defining the value of a statistical life reply abstract in general empirical estimates of the value of a statistical life vsl are biased however as pointed out by blomqvist 2001 a true blip in the hazard rate can be used to obtain an exact estimate of the vsl the question remains whether individuals and markets are able to value such short drops in the hazard rate

does corporate governance influence earnings management in latin american markets although us and european research has documented improvement in earnings quality associated with corporate governance characteristics the situation in latin america is questionable given the business environment in which firms operate which is characterized by controlling family ownership and weak legal protection the purpose of this study is to examine the relation between the internal mechanisms of corporate governance and earnings management measured by discretionary accrual we use a sample of listed latin american non financial companies from the period 2006 2009 our results show how in the latin american context the role of external directors is limited and that boards which meet more frequently take a more active position in the monitoring of insiders so showing a lower use of manipulative practices in addition we find a non linear relation between insider ownership and discretionary accruals also pointing to the fact that ownership concentration may be a manipulative practices constrictor mechanism only when the ownership of main shareholders is moderate the findings have important policy implications since this is to the best of our knowledge the first study to analyze the relation between the effectiveness of the government and the earnings management behavior as policy implications we document how when a country implements controls aimed at reducing corruption strengthening the rule of law or improving the effectiveness of government this leads to a reduction in firm earnings management

why do corrupt governments maintain public support this article addresses an issue often neglected by the current literature on political corruption why do citizens support corrupt governments the authors argue that people in countries where gove

future costs in economic evaluation a comment on lee in a recent article in this journal lee argued that indirect medical costs should be ignored in economic evaluations to reach this conclusion lee uses an unrealistic and uncommon budget constraint this comment highlights a number of methodological problems in lee s analysis moreover it highlights that looking at current practice of economic evaluation lee s model implies the inclusion rather than the exclusion of indirect medical costs

does globalization increase child labor abstract there is no empirical evidence that trade exposure per se increases child labor as trade theory and household economics lead us to expect the crosscountry evidence seems to indicate that trade reduces or at worst has no significant effect on child labor consistently with the theory a comparatively well educated labor force and active social policies appear to be conducive to a reduction in child labor for countries with a largely uneducated workforce the problem is not so much globalization as not being allowed to take part in it

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

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

unpacking the meaning of market access evidence from rural kenya summary this paper critically examines the dimensions of market access using farm panel survey data from kenya we investigate changes in ten indicators of market access during the 1997 2010 post liberalization period we find major improvements in certain market access conditions and little change in others there is generally low correlation between alternative indicators of market access all purpose indicators may not accurately reflect specific market access conditions of interest distances to physical infrastructure are often not representative of farmers access to markets changes in specific market access conditions may have more to do with the behaviors of marketing agents we consider the implications of these findings for agricultural marketing policies and for research methods

are schooling and roads complementary evidence from income dynamics in rural indonesia summary we examine the impact of spatial connectivity on household income growth and non agriculture labor supply in indonesia by combining household panel data and village census data during the period of 1995 2007 our empirical results show that the impacts of improved local road quality on income growth and the transition to non agricultural labor markets depend on household education and distance to economic centers in particular post primary education significantly increases the benefit from the improvement of local spatial connectivity in remote areas promoting labor transition to non agricultural sectors education and local road quality are complementary mutually increasing non agricultural labor supply and income in remote areas in contrast the initial landholding size does not affect the benefit from improved road quality

future costs in cost effectiveness analysis this paper resolves several controversies in cea generalizing garber a m phelps c e 1997 economic foundations of cost effectiveness analysis journal of health economics 16 1 1 31 the paper shows accounting for unrelated future costs distorts decision making after replicating meltzer d 1997 accounting for future costs in medical cost effectiveness analysis journal of health economics 16 1 33 64 quite different conclusion that unrelated future costs should be included in cea the paper shows that meltzer s findings result from modeling the budget constraint as an annuity which is problematic the paper also shows that related costs should be included in cea this holds for a variety of models including a health maximization model cea should treat costs in the manner recommended by garber and phelps

endogenous cost effectiveness analysis and health care technology adoption abstract increased health care spending has placed pressure on public and private payers to prioritize spending cost effectiveness ce analysis is the main tool used by payers to prioritize coverage of new therapies we argue that reimbursement based on ce is subject to a form of the lucas critique the goals of ce policies may not materialize when firms affected by the policies respond optimally to them for instance because costs in ce analysis reflect prices set optimally by firms rather than production costs observed ce levels will depend on how firm pricing responds to ce policies observed ce is therefore endogenous when ce is endogenously determined policies aimed at lowering spending and improving overall ce may paradoxically raise spending and lead to the adoption of more resource costly treatments we empirically illustrate whether this may occur using data on public coverage decisions in the united kingdom

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

child labor cause consequence and cure with remarks on international labor standards although the literature on child labor is enormous it lacks a common theoretical foundation in this paper analytical survey of this field is provided keeping in mind that this is an area where the primary reason for theorizing is ultimately to influence policy overall it is noted that the literature on child labor is an illustration of abundance and anarchy although empirical writings on child labor are numerous they are not usually founded on theory it is argued that there is much that can be done in curbing the issue of child labor several theories were studied in this paper including collaborative intervention such efforts include public action which alters the economic environment such that the parents of their own accord prefer to withdraw the child from labor force another strategy involves the government a legal intervention is enforcing a total ban on the subject although such interventions have good intentions some of them may not be feasible in general it is better to take economy wide measures against child labor and if there is to be a sector specific ban it should be based on the working conditions of that sector rather than the destination of the goods

do the near elderly value mortality risks differently wage hedonic models are estimated with the health and retirement study to measure the risk wage tradeoffs value of statistical lives for older workers the analysis explicitly allows for multiple employment states including retirement using a multinomial selection model the results suggest that the oldest and most risk averse workers require significantly higher not lower compensation to accept increases in job related fatality risks

indivisible labor and the business cycle abstract a growth model with shocks to technology is studied labor is indivisible so all variability in hours worked is due to fluctuations in the number employed we find that unlike previous equilibrium models of the business cycle this economy displays large fluctuations in hours worked and relatively small fluctuations in productivity this finding is independent of individuals willingness to substitute leisure across time this and other findings are the result of studying and comparing summary statistics describing this economy an economy with divisible labor and post war u s time series

medical care costs how much welfare loss hardly a week goes by without a front page newspaper article on rising health care costs and the uninsured in this article i focus mainly on costs arguing that the issue has been somewhat misconceived while the level of medical care spending in the u s is a cause for concern the welfare losses associated with rises in that level of spending may not be as large as the public rhetoric can make them seem in fact cost containment may not be as urgent as is widely supposed and some proposed cost containment policies may result in welfare losses for the insured and even increase the number of uninsured

welfare implications of learning through solicitation versus diversification in health care using roy s model of sorting behavior i study welfare implications of learning about medical care quality through the current health care data production infrastructure that relies on solicitation of research subjects due to severe adverse selection issues i show that such learning could be biased and welfare decreasing direct diversification of treatment receipt may solve these issues but is infeasible unifying manski s work on diversified treatment choice under ambiguity and heckman s work on estimating heterogeneous treatment effects i propose a new infrastructure based on temporary diversification of access that resolves the prior issues and can identify nuanced effect heterogeneity

an estimable dynamic stochastic model of fertility and child mortality this paper develops a finite horizon dynamic stochastic model of discrete choice with respect to life cycle fertility within an environment where infant survival is uncertain the model yields implications for the number timing and spacing of children a tractable estimation method is developed for the linear constraint quadratic utility case that is intimately tied to the dynamic optimization problem and the method is applied to malaysian household data estimation is based on integrating the numerical solution of the dynamic programming model of behavior with a maximum likelihood procedure

peasant household behaviour with missing markets some paradoxes explained a model of peasant household behavior under varying degrees of household specific food and labor market failures is constructed to show that these structural features can explain several well known patterns of peasant response which have often been attributed to peculiar motives presumed specific to peasants the model explains sluggish response to cash crops prices and high instability in perceived food and labor scarcities the key role of manufactured consumer goods prices in stimulating peasants effort in cash crops production the effectiveness of taxation as opposed to incentives in stimulating cash crops production and the key role of technological change in food production to enhance cash crop production results are obtained analytically in the case of one market failure and by numerical simulation with more than one

child labour in indonesian small industries abstract we analyse the geographic incidence of child labour in small manufacturing firms in indonesia at the village level our unique data set covers virtually all indonesian villages and urban neighbourhoods it allows us to distinguish between demand and supply side determinants of child labour we show by correcting for sample selection that a number of counterintuitive results child labour being unaffected by credit access and school proximity are the result of an interplay between supply and demand side determinants credit access and school proximity reduce child labour supply but simultaneously constitute positive location factors for firms thereby increasing the demand for child labourers to effectively reduce child labour growth oriented policies such as enhancing school and credit facilities should be complemented by policies specifically geared towards increasing school attendance

transactions costs and agricultural household supply response we develop and estimate a model of supply response when transactions costs create a situation where some producers buy others sell and others do not participate in markets we present two rationales for why producing households may have different relationships to the market proportional and fixed transactions costs using data on mexican corn producers we estimate an empirical model that allows for separate tests of the significance of both types of transactions costs revealing that both fixed and proportional transactions costs matter for the estimation the results provide consistent estimates of supply elasticity and measures of the relative importance of factors determining both proportional and fixed transactions costs

economies of scale household size and the demand for food household scale economies are plausibly attributed to shared household public goods that make larger households better off at the same level of per capita resources larger households should therefore have higher per capita consumption of private goods such as food provided that they do not substitute too much toward the effectively cheaper public goods the evidence shows exactly the opposite data from rich and poor countries indicate that at constant per capita total expenditure the per capita demand for food decreases with household size and that it does so most in the poorest countries where substitution should be the least

wtp and qaly based approaches to valuing health for policy common ground and disputed territory this paper discusses links between two approaches to the value of health the willingness to pay approach of environmental economics and the quality adjusted life year approach of health economics the approaches are used in cost benefit and cost effectiveness analyses of health interventions despite fundamental differences in the decision contexts and conceptual foundations of the two approaches in current practice they are likely to lead to similar policy decisions the paper also shows how research on the quality adjusted life year qaly can be used to fill in gaps in the willingness to pay literature the paper sketches a simple model that shows how to qaly fy the value of a statistical life i e how to combine qaly estimates with estimates of the value of a statistical life to estimate willingness to pay for morbidity risks

annual bonus schemes and the manipulation of earnings abstract using confidential data of executive specific short term bonus plans we investigate the extent to which executives manipulate earnings to maximize the present value of bonus plan payments as such this paper extends the work of healy 1985 like healy we find evidence consistent with the hypothesis that managers manipulate earnings downwards when their bonuses are at their maximum unlike healy we find no evidence that managers manipulate earnings downwards when earnings are below the minimum necessary to receive any bonus we demonstrate that healy s results at the lower bound are likely to be induced by his methodology

capital accumulation and uncertain lifetimes with adverse selection this paper examines the implications of adverse selection in the private annuity market for the pricing of private annuities and the consequent effects on constrption and bequest behavior with privately known heterogeneous mortality probabilities adverse selection causes the rate of return on private annuities to be less than the actuarially fair rate based on population average mortality however a fully funded social security system with compulsory participation can offer an implied rate of return equal to the actuarially fair rate based on population average mortality thus since social security offers a higher rate of return than private annuities consumers cannot completely offset the effects of social security by transacting in the private annuity market using an overlapping generations model with uncertain lifetimes we demonstrate that the introduction of actuarially fair social security reduces the steady state rate of return on annuities and raises the steady state levels of average bequests and average consumption of the young the steady state national capital stock rises or falls according to the strength of the bequest motive this abstract was borrowed from another version of this item

qalys and the equity efficiency trade off as the volume of research on quality adjusted life years qalys has increased concern has begun to be expressed about the equity aspects of resource allocation decisions based on the results of this research this paper suggests that a common theme running through the criticisms of the qaly approach is a concern about inequality it also suggests that the method for incorporating distributional concerns which is currently being pursued by advocates of the qaly approach will only ever capture concerns other than a concern about inequality the paper suggests a method for incorporating both sets of concerns into resource allocation decisions

ceo stock option awards and the timing of corporate voluntary disclosures abstract we investigate whether ceos manage the timing of their voluntary disclosures around stock option awards we conjecture that ceos manage investors expectations around award dates by delaying good news and rushing forward bad news for a sample of 2 039 ceo option awards by 572 firms with fixed award schedules we document changes in share prices and analyst earnings forecasts around option awards that are consistent with our conjecture we also provide more direct evidence based on management earnings forecasts issued prior to award dates our findings suggest that ceos make opportunistic voluntary disclosure decisions that maximize their stock option compensation

child labor urban proximity and household composition using detailed survey data from nepal this paper examines the determinants of child labor with a special emphasis on urban proximity we find that children residing in or near urban centers attend school more and work less in total but are more likely to be involved in wage work or in a small business the larger the urban center the stronger the effect is urban proximity is found to reduce the workload of children and improve school attendance up to 3 h of travel time from the city in areas of commercialized agriculture located 3 to 7 h from the city children do more farm work urban proximity effects are accounted for by a combination of local labor supply and demand conditions most notably the local importance of agriculture the education level of the parents and the local wage rate child servants which represent a small proportion of all children work much harder than other children and appear particularly at risk

toward a theory of agency and altruism in family firms surprisingly the majority of u s family firms offer employed family members short and long term performance based incentive pay we draw on the household economics and altruism literatures to explain why family firms might feel compelled to do so and develop theory that predicts when this practice will be beneficial results based on data obtained from 883 family firms show that altruism as reflected by the parents estate and share transfer intentions moderates the effect of these pay incentives as our theory predicts as such this article helps explain both how altruism influences agency relationships in family firms and why business practice in family firms differs from those found in other types of firms

life cycle preferences over consumption and health when is cost effectiveness analysis equivalent to cost benefit analysis this paper studies life cycle preferences over consumption and health status we show that cost effectiveness analysis is consistent with cost benefit analysis if the lifetime utility function is additive over time multiplicative in the utility of consumption and the utility of health status and if the utility of consumption is constant over time we derive the conditions under which the lifetime utility function takes this form both under expected utility theory and under rank dependent utility theory which is currently the most important nonexpected utility theory if cost effectiveness analysis is consistent with cost benefit analysis it is possible to derive tractable expressions for the willingness to pay for quality adjusted life years qalys the willingness to pay for qalys depends on wealth remaining life expectancy health status and the possibilities for intertemporal substitution of consumption

technology growth and expenditure growth in health care in the united states health care technology has contributed to rising survival rates yet health care spending relative to gdp has also grown more rapidly than in any other country we develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth we show that health care productivity depends on the heterogeneity of treatment effects across patients the shape of the health production function and the cost structure of procedures such as mris with high fixed costs and low marginal costs the model implies a typology of medical technology productivity i highly cost effective home run innovations with little chance of overuse such as anti retroviral therapy for hiv ii treatments highly effective for some but not for all e g stents and iii gray area treatments with uncertain clinical value such as icu days among chronically ill patients not surprisingly countries adopting category i and effective category ii treatments gain the greatest health improvements while countries adopting ineffective category ii and category iii treatments experience the most rapid cost growth ultimately economic and political resistance in the u s to ever rising tax rates will slow cost growth with uncertain effects on technology growth

accounting for future costs in medical cost effectiveness analysis most medical cost effectiveness analyses include future costs only for related illnesses but this approach is controversial this paper demonstrates that cost effectiveness analysis is consistent with lifetime utility maximization only if it includes all future medical and non medical expenditures estimates of the magnitude of these future costs suggest that they may substantially alter both the absolute and relative cost effectiveness of medical interventions particularly when an intervention increases length of life more than quality of life in older populations current methods overstate the cost effectiveness of interventions which extend life compared to interventions which improve the quality of life

will trade sanctions reduce child labour the role of credit markets abstract we examine the interaction between credit markets trade sanctions and the incidence of child labour in a two good two period model with unequally wealthy households both poverty and poor education quality inter alia are important determinants of child labour the incidence of child labour decreases as we move from the case of borrowing constraints to the case in which poor households can borrow freely from rich ones and then to the case of perfect international credit markets trade sanctions can increase child labour especially among poor households a possibility that decreases as their access to credit improves

measurement of health state utilities for economic appraisal health status measurement for use in economic appraisal of health care programmes is reviewed in this paper with particular emphasis on utility measurement a framework for economic appraisal is presented displaying the various components that must be measured and showing how the three forms of analysis cost effectiveness analysis cost benefit analysis and cost utility analysis relate to the framework and to each other one of the components in the framework is health status it can be measured using ad hoc numeric scales willingness to pay receive or health state utilities the determination of health state utilities is reviewed covering the following issues alternative sources of utilities health state descriptions multi attribute utility approach determination of appropriate subjects utility aggregation and accuracy three measurement techniques for health state utilities are described in detail rating scale standard gamble and time trade off the use of these methods is described for both chronic and temporary health states and for both health states considered better than death and those considered worse than death

willingness to pay and sensitivity to time framing a theoretical analysis and an application on car safety stated preference sp surveys attempt to obtain monetary values for non market goods that reflect individuals true preferences numerous empirical studies suggest that monetary values from sp studies are sensitive to survey design and so may not reflect respondents true preferences this study examines the effect of time framing on respondents willingness to pay wtp for car safety we explore how wtp per unit risk reduction depends on the time period over which respondents pay and face reduced risk in a theoretical model and by using data from a swedish contingent valuation survey our theoretical model predicts the effect to be nontrivial in many scenarios used in empirical applications in our empirical analysis we examine the sensitivity of wtp to an annual and a monthly scenario our theoretical model predicts the effect from the time framing to be negligible but the empirical estimates from the annual scenario are about 70 higher than estimates from the monthly scenario

mutual fund activism and market regulation during the pre ifrs period the case of earnings informativeness in china from an ethical perspective this paper investigates the emerging effect of mutual fund involvement on the agency problem between majority and minority shareholders during the pre ifrs period in china indicated by earnings informativeness from an ethical perspective we find that the presence of mutual fund hampers earnings informativeness implying that mutual funds in general at their early stage in china are not yet capable of serving as an effective monitor this finding is in sharp contrast to the role of institutional investors in mature markets as documented in the literature however mutual funds affiliated with banks have been found to be effective to improve earnings informativeness of chinese listed companies and the impact is more pronounced among those affiliated with joint equity banks compared to their counterparts affiliated with state owned banks

education and household welfare abstractusing census data from nepal we examine how the partial derivatives of predicted household welfare vary with parental education we focus on fertility child survival schooling and child labor female education is not as strongly associated with beneficial outcomes as is often assumed male education often matters more and part of the association between female education and welfare is driven by marriage market matching with more educated men controlling for the average education of parental cohorts does not change this finding but when we use educational rank to proxy for unobserved ability and family background the positive association between female education and beneficial outcomes becomes weaker or is reversed for women the association between educational rank and outcomes is strong women who obtain more schooling than their peers in school have fewer children and educate them better in contrast for men the statistical association between education and household welfare remains str

why does child labor persist with declining poverty we develop a dynamic overlapping generations model to highlight the role of income inequality in explaining the persistence of child labor under declining poverty differential investment in two forms of human capital schooling and health in the presence of inequality gives rise to a nonconvergent income distribution in the steady state characterized by multiple steady states of relative income with varying levels of education health and child labor the child labor trap thus generated is shown to preserve itself despite rising per capita income policy recommendations include public provision of education targeted toward reducing schooling costs for the poor or raising the efficacy of public health infrastructure jel i1 j2 o1 o2

the welfare value of fda s mercury in fish advisory a dynamic reanalysis assessing the welfare impact of consumer health advisories is a thorny task recently shimshack and ward 2010 studied how u s households responded to fda s 2001 mercury in fish advisory they found that the average at risk household reduced fish consumption by 21 resulting in a 17 reduction in mercury exposure at the cost of a 21 reduction in cardioprotective omega 3 fatty acids based on a static assessment of the health costs and benefits shimshack and ward concluded that the advisory policy resulted in an overall consumer welfare loss in this note we propose a dynamic assessment that links the long term cardiovascular health effects of the advisory to life cycle consumption we find that under reasonable assumptions the welfare loss might be much larger than suggested our analysis highlights the importance of accounting for dynamic effects when evaluating persistent changes in exposure to environmental health risks

corporate governance in brazil corporate governance is an issue of growing importance in developing economies as many firms pass through significant transformations due to the combined forces of sociopolitical changes technological progress and economic trends toward globalization these elements along with the structural characteristics of developing economies such as less developed capital markets and governmental interventionism draw a picture for corporate governance practices that may in some aspects be fundamentally different from the practices found in european or north american contexts in this paper we review and discuss the state of corporate governance practices in brazil focusing on how the governance structure of brazilian firms has been subjected to important changes in the recent past and how even more changes are expected to happen

flexibility of household structure child fostering decisions in burkina faso using data i collected in africa this paper examines a household s decision to adjust its size through child fostering an institution where biological parents temporarily send children to live with other families households experiencing negative idiosyncratic income shocks child gender imbalances located further from primary schools or with more good quality network members fewer subsistence farmers and unmarried individuals and more educated members are significantly more likely to send a child results reject an overall symmetric fostering model across senders and receivers but evidence of symmetry is found when the test is restricted to exogenous income shocks and gender imbalances

is there a meaningful definition of the value of a statistical life a definition of the value of a statistical life is derived this definition has a meaningful interpretation in terms of the monetary value of expected present value utility if consumption is age independent in all other cases empirical estimates of the value of a statistical life are biased estimators of the monetary counterpart to expected present value utility