establish that gender differences in investment decisions exist though they are more complicated than previous studies have suggested we show that these differences are not completely explained by differences in individual or household characteristics a few studies have examined gender differences in investment decisions vickie l bajtelsmit and jack l vanderhei 1997 richard p hinz et al 1997 these studies use administrative data and report that women tend to invest their retirement funds in less risky vehicles than men michael haliassos and carol c bertaut 1995 use the 1983 scf to examine why such a large fraction of households do not own any stock they report that gender does not have a significant effect on the probability of owning stock though gender differences are not the focus of their paper what these data sources lack haliassos and bertaut being the exception is a rich set of demographic and other variables on households that theory predicts should affect investment behavior this paper adds to the literature by examining gender differences in investment decisions conditioning on such variables the results highlight the importance of including marital status risk aversion measures and the portfolio of assets held outside dc plans when examining gender differences in investment decisions in these plans

are women more risk averse we find that single women exhibit relatively more risk aversion in financial decision making than single men using u s sample data we examine household holdings of risky assets to determine whether there are gender differences in financial risk taking as wealth increases the proportion of wealth held as risky assets is estimated to increase by a smaller amount for single women than for single men gender differences in financial risk taking are also influenced by age race and number of children greater financial risk aversion may provide an explanation for women s lower levels of wealth compared with men s jel j16 d81 g11

credit as insurance in agrarian economies abstract this paper examines consumption credit as an insurance mechanism in agrarian economies it explains the more rapid adoption of new technology in the green revolution by large farmers who had greater access to consumption credit the paper also demonstrates how the emergence and expansion of consumption credit markets by mitigating the need for hoarding in order to meet consumption contingencies enhances growth by encouraging investment

performance in competitive environments gender differences even though the provision of equal opportunities for men and women has been a priority in many countries large gender differences prevail in competitive high ranking positions suggested explanations include discrimination and differences in preferences and human capital in this paper we present experimental evidence in support of an additional factor women may be less effective than men in competitive environments even if they are able to perform similarly in non competitive environments in a laboratory experiment we observe as we increase the competitiveness of the environment a significant increase in performance for men but not for women this results in a significant gender gap in performance in tournaments while there is no gap when participants are paid according to piece rate this effect is stronger when women have to compete against men than in single sex competitive environments this suggests that women may be able to perform in competitive environments per se

health enterprise and labor complementarity in the household we study the role of household enterprise as a coping mechanism after health shocks using variation in the cost of traveling to formal sector health facilities to predict recovery from acute illness in tanzania we show that individuals with prolonged illness switch from farm labor to enterprise activity this response occurs along both the extensive entry and intensive capital stock and labor supply margins family members who are not ill exhibit exactly the same pattern of responses deriving a simple extension to the canonical agricultural household model we show that our results suggest complementarities in household labor

do women shy away from competition do men compete too much we examine whether men and women of the same ability differ in their selection into a competitive environment participants in a laboratory experiment solve a real task first under a noncompetitive piece rate and then a competitive tournament incentive scheme although there are no gender differences in performance men select the tournament twice as much as women when choosing their compensation scheme for the next performance while 73 percent of the men select the tournament only 35 percent of the women make this choice this gender gap in tournament entry is not explained by performance and factors such as risk and feedback aversion only playa negligible role instead the tournament entry gap is driven by men being more overconfident and by gender differences in preferences for performing in a competition the result is that women shy away from competition and men embrace it

income risk borrowing constraints and portfolio choice economic theory suggests that uninsurable income risk and the expectation of future borrowing constraints can reduce the share of risky assets in a household s portfolio if the utility function exhibits decreasing absolute risk aversion and decreasing prudence an individual will reduce his exposure to rate of return risks when confronted with other independent risks if there are transaction costs the expectation of future borrowing constraints should induce individuals to keep a lower proportion of their wealth in the form of illiquid and risky assets the authors find support for these propositions in a cross section of italian households copyright 1996 by american economic association

savings and nutrition at low incomes while many development theorists assume saving propensities vary among different groups there has been limited theoretical justification for this view this paper analyzes two complementary theories stressing the effect on saving of physiological consequences of poor nutrition at low incomes one influence is on the probability of survival another is on workers productivity either effect means that the average propensity to save can rise with income issues considered include annuities exogenous changes in survival and efficiency implications for the efficiency wage theory of unemployment and distinctions between wage and nonwage income implications of nutritional effects for econometric specification of saving functions are stressed

the cyclicality of sales regular and effective prices business cycle and policy implications author s coibion olivier gorodnichenko yuriy hong gee hee abstract we study the cyclical properties of sales regular price changes and average prices paid by consumers effective prices using data on prices and quantities sold for numerous retailers across many us metropolitan areas inflation in the effective prices paid by consumers declines significantly with higher unemployment while little change occurs in the inflation rate of prices posted by retailers this difference reflects the reallocation of household expenditures across retailers a feature of the data which we document and quantify rather than sales we propose a simple model with household store switching and assess its implications for business cycles and policymakers jel d12 e31 e32 l25 l81

evaluating familial support for the elderly the intrahousehold allocation of medical expenditures in rural pakistan introduction in this article i examine the determinants of medical expenditures on the elderly in rural pakistani households analyzing in particular the dependence of such expenditures on the economic contribution of the elderly to household income the results for older males are contrasted with those for younger males improved life expectancies in the south asian economies as in other developing economies have generated new policy interest in the economic status of the elderly there is however little empirical evidence on this topic while the scant research on the elderly in south asia undoubtedly reflects the fact that they represent one of the smallest demographic groups in these economies it also reflects the widespread belief that they are well provided for by the intergenerational households where the vast majority of them reside with their adult children however this assumption has been questioned by a number of scholars who find that medical expenditures on the elderly are closely correlated with the elderly s individual incomes and wealth household data from pakistan support such claims data on individual medical expenditures and days of illness are available from two household surveys a panel data set collected by the international food policy research institute ifpri and from the pakistan living standards measurement survey lsms both data sets reveal a strong correlation between the number of days of illness reported by adult males and age leading one to expect a similarly strong correlation between medical expenditures and age instead the ifpri data yield a correlation that is less than one would expect given the relationship between illness and age the lsms data set which provides information on many more

risk credit constraints and financial efficiency in peruvian agriculture abstract based on a panel data set we use a two stage analysis to evaluate the effects of access to formal credit on financial efficiency of farms in northern peru the first stage uses non parametric data envelope analysis to estimate farm specific measures of financial efficiency 28 per cent of farmers are financially inefficient and credit constraints reduce profits of these farmers by an average of between 17 and 27 per cent the second stage uses tobit regression to evaluate the determinants of financial inefficiency the results point to uninsured risk as a key determinant of financial inefficiency and suggest that policies to strengthen agricultural insurance markets would likely pay large dividends in rural peru

health and other asset holdings despite clear evidence of correlations between financial and medical statuses and decisions most models treat financial and health related choices separately this article bridges this gap by proposing a tractable dynamic framework for the joint determination of optimal consumption portfolio holdings health investment and health insurance we solve for the optimal rules in closed form and capitalize on this tractability to gain a better understanding of the conditions under which separation between financial and health related decisions is sensible and of the pathways through which wealth and health determine allocations welfare and other variables of interest such as expected longevity or the value of health furthermore we show that the model is consistent with the observed patterns of individual allocations and provide realistic estimates of the parameters that confirm the relevance of all the main characteristics of the model

the effects of male and female labor supply on commodity demands we examine the effects of male and female labor supply on household demands and present a simple and robust test for the separability of commodity demands from labor supply using data on individual households from six years of the uk fes we estimate a demand system for seven goods which includes hours and participation dummies as conditioning variables allowance is made for the possible endogeneity of these conditioning labor supply variables we find that separability is rejected furthermore we present evidence that ignoring the effects of labor supply leads to bias in the parameter estimates

health nutrition and economic development the relationship between health and economic development is explored focusing on nutrition based health indicators the spotlight is placed on the inter related feedbacks between the influence of health on productivity on one hand and the influence of income on health status on the other disentangling causality in these relationships has preoccupied much of the literature we evaluate different empirical strategies that have been adopted and assess the results there is now a body of evidence based on careful empirical studies that demonstrates a causal relationship between health and labor productivity there is also evidence that at least among the very poor additional income is spent on improved nutrition there are two issues that have received little attention although we argue they are likely to be very important first measurement of health is discussed in detail evidence is presented on how taking into account differences in the extent of measurement error is critical for interpreting the impact of health on wages the same theme emerges in studies of the effect of income on health specifically calorie intake the key role of non linearities in these relationships is highlighted and we demonstrate that a good deal of the variation in estimates of income elasticities of demand for calories can be ascribed to the role of measurement and functional form authors

using weather variability to estimate the response of savings to transitory income in thailand this paper measures the extent to which farmers are able to use savings and dissavings to smooth consumption in response to unexpected shocks to income time series information on regional rainfall is used to construct estimates of transitory income due to rainfall shocks the relationship between these measures of transitory income and savings indicates that farm households save a significantly higher fraction of transitory income than nontransitory income jel d91 016 the incomes of farm households in developing countries are notorious for being both low and uncertain policies that increase the incomes of farmers may well be different

direct elicitation of credit constraints conceptual and practical issues with an application to peruvian agriculture abstract this article provides a methodological bridge leading from the well developed theory of credit rationing to the less developed territory of empirically identifying credit constraints we begin by developing a simple model showing that credit constraints may take three forms quantity rationing transaction cost rationing and risk rationing each form adversely affects household resource allocation and thus should be accounted for in empirical analyses of credit market performance we outline a survey strategy to directly elicit households status as unconstrained or constrained in the credit market and if constrained to further identify which of the three nonprice rationing mechanisms is at play we discuss several practical issues that arise due to the use of a combination of factual and interpretative survey questions finally using a farm level data set from peru we illustrate how the methodology can be used to estimate the impacts of credit constraints

are women as likely to take risks and compete behavioural findings from central vietnam using controlled experiments to compare the risk attitude and willingness to compete of husbands and wives in 500 couples in rural vietnam we find that women are more risk averse than men and that compared to men women are less likely to choose to compete irrespective of how likely they are to succeed relevant to development programmes concerned with lifting women out of poverty our findings suggest that women may be more reluctant to adopt new technologies take out loans or engage in economic activities that offer higher expected returns in order to avoid setups that require them to be more competitive or that have less predictable outcomes

smoothing consumption by smoothing income hours of work responses to idiosyncratic agricultural shocks in rural india while research has demonstrated that farm households in developing economies are able to protect consumption from idiosyncratic crop shocks little evidence shows how this is achieved this paper examines the extent to which labor markets allow households to shift labor from farm to off farm employment and the extent to which such a shift explains the observed lack of correlation between consumption and idiosyncratic crop shocks the empirical analysis uses a novel measure of the idiosyncratic crop income shock which utilizes information on start of season cropping choices to more accurately estimate household expectations of weather

time to change what to sow risk preferences and technology adoption decisions of cotton farmers in china this paper examines the role of individual risk attitudes in the decision to adopt a new form of agricultural biotechnology in china i conducted a survey and a field experiment to elicit the risk preferences of chinese farmers who faced the decision of whether to adopt genetically modified bt cotton a decade ago in my analysis i expand the measurement of risk preferences beyond expected utility theory to incorporate prospect theory i find that farmers who are more risk averse or more loss averse adopt bt cotton later farmers who overweight small probabilities adopt bt cotton earlier

financial decision making are women really more risk averse 40 males 33 females gain gambling gain domain loss gambling loss domain a contextual frames b abstract gambling frames studies the application of experimental methods provided stronger control of the economic environment in which decisions were made we elicited data which call into question the prevalence of stereotypic risk attitudes in financial decision making first we find that the comparative risk propensity of male and female subjects is strongly dependent on the financial decision setting second and more important we observe no gender differences in risk propensity when subjects face contextual decisions since in practice financial decisions are always contextual our results suggest that the above gender stereotype may not reflect true male and female attitudes toward financial risks i gender specific risk behavior an experimental design our experiment was designed to examine gender specific risk propensity in decisions relevant for investors and managers table 1 gives an overview of the experimental design in the main treatment we implemented risky choices in the form of investment and insurance decisions choice behavior in this treatment henceforth called the context treatment directly measures the risk behavior of male and female subjects in contextual financial decisions we also ran a control treatment in which the same risky choices were presented as abstract gambling decisions this control treatment henceforth called the abstract treatment allows us to validate the risk behavior induced by our experimental procedure in the light of the above mentioned gambling evidence in the context treatment subjects were confronted with risky choices in two different decision contexts subjects first had to complete a series of investment decisions they were then presented with a series of identical choices this time however framed as insur1 wealth effects from income differences outside the laboratory may still affect risk behavior in our experiment they are controlled for in our model 2 experimental instructions are available in german from the authors or in english from our web page www wif ethz ch publikationen htm ance decisions each investment and insurance decision incorporated a choice between a risky lottery and a certain payoff with the series of choices implemented in the two frames we elicited our subjects certainty equivalents for the same four risky lotteries l1 l2 l3 l4 in both contexts we implemented two frames in the context treatment in order to measure the risk propensity of subjects toward both perceived gains and perceived losses in both frames all possible payoffs for each decision were positive in the investment frame these payoffs were also presented as gains while in the insurance frame the same payoffs were presented as losses relative to an initial endowment therefore elicited certainty equivalents in the investment frame measure subjects risk propensities in the gain domain while certainty equivalents in the insurance frame measure risk propensity in the loss domain if in contextual financial decisions female subjects are generally more risk averse than men our results should display ceteris paribus lower female certainty equivalents in both the investment and insurance frames 3 the four lotteries l1 l2 l3 and l4 each had two possible outcomes payoffs in swiss francs 1 sfr a 0 60 and their probabilities were 30 sfr 6 10 sfr 6 30 sfr 2 10 sfr 2 30 sfr 6 10 sfr 6 and 50 sfr 2 20 sfr 2 respectively 4 experimental evidence suggests that individual risk propensity will vary systematically between the gain and loss domain daniel kahneman and amos tversky 1979 383 vol 89 no 2 gender and economic transactions 3y16 my68 mp 383 friday dec 10 08 20 am lp aer my68 figure 1 differences in mean certainty equivalents ce between male and female subjects by frame note certainty equivalents and male female differences are measured in swiss francs in the abstract treatment we confronted a different group of subjects with exactly the same risky decisions as those in the main treatment however as mentioned before all choices in this control treatment were framed as abstract gambling decisions again two frames were implemented in the gaingambling and loss gambling frames we measured the risk attitudes of subjects toward gambles in the gain and loss domain respectively subjects in both treatments were told in advance that one of their choices would determine their experimental earnings further all subjects completed a post experimental questionnaire which yielded information on each subject s disposable income this information is necessary to exclude wealth effects due to income differences outside the laboratory as an explanation of gender specific choice behavior

how to measure the economic impact of vector borne diseases at country level vector borne diseases vbds are widespread in less developed countries and reemerging in developed ones available economic studies agree that vbds have significant effects on countries economic outcomes and affirm that a systematic evaluation of such effects is crucial for the efficient allocation of resources to health related priorities this paper provides a comparative assessment of available methodologies for measuring the economic impact of vbds at national level we review both macroeconometric and micro based approaches and examine advantages and disadvantages of current methods we conclude by suggesting possible areas for future research

liquidity risk economic development and the effects of monetary policy abstract empirical evidence indicates that monetary policy is not super neutral in many countries in particular in high inflation economies inflation is negatively related to economic activity by comparison inflation may be positively correlated with output in low inflation countries we present a neoclassical growth model with money in which the incidence of liquidity risk is inversely related to aggregate capital formation interestingly there may be multiple monetary steady states where the effects of monetary policy vary in poor economies the financial system is highly distorted and higher rates of money growth are associated with less capital formation in contrast in advanced economies a tobin effect is observed since inflation exacerbates distortions from a coordination failure in the low capital steady state individuals become much more exposed to liquidity risk consequently optimal monetary policy depends on the level of development

who are russia s entrepreneurs social scientists studying entrepreneurship have emphasized three distinct sets of variables the institutional environment sociological variables and personal and psychological characteristics we are conducting surveys in five large developing and transition economies to better understand entrepreneurship in this short paper using over 2 000 interviews from a pilot study in russia we find evidence that the three sets of variables matter perceptions of the local institutional environment social network effects and individual characteristics are all important in determining entrepreneurial behavior jel m13 o12 p12

human and financial capital for microenterprise development evidence from a field and lab experiment microenterprises constitute an important source of employment and developing such enterprises is a key policy concern in most countries but what is the most efficient tool for microenterprise development we study this question in a developing country context tanzania where microenterprises are the source of employment for more than half of the labor force and we report from a field experiment that jointly investigated the importance of a human capital intervention business training and a financial capital intervention business grant using data from three survey rounds a lab experiment and administrative records of the microfinance institution we present evidence on business performance management practices happiness business knowledge and noncognitive abilities our study demonstrates strong effects of the combination of the two interventions on male entrepreneurs while the effects on female entrepreneurs are much more muted the results suggest that long term finance is an important constraint for microfinance entrepreneurs but that business training is essential to transform financial capital into productive investments our study also points to the need for more comprehensive measures to promote the businesses of female entrepreneurs data as supplemental material are available at http dx doi org 10 1287 mnsc 2014 1933 this paper was accepted by john list behavioral economics

social capital formation and credit access evidence from sri lanka summary while previous studies evaluate the impact of social capital on development outcomes there are very few empirical studies on determinants of social capital formation we use unique long panel data from sri lanka to examine the mechanism of social capital formation in an imperfect credit market we show that households facing credit constraints reduce investments in social capital furthermore temporal declines in investment persistently reduce general trust trust in villagers and trust in business partners while previous studies argue that social capital improves access to informal credit we show the reverse causality combining these findings suggests a potential poverty trap

investigating income effects in scanner data do gasoline prices affect grocery purchases there is much discussion in the popular press about how consumers adjust their purchase decisions for items from lattes and restaurant meals to which type of meat to purchase for dinner during times of rising fuel prices 1 while analysts ascribe declines in retail sector profits when fuel prices rise to changes in demand elasticity most empirical analysis of consumer choice for such daily items abstracts from inter temporal income effects instead fuel prices are used in demand estimation as exogenous shifters of production costs and therefore valid instruments for identifying demand parameters though introspection and popular press suggest that sharp changes in fuel costs may shift price sensitivity in nonfuel purchases through an income effect little empirical work has been done to estimate or quantify this effect 2

gender differences in risk behavior an analysis of asset allocation decisions in ghana abstract within a developing country context little is known about gender differences in risk preferences as reflected in asset allocation decisions much of the empirical literature within development studies on risk and investment in assets centers on risk coping and risk management strategies of households with some exceptions this literature primarily focuses on household and household level outcomes previous experimental studies have explored gender differences in risk preferences in developing countries with inconclusive results using unique national representative sex disaggregated data with self reported asset ownership and wealth information of individuals within households in ghana from a multi country project the gender asset gap project this paper explores men and women s risk preferences as reflected in asset allocation decisions through a decomposition method typically used to explore gender differences in wage employment the study finds that although women hold significantly fewer risky assets than men in absolute terms and as a proportion of their wealth in the sample men and women do not have systematically different risk preferences the results in this paper differ from the results in many empirical studies in developed countries where women are often found to be more risk averse than men as the first study to look at gender differences in risk aversion in terms of asset allocation with in the developing country context the results from this study provide evidence that gender differences in risk attitudes may vary by cultural context as the growing experimental literature in developing countries suggests

hedonic prices for a nondurable good the case of breakfast cereals numerous studies have estimated hedonic price functions for durable goods in this paper the authors apply the methodology to breakfast cereals a nondurable good they employ maximum likelihood to estimate the hedonic price functions using data from three large supermarkets the price function depends on characteristics that provide taste nutrition and convenience to consumers and the estimates yield insights into pricing policies consumer preferences and consumer use of information copyright 1991 by mit press

shopping around how households adjusted food spending over the great recession over the great recession real wages stagnated and unemployment increased concurrently food prices rose sharply outstripping growth in food expenditure and leading to a reduction in calories purchased this has led to concern about rising food poverty we study british households to assess how they adjusted to changes in the economic environment we show they switched to cheaper calories implying food consumption was smoother than expenditure we use longitudinal data to quantify the way households lowered their per calorie spending and show they done this in part by increasing shopping eort and without lowering the nutritional quality of

risk rationing and wealth effects in credit markets theory and implications for agricultural development we develop a model that shows that asymmetric information can result in two types of credit rationing conventional quantity rationing and risk rationing whereby farmers are able to borrow but only under high collateral contracts that offer them lower expected well being than a safe subsistence activity after exploring its incidence with respect to wealth we show that risk rationing has important policy implications specifically land titling will be only partially effective because it does not enhance producers willingness to offer up the collateral needed to secure loans under moral hazard constraints efforts to enhance agricultural investment and the working of agricultural credit markets must step beyond land titling and also deal with risk copyright 2008 oxford university press