transition and capital misallocation the chinese case this paper demonstrates that the allocation of household savings to state owned enterprises soes in china and not to the increasing share of private firms explains both the patterns of capital flows fdi entries and the accumulation of foreign assets and the drop in the consumption share during china s transition the contribution is to explain these two elements in a dynamic general equilibrium model with tfp growth that differentiates fdi and foreign assets in addition to other frictions financial intermediation and soes have the crucial role by misdirecting household savings it modifies firms labor and capital intensiveness and creates shifts in savings accumulation and capital flows moreover the increasing share of credit constrained private firms hinders wage growth and returns on household savings are low to finance soes these two elements reduce the consumption share with a calibration adapted to the chinese economy and deterministic shocks the model also matches to a large extent the data for a variety of stylized facts over the last 30 years

parametric recoverability of preferences revealed preference theory is brought to bear on the problem of recovering approximate parametric preferences from consistent and inconsistent consumer choices we propose measures of the incompati

rebates matches and consumer behavior an experiment conducted to examine the effects of different discount formats on consumer purchases is reported participants made a series of purchase decisions for chocolate bars given 1 rebates from the listed price 2 matching quantities of chocolates for each bar purchased and 3 simple price reductions contrary to standard theoretical predictions and consistent with results in the context of charitable contributions by eckel and grossman 2003 we find that participants purchase significantly more chocolate bars under a matching sales format than under a comparable rebate format inattention to the net consequences of decisions as well as some rebate aversion explain the preference for matching discounts

we the rich inequality identity and cooperation abstract inequality not only generates status differentials between rich and poor individuals it also generates status differentials between groups of different composition and income level we organise the social structure within which groups are embedded to manipulate their composition and relative status thus inducing weaker or stronger group identities in their members via the processes of social categorization identification and comparison we therefore manipulate the fundamental components of group identity rather than resorting to ad hoc identity reinforcement tasks how strongly individuals identify with each group will ultimately determine the degree of cooperativeness within the group and the whole society we find that the impact of inequality on social cooperativeness is not trivial cooperation varies with the strength of the group s identity as predicted by social identity theory in particular high endowment homogeneous groups cooperate most and increasingly over time low endowment homogeneous groups display intermediate levels of cooperation heterogeneous groups cooperate least a result driven by lack of cooperation on behalf of the rich as endowment sizes and groups are exogenously allocated we argue that our findings are a lower bound for the effects generated where endowments and groups are endogenously determined in or outside of the laboratory

inequality of opportunity in energy consumption in china abstract this paper proposes an empirical implementation of the concept of inequality of opportunity in energy consumption expenditure and applies this to data from chinese general social survey cgss we examine the role played by circumstances beyond the control of individuals for instance gender hukou status family background and region of birth in generating inequality in energy consumption expenditure in china this study shows that the relative share of inequality of opportunity ior in energy consumption expenditure in china is 10 02 for the entire sample ior turns out to be larger for the older cohort peaking at 14 40 for the 1955 64 cohort a shapley value decomposition presents that hukou status and region of birth are the two largest contributors to inequality of opportunity across birth cohorts a heterogeneity analysis further shows that more disadvantaged groups for instance female individuals born in the west of rural china with worse family backgrounds are facing more unequal opportunities in energy consumption in china these results suggest that energy policies focused on zero discrimination in opportunities should be encouraged

hukou status and individual level labor market discrimination an experiment in china this article examines discrimination based on hukou status a legal construct that segregates locals and migrants in urban china local and migrant household helpers were recruited as experimental

status in markets this project tests for the effect of social status in a laboratory experimental market we consider a special box design market in which a vertical overlap in supply and demand ensure that there are multiple equilibrium prices we manipulate the relative social status of our subjects by awarding high status to a subset of the group based on one of two procedures in the first a subject s score on a trivia quiz determines his or her status in another subjects are assigned randomly to a higher status or lower status group in both treatments we find that average prices are higher in markets where higher status sellers face lowerstatus buyers and lower when buyers have higher status than sellers across all sessions the higher status side of the market captures a greater share of the surplus earning significantly more than their lower status counterparts

place to place migration in colombia the determinants of lifetime and recent place to place migration in colombia are investigated using unpublished data from the 1973 census the data cover 12 zones rural and urban segments of 6 regions and are analyzed for the population as a whole and for eight specific demographic groups including four educational categories and the two sexes the basic proposition is that areas economic opportunities play a central role in determining the spatial allocation of the population the results give strong support to the economic model of migration overall and in explaining differences in migration behavior among demographic groups excerpt

garp for kids on the development of rational choice behavior in this paper we examine the extent to which consumption choices by 7 and 11 year old children and college undergraduates satisfy the axioms of revealed preference we find that choices by even the 7 year olds are considerably more likely to obey revealed preference axioms than would be true if they were choosing randomly 11 year olds do better still while college students do no better than 11 year old children we also find that mathematical ability is not correlated with choosing rationally we argue that this evidence suggests that the ability to choose rationally is not innate but that it does develop quickly

labor migration and risk aversion in less developed countries in this paper we question the pioneering work of todaro which states that rural to urban labor migration in less developed countries ldcs is an individual response to a higher urban expected income we demonstrate that rural to urban labor migration is perfectly rational even if urban expected income is lower than rural income we achieve this under a set of fairly stringent conditions an individual decision making entity a one period planning horizon and global risk aversion we obtain the result that a small chance of reaping a high reward is sufficient to trigger rural to urban labor migration

the end of cheap chinese labor abstract in recent decades cheap labor has played a central role in the chinese model which has relied on expanded participation in world trade as a main driver of growth at the beginning of chi

let s not throw the baby out with the bath water the role of urban villages in housing rural migrants in china in the era of china s economic growth and urbanisation providing adequate and affordable housing for rural urban migrants in urban areas is crucial for the success of china s multifaceted reforms

the impact of group membership on cooperation and norm enforcement evidence using random assignment to real social groups due to incomplete contracts efficiency of an organization depends on willingness of individuals to take non selfish actions such as cooperating when there is no incentive to do so or punishing inefficient actions by others organizations also constitute a social boundary or group we investigate whether this social aspect of organizations has an important benefit fostering unselfish cooperation and norm enforcement within the group but also whether there is a dark side in the form of hostility between groups our experiment provides the first evidence free from the confounding effect of self selection into groups individuals are randomly assigned to different platoons during a four week period of officer training in the swiss army we conduct choice experiments simultaneous prisoner s dilemma games with and without third party punishment in week three random assignment significantly increases willingness to cooperate with fellow platoon members assignment does not lead to hostility in the sense of vindictive punishment of outsiders but does affect norm enforcement enhancing willingness to enforce a norm of cooperation towards fellow platoon members this suggests that the social aspect of organizations motivates efficient behavior even when ordinary incentives fail and helps to explain practices designed to foster social ties or group identification within an organization this abstract was borrowed from another version of this item

revealed preference analysis of non cooperative household consumption we develop a revealed preference approach to analyse non unitary household consumption behaviour that is not cooperative or pareto efficient we derive global necessary and sufficient conditions for data consistency with the model we show that the conditions can be verified by means of relatively straightforward mixed integer programming methods which is particularly attractive in view of empirical analysis our framework extends to tests for separate spheres and joint contribution to public goods an application to data drawn from the russia longitudinal monitoring survey demonstrates the empirical relevance of the non cooperative consumption model

unforeseen contingencies and incomplete contracts we scrutinize the conceptual framework commonly used in the incomplete contract literature this literature usually assumes that contractual incompleteness is due to the transaction costs of describing or of even foreseeing the possible states of nature in advance we argue however that such transaction costs need not interfere with optimal contracting i e transaction costs need not be relevant provided that agents can probabilistically forecast their possible future payoffs even if other aspects of the state of the nature cannot be forecast in other words all that is required for optimality is that agents be able to perform dynamic programming an assumption always invoked by the incomplete contract literature the foregoing optimality result holds very generally provided that parties can commit themselves not to renegotiate moreover we point out that renegotiation may be hard to reconcile with a framework that otherwise presumes perfect rationality however even if renegotiation is allowed the result still remains valid provided that parties are risk averse

how urban segregation distorts chinese migrants consumption summary this paper provides a new explanation for china s low consumption to gdp ratio by highlighting the constraints of the household registration system hukou on china s household consumption our baseline results show that the consumption of migrants is 16 20 lower than that of local urban residents we further find evidence suggesting that caused by hukou restrictions migrants save more for precautionary purposes have lower expectation of permanent income and consume much less durable goods because of high mobility moreover we have found no evidence that the consumption heterogeneity can be explained by migration effects culture or other forms of household heterogeneity as both the number and income level of migrants are rising quickly the constraining effects of hukou on household consumption is increasing 2014 elsevier ltd all rights reserved

inside china s cities institutional barriers and opportunities for urban migrants one of the most glaring legacies of 20thcentury chinese socialism is a sharp and widened divide between china s urban and rural areas china s widened urban rural divide arose from a socialist industrialization process which created a hastened heavy industrial base at the expense of its rural population china s vast rural population not only endured a standard of living far below that in the urban sector they were also denied access to many social welfare benefits and social mobility opportunities martin king whyte 1996 this urban rural gap in social and economic wellbeing together with a massive reservoir of rural surplus labor and an acute shortage of consumer goods formed the driving forces for china s change of migration control policy and for the rapid increase of rural migrants in chinese cities though the exact number of migrants is still hard to ascertain due to both a lack of consensus in the definition of migrant and the absence of an authoritative national survey migrants prominent presence in chinese cities is hardly disputable in china s largest cities for instance it is often quoted that at least one out of every five persons is a migrant and most likely a migrant from rural areas in shanghai the number of migrants rose tenfold in one decade from 0 26 million in 1981 to 2 81 million in 1993 the percentage of local residents who were migrants correspondingly rose from less than 5 percent in the early 1980 s to 21 7 percent in 1993 changming sun 1997 in beijing the number of migrants was 3 29 million in 1994 compared to a locally registered population of 10 63 million for the whole municipality and 6 million for its city districts dangsheng ji et al 1996 p 95 in city districts one out of every three persons in beijing is a temporary migrant from elsewhere most of these recorded migrants are also genuine migrants not short term visitors more than 60 percent had stayed for more than half of a year and only 17 percent had been in beijing for less than one month three quarters of all the surveyed migrant population listed business or employment as their purpose of stay ji et al 1996 pp 96 97 rural migrants account for over threequarters of all migrants in large chinese cities in shanghai for instance a survey in 1995 found that 88 1 percent of all migrants had their place of household registration in the countryside wang and zuo 1997 similarly in beijing where one expects to see a higher circulation of urban to urban migrants close to 80 percent of migrants surveyed in late 1994 were peasants before moving into beijing xiuhualiu 1996 p 112

the money pump as a measure of revealed preference violations we introduce a measure of the severity of violations of the revealed preference axioms the money pump index mpi the mpi is the amount of money one can extract from a consumer who violates the axioms it is also a statistical test for the hypothesis that a consumer is rational when behavior is observed with error we present an application using a panel data set of food expenditures the data exhibit many violations of the axioms mostly the mpi for these violations is small the mpi indicates that the hypothesis of consumer rationality cannot be rejected

what makes growth sustained abstract we identify structural breaks in economic growth in 140 countries and use these to define growth spells periods of high growth preceded by an upbreak and ending either with a downbreak or with the end of the sample growth spells tend to be shorter in african and latin american countries than elsewhere we find evidence that growth duration is positively related to the degree of equality of the income distribution democratic institutions export orientation with higher propensities to export manufactures greater openness to fdi and avoidance of exchange rate overvaluation favorable for duration and macroeconomic stability

why do the young and educated in ldcs concentrate in large cities evidence from migration data do the young and educated in ldcs have a greater preference to locate in big cities if so this may help to explain how cities spatially concentrate the educated and young and why the rising share of these workers in many ldcs may contribute to city growth this paper explores migration flows into and out of egypt s three largest cities we study whether the higher shares of such workers in cities arise because these workers perceive relatively greater benefits from living in cities given relative urban rural wage rates or because the relative demand for these workers rises with city size

norms of punishment experiments with students and the general population i introduction the issue of external validity of laboratory experiments has received increasing attention in the last decades while the vast majority of experiments are conducted with a fitting sample of college students it remains an open question whether the behavior observed in such studies is informative about society at large here we focus on experiments on social dilemmas to study other regarding preferences and civic norms of cooperation we compare cooperation levels in two distinct subject pools originating from the same geographical area one sample was drawn from the student population of a large public university student treatment the other sample was drawn from the general adult population representative treatment and stratified according to gender age and employment status everyone participated in public good games with and without opportunities for peer punishment there are many contributions in the literature that compare the behavior of students with other pools of participants with the explicit aim to test the external validity of laboratory experiments 1 the existing evidence appears to suggest that students are less prosocial than other subject pools for instance in a prisoner s dilemma students cooperate less than white collar workers bigoni casari and camera 2012 or bicycle messengers burks carpenter and goette 2009 similarly students are less prosocial than rural and urban citizens in a public good game gachter and herrmann 2011 than rural villagers in the appropriation of common pool resources cardenas 2005 and than employees in a dictator game carpenter burks and verhoogen 2005 dragone galeotti and orsini 2013 the gap remains when one compares students and professionals that is self selected subjects with a high degree of expertise who ordinarily deal with situations resembling the experimental task the evidence includes studies on voluntary contributions to a public good among elected officials butler and kousser 2013 and shrimp fishermen carpenter and seki 2011 threshold public goods without refunding among nurses bram cadsby and maynes 1998 trust games among ceo principals fehr and list 2004 2 more in general the most appropriate pool of participants should depend both on the task and the goal of the study for instance contractors may be a better sample than college students for the external validity of auction experiments dyer kagel and levin 1989 and villagers may be a better sample than city dwellers for experiments about the management of a renewable natural resource cardenas 2005 contractors and villagers are more appropriate than students in this case because they are more familiar with the experimental task and their behavior is more relevant because they are those who actually make the decisions in the field both aspects boost the external validity of the experimental results 3 the goal of the study is also relevant when studying issues of bounded rationality for instance one may prefer participants with very high or very low cognitive skills depending on the initial conjecture to be tested high score participants may be preferred when collecting evidence about the presence of a bound to rationality showing that game theorists choose numbers in a guessing game away from the nash equilibrium prediction provides more compelling evidence about the descriptive inaccuracy of the theory than using a representative sample of the general population camerer 2003 conversely participants with low cognitive skills who succeed at a task suggest that such task is not too demanding in short to enhance the external validity of experimental results one should recruit participants with a bias against the initial conjecture as we are interested in norms of cooperation and punishment of the society broadly defined the most appropriate pool of participants would be a representative sample of the population at large

revealed preference tests of the cournot model the aim of this paper is to develop revealed preference tests for cournot equilibrium the tests are akin to the widely used revealed preference tests for consumption but have to take into account the presence of strategic interaction in a game theoretic setting the tests take the form of linear programs the solutions to which also allow us to recover cost information on the firms to check that these nonparametric tests are sufficiently discriminating to reject real data we apply them to the market for crude oil publication abstract

productivity gains from geographic concentration of human capital evidence from the cities abstract based on recent theoretical developments the argument is made that the average level of human capital is a local public good cities with higher average levels of human capital should therefore have higher wages and higher land rents after conditioning on the characteristics of individual workers and dwellings this prediction is supported by data for standard metropolitan statistical areas smsas in the united states where the smsa average levels of formal education and work experience are used as proxies for the average level of human capital the alternative explanations of omitted smsa variables and self selection are evaluated an estimate of the effect of an additional year of average education on total factor productivity is computed

china s uneven progress against poverty while the incidence of extreme poverty in china fell dramatically over 1980 2001 progress was uneven over time and across provinces rural areas accounted for the bulk of the gains to the poor though migration to urban areas helped the pattern of growth mattered rural economic growth was far more important to national poverty reduction than urban economic growth agriculture played a far more important role than the secondary or tertiary sources of gross domestic product gdp rising inequality within the rural sector greatly slowed poverty reduction provinces starting with relatively high inequality saw slower progress against poverty due both to lower growth and a lower growth elasticity of poverty reduction taxation of farmers and inflation hurt the poor external trade had little short term impact

are cadre offspring in the fast lane evidence from the labour market for college graduates in china this paper studies the impact of having a cadre parent on the labour market performance and channels of the intergenerational transference using a recent data set we find that college graduates w

migrations risks and uncertainty a field experiment in china abstract we report data from the first incentivized artefactual field experiment conducted in china to understand whether chinese migrants differ from non migrants in terms of preferences regarding risk and uncertainty in various contexts we find that compared to non migrants migrants are significantly more likely to enter competitions when they expect competitive entries from others however migrants are not different from non migrants in risk and ambiguity preferences where strategic uncertainty is absent our results suggest that migration may be driven more by a stronger belief in one s chance of succeeding in an uncertain competitive environment than by differences risk attitudes related to state uncertainty

rural to urban migration human capital and agglomeration a new general equilibrium model that links together rural to urban migration the externality effect of the average level of human capital and agglomeration economies shows that in developing countries unrestricted rural to urban migration reduces the average income of both rural and urban dwellers in equilibrium various measures aimed at curtailing rural to urban migration by unskilled workers can lead to a pareto improvement for both the urban and rural dwellers in addition the government can raise social welfare by reducing the migration of skilled workers to the city moreover without a restriction on rural to urban migration a government s efforts to increase educational expenditure and thereby the number of skilled workers may not increase wage rates in the rural or urban areas

precautionary behavior migrant networks and household consumption decisions an empirical analysis using household panel data from rural china abstract we develop a test of precautionary behavior in the consumption decisions of rural agricultural households among surveyed households facing a median level of consumption risk 10 of savings can be attributed to a precautionary motive and this increases to 15 for households with consumption per capita below the poverty line we next use distant lags of local rainfall shocks uncorrelated with current consumption growth to identify the size of migrant networks outside the village and then present evidence that both poor and nonpoor households engage in less precautionary saving as the size of the village migrant network increases

a decomposition method on employment and wage discrimination and its application in urban china 2002 2013 abstract labor market discrimination is an important issue in developing countries where path dependent institutions have been dominant while effective institutional arrangements and policies have been hidden by local customs and culture however the existing applications of classical blinder oaxaca decomposition face criticism for their imprecise understanding of the factors affecting institutional discrimination in labor markets as well as for their lack of power in formulating well targeted anti discrimination policies following oaxaca 1973 we propose a new method to decompose the total discrimination index tdi to analyze employment and wage discrimination in the labor markets of developing countries the tdi is decomposed into the employment discrimination index edi and the wage discrimination index wdi then into the underpayment index to majorities upi and the overpayment index to minorities opi we apply this method to the institutional discrimination against rural migrants in china s urban areas using national representative data from 2002 to 2013 we have found that 1 the tdi increased quickly after china entered the wto then dropped after anti discrimination policies were implemented 2 the tdi is mainly determined by the upi while the tdi s fluctuation is mainly determined by the wdi our method provides insights into the changing composition of employment and wage discrimination and their respective labor market outcomes in developing countries as a result appropriate policy measures may be developed accordingly

an experiment on the pure theory of consumer s behaviour by checking whether consumer demand satisfies the axioms of revealed preference one can test the empirical validity of the neoclassical theory of consumer behaviour however applying the axioms to actual consumer purchase data is difficult if not impossible since it poses serious problems of both a methodological and a practical nature after commenting on the few existing empirical studies in this field we summarise the results from an experimental approach to revealed preference theory data were obtained through a controlled experiment that involved real consumption of the goods chosen we find that most subjects violated the axioms

gender and competition at a young age gender gaps may be observed in a variety of economic and social environments one of the possible determining factors is that men are more competitive than women and so when the competitiveness of the environment increases the performance of men increases relative to that of women we test this hypothesis in a field study conducted with 9 year old children running on a track they first run alone and then in pairs over a short distance with different gender composition of the pairs the results support the hypothesis that performance in competition varies according to gender when children ran alone there was no difference in performance in competition boys but not girls improved their performance this finding relates to the discussion regarding single sex schools the outcomes of examinations in a mixed sex school can show a gender gap in favor of boys even when this gap does not reflect actual abilities girls who are as talented as boys will end up performing worse just because they are not as competitive and will not achieve as high scores in examinations as boys

a numerical simulation analysis of hukou labour mobility restrictions in china abstract we use numerical simulation methods to analyze the hukou system of permanent registration in china which many believe has supported growing relative inequality over the last 20 years by restraining labour migration both between the countryside and urban areas and between regions and cities our aim is to inject economic modelling into the debate on sources of inequality in china which thus far has been largely statistical we first use a model with homogeneous labour in which wage inequality across various geographical divides in china is supported solely by quantity based migration restrictions urban rural areas rich poor regions eastern central and western non coastal zones eastern and central western development zones eastern central western zones more disaggregated 6 regional classifications and an all 31 provincial classification we calibrate this model to base case data and when we remove migration restrictions all wage and most income inequality disappears results from this model structure points to a significant role for hukou restrictions in supporting inequality in china we then present a further model extension in which urban house price rises retard rural urban migration the impacts of removing hukou restrictions on migration are smaller but are still significant finally we modify the model to capture labour productivity differences across regions calibrating the modified model to estimates of both national and regional gini coefficients removal of migration barriers is again inequality improving but less so

the revealed preference approach to collective consumption behaviour testing and sharing rule recovery we present a revealed preference methodology for empirically analysing collective consumption behaviour first we introduce an integer programming ip methodology for testing data consistency with collective consumption models that account for publicly as well as privately consumed goods this ip methodology can include information on assignable quantities for private goods next we show that the ip methodology allows for recovering the personalized lindahl prices for the public goods and the personalized quantities for the private goods in turn this implies recovery of the sharing rule i e personalized income share levels an empirical application demonstrates the practical usefulness of the

the development of egalitarianism altruism spite and parochialism in childhood and adolescence we study how the distribution of other regarding preferences develops with age based on a set of allocation choices we classify each of 717 subjects aged 8 17 years as either egalitarian altruistic or spiteful we find a strong decrease in spitefulness with increasing age egalitarianism becomes less frequent and altruism much more prominent with age females are more frequently classified as egalitarian than males and less often as altruistic by varying the allocation recipient as either an in group or an out group member we also study how parochialism develops with age parochialism emerges significantly in the teenage years

economic behavior of children and adolescents a first survey of experimental economics results abstract about 15 years ago economic experiments with children and adolescents were considered as an extravagant niche of economic research since then this type of research has exploded in scope and depth it has become clear that studying the development of economic behavior and its determinants is important to understand economic behavior of adults and to provide a basis for potential policy interventions with respect to economic behavior in childhood and adolescence given the huge increase of papers we provide the first overview of economic experiments with children and adolescents we focus on the following aspects rationality of choices risk preferences time preferences social preferences cooperation and competitiveness all of these aspects are analyzed with respect to the influence of age and gender and we also consider the role of socio economic status or interventions

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

social identity and inequality the impact of china s hukou system abstract we conduct an experimental study to investigate the causal impact of social identity on individuals performance under incentives we focus on china s household registration hukou system which favors urban residents and discriminates against rural residents in resource allocation our results show that making individuals hukou identity salient significantly reduces the performance of rural migrant students relative to their local urban counterparts on an incentivized cognitive task and consequently significantly lowers their relative ranking in the earnings distribution under the piece rate regime however the impact of hukou identity salience is insignificant in the tournament regime suggesting that its negative effect on migrant students performance may be mitigated when competition is introduced the results demonstrate the impact of institutionally imposed social identity on individuals economic performance and potentially on inequality

do rational demand functions differ from irrational ones evidence from an induced budget experiment various studies e g becker 1962 ariely et al 2003 have noted anomalies concerning the relationship between observed demand and the preferences presumed to motivate it we re examine these findings using experimental choice data after separating our subjects choices into rational and irrational subsets based on consistency with the axioms of revealed preference we estimate and compare demand coefficients mirroring ariely et al s coherently arbitrary choice both rational and irrational demand estimates exhibit negative price and positive endowment coefficients however a comparison of the full set of demand coefficients indicates significant differences between the two yielding an observable artefact of the preference hypothesis relaxing the goodness of fit of the revealed preference test afriat 1987 varian 1994 does not alter our findings

discrimination social identity and durable inequalities what are the mechanisms by which societal discrimination affects individual achievement and why do the effects of past discrimination endure once legal barriers are removed we report the findings of two experiments in village india that suggest that the mechanisms of discrimination operate in part within the individuals who are members of the groups who have been discriminated against we demonstrate that publicly revealing an individual s membership in such a group alters his behavior in ways that make the effects of past discrimination persist over time a growing literature in social psychology on stereotype threat finds that stereotyped based expectations affect individual performance in the domain of the stereotype a study by jeff stone et al 1999 is illustrative when college students were asked to perform a task described as diagnostic of natural athletic ability blacks stereotyped as better athletes but worse students than whites performed better than whites when the same test was presented as diagnostic of sports intelligence the performance of blacks declined that of whites improved and the racial gap was reversed evidence suggests that a mediating factor in stereotype threat is a change in self confidence mara cadinu et al 2005 in our studies we investigated whether the public revelation of social identity caste affects cognitive task performance and responses to economic opportunities by young boys in village india subjects were sixth and seventh graders drawn from the two ends of the caste hierarchy we asked subjects to learn and then perform a task under incentives and we manipulated whether their peers in the experimental session knew their caste caste is well suited to this manipulation because unlike race gender and ethnicity there are no unambiguous outward markers of caste among young boys six subjects generally from six different villages participated in each experimental session in the control condition the subjects were anonymous within the six person group in the experimental conditions the experimenter publicly revealed subjects names and caste in the task solving mazes in which performance was studied here the low caste subjects in the anonymous condition did not perform significantly differently from high caste subjects but when caste identity was publicly revealed in a mixed caste group a significant caste gap emerged the caste gap was due to a 20 percent decline in the average number of mazes solved by the low caste the study shows that publicly revealing the social identity of an individual can change his behavior even when that information is irrelevant to payoffs our results are a generalization of the literature on stereotype threat like that literature we find that individuals performance is more in accordance with the stereotype of the group when group membership is made salient in some way unlike that literature salience in our experiments depends on the public revelation of social identity and more importantly we do not argue that the domain of the tasks undertaken by discussants rachel croson university of pennsylvania iris bohnet harvard university stefano dellavigna university of california berkeley

how demanding is the revealed preference approach to demand a well known problem with revealed preference methods is that when data are found to satisfy their restrictions it is hard to know whether this should be viewed as a triumph for economic theory or a warning that these conditions are so undemanding that almost anything goes this paper allows researchers to make this distinction our approach uses an axiomatic characterization of a measure of predictive success due to selten 1991 we illustrate the idea using a panel dataset the results show that this approach can lead us to radically reassess our view of the empirical performance of economic theory

migration and remigration of male household heads in turkey 1963 1973 this article offers an overview of aggregate migration flows in turkey during 1963 73 and then develops models for explaining the qualitative and quantitative importance of various factors behind migration and remigration during 1963 73 the framework is based on the economic theories of migration that view geographic mobility as a response to differential earning opportunities distributed over time and across space the analysis accounts for the impact of regional and macroeconomic variables on migration status while controlling for personal characteristics including migration history the model uses a discrete choice formulation that accounts for consideration of remigration at the time of the initial migration decision migration status is assessed at the province district and village levels over 5 and 10 year intervals the author uses six different definitions of migration during 1950 80 turkey experienced rapid urbanization and migration from economically backward areas to more dynamic areas usually in the western region data for the study were obtained from a sample of household heads from the male survey portion of the 1973 retrospective survey of the structure of population and population problems findings indicate that undesirable work conditions in the sending area such as limited job opportunities lack of job related security and unemployment plus human capital variables had a strong impact on the migration decision the main finding is that regional and macroeconomic variables had a significant impact when individual heterogeneity was controlled for it is argued that policy variables can reverse the impact of economic variables only by inducing extreme changes in the human capital variables migration policies should be directed at changing broad regional economic structures findings varied with the definition of migration and time results improved by distinguishing between return migrants and repeat migrants

who is more rational we report on the results of a large scale field experiment that enables us to test for consistency with utility maximizing behavior and to investigate the correlation between individual behavior and demographic and economic characteristics we conducted the experiment with the centerpanel a representative sample of over 2 000 dutch households using procedures similar to those used by choi et al 2007b in a setting with risk we find a high level of consistency in the individual level decisions there is also considerable heterogeneity in subjects consistency scores high income and high education subjects display greater levels of consistency men are more consistent than women and young subjects are more consistent than those who

integrating social conflict into economic theory the generalisation of coasian theorem to the power relationship amounts to depicting conflict as a bargaining process between conflictual parties that are simultaneously both partners and adversaries this perspective leads to different models of rational conflicts i e a threat of conflict without any real clash an alternative approach is developed by different models inspired by the public choice school which build upon the logic of coercive power within the framework of a self interested behaviour the integration of social conflicts in a narrowly defined individual cost benefit theoretical framework has resulted in reducing social conflict to real private but not social conflict in other words economic theory has considered social protesters either as potential or actual looters but rarely as a group of people struggling for a common cause integration of social conflict into economic theory will require i abandoning the ubiquitous market model when describing conflictual relationships ii accepting the logic of force or coercive power as a starting point and iii expanding the idea of interest to include encompassing including class interest

anarchy and its breakdown anarchy defined as a system in which participants can seize and defend resources without regulation from above is not chaos but rather a spontaneous order however anarchy is fragile and may dissolve either into formless amorphy or into a more organized system such as hierarchy under anarchy each contestant balances between productive exploitation of the current resource base and fighting to acquire or defend resources anarchy is sustainable only when there are strongly diminishing returns to fighting effort the decisiveness parameter is sufficiently low and incomes exceed the viability minimum these considerations explain many features of animal and human conflict

is india s economic growth leaving the poor behind there has been much debate about how much india s poor have shared in the economic growth unleashed by economic reforms in the 1990s the authors argue that india has probably maintained its 1980s rate of poverty reduction in the 1990s however there is considerable diversity in performance across states this holds some important clues for understanding why economic growth has not done more for india s poor india s economic growth in the 1990s has not been occurring in the states where it would have the most impact on poverty nationally if not for the sectoral and geographic imbalance of growth the national rate of growth would have generated a rate of poverty reduction that was double india s historical trend rate states with relatively low levels of initial rural development and human capital development were not well suited to reduce poverty in response to economic growth the study s results are consistent with the view that achieving higher aggregate economic growth is only one element of an effective strategy for poverty reduction in india the sectoral and geographic composition of growth is also important as is the need to redress existing inequalities in human resource development and between rural and urban areas

the anatomy of distributional preferences with group identity abstract the increasing diversity of societies raises questions about the consequences for redistributive preferences this paper assesses the impact of social identity on distributional preferences in a modified dictator game i estimate individual level utility functions with two parameters that govern the trade offs between equity and efficiency and giving to self and to other subjects on average put less weight on income of the out group the out group treatment also changes the distribution of equity efficiency concerns however the experiment also uncovers a large individual heterogeneity of preferences an analysis of garp violations reveals that choices in both treatments overwhelmingly stem from well behaved yet systematically different underlying utility functions hence the evidence presented here suggests that the rational choice approach is a useful tool for understanding the effect of social identity on preferences

sequential migration theory and evidence from peru abstract the standard human capital model of labor migration has been successful in explaining several empirical regularities of the migration process however there are a number of empirical facts that have not yet been explained or empirically tested among them that migrants usually perform more than one move in their lifetime return migration accounts for a very important share of total migration rates and there is a high positive correlation between in and out migration rates in the more advantageous regions this paper presents both a simple model explaining these facts and an empirical analysis using data from peru

appropriation violent enforcement and transaction costs a critical survey this paper focuses on the extension of transaction costs to appropriative activity and coercive power in the property rights approach it has been argued that including the costs of appropriation and violent enforcement in transaction costs is based on the assumption that coaseian bargaining can be extended to any institutional scenario i e voluntary as well as coercive exchange however voluntary transactions cannot capture the logic of coercive power this means that the assumption of an efficient political market is not valid and that the political coase theorem lacks the logical consistency to provide a cornerstone for political theory

social identity and preferences social identities prescribe behaviors for people we identify the marginal behavioral effect of these norms on discount rates and risk aversion by measuring how laboratory subjects choices change when an aspect of social identity is made salient when we make ethnic identity salient to asian american subjects they make more patient choices when we make racial identity salient to black subjects non immigrant blacks but not immigrant blacks make more patient choices making gender identity salient has no effect on intertemporal or risk choices

introduction to the special issue things we do and don t understand about the household and the environment environmental economics has been slow to incorporate the full and complex nature of the household into its analytical structures and to reflect empirical evidence on household decision making this paper provides an overview of some of the main unanswered questions

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

nonparametric comparative revealed risk aversion abstract we introduce a nonparametric method to compare risk aversion of different investors based on revealed preference methods using yaari s 1969 50 definition of more risk averse than we show that it is sufficient to compare the revealed preference relations of two investors this makes the approach operational the central rationalisability theorem provides strong support for this approach we also provide a measure of economic significance to quantify the differences in risk aversion which can also help to interpret differences in risk aversion in parametric models the approach is an alternative or complement to parametric approaches and a robustness check as a necessary first step towards this comparative approach we show how to test data for consistency with stochastic dominance relations which can also be used to recover larger parts of preferences we include an application to experimental data by choi et al 2007 10 11 which demonstrates the potential of the comparative approach

contested exchange political economy and modern economic theory university of california berkeley department o f economics berkeley c a l i f o r n i a working paper 8876 contested exchange political economy and modern economic theory samuel bowles and herbert gintis june 8 1988 key words c o n t e s t e d exchange p o l i t i c a l jel c l a s s i f i c a t i o n economy

migration and incomes in source communities a new economics of migration perspective from china the objective of this paper is to understand the effects of china s migration on source communities and to discuss their policy implications we draw from new economics of labor migration nelm theory to understand how migration and migrant remittances can relax or tighten market constraints in china s rural economy using simultaneous equation econometric techniques and household survey data from china we estimate net sectorspecific effects of migration on rural household income focusing on farm production and self employment our econometric findings indicate that the loss of labor to migration has a negative effect on household cropping income in source areas however we provide evidence that remittances sent home by migrants positively compensate for this lost labor effect contributing to household incomes directly and indirectly by stimulating crop and possibly self employment production this finding offers evidence in support of the nelm hypothesis that remittances loosen constraints on production in the imperfect market environments characterizing rural areas in less developed countries taking into account both the multiple effects of migration and the change in household size participating in migration increases household per capita income between 14 and 30 percent migration and incomes in source communities a new economics of migration perspective from china china is experiencing the largest peacetime flow of labor out of agriculture ever witnessed in world history solinger 1999 rozelle et al 1999 despite the rapid expansion of labor migration china s work force is still disproportionately employed in agriculture compared to other countries at similar levels of per capita gdp taylor and martin 2001 hence as china s economy continues to expand the flow of labor to urban areas will continue and even accelerate johnson 1999 the massive flow of labor away from farms has intensified research interest in china s migration in recent years however as in the broader literature on migration in less developed countries most recent studies on china s migration have focused on determining the size and composition of the labor flow macroeconomic implications of increased migration and the effects of migration on urban areas zhao 1999 yang 1999 1997 less emphasis has been placed on researching the effects of migration on the rural communities that migrants leave even though evidence shows that the rural household in the village of origin is typically the central concern of all those involved in migration both those who leave and those who stay behind exceptions include wang and zuo 1999 bai 2001 moreover the recent increase in migration has left policy makers particularly concerned regarding the way source communities will be affected moa 1999 they are concerned that as labor flows away from farms food production and crop income will decline potentially threatening china s food security furthermore policy makers are concerned about the increasing gap between urban and rural household incomes if migration exacerbates this gap some fear that as it grows rural residents eventually will flood cities ill equipped to absorb them others fear that discontent over a rising urban rural income gap could even spill over into political unrest yang 1999 because china s markets and other modern economic institutions are still relatively undeveloped migration may play a pivotal role in creating or overcoming constraints caused by the lack of well functioning markets and or institutions knight and song 1999 benjamin and brandt 2000 the new economics of labor migration nelm literature analyzes migration as a household decision rather than as an individual decision stark 1991 the nelm hypothesizes that rural households facing imperfect market environments decide

migration amongst the batswana the present study undertakes analysis of the effects of employment probabilities and wage alternatives on migration decisions in the context of botswana adopting micro level data both to estimate a multinomial migration function and to develop prediction equations for wages and likelihood of employment data are from the 1978 1979 national migration survey the factors that influence rural batswana adults to remain at home migrate to town on a short or long term basis move to another rural area or emigrate to south africa are examined consideration is given to the effects of employment alternatives on the rate of internal migration and the selectivity of movements with respect to personal household and locational factors excerpt

the political economy of growth a critical survey of the recent literature this article reviews the recent literature on the political economy of growth focusing on the research that has developed at the intersection of the endogenous growth literature and the new political economy it explores the relationship among four key variables economic growth and capital accumulation political instability political freedom and democratic institutions and income inequality

children s rationality risk attitudes and field behavior abstract we investigate the relationship between risk attitudes choice consistency and field behavior of children by conducting economic experiments with 1275 8th graders choices are not completely consistent with any of the economic theories we consider however they are not random either we use our experimental data to structurally estimate risk preferences and correct for decision error using a measure constructed from the estimates and individual choices we find that risk preferences do predict future field behavior children who are more risk averse are less likely to receive disciplinary referrals one and two years after the experiment and are more likely to complete high school even controlling for economic rationality family background scholarly achievement and past misbehavior accounting for decision error turns out to be important as a simple aggregate measure of risk is not found to be correlated with field behavior

homothetic efficiency theory and applications we provide a nonparametric revealed preference approach to demand analysis based on homothetic efficiency homotheticity is widely assumed often implicitly because it is a convenient and often useful restriction however this assumption is rarely tested and data rarely satisfy testable conditions to overcome this we provide a way to estimate homothetic efficiency of consumption choices the method provides considerably higher discriminatory power against random behavior than the commonly used afriat efficiency we use experimental and household survey data to illustrate how our approach is useful for different empirical applications and can provide greater predictive success

the determinants of temporary rural to urban migration in china this paper evaluates the impact of various explanatory factors on temporary rural to urban migration in china using a series of probit models of the migration decision the empirical basis of this work is a sample of 11 924 individuals age 16 35 years drawn from the 1995 data of the chinese household income project chip we find that the profiles for migration age and migration education are both quadratic with the least educated and most educated members of rural society being less likely to migrate in addition the marginal effect of education tends to be higher for men than for women an increase in farming income reduces the probability of migration while the amount of land controlled by a household does not have a significant effect on migration in most provinces

exploring the capability to reason backwards an experimental study with children adolescents and young adults this is the first study investigating the development of the capability to reason backwards in children adolescents and young adults aged 6 to 23 under controlled laboratory conditions the experimental design employs a modified version of the race game as in the original game subjects need to apply backward analysis in order to solve the games we find that subjects capability to reason backwards improves with age but that this process systematically differs across genders our repetition of the games indicates that differences exist also in learning between age groups and across genders

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

urbanization in a developing country city size and population composition abstract in developing countries typically there is a very high correlation between city size and educational attainment of the local population which is less pronounced or even absent in developed countries such as canada the u s a or the u k two explanations are examined first the types of goods produced in larger cities require relatively high skill labor inputs second public and perhaps private services demanded by higher skill people are only offered in larger cities the paper econometrically tests these hypotheses for brazil estimating the elasticities of substitution or typically complementarity between high and low skill labor and the bright lights effect for high versus low skill labor

evolution and human nature from an economic perspective on individual decision making human beings have three key characteristics preferences beliefs and rationality beliefs are the probabilities with which people think various outcomes will occur conditional on information that might be available preferences are the rankings over the set of gambles that are based on such beliefs over the outcomes rationality is the extent to which people succeed in choosing optimal actions in the light of their beliefs and preferences and the extent to which their beliefs are appropriately modified by their information economists typically impose only rather weak assumptions on preferences for example preferences are taken to be transitive and sometimes less explicitly exogenous and unchanging stronger assumptions are typically imposed on preferences in specific contexts however for example preferences over time might be represented by an additively separable function with constant rate of discount despite widespread recognition that this case is a special one further attitudes to risk are often represented by the expected utility theorem which rests on assumptions that are strong if also appealing the assumptions made on rationality in particular are usually very strong that is rationality in economic models usually entails the exact optimization of preferences and modification of beliefs in accordance with bayes theorem the economist s basic picture of preferences beliefs and rationality has been subject to challenges from a growing number of empirical anomalies the proposed explanations of these anomalies involve relaxing the assumptions that economists make on these preferences beliefs or rationality for example preferences

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on

swords or plowshares a theory of the security of claims to property this paper develops a general equilibrium model of the allocation of resources among appropriative and productive activities the model emphasizes the distinction between offensive weapons which are the instruments of predation and fortifications which provide defense against predation the analysis of this model shows how the equilibrium security of claims to property is determined the analysis focuses on the possibility of a nonaggressive equilibrium in which no resources are allocated to offensive weapons and claims to property are fully secure we also analyze the complex relation between economic welfare and the security of claims to property we find for example that a relatively poor agent could be better off in an equilibrium with less secure claims to property

the influence of hukou and college education in china s labour market this paper examines the impact of hukou and college education on job placement and wage attainment for chinese rural migrant workers in the cities the analysis of the 2010 chinese general social survey shows that when rural born individuals gain both urban hukou and college education they enjoy equal job sector placement and they earn significantly higher wages than the college educated locals but in the absence of a rural to urban hukou transfer migrants have fewer opportunities to go to college than local peers and even college education does not gain a migrant an equal chance of working in the state sector or receiving equal earnings a major contribution of this study is to suggest a nine category analytic scheme which takes into account how education hukou and type of workplace affect one another in jointly influencing labour market inequality between rural migrants and urbanite workers

does market experience promote rational choice experimental evidence from rural ethiopia abstractwe organize a field experiment with sesame farmers and brokers in northern ethiopia to explore whether market experience fosters rational behavior proxied by fewer generalized axiom of revealed preference garp violations in a simple choice experiment in the baseline study farmers and brokers performed equally well or badly which is consistent with qualitative evidence that the prior trading experience of our brokers is not obtained in a competitive setting following random assignment to a competitive market setting a one day trading session in a sesame auction we find that treated farmers and brokers behave more rationally than their peers in the control group

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

children as consumers investigating child diary expenditure data we investigate expenditure behaviour of school aged children using child diary information contained in the british family expenditure survey the estimates from an almost ideal demand system aids for child expenditure suggest that drinks sweets books and toys are normal goods for children but clothes travel leisure and vice prod ucts are luxury items with income elasticities greater than one being a lone parent child and having a working mother are important factors in determining child expenditure de cisions importantly a higher parental budget share on any given commodity is typically associated with an increased child budget share on the same commodity jel classification dll d12 j13

can high inequality developing countries escape absolute poverty do the poor face the same prospects for escaping poverty in high inequality developing countries as in low inequality countries is it possible for inequality to be so great as to stifle prospects of reducing absolute poverty even when other initial conditions and policies are favorable to growth household survey data for developing countries suggest that initial distribution does affect how much the poor share in rising average incomes higher initial inequality tends to reduce growth s impact on absolute poverty by the same token higher inequality diminishes the adverse impact on the poor of general economic contraction combining this evidence with that from recent investigations of inequality s effect on growth the author finds that if inequality is high enough countries that would have very good growth prospects at low levels of inequality may see little or no overall growth and little progress in reducing poverty or even a worsening on both counts the data the author uses suggest that such cases do occur the precision with which key parameters have been estimated makes it difficult to say with confidence how common such cases are but they appear to be in the minority what appear to be the best available estimates suggest that about one fifth of the spells between surveys he analyzed were cases in which poverty was rising yet positive growth in the mean and hence falling poverty is predicted at zero inequality inequality can be high enough to result in rising poverty despite good underlying growth prospects

the incentive effects of affirmative action in a real effort tournament abstract affirmative action policies bias tournament rules in order to provide equal opportunities to a group of competitors who have a disadvantage they cannot be held responsible for its implementation affects the underlying incentive structure which might induce lower performance by participants and additionally result in a selected pool of tournament winners that is less efficient in this paper we study the empirical validity of such concerns in a case where the disadvantage affects capacities to compete we conducted real effort tournaments between pairs of children from two similar schools who systematically differed in how much training they received ex ante on the task at hand contrary to the expressed concerns our results show that the implementation of affirmative action did not result in a significant performance loss for either advantaged or disadvantaged subjects instead it rather enhanced the performance for a large group of participants moreover affirmative action resulted in a more equitable tournament winner pool where half of the selected tournament winners came from the originally disadvantaged group hence the negative selection effects due to the biased tournament rules were at least partially offset by performance enhancing incentive effects

patience among children abstract recent policy initiatives offer cash payments to children and often their families to induce better health and educational choices these policies implicitly assume that children are especially impatient i e have high discount rates however little is known about the nature of children s patience how it varies across children and whether children can even make rational inter temporal choices this paper examines the inter temporal choices of 5 to 16 year old children in an artefactual field experiment we examine their choices between varying levels of compensation received in 2 or 4 months in the future and in 0 or 2 months in the future we find that children s choices are consistent with hyperbolic discounting boys are less patient than girls older children are more patient and that mathematical achievement test scores private schooling and parent s patience are not correlated with children s patience we also find that although more than 25 of children do not make rational inter temporal choices within a single two period time frame we cannot find variables that explain this behavior other than age and standardized mathematical achievement test scores