optimal supply diversification under general supply risks we analyze a planning model for a firm or public organization that needs to cover uncertain demand for a given item by procuring supplies from multiple sources the necessity to employ multiple suppliers arises from the fact that when an order is placed with any of the suppliers only a random fraction of the order size is usable the model considers a single demand season with a given demand distribution where all supplies need to be ordered simultaneously before the start of the season the suppliers differ from one another in terms of their yield distributions their procurement costs and capacity levels the planning model determines which of the potential suppliers are to be retained and what size order is to be placed with each we consider two versions of the planning model in the first the service constraint model scm the orders must be such that the available supply of usable units covers the random demand during the season with at least a given probability in the second version of the model the total cost model tcm the orders are determined so as to minimize the aggregate of procurement costs and end of the season inventory and shortage costs in the classical inventory model with a single fully reliable supplier these two models are known to be equivalent but the equivalency breaks down under multiple suppliers with unreliable yields for both the service constraint and total cost models we develop a highly efficient procedure that generates the optimal set of suppliers as well as the optimal orders to be assigned to each most importantly these procedures generate a variety of important qualitative insights for example regarding which sets of suppliers allow for a feasible solution both when they have ample supply and when they are capacitated and how various model parameters influence the selected set of suppliers the aggregate order size and the optimal cost values

a normative model of behavior based upon an activity hierarchy this paper integrates the psychological framework of a preference hierarchy with the economic framework used to analyze the allocation of time and commodities residual income available to an activity is found to be the primary determinant of the level of an activity s time and commodity demands and the most important variable affecting marginal consumption of new commodities

assessing the effects of wives earnings on family income inequality we argue that the effect of wives earnings can be assessed meaningfully only by comparing the observed distribution of income with a reference distribution the components of the standard decomposition of the gini coefficient have no implicit reference distribution and therefore should not be interpreted as a measure of the effect of an income source on inequality we suggest several intuitive counterfactual reference distributions and illustrate their use with 1979 and 1989 u s data we conclude that wives earnings reduced inequality in that the income distribution would have been less equal in their absence alternative measures of the impact have mixed results

entrepreneurship and income inequality in southern ethiopia this article uses inequality decomposition techniques in order to analyze the consequences of entrepreneurial activities to household income inequality in southern ethiopia a uniform increase in entrepreneurial income reduces per capita household income inequality this implies that encouraging rural entrepreneurship may be favorable for both income growth and income distribution such policies could be particularly successful if directed at the low income low wealth and relatively uneducated segments of the society

household carbon inequality in urban china its sources and determinants designing mitigation policies for households requires knowledge of household carbon distributions this study surveys the household carbon inequality in urban china and analyzes its sources and determinants using weighted household survey data different from existing literatures studying carbon inequality on the international or regional level we focus on the household aspect and first survey its characteristics by some comparisons by ascribing household carbon emissions calculated by the consumer lifestyle approach to several consumption categories with the method of gini coefficient decomposition we find that residential consumption with high carbon intensity is the most important source of household carbon inequality in urban china food consumption and the consumption of educational cultural and recreational services are the next largest sources because of the consumed quantities or carbon intensity the application of shapley decomposition shows the determinants of household carbon inequality in urban china and their contributions which are household demographic characteristics 59 74 household employment and income 24 31 household burdens 8 00 and household assets and financial plans 7 95 the policy implications of these results are also discussed

multinomial logit market share models equilibrium characteristics and strategic implications we specify and analyze the conditions under which the mnl market share models are appropriate for equilibrium analysis our results show that a linear price response function as is often used in empirical research in conjunction with the typical concavity assumed in a large range of marketing response functions would yield an interior equilibrium solution we then consider the optimal reactions on pricing and marketing spending to entry and potential market expansion in the context of the mnl models we demonstrate that the entry of a new brand evokes a decrease in the equilibrium prices of the existing brands as a defensive reaction this is true in both an expanding market as well as a fixed market however while new entry into a fixed market would trigger the incumbents to lower the marketing expenditure we show that firms tend to raise marketing activities as they experience market expansion consequently there exist distinct possibilities that marketing efforts for the existing brands increase in view of entry in an expanding market further managerial and marketing implications for endogeneity of the number of firms are explored

imputed income from owner occupied housing and income inequality imputed income from owner occupied housing is generally not included in analyses of the distribution of income yet the value of homeownership is undoubtedly an important element distinguishing the economic status of one family from another in this paper using a new method to decompose income inequality by income source we analyze the impact of potential income derived from the net worth of housing on a representative national sample of us homeowners using 1980 survey of residential finance data we find that housing income adds less to inequality per dollar of income than does income from all other sources

income inequality and efficiency a decomposition approach and applications to china abstract this paper suggests a new interpretation for a decomposition of the theil inequality index when income can be expressed as multiplicative components applying the method to china we find that the impact of technical inefficiency on inter regional inequality has shown a declining trend

remittances and inequality in this paper the authors propose a framework and develop techniques for analyzing the impact of migrant remittances on the distribution of rural income by size and subsequently its impact on rural welfare household data are used to assign numerical coefficients to the impact of net remittances from both internal and international migrants on income inequality in 2 mexican villages the impact of migrant remittances on the distribution of rural income by size depends critically on the degree to which migration opportunities become diffused through the village population on the returns to human capital embodied in remittances and on the distribution of potentially remittance enhancing skills and education across village households our empirical findings demonstrate that in a village where many households contain internal migrants but few have experience migrating to the u s remittances from mexico to us migrants have an unequalizing impact on village incomes while remittances from internal migrants have a favorable effect on the village income distribution by contrast in a village with a long historyh of sending migrants to the us and hence a more ready access to us labor markets us to mexico remittances have an equalizing impact on incomes remittances from internal migrants in this village however embody a large human capital component and are highly correlated with household income hence internal migrant remittances account for a comparatively large share of inequalities in the 2nd village the overall effect of remittances on income inequality is favorable in both villages migration type migration stage and interaction terms all appear to play a role in this context the effects of small changes in remittances upon income inequality and rural welfare in the 2 villages are explored and some implications for migration and rural development policy are considered authors modified

product portfolio management with production flexibility in agribusiness the acquisition of production flexibility is a well documented strategy pursued by many firms to counteract certain operational constraints however these flexibilities can increase the complexity of a production system and the difficulties in managing increased complexity may hinder exploiting the full benefit of flexibility in this paper we consider one such flexibility paradox at an agribusiness firm for an annual 800 million production decision the firm produces a number of products hybrid seeds using limited inventories of several raw materials parent seeds and a production process that is subject to random variations to handle the raw material availability constraint and to partially mitigate the supply risk the firm invests in a costly second production in south america that can be used if the yield in the first production in north america is low we solve this joint problem of raw material allocation and sequential production by reformulating it as a tractable simultaneous optimization

product and price competition with satiation effects consumers become satiated with a product when purchasing too much too quickly how much is too much and how quickly is too quickly depends on the characteristics of the product relative to the time interval between consumption periods knowing that consumers allocate their budget to products that generate less satiation effects retailers should then choose to sell products that induce minimal satiation but usually this is operationally more costly to study this trade off we provide an analytical model based on utility theory that relates customer consumption to price and satiation in the context of multiple competing retailers we determine the purchasing pattern over time and provide an explicit expression to determine the consumption level in steady state we derive market shares and show that they take the form of an attraction model in which the attractiveness depends on price and product satiation we use this to analyze the competition between firms that maximize long term average profit we characterize the equilibrium under three scenarios i price only competition ii product only competition and iii price and product competition the results reveal the interplay between a key marketing lever price and the firm s ability to offer products that generate less satiation in particular we show that when a firm becomes more efficient at reducing satiation its competitor may benefit if competition is on product only but not if it is on price and product we also find that when satiation effects are not managed a firm s profit may be significantly reduced while a strategic competitor can largely benefit this paper was accepted by yossi aviv operations management

migration remittances and inequality a sensitivity analysis using the extended gini index abstract this paper uses the extended gini inequality index to examine the sensitivity of measurements of impacts of migrant remittances on the distribution of household income by size to different value judgements when measuring inequality the results illustrate the robustness of earlier findings that the impacts of migration on village income distributions differ for different types of migration and for different periods in a village s migration history the magnitude of these impacts however appears to be quite sensitive to the weights attached to incomes at different points in the village income distribution for example in a village with considerable mexico to u s migration experience remittances from mexico to u s migrants have a favorable effect on the village income distribution however the extended gini analysis shows that this favorable impact decreases as more weight is attached to incomes in the poorest households this finding is consistent with the view that barriers to high paying mexico to u s migration work exist for households at the bottom of the village income distribution

the effects of oil price shocks on the iranian economy abstract the iranian economy is highly vulnerable to oil price fluctuations this paper analyzes the dynamic relationship between oil price shocks and major macroeconomic variables in iran by applying a var approach the study points out the asymmetric effects of oil price shocks for instance positive as well as negative oil price shocks significantly increase inflation we find a strong positive relationship between positive oil price changes and industrial output growth unexpectedly we can only identify a marginal impact of oil price fluctuations on real government expenditures furthermore we observe the dutch disease syndrome through significant real effective exchange rate appreciation

iranian oil free zone and international oil prices abstract one of the main elements of economic sanctions against iran due to its nuclear and military programs is crude oil exportation restrictions in addition to investment in iranian energy related projects senders of such sanction are interested in understanding the impacts of such embargos on international oil prices we apply unrestricted vector autoregressive var model using impulse response functions irf and variance decomposition analysis vda tools with annual data from 1965 to 2012 to analyze the dynamic response of international oil prices to iranian oil export sanction controlling for the supply of non iranian oil the world gdp per capita and post islamic revolution exogenous dummy variables we show that international oil prices respond negatively and statistically significant to increasing shock in absolute negative changes of the iranian oil exports our proxy of iran oil sanctions following the first 2 years after shock the main reason is the positive response of the non iranian oil supply to negative shocks in iranian oil exports filling the missing supply of iranian oil in international markets

decomposing inequality in co2 emissions the role of primary energy carriers and economic sectors emission inequality across countries and the contribution of the energy mix and the sectoral composition of a country s energy use are of central importance to the climate debate we analyze the evolution of inequality in global co2 per capita emissions using both historical data on energy related co2 emissions and future emission scenarios generated with the integrated assessment model remind within our sample of 90 countries the results indicate that the gini index declined from about 0 6 in 1971 to slightly above 0 4 in 2008 a decomposition of the gini index of total emissions into primary energy carriers indicates that this reduction is mainly attributed to declining shares of emissions from coal peat and oil in total emissions and decreasing emission inequality within all fossil primary energy sources from the perspective of economic sectors the decline in overall inequality is almost entirely due to a decline of the contribution of emissions from manufacturing construction our analysis also suggests that an equally spread emission reduction from any one source would not have a major impact on overall emission inequality the analysis of future scenario data indicates that climate policy reduces absolute emission inequality while inducing drastic progressive emission reductions in all regions

consumer expenditures and inequality an analysis based on decomposition inequality in u s consumption expenditures is examined using the lerman and yitzhaki covariance method for decomposing the gini coefficient by factors from the decomposition nonparametric estimates of elasticities with respect to total expenditures are derived using data from the 1987 u s consumer expenditure interview survey the overall gini based on total annual consumption expenditures is 0 33 consistent with parametric expenditure elasticities the gini expenditure elasticities for household operations apparel and services and entertainment are relatively high an implication of this result is that taxing such goods and services will increase the progressivity or reduce the regressivity of the tax system copyright 1993 by mit press

natural resources and income inequality the role of ethnic divisions we hypothesize that natural resources raise income inequality in ethnically polarized societies but reduce income inequality in ethnically homogenous societies and we present empirical evidence in support of this hypothesis

modeling asymmetric competition the effects of the marketing actions of one brand can be distributed among its competitors market shares in a complex manner this paper presents and illustrates methods for modeling brand competition and brand strategies in markets where competitive effects can be differentially and asymmetrically distributed we discuss the empirical specification parameter estimation and competitive strategy implications of the models proposed price and advertising competition among eleven brands of an australian household product is used to illustrate the application of these procedures

transforming rural economies migration income generation and inequality in rural mexico abstract we analyse how migration shapes the distribution and sources of rural income using nationally representative panel data from mexico income source gini decompositions provide some support for the migration diffusion hypothesis nevertheless migration s influence on other income sources and household re ranking substantially alter distributional impacts we find significant impacts of migration on non remittance income as well as changes in the effects of non migration activities on inequality over time we conclude that migration is transforming rural economies in ways that go beyond the scope of most past research on migration and inequality

the gini multi decomposition and the role of gini s transvariation application to partial trade liberalization in the philippines this article proposes a unified technique of the gini decomposition the gini multi decomposition is a combination of the income source decomposition and the subgroup decomposition this technique is applied on reference situation and simulated scenarios for partial trade liberalisation in philippines and is extended to different orderings to capture a wide range of between group indicators we simulate variations in income source distributions for seven educational groups in the philippines in order to measure the inequality variations between a reference situation and a post simulation one with positive externalities due to public expenditures on the private sector productivity

resource rents distribution income inequality and poverty in iran abstract our goal is to examine the income inequality and welfare effects of the direct distribution of resource rents and subsequent taxation in iran we use survey based microdata that covers 140 000 individuals which include more than 36 000 iranian urban and rural households in 2009 we examine how direct distribution of oil and gas rents among all citizens and a subsequent direct income tax differ from distributional impacts of targeted policies on income inequality and poverty in iran our analysis shows that the resource dividend policy with a subsequent direct income tax has a significant decreasing effect on the household gini index while targeted policies are more effective in reducing number of households under the poverty line

few opportunities much desperation the dichotomy of non agricultural activities and inequality in western kenya summary using data from western kenya we confirm the existence of a dichotomous non agricultural sector the poverty and inequality implications of the differently motivated diversification strategies only partly correspond to expected patterns while high return activities are indeed confined to richer households low return activities constitute an important income source for households across the entire income distribution finally we examine the wider implications of our findings for rural livelihoods we find that only engagement in high return non agricultural activities is significantly associated with increased agricultural productivity it seems that such high return activities play a key role in triggering cumulative effects of relative livelihood success

the shadow value of migrant remittances income and inequality in a household farm economy this article offers econometric evidence that income remittances sent home by family migrants stimulate household farm incomes indirectly by relieving credit and risk constraints on household farm production a high but unequally distributed shadow value of migrant remittances appears to reinforce an equalising direct effect of remittances on the income distribution across a sample of household farms in rural mexico

preference trees preference hierarchies and consumer behavior n a recent article coursey 1985 i considered consumer behavior in a model in which preferences are described by an activity hierarchy using this activity hierarchy description consumers were found to sequentially satisfy higher ranked activities in their preference ordering up to the point that their monetary and time resources were exhausted among the more interesting implications of this behavior were that 1 if a consumer s economic resources are subsequently increased then additional consumption will commence at the point where the consumer s resources were initially exhausted 2 a change in the price of a commodity used in an activity will have a pure substitution effect in the production of that activity and a spillover income effect at the point of resource exhaustion and 3 comparative statics effects of any change are unidirectional and will affect behavior only from the point where the effects enter the consumer s sphere forward to the point of exhaustion of economic resources the results were derived under the assumption that each commodity can be used in the production of only one activity in their follow up article brooks and earl 1987 relaxed this assumption and considered the implications of jointness in consumption in the context of the activity hierarchy model in their extension a commodity may be used as a perfect substitute at different places in the activity hierarchy they concluded that my general results become less clear when commodities can be used in this fashion i fully concur with their motive for this extension and welcome their remarks as a further contribution to the field of choice regarding priorities 2 in this brief article i wish to outline fully how their results should be interpreted one interpretation involves the theoretical relationship between the activity hierarchy model and the more traditional to economists utility maximization model the second interpretation involves the use of the activity hierarchy model and its extensions for empirical analysis

shocks income and wealth do they affect the extraction of natural resources by rural households summary this paper examines the effects of household and village level characteristics on environmental reliance and participation in resource extraction decisions unlike previous analyses that used case studies or regional samples i use a nationally representative sample of rural households rounds i and ii of the mexico national rural household survey enhrum econometric results show that participation in resource extraction follows an inverted u shaped relationship with income and that environmental reliance decreases with income beyond income results show that relatively wealthy households in rural mexico are less likely to participate in resource extraction and have lower reliance than those with less wealth there is also clear evidence that natural resources provide some sort of insurance for households that are subjected to negative agricultural shocks

hierarchical choice in economics abstract the paper examines the relevance for economic issues of choice which is not characterized by unlimited substitutability after showing that hierarchical choice is common in other social sciences like psychology the paper proceeds with an examination of such choice and of its different categories subsequently the implications for hierarchical choice for specific economic issues are analysed in particular there is discussion and literature review of demand theory engel curves the theory of the firm and social choice theory finally some suggestions for the application to other economic problems are considered

a head to head comparison of augmented wealth in germany and the united states we examine the composition of augmented household wealth i e the sum of net worth and pension wealth in the united states and germany pension wealth makes up a considerable portion of household wealth of about 48 percent in the united states and 61 percent in germany when pension wealth is included in household wealth the gini coefficient falls from 0 889 to 0 700 in the united states and from 0 755 to 0 508 in germany if the wealth shares in germany were the same as in the united states this would lead to a 12 6 percent increase in the gini coefficient in the augmented wealth distribution in germany

two decades of the rice economy of thailand 2530 31 2550 51 abstract this paper investigates the transitions in thai rice economy and farm household income structure it also describes the impacts of the changes on income inequalities and poverty indices during 1987 88 and 2007 08 crop years the cost of rice production has continuously increased over time contributing to declining returns despite increasing yields this suggests that the most effective way to raise farmer income is to reduce their production cost without reducing yields practices should be promoted that reduce production costs and maintain yields especially in the use of seed and fertilizer as to household income structure the non agricultural sector contributed a significant and increasing proportion of the farm household s income except in irrigated areas where rice farming still contributes the major part of the total income of households incomeinequality increased over the two decades this inequality occurred in the income from rice farming but other sources of inequality were in the other farm income and agriculture hired labor income despite this growing inequality there was an improvement in poverty situation during the period the incidence of poverty was lower in irrigated development villages than in the other villages keywords rice income distribution poverty reduction

income sources effects on inequality abstract based on certain desirable properties a subset of entropy decomposition rules is proposed to assign inequality contributions to different components of income in addition a method of assessing the impact on inequality of marginal changes in income components originally applied to gini index by lerman and yitzhaki the review of economics and statistics 67 1985 151 is extended to other measures of inequality an empirical exercise based on australian income distribution data illustrates the usefulness of the proposed analytical framework

competition under generalized attraction models applications to quality competition under yield uncertainty we characterize the equilibrium behavior in a broad class of competition models in which the competing firms market shares are given by an attraction model and the aggregate sales in the industry depend on the aggregate attraction value according to a general function each firm s revenues and costs are proportional with its expected sales volume with a cost rate that depends on the firm s chosen attraction value according to an arbitrary increasing function whereas most existing competition papers with attraction models can be viewed as special cases of this general model we apply our general results to a new set of quality competition models here an industry has n suppliers of a given product who compete for the business of one or more buyers each of the suppliers encounters an uncertain yield factor with a given general yield distribution the buyers face uncertain demands over the course of a given sales season the suppliers compete by selecting key characteristics of their yield distributions either their means their standard deviations or both these choices have implications for their per unit cost rates

the gini concentration index a review of the inference literature more than a century ago corrado gini proposed his well known concentration index for measuring the degree of inequality in the distribution of income and wealth his index is still extremely relevant and widely used in several fields of research and application in this paper we focus on the inferential properties of the gini index and discuss the main directions of analysis proposed in the literature the aim of the paper is to provide a comprehensive review of the main developments on the inferential aspects of the gini concentration ratio we feel that this work can provide a valuable contribution to those scholars who are approaching the large amount of literature on the inferential properties of the gini index

an institutional economic analysis of the decision to do it yourself in housing renovation this paper examines home renovators decision in choosing do it yourself diy or hiring contractors diy may reduce financial pressure but may lead to potential domestic discord and perils of incompetence hiring contractors may alleviate time pressures but may require more financial resource this choice is modelled as analogous to williamson s corporate strategic decision between outsourcing and internalisation in the context of vertical integration and extended via richardson s capabilities based theory with social reputation effect taken into account based on a survey of brisbane home renovators it is found that the richardson s thesis seems stronger than the williamson s when applied to housing renovation and that trust issues in respect of contractors are paramount

marginal tax rates and income inequality in a life cycle model in this paper we perform computational counterfactual experiments to examine the quantitative impact of marginal tax rates on the distribution of income our methodology builds on previous simulation models developed by auerbach and kotlikoff and fullerton and rogers and uses an algorithm that allows us to examine marginal tax rate structures in their literal form we find that distortions associated with particular marginal tax rate structures have sizable effects on income inequality in a reasonably quantified life cycle setting in our baseline experiments the change in steady state income inequality under 1989 u s income tax rates vis a vis 1984 rates is about half as large as the change actually seen in the data over those two years when measured in terms of a monetary metric derived from gini coefficients

on the implications of jointness in a normative model of behavior based on an activity hierarchy t he widespread belief that it is often useful to kill two birds with one stone makes it clear that most consumers recognize that there exists considerable scope for using an input gainfully in the production of more than one consumption activity however economic theorists often forget this lay belief as they set up their formal models and consequently they come to inappropriate conclusions this recently occurred in coursey s 1985 normative analysis of consumer behavior in this journal where he models priority based choice over activities this article indicates how the implications of his model may be modified if activities use a common input 2 in contrast to coursey we show that priority based choice does not necessarily imply that 1 an increase in an individual s income will lead to a reduction in the percentage of a consumer s budget spent on inframarginal activities or 2 a change in the price of a commodity producing a marginal activity will only lead to changes in an individual s consumption of marginal and extramarginal commodities put simply it appears that coursey s general results are valid only when one adopts his implicit assumption that there is no jointness in production

poverty and the rural nonfarm economy in oromia ethiopia the rural nonfarm sector has gained increasing importance not only in asia but also in africa it is however widely believed that in most parts of africa the growth of the nonfarm economy has increased inequality and has had a limited effect on the poor who face entry barriers to nonfarm activities the present article analyzes the relation between nonfarm income poverty and inequality in oromia ethiopia we use two complementary methodologies i econometric estimates of household income from the nonfarm sector and ii a gini decomposition of analysis income inequality by source the results consistently indicate that in oromia entry barriers to nonfarm activities is low and the general growth of the sector will benefit the poor

the narrow moving band the dutch disease and the competitive consequences of mrs thatcher notes on trade in the presence of dynamic scale economies abstract this paper presents a model of trade in which comparative advantage instead of being determined by underlying attributes of countries evolves over time through learning by doing in this model arbitrary patterns of specialization once established tend to become entrenched over time the model sheds light on three widely held views that do not make sense in more conventional models first is the view that temporary protection of selected sectors can permanently alter the pattern of comparative advantage in the protecting country s favor second is the view that seemingly favorable developments such as the discovery of exportable natural resources may lead to a permanent loss of other sectors and reduce welfare in the long run third is the possibility that a temporary overvaluation of a currency due to tight money can lead to a permanent loss of competitiveness in some sectors

demographic transition in resource rich countries a blessing or a curse summary this study argues that resource wealth is a key factor for understanding income effects of demographic transition we develop a simple model highlighting how the income effect of increased labor supply may depend on resource rents and provide empirical evidence that support the theoretical predictions using panel data covering the period from 1982 to 2006 for more than 120 countries we find a negative interaction effect between resource wealth and demographic transition on national income moreover the negative interaction effect does not depend on institutional quality and is found also across different samples

inflation employment and the dutch disease in oil exporting countries a short run disequilibrium analysis the author uses nontraded goods and labor shortages in the gulf countries the decline of the traded goods sector in oil producers dutch disease and the absence of employment benefits of higher oil revenues in latin american oil producers higher oil revenues can be likened to a transfer putting pressure on non oil traded nt goods prices and drawing resources out of the t sector the slope of the wage indexation line determines whether classical unemployment or repressed inflation results various policy measures are analyzed 3 references 8 figures

a general equilibrium model for industries with price and service competition this paper develops a stochastic general equilibrium inventory model for an oligopoly in which all inventory constraint parameters are endogenously determined we propose several systems of demand processes whose distributions are functions of all retailers prices and all retailers service levels we proceed with the investigation of the equilibrium behavior of infinite horizon models for industries facing this type of generalized competition under demand uncertainty we systematically consider the following three competition scenarios 1 price competition only here we assume that the firms service levels are exogenously chosen but characterize how the price and inventory strategy equilibrium vary with the chosen service levels 2 simultaneous price and service level competition here each of the firms simultaneously chooses a service level and a combined price and inventory strategy 3 two stage competition the firms make their competitive choices sequentially in a first stage all firms simultaneously choose a service level in a second stage the firms simultaneously choose a combined pricing and inventory strategy with full knowledge of the service levels selected by all competitors we show that in all of the above settings a nash equilibrium of infinite horizon stationary strategies exists and that it is of a simple structure provided a nash equilibrium exists in a so called reduced game we pay particular attention to the question of whether a firm can choose its service level on the basis of its own input characteristics i e its cost parameters and demand function only we also investigate under which of the demand models a firm under simultaneous competition responds to a change in the exogenously specified characteristics of the various competitors by either i adjusting its service level and price in the same direction thereby compensating for price increases decreases by offering improved inferior service or ii adjusting them in opposite directions thereby simultaneously offering better or worse prices and service

resource rents redistribution and halving global poverty the resource dividend summary this paper considers the proposal that each country distributes its resource rents directly to citizens as a universal and unconditional cash transfer or resource dividend and estimates its potential impact on global poverty for the years 2000 06 using a global dataset on resource rents and the distribution of income i find that if every developing country implemented the policy then the number of people living below 1 a day would be cut by between 27 and 66 depending on the year and the assumptions made looking ahead poverty could be better than halved as long as commodity prices do not drop below their 2004 level

regional differences in china s fossil energy consumption an analysis for the period 1997 2013 abstract measuring regional differences in fossil energy consumption is the first step to the study of natural resource allocation and utilization this paper employs annual and cumulative consumption gini indexes as well as the deviation index to discuss regional differences in the per capita consumption of fossil energy and related products across 30 chinese provinces from 1997 to 2013 the results show that chinese inter provincial gini ratio of fossil energy consumption is below 0 3 in recent years and change in per capita energy consumption is the key factor behind the decline in the overall gini index unlike existing studies based only on annual flows of energy consumption this paper also focuses on cumulative energy consumption moreover decomposing annual and cumulative consumption gini coefficients by type group and incremental variation is rarely seen in other studies based on the above positive analysis the paper provides some policymaking suggestions

comment on the interpretation and misinterpretation of inequality decompositions by income sources summary this paper discusses interpretations of different inequality decomposition rules when inequality is decomposed by income sources it argues that authors of a recent article based their conclusions on misinterpreted decomposition results it also argues that marginal effects derived as elasticities of inequality with respect to uniform increases in income from each source are easily interpreted and can be compared across different decomposition rules

selecting a portfolio of suppliers under demand and supply risks we analyze a planning model for a firm or public organization that needs to cover uncertain demand for a given item by procuring supplies from multiple sources each source faces a random yield factor with a general probability distribution the model considers a single demand season all supplies need to be ordered before the start of the season the planning problem amounts to selecting which of the given set of suppliers to retain and how much to order from each so as to minimize total procurement costs while ensuring that the uncertain demand is met with a given probability the total procurement costs consist of variable costs that are proportional to the total quantity delivered by the suppliers and a fixed cost for each participating supplier incurred irrespective of his supply level each potential supplier is characterized by a given fixed cost and a given distribution of his random yield factor the yield factors at different suppliers are assumed to be independent of the season s demand which is described by a general probability distribution determining the optimal set of suppliers the aggregate order and its allocation among the suppliers on the basis of the exact shortfall probability is prohibitively difficult we have therefore developed two approximations for the shortfall probability although both approximations are shown to be highly accurate the first based on a large deviations technique ldt has the advantage of resulting in a rigorous upper bound for the required total order and associated costs the second approximation is based on a central limit theorem clt and is shown to be asymptotically accurate whereas the order quantities determined by this method are asymptotically optimal as the number of suppliers grows most importantly this clt based approximation permits many important qualitative insights

the impact of income inequality on economic residential segregation the case of malmo 1991 2010 as in other western countries in sweden there is a widespread conviction that residential segregation influences the opportunities for residents social mobility and therefore is a cause of income

logit demand estimation under competitive pricing behavior an equilibrium framework discrete choice models of demand have typically been estimated assuming that prices are exogenous since unobservable to the researcher product attributes such as coupon availability may impact consumer utility as well as price setting by firms we treat prices as endogenous specifically prices are assumed to be the equilibrium outcomes of nash competition among manufacturers and retailers to empirically validate the assumptions we estimate logit demand systems jointly with equilibrium pricing equations for two product categories using retail scanner data and cost data on factor prices in each category we find statistical evidence of price endogeneity we also find that the estimates of the price response parameter and the brand specific constants are generally biased downward when the endogeneity of prices is ignored our framework provides explicit estimates of the value created by a brand i e the difference between consumers willingness to pay for a brand and its cost of production we develop theoretical propositions about the relationship between value creation and competitive advantage for logit demand systems and use our empirical results to illustrate how firms use alternative value creation strategies to accomplish competitive advantage

oil revenue shocks and government spending behavior in iran abstract oil revenues play an important role in the political economy of iran on average 60 of the iranian government revenues and 90 of export revenues originate from oil and gas resources current international sanctions on iran have mainly targeted the oil production capacity of iran and its exports to the global markets in this study we analyze the dynamic effects of oil shocks on different categories of the iranian government expenditures from 1959 to 2007 using impulse response functions irf and variance decomposition analysis vdc techniques the main results show that iran s military and security expenditures significantly respond to a shock in oil revenues or oil prices while social spending components do not show significant reactions to such shocks

inequality and poverty in united states the effects of rising dispersion of men s earnings and changing family behaviour using semiparametric density estimation techniques we analyse the effect of rising dispersion of men s earnings and related changes in family behaviour on increasing inequality in the distribution of family income in the united states for the period 1969 1989 the growing dispersion of men s earnings and changing family structure can account for most of the rise in family income inequality by contrast the increase in labour force participation by women offset this trend inequality grew at a slower rate in the 1990s than in earlier decades largely because of stabilization in the relative earnings of men from low income families

does natural resource abundance increase latin american income inequality abstract why is income inequality higher in latin america than in east asia is this phenomenon related to the region s natural resource abundance is it a contributor to latin america s slow and narrowly focused human capital accumulation if so can anything be done to reverse the latin american trends or should we think of the region s fate as unalterable to help answer these questions this paper draws upon standard trade theory and cross sectional empirical analysis to demonstrate that natural resource intensive sectors particularly permanent agriculture absorb capital that might otherwise flow to manufacturing this depresses workers incentive to accumulate skill and delays industrialization

nonfarm employment and rural welfare evidence from the himalayas the potential importance of nonfarm employment for the welfare of rural households has long been recognized but whether the nonfarm sector offers prospects for improving the welfare of the rural poor remains a contentious issue we examine distributional and well being effects of nonfarm employment of rural households in the himalayas we account for heterogeneity of nonfarm employment and estimate a system of structural equations to better understand the causal linkages between nonfarm employment and household well being the results confirm that disaggregating nonfarm employment activities matters for understanding the relationship between nonfarm employment and rural welfare while low return nonfarm employment is associated with lower income inequality high return nonfarm activities have a disequalizing effect on the distribution of household incomes we also find that the ability to engage in high return nonfarm activities is associated with higher economic well being poor households on the other hand tend to rely on low return activities that do not contribute to improved well being

the distribution of income and wealth of farm operator households because of the relatively low incomes of people associated with farming in the past income maintenance has been a major focus of farm policy the average money income of families earning farm self employment income in 1983 was 93 of the average money income of other u s families usdc however an average income of farm households has lost much of its meaning because it masks a great deal of variation compared to the past farm households represent a heterogenous population presenting a new challenge to policy makers concerned about framing income maintenance policies the current farm bill debate began in 1984 amidst piecemeal information on increased bankruptcies and general financial stress of farms analysis of the financial leverage and cash flow positions of farm businesses has since been forthcoming johnson baum and prescott however information on the financial well being of those households associated with farming has remained limited the purpose of this paper is to describe the financial well being of farm operator households by measuring their size distribution of personal income and farm equity in 1984 the contribution of each source of income to the total inequality of incomes is also analyzed

wage policies of a russian firm and the financial crisis of 1998 evidence from personnel data 1997 to 2002 the authors use a rich personnel data set from a russian firm for the years 1997 to 2002 to analyze how the firm adjusts wages and employment during this period in which local labor market conditions changed in the aftermath of the financial crisis in 1998 they relate the development of turnover and wages for various employment categories to alternative models of wage and employment determination the authors argue that the firm s behavior is consistent with the predictions of efficiency wage models of the shirking and turnover type

transfer efficiency and distributional impacts of u s farm support evidence from a macro micro simulation the objective of this analysis is to provide insight into the transfer and distributional efficiency of farm support policies a one shot macro micro simulation model weaves together the two prominent threads in the agri cultural decoupling literature that focuses for the first part on economy wide impacts and for the second on the role of cross household het erogeneity experimental shocks to output and land subsidies that generate a 1 increase in net national farm income are compared for the united states with output subsidies shown to have lower transfer efficiency but comparable distributional impact surprisingly a more cou pled approach to policy whereby some agricul tural enterprises are excluded from program participation is found to generate a stronger reduction in inequality this is partially at tributed to the inclusive definition of a farm

industrial policy reform in six large newly industrializing countries the resource curse thesis abstract all six large newly industrializing countries nics in this study favored an autarkic industrial policy aip in the 1950s aip required however the rapid build up of heavy and chemical industry hci which caused foreign exchange shortages if the hci matured slowly this is because the import and subsidy demands of the growing protected hci sector became too burdensome for the competitive primary sector whose rents shrank in relative importance as the economic structure evolved the two least well endowed nics abandoned aip early in favor of a competitive industrial policy cip which relied on labor intensive exports to earn foreign exchange and resulted in rapid economic growth in contrast the resource bonus of the four best endowed nics sustained aip longer but the longer aip lasted the harder it became to reform and the slow maturing hci sector adversely affected economic growth in this way the resource bonus became a curse rather than a blessing

endogenous quality choice price vs quantity competition two versions of a vertical product differentiation model one with fixed and the other with variable costs of quality are analyzed to study how the hypotheses of price versus quantity competition affect equilibrium solutions product differentiation arises under all the scenarios considered contrasting previous findings of symmetric quality choices under cournot behavior however to relax harsher market competition firms differentiate more under bertrand than under cournot a simple welfare measure also indicates that the economy is better off when firms compete on prices with fixed costs of quality not only consumer but also producer surplus is higher under price competition copyright 1993 by blackwell publishing ltd

strategic implications of market share attraction models market share attraction models which specify that a firm s market share is equal to the ratio of its attraction to the total attraction for all firms have received increasing attention in recent years however there has been little research investigating the practical implications of such models this paper presents a game theoretic analysis of such a model and deduces the strategic implications of a nash equilibrium solution to the model it is shown that these implications are consistent with previous empirical research in marketing and business policy

lifetime earnings inequality in germany we employ german social security records to investigate intragenerational lifetime earnings inequality and mobility of yearly earnings for 35 cohorts starting with the birth year 1935 our main result is a striking secular rise of intragenerational inequality in lifetime earnings west german men born in the early 1960s are likely to experience about 85 more lifetime inequality than their fathers in contrast both short term and long term intragenerational mobility are stable longer unemployment spells of workers at the bottom of the distribution of younger cohorts contribute to explaining 20 40 of the overall increase in lifetime earnings inequality

longitudinal analysis of income related health inequality this paper considers the characterisation and measurement of income related health inequality using longitudinal data the paper elucidates the nature of the jones and lopez nicolas 2004 index of health related income mobility and explains the negative values of the index that have been reported in all the empirical applications to date the paper further presents an alternative approach to the analysis of longitudinal data that brings out complementary aspects of the evolution of income related health inequalities over time in particular we propose a new index of income related health mobility that measures whether the pattern of health changes is biased in favour of those with initially high or low incomes we illustrate our work by investigating mobility in the general health questionnaire measure of psychological well being over the first nine waves of the british household panel survey from 1991 to 1999

technical note pricing under the nested attraction model with a multistage choice structure we develop a solution approach to the centralized pricing problem of a nested attraction model with a multistage tree structure we identify conditions under which the optimal solution can be uniquely determined and we characterize the optimal solution as a fixed point of a single variable in the special case of a multistage nested logit model we show the impact of asymmetry in price sensitivity and adjustment index also known as the dissimilarity index and we derive a closed form solution when the tree structure is symmetric many existing results in the literature regarding the single or two stage nested attraction model are shown to be special cases of the results we have derived we show that the equal markup property which holds for the single stage logit model with symmetric price sensitivity in general does not hold for products that do not share the same immediate parent node in the nested choice structure even when price sensitivities are the same for all products

linking yitzhaki s and dagum s gini decompositions in this article we show that the gini coefficient is simultaneously decomposable both by sources of income and by populations of income receivers for nonoverlapping income distributions the so called first best gini multi decomposition we show that this multidimensional decomposition is useful for many reasons i it is related to the degree of inequality aversion of the decision maker ii it is especially well suited to study inequalities between poor and nonpoor people iii it enables one to measure the impact of marginal tax reforms on within and between group inequalities respectively

unemployment shocks and income distribution how did the nordic countries fare during their crises we study the inequality of disposable income in denmark finland norway and sweden during the late 1980s and early 1990s when unemployment rose dramatically in all four countries a standard measure of inequality the gini coefficient was surprisingly stable in all countries during this period by decomposing the gini into income components we test hypotheses about the reasons for this stable income distribution our most straightforward hypothesis that rising unemployment benefits counteracted the impact of more unequally distributed earnings receives only limited support more complex mechanisms seem to have been at work jel classification d30 d31 j60

the elusive curse of oil abstract our goal is to show that contrary to the claims made in several recent papers the effect of a large endowment of oil and other mineral resources on long term economic growth of countries has been on balance positive moreover the claims of a negative effect of oil and mineral wealth on the countries institutions are called into question

income inequality income composition and macroeconomic trends israel 1979 93 the paper offers several explanations for income inequality trends in israel during 1979 93 two types of analysis are employed decomposition of the gini coefficient by income source and population sub group and time series regression on macroeconomic variables it is found that the slight increase in inequality over the period is a result of opposing forces and that the major difference between the inflation 1979 84 and stabilization 1985 93 periods is in the inequality reducing effect of direct taxes increasing in the first period while declining in the second unemployment had a regressive impact whereas inflation acted as a progressive tax in the first period but not in the second