measuring welfare latent variable models for happiness and capabilities in the presence of unobservable heterogeneity the paper contributes to the operationalisation of the capabilities approach to welfare economics by developing and analyzing data on the freedoms of adults in argentina specifically it reports on the development and delivery of a survey instrument for measuring capabilities calculates for each respondent a nehring puppe type index of capabilities and examines the distribution of index scores the main analytic part of the paper then goes on to develop a generalized linear latent and mixed model gllamm for assessing the impact of capabilities on life satisfaction in which allowance is made for i unobserved heterogeneity and ii possible endogeneity by introducing latent individual effects and by instrumenting capability variables using income and other socio economic variables our empirical results show that empathy self worth goal autonomy discrimination safety and stress are statistically significant determinants of life satisfaction in a decreasing order of importance the paper concludes by suggesting that if replicated the findings have profound implications for the conceptualisation and evaluation of economic progress

using a policy mix for pollution control a review of economic literature this article provides a review of economic studies analyzing the use of multiple policies a socalled policy mix to cope with single pollution problems to guide and structure the review an analytical framework is developed and applied the framework integrates transaction costs into the analysis of pollution problems and policies to overcome them moreover it understands a pollution externality not only as a market failure but more generally as the failure of private governance structures based on this insight two rationales for using a policy mix are identified first a policy mix may help to correct for multiple reinforcing failures of private governance structures such as pollution externalities and technological spillovers second a policy mix can be employed if the implementation of single first best policies brings about high transaction costs e g when marginal pollution damages are heterogeneous or polluters are unlikely to comply with the policy for each rationale the relevant literature is presented based on the review avenues for future research are identified

measuring lifetime poverty abstract this paper presents an axiomatic framework for measuring lifetime poverty over multiple periods for an individual we argue that lifetime poverty is influenced by both the snapshot poverty of each period and the poverty level of the permanent lifetime consumption it is also influenced by how poverty spells are distributed over the lifetime we axiomatically characterize classes of lifetime poverty indices and derive dominance conditions of poverty orderings for both individual and societal lifetime poverty measurements

an axiomatic characterization of yitzhaki s index of individual deprivation abstract this note presents and discusses a number of properties a measure of individual deprivation should satisfy the axioms we propose are necessary and sufficient to characterize yitzhaki s index of deprivation making the structure of the index more transparent

size and distribution of incomes as determinants of social welfare abstract the paper is concerned with the relationship between the inequality of income distributions and the social welfare they imply starting point is an ordering of income distributions in terms of inequality based on explicit value judgments about the trade off between size and distribution of incomes an ordering in terms of social welfare is derived the welfare functions representing this ordering allow a size distribution split up it is shown that the procedure can be reversed this ordinal approach is considerably more flexible and less arbitrary than most methods proposed in the literature

administrative costs and instrument choice for stochastic non point source pollutants this paper extends the empiricalanalysis of non point source pollution to thecase where the pollutant is stochastic andalternative regulatory instruments havedifferent administrative costs it also appliesa method of stochastic programming whereemissions are log normally distributed forthe kennet catchment in south west england werank a range of policies in terms of abatementcosts alone and total costs abatement andadministrative costs on the basis ofabatement costs alone a uniform emission taxis the cost minimising policy but on the basisof total cost a nitrogen input tax is theleast cost policy furthermore the policyranking based on total costs changes as thereliability standard increases

counting and multidimensional poverty measurement this paper proposes a new methodology for multidimensional poverty measurement consisting of an identification method k that extends the traditional intersection and union approaches and a class of poverty measures m our identification step employs two forms of cutoff one within each dimension to determine whether a person is deprived in that dimension and a second across dimensions that identifies the poor by counting the dimensions in which a person is deprived the aggregation step employs the fgt measures appropriately adjusted to account for multidimensionality the axioms are presented as joint restrictions on identification and the measures and the methodology satisfies a range of desirable properties including decomposability the identification method is particularly well suited for use with ordinal data as is the first of our measures the adjusted headcount ratio we present some dominance results and an interpretation of the adjusted headcount ratio as a measure of unfreedom examples from the us and indonesia illustrate our methodology

how did the great recession affect gender disparity in europe an analysis by a multidimensional deprivation approach this paper analyses how the great recession affected the gender disparity in material and social deprivation in europe we propose multidimensional non monetary indexes of absolute and relative i

deprivation and social exclusion social exclusion manifests itself in the persistent relative lack of an individual s access to functionings compared with other members of society and we model it as being in a state of deprivation over time we view deprivation as having two basic determinants the lack of identification with other members of society and the aggregate alienation experienced by an agent with respect to those having fewer functioning failures using an axiomatic approach we characterize new individual and aggregate measures of deprivation and social exclusion the aggregate measures are then applied to eu data for the period 1994 2001

conflict and distribution abstract we develop a behavioral model that links the level and pattern of social conflict to the societywide distribution of individual characteristics the model can be applied to groups that differ in characteristics such as wealth ethnicity religion and political ideology we settle questions of existence and uniqueness of conflict equilibrium conflict is seen to be closely connected with the bimodality of the underlying distribution of characteristics however in general the conflict distribution relationship is nonlinear and surprisingly complex our results on conflict patterns also throw light on the phenomena of extremism and moderation journal of economic literature classification numbers d63 d72 d74

to rebate or not to rebate fuel economy standards versus feebates we compare the welfare effects in equilibrium of two environmental regulations that aim at increasing the new cars fleet s average fuel efficiency the fuel economy standards and the feebate policies maintaining the same environmental benefit and tax revenue we simulate the implementation of each policy in france and the united states standard type policies have larger negative welfare effects up to 3 2 times those from the feebate effects on manufacturers are heterogeneous some are better of under the standard regulation the addition of a market to trade levels of fuel efficiency dominates the simple standard regulation but not always the feebate we also consider the attribute based standard technological improvements and the equivalence with fuel taxes as extensions

adverse selection and pigou taxes it id assumed that firms have different technologies and that an environment protection agency knows which technologies exist but not which is used by which firms neither the emissions of individual firms nor their total emissions are observable the output of each individual firm however can be monitored without cost based on this information tax schemes are constructed which induce firms to produce the socially efficient output quantities conditions about cost functions are derived which ensure the existence of tax schemes which yield first best solutions

wealth inequality educational environment and school enrolment evidence from mexico using data from the extended section of the 2010 mexican census 2 9 million households we study how school enrolment is associated with wealth inequality and with the educational environment the child is exposed to at the household and municipal levels we provide robust evidence of wealth inequality as a negative predictor of school enrolment for children in primary secondary and high school age ranges while a positive role is played by the educational environment through the introduction of interaction terms we account for how economic and educational variables are intertwined at both the household and the municipal level and we are able to illustrate the considerable heterogeneity in the role of adult education for households at different standards of living

the effects of the corporate average fuel efficiency standards in the us this paper examines the effects of the corporate average fuel economy standards cafe on automobile sales prices and fuel consumption first a discrete choice model of automobile demand and a continuous model of vehicle utilization are estimated using micro data from the consumer expenditure survey for 1984 1990 next the demand side model is combined with a model of oligopoly and product differentiation on the supply side with these elements in place the effects of the cafe regulation are assessed through simulations and compared to the effects of alternative policy instruments such as an increase in gasoline tax

environmental impairment liability as an instrument of environmental policy abstract this paper evaluates the role of liability that may arise in the context of an impairment of the environment environmental impairment liability or eil for short is analyzed as an instrument of environmental policy interrelationships between injurers victims the legal system insurers and the environment serve to show that eil may contribute to preserve the environment however peculiarities such as mass torts and uncertain behavior of courts serve to detract from the effectiveness of eil the question arises of whether these shortcomings are 1 mitigated or exacerbated by eil insurance the potential contribution of insurance to eil is found to be undermined by partial market failure which however can be alleviated by permitting the flotation of environmental risk warrants on capital markets

regulation and industrial organization this paper examines the effects on firm behavior and industry structure of industry wide price regulation by the state such regulation wherein regulators set prices with regard to an industry wide aggregate performance measure has been and still is widely used and is shown to induce inefficiencies in firm operation in general such regulation can result in setting prices high enough to maintain inefficient firms and it encourages to inefficient firm operation due to incentives to inflate costs and averch johnson effects

poverty and social exclusion two sides of the same coin or dynamically interrelated processes there is growing interest in the analysis and measurement of social exclusion to complement the static and dynamic literature on income poverty on theoretical grounds social exclusion and income poverty are seen as different processes but with closely interrelated dynamics however our empirical understanding of the way these two processes dynamically interact at the individual level is still very limited to shed some light on the issue we use a dynamic bivariate probit model controlling for unobserved heterogeneity and wooldridge 2005 type initial conditions both the first and second order markov dynamics are examined we estimate the model using the italian sample of the european community household panel echp waves 1 8 and find a sizable extent of state dependence in both poverty and social exclusion moreover there are dynamic cross effects implying that poverty and social exclusion are mutually reinforcing social policies aimed at eradicating poverty and avoiding individuals social

an ecological economic modelling procedure to design compensation payments for the efficient spatio temporal allocation of species protection measures abstract using an interdisciplinary approach we present an ecological economic modelling procedure to design compensation payments for species protection we develop our procedure on the example of white stork protection in a spatio temporally structured landscape generated by human land use the proposed procedure is able to solve complex allocation problems such as the spatio temporal allocation of a budget among more than two areas with spatially differing species specific cost and benefit functions of any shapes furthermore the procedure delivers the efficient compensation payments not only qualitatively but quantitatively and is hence relevant to the implementation of species protection policies

spatially uniform versus spatially heterogeneous compensation payments for biodiversity enhancing land use measures the importance of compensation payments for biodiversity enhancing land use measures has grown over the past decade particularly in connection with agri environmental policy given that both the costs and the benefits of biodiversity enhancing land use measures are subject to spatial variation the criterion of cost effectiveness calls for spatially heterogeneous compensation payments however when deciding whether to implement uniform or heterogeneous compensation payments the regulator has to compare the disadvantage of uniform payments in terms of cost effectiveness with the disadvantages of spatially heterogeneous payments to help resolve this issue this paper provides a simple ecological economic model that allows the reduced cost effectiveness associated with uniform payments for biodiversity enhancing land use measures to be assessed for different types of benefit and cost functions

are consumers myopic evidence from new and used car purchases abstract we investigate whether car buyers are myopic about future fuel costs we estimate the effect of gasoline prices on short run equilibrium prices of cars of different fuel economies we then compare the implied changes in willingness to pay to the associated changes in expected future gasoline costs for cars of different fuel economies in order to calculate implicit discount rates using different assumptions about annual mileage survival rates and demand elasticities we calculate a range of implicit discount rates similar to the range of interest rates paid by car buyers who borrow we interpret this as showing little evidence of consumer myopia jel d12 h25 l11 l62 l71 l81

uniformity versus differentiation in regulating externalities abstract in the regulation of pollutant emissions a regulator may treat different sources with different costs and environmental damage as though they were the same for institutional informational or transaction cost reasons this may occur despite the efficiency gains from regulatory differentiation of sources this issue has been a source of much controversy in the environmental economics literature and is examined here from a theoretical perspective using a two pollutant economy emissions and net social benefits are compared for the case of efficient differentiated regulation and the case of uniform undifferentiated regulation of the aggregate of the two pollutants we show when aggregate emissions will be greater than equal to or less than efficient emissions and we derive conditions for each of these three possibilities further we show that when marginal costs and benefits become more steeply sloped the inefficiency associated with undifferentiated regulation increases

the relative deprivation curve and its applications this article introduces the relative deprivation curve to represent the size distribution of income and wealth the curve has many useful applications in the measurement of poverty and inequality which are explored the methodology developed is then applied to the data obtained from the australian household expenditure survey 1975 1976