david pearce and the economic valuation of biodiversity david pearce was a pioneer in the economic valuation of biodiversity his work powerfully influenced both later economists who worked in the field and natural scientists and practitioners who gained and appreciation of the importance of economics to their efforts pearce often applied the paradigm of demonstration followed by appropriation the values of biodiversity must first be demonstrated to those who make decisions concerning its survival and then appropriated by them the later step will be possible when market and policy failures are rectified so as to allow the realization of conservation values while pearce wrote extensively on these themes he was also acutely aware of the limitations of the paradigm rosy projections of values that could not be realized and appropriated would be of little practical use and pearce often cautioned against excesses of optimism yet he also clearly believed that there are compelling if not always easily demonstrated reasons for conservation i argue in this paper that pearce s seminal work on the valuation of biodiversity cannot be understood without some appreciation of his philosophical perspective pearce would have described himself as a pragmatist however his pragmatism was grounded in the belief that it is both expedient and ethical to recognize that communities in some of the poorest corners of the world will only conserve biodiversity if they are justly compensated for the sacrifices they must make to do so

the expansion of modern agriculture and global biodiversity decline an integrated assessment the world is banking on a major increase in food production if the dietary needs and food preferences of an increasing and increasingly rich population are to be met this requires the further expansion of modern agriculture but modern agriculture rests on a small number of highly productive crops and its expansion has led to a significant loss of global biodiversity ecologists have shown that biodiversity loss results in lower plant productivity while agricultural economists have linked biodiversity loss on farms with increasing variability of crop yields and sometimes lower mean yields in this paper we consider the macro economic consequences of the continued expansion of particular forms of intensive modern agriculture with a focus on how the loss of biodiversity affects food production we employ a quantitative structurally estimated model of the global economy which jointly determines economic growth population and food demand agricultural innovations and land conversion we show that even small effects of agricultural expansion on productivity via biodiversity loss might be sufficient to warrant a moratorium on further land conversion

is bioprospecting a viable strategy for conserving tropical ecosystems many prominent scientists avidly advocate bio prospecting the systematic search for new com mercial applications for biota especially hithertounstudied species as a mechanism for inducingtropical biodiversity conservation by making itcommercially attractive wilson 1992 reid et al 1993 paho 1996 weiss and eisner 1998 bio prospecting s premise is that nature contains hid den assets of potentially huge yet unknownmagnitude to humankind that can motivate andeven nance biodiversity conservation in the trop ics this undiscovered genetic or biochemical in formation is commonly framed in the context ofpotential improvements in medicine or food thusde ning a massive global population of potentialbene ciaries it is further argued that bioprospect ing can affect social and economic development indeveloping countries by rewarding biota rich butincome poor tropical communities that preserveand wisely manage their genetic resources thepremise of bioprospecting coupled with the claimthat practically all of humankind stands tobene t and perhaps most especially the poorestof the poor naturally leads to an urgent desire toconserve tropical biodiversity in order to enablediscovery extraction and value adding transfor mation of tropical biota speci cally it is claimed that bioprospectingstimulates conservation through two mechanisms first bioprospecting rms should be willing topay to preserve biodiversity for its innovationoption value since they stand to reap direct nan cial bene ts from any marketable discoveries sec ond conditional on an increase in life sciences rms willingness to pay for conservation localinhabitants and landholders valuation of biodi versity will change to the extent that they asstewards over biodiverse habitats are compen sated for their contribution to bioprospecting ac tivities to date most attention with respect to

search bioprospecting and biodiversity conservation abstract to what extent can private sector bioprospecting incentives be relied upon for the protection of biological diversity the literature contains dramatically different estimates of these incentives from trivial to quite large we resolve this controversy by isolating the fundamental source of the discrepancy and then providing empirically defensible estimates based on that analysis results demonstrate that the bioprospecting incentive is unlikely to generate much private sector conservation thus other mechanisms are likely required to preserve the public good of biodiversity

migrants in a guest worker system a utility maximizing approach this paper examines the behavior of utility maximizing migrants in a system of guest worker migration their pattern of leisure and commodity consumption at home and abroad is analysed and related

economic development and income inequality further evidence on the u curve hypothesis abstract internationally comparable data on inequality and income are utilized to reassess the empirical status of kusnets u curve hypothesis the hypothesis seems well supported when both developed countries dcs and less developed countries lcds are included in the sample however the position changes rather dramatically if the sample is restricted to lcds and very small support for the hypothesis is then observed also a simple comparison indicates that some of the support reported in earlier studies may have been due to the use of conventional gross domestic product per capita in general results based on gini coefficient seem less favorable to the hypothesis than those derived from household income shares

development and inequality revisited three decades after the seminal article of kuznets 1955 and one decade after the empirical investigation of ahluwalia 1976b the relationship between income inequality and economic developement is still controversial this paper examines the above relationship within a time series cross section framework in a sample of countries which are representative of the non centrally planned economies of the world we use gdp per capita in real un international comparison project dollors as an indicator of a country s level of economic development the results lend support to the kuznets inverse u hypothesis although other factors relfecting the institutional setting of a country are found to affect income inequality significantly during the development process as well similar results are obtained if we exclude developed countries from the sample

spatial distribution of species populations relative economic values and the optimal size and number of reserves we examine the tradeoff between the number and average size of nature reserves when the costs of enforcing reserve boundaries are negligible we find analytically that the relative price of biodiversity has a positive impact on the optimal total reserved area but an ambiguous impact on the optimal number of reserves simulation modeling of floral diversity in a tropical timber concession reveals that the resolution of this ambiguity depends on spatial distributions of the populations of tree species whether or not they are spatially aggregated clumped the impact of biodiversity price on optimal reserve number remains analytically ambiguous when enforcement costs are not negligible multiple reserves being economically superior to a single reserve now requires in addition to aggregation a biodiversity price that is sufficiently high to offset the effects of enforcement costs most of our simulation scenarios generate threshold biodiversity prices that do not exceed a leading estimate of the marginal value of a higher plant species in the bioprospecting literature several smaller reserves evidently can be economically superior to a single larger one even in the presence of enforcement costs

bayesian modeling and computations in final offer arbitration this article develops a bayesian model for the analysis of bidding behavior in final offer arbitration posterior calculations are obtained using a markov chain algorithm an example is considered using salary data from major league baseball

technology capital spending and capacity utilization i introduction capacity utilization is a variable of longstanding macroeconomic interest many studies have found it to be a valuable indicator of inflationary pressure for example cecchetti 1995 finds that capacity utilization works as well as or better than other variables in predicting inflation over the next year or two similarly in models of the level of resource utilization above which inflation accelerates the utilization rate does as well as and sometimes better than the unemployment rate in predicting this level 1 this predictive value may reflect capacity utilization s ability to do double duty picking up the extent of slack in both labor and product markets corrado and mattey 1997 however in recent years the capacity utilization and unemployment rates have at times provided different signals about the degree of tightness in resource markets notably in the late 1990s the decline in the unemployment rate below 4 suggested a relatively tight labor market but the capacity utilization rate remained unexpectedly flat figure 1 part of this divergence may be due to effects of technology on capacity utilization as the 1990s saw both an investment boom that broadly increased manufacturing capacity and a shift in the composition of capacity toward high tech machinery and equipment in the 1940s and 1950s manufacturing methods typically involved assembly line production with large scale fixed units of machinery and equipment figure 1 omitted relationships between inputs and outputs were relatively fixed and adjustments in capacity were both costly and slow modern manufacturing methods however build considerable flexibility into the management of capacity technologies like numerically controlled machines programmable controllers and modular assembly make it easier to adjust the level and composition of output at the same time the use of automated design and modular tooling lowers the cost and time needed to expand capacity while the use of advanced technologies is far from universal it is increasingly widespread for example about three quarters of plants in equipment producing industries used at least one advanced technology in 1993 about 30 used five or more 2 with the investment boom that took place in the second part of the 1990s these shares are likely higher now conceptually how these advances in technology would affect capacity utilization is not clear a priori on the one hand flexible manufacturing makes it easier to ramp production up and down this may encourage firms to install a broader margin of excess capacity that is to operate at lower average utilization in order to be able to handle upswings in demand such a strategy would be favored by declining prices of high tech capital which make excess capacity cheap on the other hand automated design and modular tooling make it faster and cheaper for firms to expand capacity this may permit them to reduce the amount of excess capacity they maintain and to operate at higher utilization on average with these two offsetting forces at work determining how advances in technology affect capacity utilization at industry levels is ultimately an empirical question this paper investigates the relationship between capacity utilization and high tech investment for u s manufacturing the next section discusses conceptual considerations in the relationship between technological change capital spending and capacity utilization we show how technological change may lead either to lower average utilization by making it cheaper to hold excess capacity or to higher utilization by making further changes in capacity less costly and time consuming the third section discusses the data and specification used for our study the extent of investment in high tech machinery and equipment has varied importantly across industries and over time thus we use data on 111 manufacturing industries from 1974 to 2000 and panel data techniques to investigate effects of technology on utilization

entry into the market for large transport aircraft abstract european governments have been accused of unfair trading practices in providing subsidies for market entry in the large commercial aircraft industry a capacity game is calibrated for 1987 to 2006 showing that the disadvantage of late entry is overcome only after a long time hence market entry is unlikely without government subsidies the scale and scope effects of production outweigh the output reducing effects of a monopoly government supported market entry as an anti monopoly policy yields higher consumer welfare overall welfare is lower due to large losses in producer surplus

threshold cointegration between inflation and us capacity utilization abstractan analogue to the phillips curve shows a positive relationship between inflation and capacity utilization some recent empirical work has shown that this relationship has broken down when using data after the mid 1980s we empirically investigate this issue using several threshold error correction models we find in the long run a 1 increase in the rate of inflation leads to approximately a 0 0046 increase in capacity utilization the asymmetric error correction structure shows that changes in capacity utilization show significant corrective measures only during booms while changes in inflation correct during both phases of the business cycle with the corrections being stronger during recessions we also find that in the short run changes in the inflation rate do granger cause capacity utilization while changes in capacity utilization do not granger cause inflation the granger causality from inflation to capacity utilization can be interpreted as supporting recent calls made in the popular

comparative productivity of korean manufacturing 1967 1987 this paper compares productivity levels in south korean manufacturing with those in the usa for 13 manufacturing branches the comparison is based on specific industry of origin purchasing power parities value added per hour worked in korean manufacturing rose from only 4 5 percent of the us level in 1967 to more than 18 percent in 1987 total factor productivity rose from only 9 percent in 1967 to 26 percent of the us level in 1987 at a more detailed level especially the leather metals and machinery industries have reached high productivity levels some of which approach levels in european manufacturing the considerable labour productivity gap between korea and the united states can partly be explained by capital intensity structural effects size effects and levels of education

comparative productivity the ussr eastern europe and the west this paper compiles comparative measures of output per worker in 1975 in four socialist and seven western market economy wme countries and explores sources of observed differences between the two groups of countries in that regard such differences seem explicable only partially by reference to differences in per worker capital stock and farm land a residual disparity of 25 to 34 percent in favor of wme countries appears to testify to superior efficiency in the latter copyright 1987 by american economic association

information decisions and productivity on board computers and capacity utilization in trucking productivity reflects not only how efficiently inputs are transformed into outputs but also how well information is applied to resource allocation decisions this paper examines how information technology has affected capacity utilization in the trucking industry estimates for 1997 indicate that advanced on board computers obcs have increased capacity utilization among adopting trucks by 13 percent these increases are higher than for 1992 suggesting lags in the returns to adoption and are highly skewed across hauls the 1997 estimates imply that obcs have enabled 3 percent higher capacity utilization in the industry which translates to billions of dollars of annual benefits jel d24 l92 o33 o47

reconciling conservation and development a dynamic hotelling model of extractive reserves the instrument of extractive reserves has been advertised as a novel approach to reconciling biodiversity conservation and economic development the empirical literature analyzing extractive reserves however delivers an ambiguous assessment of its success this paper asks whether extractive reserves are capable of delivering long term development benefits even in theory the analysis is carried out by assessing the long run viability of an extractive reserve under a set of favorable conditions through a dynamic model of spatial competition we show that for extractive reserves to be even theoretically viable a number of restrictive conditions have to be fulfilled

the effectiveness of access and benefit sharing in costa rica implications for national and international regimes the convention on biological diversity provides an international framework to ensure conservation and sustainable use of genetic resources the realization of these objectives is based on the state s sovereignty over its biological resources and the idea of a fair and equitable sharing of the benefits arising out of the utilization of genetic resources due to the enormous technical progress in biotechnology the demand for genetic resources increases especially within the pharmaceutical industry and the agribusiness whereas the biological diversity and with it the supply of diverse genetic resources decreases the concept of access and benefit sharing takes these developments into consideration and creates a market for biological resources we identify critical factors which can influence the effectiveness of this concept such as assignment of property and intellectual property rights enforcement problems and bargaining power applying these factors to evaluate the access and benefit sharing regime in costa rica we identify the specifications of these critical factors which favor economic development and sustain biodiversity at the same time we then discuss possible lessons of the costa rican experience for other biodiversity rich countries

cross national price differences for pharmaceuticals how large and why bilateral drug price and quantity indexes based on comprehensive data for seven countries us canada france germany italy japan and the uk refute the conventional wisdom that us drug prices are much higher than elsewhere for laspeyres us weighted indexes previous drug price comparisons are biased by unrepresentative samples and unweighted indexes quasi hedonic regression shows that cross national price differences reflect differences in product characteristics and in their implicit prices which reflect the regulatory regime strict price regulation systematically lowers prices for older molecules and globally diffused molecules generic competition lowers prices in less regulated regimes which also have more price elastic demand

salary arbitration and pre arbitration negotiation in major league baseball two assumptions in this analysis of baseball salary arbitration are that 1 players and clubs to serve their interests in pre arbitration negotiation submit final offers to maximize and minimize

strategic delegation in bargaining abstract principals have the opportunity to delegate to an agent in the context of the nash bargaining model this paper resolves a shortcoming in the related bargaining literature in equilibrium a symmetric outcome typically will not result and multiple equilibria exist

valuing research leads bioprospecting and the conservation of genetic resources bioprospecting has been touted as a source of finance for biodiversity conservation recent work has suggested that the bioprospecting value of the marginal unit of genetic resources is likely to be vanishingly small creating essentially no conservation incentive this result is shown to flow specifically from a stylized description of the research process as one of brute force testing unaided by an organizing scientific framework scientific models channel research effort toward leads for which the expected productivity of discoveries is highest leads of unusual promise then command information rents associated with their role in reducing the costs of search when genetic materials are abundant information rents are virtually unaffected by increases in the profitability of product discovery and decline as technology improvements lower search costs numerical simulation results suggest that under plausible conditions the bioprospecting value of certain genetic resources could be large enough to s

what impact does the choice of formula have on international comparisons in this paper an empirical comparison of a number of alternative multilateral index number formulae is undertaken the magnitude of the effect of choosing one formula over another is ascertained using an appropriate cross sectional data set constructed under the auspices of the eurostat oecd purchasing power parity programme to this end a new indicator is proposed that facilitates the measurement of the difference between two sets of bloc consumption shares each computed using a different multilateral comparison method jel classification c31 c43 c81 e31 f31 o57 quel impact est ce que le choix des formules a sur les comparaisons internationales ce memoire propose une comparaison empirique d un certain nombre de formules de nombres indices multilateraux on tente de jauger la magnitude de l impact du choix d une formule plutot qu une autre en utilisant une base de donnees transversales appropriee construite sous l egide du programme de parite du pouvoir d achat eurostat ocde on propose un nouvel indicateur qui facilite la mesure de la difference entre deux ensembles de patterns de consommation chacun calculea l aide d une methode de comparaison multilaterale differente

explaining service price differences in international comparisons this paper reexamines observed international differences in the price of services and the positive correlation of these with per capita gdp differences using a general trade model with a nontraced sector the authors find that differences in countries factor endowments populations trade policies and trade balances will have ambiguous and sometimes opposite effects on their service prices and real incomes estimating the service price equation using recent data suggests that larger endowments of agricultural land minerals and capital larger trade deficits and higher prices for tradables increase service prices conversely larger populations and labor forces reduce service prices copyright 1991 by american economic association

bargaining and the role of expert agents an empirical study of final offer arbitration abstract expert agents such as lawyers play a prominent role in conflict resolution yet little is known about how they affect outcomes we construct a model that permits us to estimate the influence of agents and test whether the parties in a dispute face prisoner s dilemma incentives using eighteen years of final offer arbitration data from new jersey we find the parties do significantly better when they retain agents and that the parties learn about this benefit over time however we also find that the gain to using an agent is fully offset when the opposing party also hires an agent since agents are costly this noncooperative equilibrium is pareto inferior

intercountry inequalities in income and index of net social progress evidence from recent data abstract intercountry income inequality is computed from real gdp data that became available recently from phase iv of international comparisons project similar inequality measures are also calculated for index of net social progress proposed by estes 1983 and for conventional gnp per capita although the three indicators are strongly and positively correlated intercountry inequality indices derived from these are rather dramatically different

a cross country tabulation of own price elasticities of demand abstract this paper tabulates frisch slutsky and cournot own price elasticities for each of 10 goods at the per capita real income levels of 30 countries ranging from india to the united states

arbitration and bargaining across the pacific this paper reports laboratory experiments comparing arbitration behavior between and across two countries with extensive trade relations the united states and japan besides comparing disputes in both locations we evaluate disputes between them while we find nominal differences between the countries we observe significant changes in both groups behavior when facing someone from the other country specifically americans seek larger profits when facing a japanese counterpart and japanese subjects settle more frequently with an american counterpart our results suggest that the literature on bargaining behavior across cultures paints an incomplete picture of international comparisons by failing to consider bargaining interactions

economic information versus quality variation in cross country data data quality in the penn world tables varies systematically across countries that have different growth rates and are at different stages of economic development thus intro ducing measurement error correlated with variables of economic interest we explore this problem with three examples from the literature showing that the problem appears to be minor in growth convergence regressions but serious in estimating the effect of income volatility on growth and in a cross country lest of the permanent income hypothesis the results suggest at the least a need for performing appropriate sensitivity tests before draw

bias in salary arbitration the case of major league baseball this study analyses all baseball arbitration cases from 1985 90 to determine if decisions differ among ethnic groups unlike earlier arbitration analyses extensive controls for individual and team performance are used holding performance constant the results indicate that latin american players have 33 less chance and blacks 19 less chance than does a white player of winning a case these differences are not reflected by more risky salary demands by minority players and only marginally reflected by market salary practices toward minority players therefore bias appears to emanate from arbitrator utility functions

another perspective on changes in international inequality from 1950 to 1980 abstract real income data derived from the third phase of the international comparisons project are used to compute theil s population weighted indices of intercountry inequality for several years between 1950 and 1980 contrary to some recently reported results a substantial increase in inequality is observed internationally comparable consumption data indicate consumption inequality increased more than income inequality

valuing biodiversity for use in pharmaceutical research biodiversity prospecting has been touted as a mechanism for both discovering new pharmaceutical products and saving endangered ecosystems it is unclear what values may arise from such activities however evidence from transactions is incomplete and existing theoretical models are flawed we calculate an upper bound on the value of the marginal species even under favorable assumptions this bound is modest slightly modified assumptions lead to drastically lower estimates we extend our findings to the value of the marginal hectare of habitat and find that the incentives for habitat conservation generated by private pharmaceutical research are also at best very modest

tariffs transfers and the real exchange rate the deviation of exchange rates from purchasing power parities ppp s has recently become the subject of theoretical and empirical attention the massive body of data collected and presented by the international comparisons project icp under the direction of kravis heston and summers khs 9 11 has permitted new empirical investigation of an old topic and has stimulated the construction of theoretical models to account for observed patterns in the icp project and the related literature the focus is on the ratio of the exchange rate to the ppp the concept of this ratio is closely related to the concept of the real exchange rate which is defined as the actual exchange rate multiplied by the ratio of an index of foreign prices to an index of domestic prices the term real exchange rate a term widely employed in both economics journals and in the financial press is frequently used to describe changes over time in a particular country and its calculation requires only time totime changes in exchange rates and price indexes the ratio of the exchange rate to the ppp on the other hand refers to a comparison of the levels of the exchange rate and the ppp at a moment in time and its calculation requires the availability of a ppp survey of the kind performed by the icp the purpose of the present paper is to analyze the effects of tariffs and transfers on the real exchange rate of a small country in this theoretical endeavor we shall hold constant the prices in foreign countries in this context it can easily be seen that the real exchange rate and the ratio of the exchange rate to the ppp are identical concepts provided that the expenditure weights used in the index of domestic prices are the same as those used in the calculation of the ppp

generalized theil tornqvist indices with applications to international comparisons of prices and real output the theil tornqvist index number is widely used for binary comparisons of prices output and productivity this paper describes various generalizations of the theil tornqvist index for purposes of multilateral spatial comparisons due to caves christensen and diewert and more recent further generalizations due to prasada rao and selvanathan based on the stochastic approach to index numbers the applicability of the new index numbers is demonstrated using international comparison data on private consumption expenditure and manufacturing sector output

productivity growth in pre 1990 mongolian agriculture spiralling disaster or emerging success the reasons for the spectacular collapse of so many centrally planned economies are a source of ongoing debate in this paper we use detailed farm level data to measure total factor productivity tfp changes in mongolian grain and potato farming during the 14 year period immediately preceding the 1990 economic reforms we measure tfp growth using stochastic frontier analysis sfa and data envelopment analysis dea methods our results indicate quite poor overall performance with an average annual tfp change of 1 7 in grain and 0 8 in potatoes over the 14 year period however the pattern of tfp growth changed substantially during this period with tfp growth exceeding 7 per year in the latter half of this period this suggests that the new policies of improved education greater management autonomy and improved incentives which were introduced in final two planning periods in the 1980s were beginning to have a significant influence upon the performance of mongolian crop farming crown copyright c 2002 published by elsevier science b v all rights reserved

exchange rate mean reversion from real shocks within an intertemporal equilibrium model abstract the post bretton woods era has been characterized by real exchange rates that exhibit mean reversion with mixed evidence as to whether this reversion is partial ppp never holds or essentially complete this paper generates these stylized facts theoretically by synthesizing a simple intertemporal open economy model with the elasticities approach to the current account a central feature of the model is the existence of non traded goods the model can generate partial or approximately complete mean reversion for the real exchange rate depending on parameter values if innovations in output are made up of permanent and temporary components in addition temporary output shocks generate a type of hysteresis wherein the short run path for the exchange rate permanently alters its long run equilibrium value

a comparison of conventional final offer and combined arbitration for dispute resolution two widely used forms of arbitration are conventional arbitration in which the arbitrator makes an unconstrained settlement choice and final offer arbitration in which the arbitrator must choose between disputants final offers under an innovative as yet unused approach called combined arbitration if the arbitrator s notion of a fair settlement lies between the disputants final offers final offer arbitration rules are used otherwise conventional arbitration rules are used theoretically by combining the risks that the two standard forms of arbitration pose for disputants who do not voluntarily settle combined arbitration should generate convergent final offers the results of this controlled laboratory study show however that dispute rates are highest in combined arbitration and lowest in conventional arbitration these results challenge the theoretical predictions for combined arbitration as well as claims that final offer arbitration should reduce disputes compared to conventional arbitration the results are however consistent with a simple theory of disputant optimism

true world income distribution 1988 and 1993 first calculation based on household surveys alone the paper derives world income or expenditure distribution of individuals for two years 1988 and 1993 it is the first paper to calculate world distribution for individuals based entirely on household survey data from 91 countries and adjusted for differences in purchasing power parity between the countries measured by the gini index inequality increased from an already very high 63 in 1988 to 66 in 1993 the increase was driven more by rising differences in mean incomes between the countries than by rising inequalities within countries the most important contributors were rising urban rural differences in china and slow growth of rural incomes in south asia compared to several large developed market economies

distinguishing characteristics of degrees of success and failure in economic sanctions episodes this paper uses 104 episodes from the hufbauer et al 1985 1990 dataset to examine the correlates of classes of outcomes of economic sanctions the parsimonious equations presented identify the characteristics of sanctions episodes conducive to success rather than marginal success and the characteristics productive of failure rather than marginal failure failure is most likely if there is significant third party assistance to the target and if the pre existing trade linkage between sender and target is small success is most easily achieved when the objective is not classified as modest and when pre sanction relations between sender and target are cordial or neutral the equations presented overcome data and methodological flaws of earlier studies exhibit reasonable predictive accuracy and satisfy a battery of tests of statistical significance hypothesized coefficient sign goodness of fit high likelihood and informational efficiency

market based conservation and local benefits the case of argan oil in morocco abstract market based approaches to biodiversity conservation gained popularity in the 1990s the success of these strategies hinges on first the successful creation or expansion of target markets and second the beneficial involvement of local stakeholders in these markets so that improved incentives induce conservation this paper evaluates these two key elements in the case of argan oil commercialization in southwestern morocco the principal finding is that even when locals appear well positioned to reap ex post benefits one can reject the hypothesis that successful resource commercialization necessarily stimulates local development and reduces poverty most locals participate only superficially in the new and expanded markets for argan oil and the benefits that do trickle down to local households appear to be regressively distributed both regionally and between households the key lies in understanding how opening or expanding markets may induce endogenous product differentiation that easily excludes locals especially the poor and how ex ante market access a variable commonly correlated with wealth conditions households capacity to participate in market induced producer windfalls

purchasing power parities and phase iv of the international comparison project do they lead to real estimates of gdp and its components abstract this paper analyzes results from phase iv of the united nations international comparison project icp it examines the icp s estimates of real gdp and per capita gdp for 60 countries along with the estimates of detailed components of gdp for india and sri lanka as compared with some industrial countries we conclude that although detailed results are often illuminating levels of per capita gdp tend to be incorrect a systematic bias seems to be present in the icp leading to a strong overvaluation of developing countries gdp icp results therefore as judged also by the statistical commission of the united nations cannot be accepted for policy purposes at the world level

biodiversity poverty and development biodiversity is crucial for the production of a range of marketed and non marketed ecosystem goods and services this paper reviews the empirical evidence for the role of terrestrial biodiversity and biodiversity conservation in economic development and poverty at both the macro e g country and micro e g farm scales it first examines general relationships between biodiversity and economic development before showing how biodiversity influences ecosystem services second future scenarios and challenges for biodiversity and development are examined given projections for further changes in global population economic growth and consumption third the relationship between biodiversity protection and incomes is investigated two specific policies protected areas and bioprospecting are reviewed with respect to their impacts on the welfare of the resource dependent poor in conclusion improvements in policy design and implementation could help minimize the possibility of earth s sixth mass extinction event at least within a few generations while ensuring that the poor are not made worse off as a result of policy implementation

union leaders as experts wage bargaining and strikes with union wide ballot requirements to avoid strikes and to curb labour militancy some governments have introduced legislation stating that union leadership as well as wage offers should be decided through union wide ballots this paper shows that members still have incentives to appoint militant union leaders if these leaders have access to information critical for the members voting decisions furthermore conflicts may arise in equilibrium even though the contract zone is never empty and there is an option to resolve any incomplete information ballot requirements hence preclude neither militant union bosses nor inefficient conflicts

an extended cross country time series analysis of the volume and quality of consumption abstract the approach of finke and theil 1985 is extended to include four countries ireland japan luxembourg and west germany for which consumption data are available at a less detailed level

machine replacement and the business cycle lumps and bumps this paper explores investment fluctuations due to discrete changes in a plant s capital stock the resulting aggregate investment dynamics are surprisingly rich reflecting the interaction between a replacement cycle the cross sectional distribution of the age of the capital stock and an aggregate shock using plant level data lumpy investment is procyclical and more likely for older capital further the predicted path of aggregate investment that neglects vintage effects tracks actual aggregate investment reasonably well however ignoring fluctuations in the cross sectional distribution of investment vintages can yield predictable nontrivial errors in forecasting changes in aggregate investment

a new cross country tabulation of the quality index of consumption abstract cross country data are used to tabulate a quality index of consumption for each of 30 countries ranging in affluence from the u s to india as well as the real income relative price and residual components of the quality index

goodness of fit and outliers in cross country demand systems abstract for a 10 good consumer demand system the fit for 30 countries in the sample is compared with that for five countries outside the sample

accounting for u s regional real exchange rates we examine the relationship between the relative price of nontradables and real exchange rate movements for fixed exchange rate regimes using bls cpi data we show that purchasing power parity holds strongly for tradables across u s regions as a result nontradables play a central role in u s regional real exchange rate movements indeed changes in the relative price of nontradables explain up to 80 of regional real exchange rate changes over medium and long run horizons we also argue that nontradables can account for a large portion of real exchange rate changes internationally with high nontradables expenditure shares

biodiversity and international stakes a question of access abstract this paper examines three main questions is it possible to create a market for genetic resources is it a perfectly or an imperfectly competitive market what impact could this market have on the management of biodiversity in the context of sustainable development i analyse the conditions for access and use of knowledge of genetic resources and the genetic resources themselves i then consider the consequences on the management of genetic resources and social welfare trends in the context of sustainable development i present product and technology transfers in terms of access and user rights i show that the lack of information on the quality of biological resources and on their value on both the demand and supply sides lead to an imperfect market model i examine how benefit sharing can be achieved via public research institutions in developed countries and the conditions of their access to private patent licences my main conclusion is that a valorisation of developing countries genetic resources is a means among others of accomplishing a sustainable management of biodiversity by an equitable access and benefit sharing from the use of biodiversity direct use of natural and biological resources valorisation of genetic resources development of new economic sectors etc furthermore it enables taking part in the economic and social development of these countries increasing the social welfare in a context of sustainable development by widening the access to genetic resources

dollar gnp estimates for central and eastern europe 1970 90 a survey and a comparison with western countries abstract in this paper a survey of the dollar gnp estimation methods used in the last 20 years for centrally palnned economies is made none of the different approaches is deemed to be fully satisfactory an explanation is offered as to why the construction of a better method would be impossible at this time the most realistic 1990 per capita gnps for practical use are indicated varying between about 4000 for romania 8000 for czechoslovakia in addition by examining the structure of the economy in terms of contribution to gdp of agriculture industry and services and comparing east and west in this respect the hypothesis is put forward that the technological and organizational evolution of eastern economies basically stopped in the early 1970s

the terms of trade the real exchange rate and economic fluctuations this paper examines the relationship between terms of trade and business cycles using a three sector intertemporal equilibrium model and a large multicountry database results show that terms of trade shocks account for nearly one half of actual gdp variability the model explains weak correlations between net exports and terms of trade the harberger laursen and metzler effect and produces large and weakly correlated deviations from purchasing power parity and real interest rate parity terms of trade shocks cause real appreciations and positive interest differentials although productivity shocks have opposite effects the puzzle that welfare gains of international asset trading are negligible is left unresolved copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

capacity utilization revisited software control and the growth of large technical systems this paper explains how a class of it intensive capital goods called control systems are used to co ordinate the flow of goods traffic materials funds services or information through complex supply production or distribution systems the paper examines how they increase productivity by improving the utilization of installed capacity creating economies of system that are distinct from the traditional economies of scale speed and scope the paper explains which sectors they are important in and how innovation in control technologies relates to architectural changes in large technical systems it is illustrated by case studies of four very different sectors elevators retailing telecommunications and investment banking while control systems improve efficiency and enable product innovation they also create reliability problems and can alter the social distribution of risk

using the law to change the custom the custom often acts as a powerful hindrance to equity increasing changes in this paper we present a simple model of legal dualism in which a progressive legal reform can under certain conditions shift the conflicting custom in the direction intended by the legislator formal law then acts as an outside anchor that exerts a magnet effect on the custom we also characterize the conditions under which a moderate reform performs better than a radical one in improving the welfare of the disadvantaged sections of the population we illustrate our insights using examples on inheritance marriage and divorce in sub saharan africa and india

bootstrapping for standard errors of instrumental variable estimates abstract theil and finke 1983 used the distance from the equator as an instrumental variable iv in the estimation of a cross country demand system here we obtain standard errors of the iv estimates using efron s 1979 bootstrap technique

world food demand long term projections of global food demand are heavily dependent on which functional form of the food demand equation is used given that real incomes can change substantially over the long term key elements are the dependence of the income elasticity on income which ensures that the food budget share always lies within the 0 1 range and the role of income inequality this article analyzes these issues proposes a new functional form that deals with them and presents estimates of income and price elasticities for food in 138 countries copyright 2012 oxford university press

an alternative demand indicator the non accelerating inflation rate of capacity utilization this article examines the usefulness of the naircu the non accelerating inflation rate of capacity utilization as a demand indicator of inflation for eight european countries so far the naircu has been estimated for the usa only where it serves as a useful indicator for inflation in most european countries deviations from the equilibrium level of capacity utilization influence inflation significantly further the results not only indicate that in more recent periods the naircu has shifted upward indicating higher efficiency of the production process but also that confidence intervals have increased over time reducing the usefulness of the naircu somewhat

species preservation and biodiversity value a real options approach abstract we evaluate biodiversity in a real options framework when the resources in use are substitutable we examine optimal conservation decisions given that a biodiversity loss is irreversible and that future use values are uncertain while species substitutability has been shown to reduce the value of diversity we show that the flexibility associated with substitutability is a source of value marginal species value is decreasing in the number of species but rising and convex in the value of the marginal species as we show in the two species homogenous model increased volatility raises biodiversity value and a positive correlation between species values both reduces the value of the pool of species and the value of biodiversity the role played by the correlation between the value of a species and the value of other species is reminiscent of the beta of a financial asset just like an asset with a negative beta derives additional value by providing insurance against fluctuations in the market portfolio a species whose value tends to move in the opposite direction as the species in use derives additional value from its higher probability to be available for substitution if the value of the species in use diminishes

cross country demand systems and centrally planned economies abstract the cross country data of kravis et al 1982 include data on four centrally planned economies the question is addressed as to how such data fit cross country demand systems

agricultural biotechnology and poverty reduction in low income countries summary while biotechnology innovation is concentrated in high income tier i countries international diffusion of innovations to improve the diet health and incomes of the poorest will be largely driven by tier ii innovators such as china and brazil adoption of beneficial biotechnologies in tier ii and tier iii countries will increase as more transgenic versions of conventionally grown varieties become available and as costs decline which in turn will depend upon regulatory approvals being needed only once for each transformation event and transaction costs for accessing technologies being minimized investments in higher education and intellectual property clearinghouse institutions can greatly facilitate technology transfer

the consumer s demand for diversity abstract the consumer s demand for diversity is measured either by the entropy or by the hirschman herfindahl index of the budget shares this notion including the income elasticity of the demand for diversity is applied to per capita consumption data of 30 countries

aggregate demand shifts income distribution and the linder hypothesis the intraindustry trade literature emphasizes nonhomothetic preferences and incomes as important determinants of aggregate demand and trade patterns the authors provide evidence for such preferences particularly that the structure of income driven demand shifts is related to indices of linder type product characteristics and that income distribution is a significant factor in determining aggregate expenditures these results imply that as general income levels rise the relative volume of trade in manufactured consumer goods should rise and the total volume of trade should rise independent of changes in the intercountry difference between income levels copyright 1996 by mit press

relative and absolute scarcity of nature assessing the roles of economics and ecology for biodiversity conservation abstract our aim in this essay is to identify and analyze some of the difficulties with interdisciplinary integration of economic and ecological contributions to the study of biodiversity loss we develop our analysis from a widely accepted definition of economics which is based on the concept of scarcity taking a closer look at this notion we find that economics actually limits itself to a very particular aspect of scarcity which we denote as relative scarcity we describe in what respect the economic approach towards biodiversity is based on this notion and also reflect on the specific understanding of the relation of humans and nature behind the economic approach we then turn to absolute scarcity as another notion of scarcity and show that this is not within the scope of economics but has been a theme of ecology and ecological economics we describe in which way ecological and ecological economic approaches towards biodiversity are based on the idea of absolute scarcity and also reflect on the specific understanding of the human nature relationship behind this notion of scarcity against this background we discuss the roles of economics and ecology for nature conservation we conclude that the interdisciplinary integration of ecology and economics requires a philosophical underpinning and suggest a framework for further research

the social value of biodiversity for r d the value of genetic resources for use in research and development r d activities has been the subject of a literature modelling the activity as onewhere individual firms engage in optimal search here we develop a moregeneralised framework in which genetic resources are used in r d at thebase of an industry that addresses recurring problems of resistance as inthe pharmaceutical or plant breeding industries the r d process is onein which firms are engaging in a continuing contest of innovation againsta background of both creative destruction schumpeterian competition andadaptive destruction natural selection and adaptation this frameworkdemonstrates that the search model is conceptually inadequate because itfails to incorporate the important dynamic characteristics of biologicalphenomena we then demonstrate the important differences between firm based valuation of genetic resources and the social value of geneticresources for use in this contest of innovation there are six externalitiesin private patent based genetic resource valuation and five of theseindicate that private valuations will under estimate social values

alternative use systems for the remaining ethiopian cloud forest and the role of arabica coffee a cost benefit analysis this paper presents a cost benefit analysis of three different use systems for the remaining cloud forests in ethiopia which at present are being depleted at the rate of 8 per year these use systems are a traditional conversion to crop land b sustainable management of the forest e g by growing high quality semi forest coffee and c strict conservation we find that under business as usual conversion to cropland yields the highest net present income value for the local population taking into account watershed services sustainable forest use is in the best interests of the country for discount rates of 10 or lower taking into account the global benefits of biodiversity conservation and carbon storage sustainable forest management also yields the highest total economic value while strict conservation does not pass a cost benefit test even at a discount rate of 3 c 2012 elsevier b v all rights reserved

a proposal for using incentive precommitments in public enterprise funding abstract among the central problems of less developed countries ldcs is the poor performance of their public enterprises pes and the seemingly limited ability of governments and other agencies to improve this performance this paper proposes that project agencies be induced as a part of the initial financing of pes to undertake specific types of precommitments a precommitment to liquidate the project if its ex post performance falls below some threshold level and a precommitment to link a non negligible part of employee compensation to actual performance our proposal is not guaranteed to improve pe performance because there are no perfect solutions to what is inherently a politically difficult problem nevertheless we argue that as long as public enterprises exist independent of whether this is a good idea or not a precommitment to use performance based incentives is likely to improve their performance we discuss the primary sources of pe losses compare their probable magnitudes and explain how various precommitments are likely to ameliorate such losses our proposal is aimed at stimulating more thought on this subject and is addressed to a broad audience

institutions freedom and technical efficiency the impact of institutions on economic performance is currently the subject of much research in this study we use panel data to estimate a stochastic production frontier and the sources of inefficiency for a broad set of countries a maximum likelihood procedure is used to estimate the parameters for the stochastic production frontier and the determinants of inefficiency simultaneously our results show that institutions that promote greater economic freedom in turn promote efficiency

the relative efficiencies of market and planned economies are planned economies systematically more or less productive than market economies this question provoked heated intellectual debate since the time of hayek 11 keynes 16 lange 19 lange and taylor 20 and lerner 22 the collapse of the communist systems of east europe since 1989 closed the debate planned economies were without doubt less efficient in utilizing economic resources than market economies but how much less efficient this question is of obvious scientific interest but it has not been answered some work addressing the broad question of comparative efficiency has been done by bergson 4 5 6 marer 25 26 moroney 28 and others all indicate comparatively lower efficiency in planned economies but none addresses the question by how much our contribution here is to answer this question using a novel methodology we estimate aggregate frontier production functions for two groups of countries 7 centrally planned economies in east europe and 17 predominantly market economies in west europe estimating frontier production functions enables two types of comparisons that have not

a cross sectional analysis of energy output correlation abstract the nature of the correlation between energy consumption and output is examined based on cross sectional data for 100 countries the bias in the correlation due to the use of nominal income and to the convention adopted in measuring non commercial energy consumption is analysed it is found that when real income is used and non commercial energy consumption measured in commercial energy replacement value the cross sectional energy elasticity increases rapidly from about unity for the low income developing countries to between 1 6 and 1 8 for the high income developing countries and declines marginally thereafter in the industrial country income range the results show certain disparity on energy output ratio across countries with higher income countries consuming disproportionately more energy per unit of real output

the ussr before the fall how poor and why this essay appraises the scholarly findings on the level of consumption and output in the ussr compared with that in the west such aggregative calculations are onerous for any country and not very surprisingly have encountered particular difficulty where such a strange society as soviet communism has been in question predictably the results have been controversial but properly viewed they still provide illuminating perspective on the extraordinary events that have lately transpired in the ussr

growth and equity in developing countries a reinterpretation of the sri lankan experience in the important debate between the proponents of direct basic needs and indirect economic growth measures of promoting welfare sri lanka has frequently been cited as one country which has successfully pursued the direct approach it has raised living standards without much cost in terms of reduced growth this conclusion however is based on analyses which do not account for the initial conditions of the countries being compared after methodologically incorporating these concerns neither the improvement in living standards nor the 2 0 percent per capita growth rate during the period of direct policy measures 1960 78 was exceptional in contrast during the period of more indirect growth promoting policies 1977 84 i economic growth more than doubled to an average rate of 4 3 percent per capita per annum ii expenditure inequality did not significantly change iii consumption expenditures of the population and the poor generally increased and iv several living standard indicators continued to improve