ngos in bangladesh activities resources and governance summary this paper reports results from one of the first large nationally representative surveys of non governmental organizations ngos in a developing country the ngo sector in bangladesh is highly organized and relatively homogeneous most ngos utilize a branch and headquarters structure in which branches have limited autonomy from headquarters at the branch level most ngos in the country whether big or small focus on credit services derive more of their income from fees for services than from grants rely on salaried rather than voluntary staff keep detailed financial accounts that are externally audited and hire middle class college educated men as managers the convergence to a modal institutional form probably is the result of the persuasive power of ideas sociological pressures toward acculturation and conformity as well as material incentives

watchdogs of the invisible hand ngo monitoring and industry equilibrium globalization has been accompanied by rising pressure from advocacy non governmental organizations ngos on multinational firms to act in socially responsible manner we analyze how ngo pressure interacts with industry structure using a simple model of ngo firm interaction embedded in an industry environment with endogenous markups and entry we explain three key empirical patterns in developing country industries under activist pressure the degree of exit under more intense activist pressure the differential response of industries to ngo activism and the general rise of ngo activism following globalization

resolving differences in willingness to pay and willingness to accept reply gwendolyn c morrison 1997 raises a logical point regarding our experimental test of the divergence between willingness to pay wtp and willingness to accept wta measures of economic value shogren et al 1994 she argues that our design does not provide a true test of the existence of a fundamental endowment effect since we did not control for the potential of a pivoting indifference map daniel kahneman et al 1990 she concludes that even though our ev idence shows that the mean wtp and wta bids for market goods with close substitutes e g candy bars and coffee mugs converge after market experience the endowment effect might still be alive and well albeit at statisti cally insignificant levels

the disparity between willingness to accept and willingness to pay measures of value psychologists have long argued that people are much more averse to a loss than attracted to an equivalent gain this behavior termed loss aversion has been formalized by kahneman and tversky 1979 in their reformulation of expected utility theory prospect theory in prospect theory the utility function is replaced by a value function that evaluates changes in income from the current level increases in income are weighted by a relatively small marginal utility decreases in income are weighted by a much larger marginal utility in effect the value function implies that a kink in the relationship between utility and income occurs at the initial income or reference point and that the slope of the utility function for losses in income is steeper than it is for gains in a recent paper knetsch and sinden 1984 report a series of experiments that demonstrate the existence of a large disparity between willingness to accept wta and willingness to pay wtp measures of value they argue that the psychological theory of loss aversion explains this difference economic theory would suggest that individuals who exhibit a large disparity between wta and wtp are perhaps underperceiving the value of gains or overperceiving the value of losses are behaving in an irrational manner and will consequently achieve a lower level of well being than if they behaved in a true utility maximizing manner this would in contrast to loss aversion usually imply near equal values for wta and wtp see willig 1976 further documentation of a larger than expected disparity between wta and wtp has been obtained in surveys asking for the value of a variety of public goods for example cummings brookshire and schulze 1986 document six

nonlinear income effects in random utility models random utility models rums are used in the literature to model consumer choices from among a discrete set of alternatives and they typically impose a constant marginal utility of income on individual preferences this assumption is driven partially by the difficulty of constructing welfare estimates in models with nonlinear income effects recently mcfadden 1995 developed an algorithm for computing these welfare impacts using a monte carlo markov chain simulator for generalized extreme value variates this paper investigates the empirical consequences of nonlinear rums in the case of sportfishing modal choice while refining and contrasting the available methods for welfare estimation

divergence in alternative hicksian welfare measures the case of revealed preference for public amenities this paper investigates the divergence between the two hicksian welfare measures of non traded amenity improvement associated with housing first the hicksian surplus measures for amenity changes are analytically developed based on explicit specification of utility structures a hedonic two stage approach is then applied to empirically show that for quantity changes in contrast to hypothetical markets divergence in real market is small the paper also analytically develops expressions for the income and substitution effects and empirically shows that for a given income effect the greater the substitution effect the smaller the divergence between the two measures copyright 2002 john wiley sons ltd

the governance of non governmental organizations in uganda summary using original survey data we document the activities resources and governance structure of ngos operating in uganda the ngo sector is funded primarily by international non governmental organizations and bilateral donors we find large differences in size and funding across ngos with only a few ngos attracting most of the funding most ngos are small and underfunded and focus on raising awareness and advocacy few ngos are faith based most screening and monitoring is done by grant agencies some monitoring is also done internally by members and trustees little monitoring is done by government ngos do not file income tax returns and few respondents are able to provide coherent financial accounts

the estimation of demand parameters in hedonic price models this paper shows that the econometric problem of estimating hedonic demand parameters is not a standard identification problem caused by demand supply interaction as has been often assumed estimation procedures based on this assumption lead to biased results the hedonic estimation problem is instead caused by the endogeneity of both prices and quantities when households face a nonlinear budget constraint an instrumental variables solution to this problem is suggested using instruments that exogenously shift the budget constraint

remedying education evidence from two randomized experiments in india this paper presents the results of a two year randomized evaluation of a large scale remedial education program conducted in mumbai and vadodara india the remedial education program hires young women from the community to teach basic literacy and numeracy skills to children who reach standard three or four without having mastered these competencies the program implemented by a ngo in collaboration with the government is extremely cheap it cost 5 dollars per child per year and is easily replicable it has been implemented in 20 indian cities and reached tens of thousands of children we find the program to be very effective on average it increased learning by 0 15 standard deviations in the first year and 0 25 in the second year the gains are the largest for children at the bottom of the distribution children in the bottom third gain 0 2 standard deviations in the first year and 0 32 in the second year in math they gain 0 51 standard deviation in the second year the results are similar in the two grade levels and in the two cities at the margin extending this program would be up to 12 16 times more cost effective than hiring new teachers authors

measuring welfare changes in settings with imposed quantities abstract an intuitively attractive money metric utility measure is developed which is applicable in settings where individuals receive fixed quantities of one or more goods one use of this measure is in cost benefit analyses of imposed quantity changes the approximate measures typically used are shown to be subject to relatively large approximation errors however techniques are presented which can always be used to numerically evaluate the exact welfare measure provided that one knows the uncompensated demand function s or marginal willingness to pay function s of individuals

corrupt governments do not receive more state to state aid governance and the delivery of foreign aid through non state actors abstract a core result of the aid allocation literature is that the quality of governance in recipient countries does not affect the amounts of foreign aid received donor countries may still give aid to poorly governed countries because of a dilemma they face those countries most in need typically also lack proper institutions this paper argues that donors try to resolve this dilemma by delivering aid through non state actors using aid shares as well as absolute amounts of aid allocated through state and non state channels and considering different dimensions of governance we provide evidence that bypassing governments via ngos and multilateral organizations is indeed a response to weak recipient state institutions the effect is stronger in aid sectors where donors can more easily switch between channels and weaker for higher levels of economic self interest among donors

randomized evaluations of educational programs in developing countries some lessons this paper reviews recent randomized evaluations of educational programs in developing countries including programs to increase school participation to provide educational inputs and to reform education it then extracts some lessons for education policy and for the practice and political economy of randomized evaluations

informative advertising with differentiated products in this paper we study the role of promotional expenditures by sellers in a model of product differentiation advertising conveys full and accurate information about the characteristics of products heterogeneous consumers who have no source of information other than advertisements seek to purchase the products that best fit their needs despite the roles played by advertising in improving the matching of products and consumers and in increasing the elasticity of demand faced by each firm we find that the market determined levels of advertising are excessive given the extent of diversity in the market we derive a promotional equilibrium based on a specific information transmission technology paying explicit attention to the structure of consumer information and its impact on firms demand curves this allows us to study the effects of changes in the advertising technology including an increased ability to target messages to specific groups of consumers on the equilibrium in the product market we find that decreased advertising costs may reduce profits by increasing the severity of price competition

tolerance and growth modeling the empirical relationship we showed in berggren and elinder 2012 that tolerance toward homosexuals is negatively and quite robustly related to economic growth in a comment bornhoff and lee this issue question this finding on model specification grounds by undertaking three changes they purport to show that our main result does not hold in this article we demonstrate that one of these changes is inconsequential replacing gdp per capita by its logarithm in controlling for conditional convergence and argue that two of them are questionable first the removal of certain central control variable risks introducing omitted variable bias and inconsistent estimates second regional dummy variables are added on arbitrary grounds for example by using regional dummy variables that are just as reasonable as the baltic dummy used by bornhoff and lee we find that significance for tolerance toward homosexuals reappears in our empirical model in all this implies that there are good grounds for considering the negative relationship between tolerance towards homosexuals and growth valid bornhoff and lee s claims notwithstanding

on the choice of funtional form for hedonic price functions this study examines how errors in measuring marginal attribute pric es vary with the form of the hedonic price function in simulations consumers with known utility functions bid for houses with given attributes various forms of the hedonic function are estimated using equilibrium housing prices errors in estimating marginal attribute prices are calculated by comparing each consumer s equilibrium marginal bid vector with the gradient of the hedonic function when all attributes are observed linear and quadratic box cox forms produce lowest mean percentage errors however when some attributes are unobserved or are replaced by proxies linear and linear box cox functions perform best copyright 1988 by mit press

not for profit entrepreneurs abstract entrepreneurs who start new firms may choose not for profit status as a means of committing to soft incentives such incentives protect donors volunteers consumers and employees from ex post expropriation of profits by the entrepreneur we derive conditions under which completely self interested entrepreneurs opt for not for profit status despite the fact that this status limits their ability to enjoy the profits of their enterprises we also show that even in the absence of tax advantages unrestricted donations would flow to non profits rather than for profit firms because donations have more significant influence on the decisions of the non profits

an alternative test of the hedonic theory of housing markets abstract in this paper the hedonic theory of housing markets is used to generate a multinomial logit model of household behavior in an urban housing market application of hedonic theory to housing markets is by now fairly familiar and a link to multinomial logit has also been established however by emphasizing more heavily the bid price interpretation of hedonic theory this paper develops a new connection to econometric estimation that essentially involves running the usual logit equations in reverse one advantage of this approach is that the link between the logit equations and hedonic theory involves bid price rather than utility functions and this in turn permits the empirical results to be given an extremely clear interpretation furthermore in contrast to the standard logit model the extreme value distribution required to justify the estimation technique emerges endogenously as part of the analysis

when ngos go global competition on international markets for development donations why are many large non governmental organizations ngos becoming multinational entities what are the welfare implications of this integration of markets for development donations to answer these questions we build a simple two country model with horizontally differentiated ngos competing in fundraising we find that ngos become multinational if the economies of scale in fundraising are sufficiently large in that case national ngos in the smaller country disappear while some national ngos remain in the larger country only if country sizes are sufficiently different social welfare is higher in the regime with multinationals than under autarky

on the welfare effects and political economy of competition enhancing policies we analyse the welfare effects of policies that intensify product market competition and the channels through which they operate using a circular model of horizontal product differentiation with asymmetric costs we study the effects of increased price competition on market selection among incumbent firms cost reduction effort and entry of new firms the model also generates an endogenous demand for competition enhancing or retarding policies arising from cost heterogeneity and we demonstrate the possibility of a low competition political economy trap simulations of the model illustrate that the selection effects we analyse which traditional cost benefit analysis is unlikely to capture can be large

what do nongovernmental organizations do nongovernmental organizations are one group of players who are active in the efforts of international development and increasing the welfare of poor people in poor countries nongovernmental organizations are largely staffed by altruistic employees and volunteers working towards ideological rather than financial ends their founders are often intense creative individuals who sometimes come up with a new product to deliver or a better way to deliver existing goods and services they are funded by donors many of them poor or anonymous yet these attributes should not be unfamiliar to economists development ngos like domestic nonprofits can be understood in the framework of not for profit contracting it is easy to conjure up a glowing vision of how the efforts of ngos could focus on problem solving without getting bogged down in corruption or bureaucracy but the strengths of the ngo model have some corresponding weaknesses in agenda setting decision making and resource allocation we highlight three factors in explaining the increased presence of ngos in the last few decades a trend towards more outsourcing of government services new ventures by would be not for profit entrepreneurs and the increasing professionalization of existing ngos

tolerance and economic growth revisited a note berggren and elinder be in this journal write on the relationship between the degree of tolerance in a nation and its rate of economic growth they are disturbed to find in their cross sections that faster economic growth statistically goes together with intolerance of homosexuals in this comment we revisit the issue and demonstrate that the concern expressed by be is unwarranted if we properly account for conditional convergence in the regressions for economic growth other things being equal a country grows faster if it starts from a poorer initial position in the be dataset china since the deng reforms is a prime example at about the same time another group of countries managed to accelerate their economic growth after a long period of stagnation the ex communist countries in central and eastern europe many of these nations also grew exceptionally fast for a number of years once freedom had been regained and the initial chaos overcome with simple modeling of these historical initial conditions we find no statistical pattern that associates bias against homosexuals with weaker economic growth our results are robust under alternative specifications

willingness to pay and willingness to accept how much can they differ comment i agree with the point made by edoh y amiran and daniel a hagen 2003 that there can be a substantial or even infinite divergence between the wta and wtp for a public good even where there is a nonzero elasticity of substitution between market goods and the public good provided that the indifference curves are asymptotically bounded with respect to market goods in the manner they describe this is an important point they are also correct to point out that the elasticity of substitution is a local concept whereas their asymptotic boundedness condition applies also for discrete changes my 1991 paper used a local analysis because it was following the structure of the analysis in robert d willig 1976 and alan randall and john r stoll 1980 i wanted to show that while randall and stoll appeared to extend willig s local result on wta versus wtp from price changes to changes in the quantity of a public good the relevant elasticity was in fact different and involved the substitution elasticity as well as the income elasticity i view these points by amiran and hagen as not two separate results but essentially the same result their asymptotic boundedness condition generalizes my zero elasticity of substitution condition to discrete changes the asymptotic boundedness condition can be expressed as follows assuming a bivariate utility function u x q and given a reference point x q associated with a reference utility level u u x q there exists some q q such that for all q q there exists no x such that u x q u in other words no amount of x can substitute for the reduction in public good from q to q q in the case of a zero elasticity of substitution q q but as amiran and hagen show in their theorem 1 this is unnecessarily restrictive when dealing with a discrete reduction in q furthermore their theorem 2 can be viewed as a special case of their theorem 1 in which q 0 which makes q an essential commodity it is well known in consumer theory that the wta to avoid the loss of an essential market good is infinite their theorem 2 extends this result to the case of an essential nonmarket good but as their theorem 1 shows essentialness is not necessary for an infinite wta the boundedness condition is the key and this implies a fundamental lack of substitutability between money market goods and the public good

consumer s surplus without apology the purpose of this paper is to settle the controversy surrounding consumer s surplus and by so doing to validate its use as a tool of welfare economics i will show that observed consumer s surplus can be rigorously utilized to estimate the unobservable compensating and equivalent variations the correct theoretical measures of the welfare impact of changes in prices and income on an individual i derive precise upper and lower bounds on the percentage errors of approximating the compensating and equivalent variations with consumer s surplus these bounds can be explicitly calculated from observable demand data and it is clear that in most applications the error of approximation will be very small in fact the error will often be overshadowed by the errors involved in estimating the demand curve the results in no way depend upon arguments about the constancy of the marginal utility of income consequently this paper supplies specific empirical criteria which can replace the apologetic caveats frequently employed by those who presently apply consumer s surplus moreover the results imply that consumer s surplus is usually a very good approximation to the appropriate welfare measures to preview below i establish the validity of these rules of thumb for a

a bayesian approach to assessing the robustness of hedonic property value studies hedonic price models are widely employed to estimate implicit prices for bundled attributes residential property value studies dominate these applications using a representative cross sectional property value data set we employ bayesian methods to translate a range of priors in covariate selection typical of hedonic property value studies into a range of posterior estimates we also formulate priors regarding measurement error in individual covariates and compute the ranges of resulting posterior means finally we empirically demonstrate that a greater and more systematic use of prior information drawn from one s own data and from other studies can break the collinearity deadlock in this data

the dutch creative class and how it fosters urban employment growth this paper examines richard florida s creative capital theory in comparison with the human capital theory using a cross section of dutch cities and towns as the sample a class of dutch creative people has been devised with creative and innovative occupations containing 19 per cent of the total dutch labour force employment growth in dutch cities and towns can be predicted both from local education levels and from the presence of a large creative class but especially from the latter this is largely due to employment growth in commercial and financial services and to newly started companies it is concluded that in theory creativity is not very different from human capital nevertheless florida s creative class is a better standard to measure human capital than are education levels

an empirical investigation into the performance of ellickson s random bidding model with an application to air quality valuation abstract this paper compares ellickson s random bidding model to the standard hedonic model in estimating benefits due to marginal and non marginal changes in housing attributes using data on the chicago housing market the paper shows that the benefit estimates obtained using the two models are very close in addition various categorizations based on household characteristics are tested in the case of the random bidding model the study shows that the effect of categorization on the overall benefit estimates are negligible moreover the results from the random bidding model reveal that increased income leads to greater demand for environmental quality

brothers in alms coordination between nonprofits on markets for donations mission driven nonprofit organizations compete for donations through fundraising activities such competition can lead to inefficient outcomes if nonprofits impose externalities on each others output this paper studies the sustainability of fundraising coordination agreements using a game theoretic model of coalition formation we show that three key characteristics determine the stability of cooperation between nonprofits i the alliance formation rule ii the extent to which fundraising efforts are strategic complements substitutes and iii whether deviation from the agreements is by an individual or by a group of nonprofits we analyze how the interaction of these three features induces or not the stability of pareto optimal full coordination in fundraising

the choice of functional forms for hedonic price equations comment abstract rosen 13 freeman 4 halvorsen and pollakowski 6 and others have stressed that economic theory does not suggest an appropriate functional form for hedonic price functions 1 it consequently is reasonable to try several functional forms and utilize the multiple regression equation with the best performance in this spirit halvorsen and pollakowski 6 recommend using the box cox flexible functional form for hedonic analysis and measuring best performance with a goodness of fit test the box cox methodology has also been adapted in hedonic studies by goodman 5 linneman 10 blomquist and worley 1 and eberts and gronberg 3 2 the box cox is particularly suited for testing functional forms because many familiar forms such as semilog log linear and translog are subsets of the flexible box cox permitting nested hypothesis testing in this note we illustrate that the formal hypothesis testing advantage of the box cox functional form is purchased at the expense of other important goals the goal of most hedonic studies is to estimate the prices of the characteristics to measure the response to changes in the prices and or to predict future expenditures using a best fit criterion to choose functional forms does not necessarily lead to more accurate estimates of characteristic prices in fact the large number of coefficients estimated with the box cox functional form reduces the accuracy of any single coefficient which could lead to poorer estimates of specific prices second because any negative number raised to a noninteger real power is imaginary the traditional box cox functional form is not suited to any data set containing negative numbers third the box cox functional form may be inappropriate for prediction since the mean predicted value of the untransformed dependent variable need not equal the mean of the sample upon which it is estimated the predicted untransformed variable housing value will be biased the predicted untransformed dependent variable may also be imaginary fourth the nonlinear transformation results in complex estimates of slopes and elasticities which are often too cumbersome to use properly we discuss each of these drawbacks and quantify them when possible in the remainder of this note

offshoring with endogenous ngo activism the process of globalization is characterized by an impressive growth of global value chains as well as the proliferation of non governmental organizations ngos interacting with multinational firms this paper presents a model of offshoring and ngo firm interactions in which offshoring to a low regulation country allows a monopolist to implement a dirty technology undesired by consumers consumers can reduce the incentive for dirty production by financing an ngo monitoring the firm ngo emergence and offshoring can arise as joint and interacting outcomes for a range of trade costs ngo emergence allows firms to capture gains from globalization which would otherwise be unattainable somewhat paradoxically ngo emergence can be at the expense of consumers possibly leading to welfare losses through offshoring

willingness to pay and compensation demanded experimental evidence of an unexpected disparity in measures of value aside from possible income effects measures of the maximum amounts people will pay to avoid a loss and the minimum compensation necessary for them to accept it are generally assumed to be equivalent unexpectedly wide variations between these sums however have been noted in survey responses to hypothetical options this paper reports the results of a series of experiments that confronted people with actual money payments and cash compensations the results indicate that the compensation measure of value seems to exceed significantly the willingness to pay measure which would appear to call into some question various rules of entitlement damage assessments and interpretations of indifference curves

hedonic prices and implicit markets estimating demand and supply functions for differentiated products in choosing the level of quality to purchase the buyer of a differentiated product also chooses a point on the marginal price schedule for that product hence in general the demand functions for product characteristics cannot be consistently estimated by ordinary least squares market equilibrium results in a matching of characteristics of demanders and suppliers this matching restricts the use of buyer and seller characteristics as instruments when estimating demand and supply functions for product characteristics the paper develops these issues a stochastic structure for hedonic equilibrium models is then proposed identification results are presented and estimation procedures are outlined

is tolerance good or bad for growth we investigate how tolerance as measured by attitudes toward different types of neighbors affects economic growth in a sample of 54 countries unlike previous studies by richard florida and others we find that tolerance toward homosexuals is negatively related to growth for tolerance toward people of a different race we do not find robust results but the sign of the estimated coefficients is positive suggesting that inclusion of people irrespective of race makes good use of productive capacity we propose mechanisms to explain these divergent findings which clarify why different kinds of tolerance may be of different economic importance