s p 500 cash stock price volatilities s p 500 stock return volatilities are compared to the volatilities of a matched set of stocks after controlling for cross sectional differences in firm attributes known to affect volatility no significant difference in volatility is observed between 1975 and 1983before the start of trade in index futures and index options since then s p 500 stocks have been relatively more volatile the difference is statistically but not economically significant the relative increase occurs primarily in daily returns and only to a lesser extent in longer interval returns other factors besides the start of derivative trade could be responsible for the small increase in volatility stock price volatility has received much attention in the popular press over the last few years especially since the october 19 1987 stock market crash the rise in volatility has alarmed investors regulators and the public in general some suggest that the start of trade in stock index futures and index options increased speculative activity that in turn destabilized cash markets causing higher volatility large trading activity in the derivative contracts makes the suggestion plausible volume in index futures and index options increased dramatically since their introductions in 1982 and 1983 by 1987 the average daily dollar volume in the s p 500 futures contracts alone exceeded the dollar volume of cash s p 500 trade by a factor of about two while the dollar value of the daily net change in total open interest is about 8 of s p 500 stock dollar volume speculative trade in futures and options frequently is accused of destabilizing underlying cash markets the charge has been made for more than a century in the agricultural precious metal and currency markets recent evidence by french and roll 1986 showing stock variance to be strongly related to trading session hours heightens these concerns unfortunately theoretical analyses of whether speculative trade destabilizes cash markets lead to conflicting conclusions depending on what assumptions are made 1 school of business administration university of southern california and office of economic analysis u s securities and exchange commission i wish to thank mary denny mcsweeny and steve hornstein for their valuable research assistance and the referee and editor for their many suggestions and insights the opinions expressed in this paper do not necessarily reflect those of the u s securities and exchange commission or those of the author s colleagues on its staff an increase in well informed speculative trade has two opposite effects on measured volatility it decreases volatility due to order flow imbalances caused by uninformed traders because informed traders provide liquidity in such events and it increases volatility due to new fundamental information since the information which is assumed to be generated at discrete time intervals is impounded into

estimation of opportunity inequality in brazil using nonparametric local logistic regression abstract this article measured opportunity inequality in brazil by combining a series of theoretical and empirical tools the database was built using a two sample instrumental variable tsiv developed by angrist and krueger after that the axiomatic approach put forward by o neill et al was used in which the estimation of children s income distribution function is conditional on their fathers wages the inference process was based on nonparametric local logistic regression the results indicate that brazil has a high level of opportunity inequality in other words in the context of intergenerational mobility those whose fathers belong to lower income strata have to expend greater effort in order to attain a certain income level

joint confidence intervals for income shares and lorenz curves in a recent paper beach and davidson 1983 extended the principles of statistical inference to lorenz curves and income shares by establishing the asymptotic distribution and covariance structure of a vector of lorenz curve ordinates corresponding to a set of quantile abscissae one can thus use the lorenz curve and income shares no longer just as descriptive devices for summarizing distribution information but now also as analytical tools for comparing alternative distributions and carrying out conventional statistical inference on them it would clearly be desirable however to extend and complement this work by providing a method for computing a set of joint confidence intervals about these income shares and for illustrating graphically a joint confidence band about a set of estimated lorenz curve ordinates the present paper provides a new and simple technique for doing this when analyzing differences between sets of income shares or lorenz curves one typically wants to elicit more detailed information than is provided by a standard joint chi square test on the overall set of shares that is when the hypothesis of two sets of shares being the same is rejected we generally want to know further which particular differences in shares are different from zero and of these nonzero differences which are positive and which negative savin 1980 a natural way of providing such information is through multiple comparison procedures developed in this paper in a recent work richmond 1982 has developed a general method of finding multiple comparison intervals that is particularly suited to the present problem and in this situation appears to dominate other conventional alternatives in contrast for example to scheff s s projection method richmond s approach focuses on a set of primary points of interest income shares among a more general set of points including the lorenz curve ordinates and optimizes the joint confidence interval lengths on this primary set of points since estimated lorenz curve ordinates are built up from underlying income shares these shares perhaps further supplemented are natural choices for the primary set the method however also provides a joint confidence band that geometrically bounds the set of lorenz curve ordinates and interpolated segments between them the present

labor protection laws and bank loan contracting abstractthis paper examines the impact of labor regulations that restrict firms flexibility to adjust labor resources on the cost of corporate bank loans using within country variation in employment protection legislation across 25 countries i find that increases in employment protection lead to higher loan spreads tighter nonprice loan contract terms and more diffuse loan ownership structure the effects of labor regulations are greater in industries with a higher rate of labor turnover and among borrowers with a higher probability of default these results suggest that rigidities imposed by labor regulations have a significant impact on firms cost of capital

economic policy and equality of opportunity we employ eop definitions that have appeared in the philosophical literature on distributive justice and apply it to a formal economic model which incorporates human capital investment and luck within and across generations the human capital acquisition technology features multiple stages of parental investments during childhood and on the job investments in adulthood the benchmark model features an intergenerational borrowing constraint education and low income subsidies which are financed by a progressive income tax the model is calibrated to the u s in 1990 on which we operationalize philosophical concepts by using the children s continuation values as outcomes and the state space of the recursive decision problem as circumstances this reveals that intergenerational investments should be accounted for when comparing measures of eop when conditioning on parental luck instead of outcomes eop looks much larger luck is overwhelmed by human capital accumulation in contrast when looking at children s net wealth instead of lifetime earnings eop looks worse intergenerational borrowing constraints are more pronounced in wealth than in earnings in counterfactual experiments we find that education subsidies increase utilitarian welfare and decrease overall inequality but does little to promote eop this is for two reasons when one takes the view that intergenerational efforts should be rewarded there is little room for improvement in eop to begin with on the other hand when one takes the view that intergenerational efforts should not be rewarded much stronger redistribution is needed for the policies to have a quantitative impact

ex ante and ex post welfare optimality under uncertainty it is widely believed by economic theorists that if there were no transactions costs and if all information about the economy were perfectly shared by all then arrow debreu contingent commodity markets should bring about an ideal allocation the basis for this belief seems clear we have the two efficiency theorems of welfare economics which assure us that in the absence of external effects any competitive allocation is pareto efficient and that any pareto efficient allocation is competitive provided that appropriate lump sum transfers are made of course there are some reservations that need to be made local satiation and non convexities are well known to cause problems but these are not the problems i wish to discuss here to return to the usual argument the next step involves noticing how with contingent commodity markets the efficiency theorems of welfare economics carry over to an economy with uncertainty as explained for instance in chapter 7 of debreu s theorpj of value the fundamental value judgment that gives these efficiency theorems their normative interest is what may be called consumer sovereignty it is an assumption that the social welfare ordering should respect the preferences that govern consumers market behaviour it is a serious value judgment more serious than most economists have been prepared to concede but its seriousness increases when there is uncertainty we know full well that individuals misperceive the probabilities of certain events assuming that they even perceive any probabilities at all see for example kahneman and tversky 1979 nor are we always willing to accept as appropriate the attitudes to risk of individuals who seem either extremely reckless or extremely cautious societies are often willing to make some gestures towards property owners who have not insured themselves adequately against damage from fire flood or tempest and not just because of imperfect insurance markets or even misperceptions of probabilities in addition the inequalities of income that arise when some individuals take more risks than others are not necessarily seen to be desirable particularly if an individual has undertaken a useful but risky activity and has a very low income as a result of failure such gestures are examples of contingent lump sum transfers it seems clear that if such transfers occur to a sufficient extent they could supplant completely the securities markets which are usually sufficient to bring about pareto efficiency they may even be able to go further and correct the imperfections of an arrow debreu market allocation when individuals do misperceive probabilities or else have wrong attitudes to risk this is the main question i wish to consider here the idea that consumer sovereignty should not always extend to economies with uncertainty is not new it can be found in work by diamond 1967 dr6ze

a note on the impact of options on stock return volatility abstract this paper measures the impact of option introductions on the return variance of underlying stocks past research generally finds a significant reduction in stock return variance following the listing of options through 1986 using a more extensive sample i compare changes in the return variance of optioned stocks to changes in the return variance of a control group since the average change in the control group is statistically indistinguishable from the average change in the optioned stocks i conclude that option introductions do not significantly affect stock return variance

approaches to inequality of opportunity principles measures and evidence we put together the dierent conceptual issues involved in measuring inequality of opportunity discuss how these concepts have been translated into computable measures and point out the problems and choices researchers face when implementing these measures our analysis identies and suggests several new possibilities to measure inequality of opportunity the relevance of the conceptual issues and modelling choices are illustrated with ndings from the empirical literature on income inequality of opportunity

cross country differences in intergenerational earnings mobility international studies of the extent to which economic status is passed from one generation to the next are important for at least two reasons first each study of a particular country characterizes an important feature of that country s income inequality second comparisons of intergenerational mobility across countries may yield valuable clues about how income status is transmitted across generations and why the strength of that intergenerational transmission varies across countries the e rst section of this paper explains a benchmark measure of intergenerational mobility commonly used in u s studies the second section summarizes comparable empirical e ndings that have accumulated so far for countries other than the united states the third section sketches a theoretical framework for interpreting cross country differences in intergenerational mobility

inequality of opportunity in sub saharan africa in the last decades inequality of opportunity has been extensively studied by economists on the assumption that in addition to being normatively undesirable it can be related to low potential for growth this paper evaluates inequality of opportunity and the different sources of unequal opportunities in 11 sub saharan africa countries the results indicate that the portion of total inequality that can be attributed to exogenous circumstances that is circumstances outside the control of individuals control is between 30 percent and 40 percent in the countries considered the results also indicate a positive association between total consumption inequality and inequality of opportunity finally this paper addresses a number of methodological issues that typically arise when measuring inequality of opportunity with imperfect data which is the typical case in developing countries

when is inequality fair an experiment on the effect of procedural justice and agency abstract we investigate how the perceived fairness of an income distribution depends on the beliefs about the process that generates the inequality specifically we examine how two crucial features of this process affect fairness views 1 procedural justice equal treatment of all 2 agency one s ability to determine his her income we do this in a lab experiment by differentially varying subjects ability to influence their earnings comparison of ex post redistribution decisions of total earnings under different conditions indicate both agency and procedural justice to matter for fairness highlighting the importance of agency we observe lower redistribution of unequal earnings resulting from risk when risk is chosen freely highlighting the importance of procedural justice we find introduction of inequality of opportunity to significantly increase redistribution despite this increase under inequality of opportunity the share of subjects redistributing none remain close to the share of subjects redistributing fully revealing an underlying heterogeneity in the population about how fairness views should account for inequality of opportunity

quality indicators in theory and in fact abstract in recent literature it has been suggested that consumers need have no knowledge of product quality as a number of quality indicators or signals may be used as substitutes very little attention has been paid to the empirical verification of these studies the present paper is devoted to the issue of how well these indicators perform using market data provided by consumer magazines from 3 countries the results strongly indicate that price is a poor quality indicator the paper also presents some evidence which suggests that seller reputation and easily observable characteristics are also poor indicators

individual preferences for political redistribution what drives people s support of governmental reduction of income inequality we employ data from a large international survey in order to evaluate the explanatory power of three competing forces referred to as the homo oeconomicus effect the public values effect and the social rivalry effect the empirical analysis reveals that at the aggregate level all three effects play a significant role in shaping individual preferences for political redistribution attitudes of citizens in formerly socialist countries turn out to differ from those of western citizens in a systematic way 2002 elsevier science b v all rights reserved

does futures trading increase stock market volatility 1988 does futures trading increase stock market volatility financial analysts journal vol 44 no 1 pp 63 69

futures trading information and spot price volatility evidence for the ftse 100 stock index futures contract using garch abstract this paper examines the impact of trading in the ftse 100 stock index futures on the volatility of the underlying spot market to examine the relationship between information and volatility as subject neglected in previous studies the garch family of techniques is used the results suggest that futures trading has led to increased volatility but that the nature of volatility has not changed post futures the finding of price changes being integrated pre futures but being stationary post futures implies that the introduction of futures has improved the speed and quality of information flowing to the spot market

equality of opportunity theory and measurement during the last third of the twentieth century political philosophers actively debated about the content of distributive justice the ruling ethical view of utilitarianism was challenged by various versions of equality of opportunities economists formulated several ways of modeling these ideas focusing upon how individuals are placed with respect to opportunities for achieving various outcomes and what compensation is due to individuals with truncated opportunities after presenting a review of the main philosophical ideas section 2 we turn to economic models sections 3 and 4 we propose a reformulation of the definition of economic development replacing the utilitarian measure of gdp per capita with a measure of the degree to which opportunities for income acquisition in a nation have been equalized finally we discuss issues that the econometrician faces in measuring inequality of opportunity briefly review the empirical literature section 6 and conclude section 7

regional convergence and national inequality this paper explores the implications of regional income convergence for measures of inequality at the national level in general such convergence occurs as poorer regions overtake more developed ones it is difficult to imagine any realistic scenario in which rising incomes in poorer regions would not have the effect of reducing absolute poverty at the same time it seems reasonable to assume that national inequality would fall as the mean incomes in the various regions converge given these general presumptions the recent economic history of regional convergence between the southern united states and the rest of the nation is quite puzzling over the last twenty five years mean family income in the southern united states has gone from about 80 of the national mean to about 93 at the same time inequality in the south and that in the non south have been changing only slightly when measured by gini coefficients under these circumstances with no serious deterioration in intraregional measures of inequality we would expect to observe a substantial reduction in national inequality as these two broad regions converge in mean incomes nevertheless there has been no significant decline in the national gini coefficient this apparent paradox is in contrast to an earlier period in u s history in which regional convergence occurred while national inequality was falling smolensky 1961 1963 the purpose of this paper is to demonstrate that the relationship between regional convergence and overall inequality is far from obvious in particular we shot that the convergence of mean incomes among regions ceteris paribus is not a sufficient condition for a reduction in common measures of ov erall inequality such as the gini coefficient the ceteris paribas conditions here are that the distribution of population across regions and the relative distribution of income within each region are held constant the proof of this assertion is made in section ii in section iii we demonstrate the relevance of this analysis to the u s case we show that the simple mean convergence of family incomes between the southern united states and the rest of the nation over the last twenty five years should not have been expected to have a direct effect on national inequality the naive link between regional income convergence and national income distribution does not hold up in this important case hence the arguments of section ii are more than analytical curiosa in a situation where the direct effects of income convergence are insufficient to reduce overall inequality there is the possibility that the broader process of regional convergence achieves this result more indirectly regional convergence may involve economic changes that work on intra regional income distributions or the distribution of population across regions in ways favorable to greater national equality in section iv we speculate on such indirect effects from a theoretical point of view we conclude that the direction and extent of such interactions are not obvious

accounting for south non south real wage differentials and for changes in those differentials over time a unified accounting framework for analyzing differences in real wages between the south and non south in 1979 and for changes in south non south wage ratios between 1973 and 1979 is outlined cross section analysis of real wage differentials allows two sources of regional wage variation 1 worker and job characteristics and 2 returns to those characteristics our results suggest that differences in the latter may be as important in accounting for regional wage differentials as the former an interactive specification permits decomposition of changes in regional wage ratios into direct effects of changes in characteristics and indirect effects of region year and region year variations in returns more than half the predicted changes in south non south wage ratios can be accounted for by changing relative returns to characteristics between the south and non south

the failure and promise of mandated consumer mortgage disclosures evidence from qualitative interviews and a controlled experiment with mortgage borrowers policy responses to record rates of mortgage delinquency default and foreclosure will likely affect the cost and availability of consumer credit for decades to come although the current crisis began over two years ago one consumer policy change that surely passes a cost benefit test has yet to be adopted consumers still do not receive one clear disclosure document that conveys the key costs and risks of their mortgages the results of this study based on quantitative testing in a controlled randomized experiment with more than 800 mortgage borrowers and in depth qualitative interviews with several dozen additional borrowers suggests that federally mandated consumer mortgage disclosures failed resulting in many borrowers who did not understand the costs and risks of their loans likely contributing to the mortgage crisis an overhaul of consumer mortgage disclosures culminating in a single disclosure document designed using a combination of qualitative and quantitative consumer research could substantially improve consumer understanding of their mortgage choices the failure of mandated disclosures to convey mortgage terms to borrowers was not due to cognitive limitations or irrationality of consumers nor to an irreducible complexity of new mortgage instruments but to poorly designed disclosures disclosure documents failed to include key loan information and the information disclosed was often confusing and sometimes misleading problems with mandated disclosures were evident across a range of consumers and loan types prime and subprime borrowers were similarly confused confusion the failure and promise of mandated consumer mortgage disclosures evidence from qualitative interviews and a controlled experiment with mortgage borrowers

equality of opportunity and luck definitions and testable conditions with an application to income in france abstract we offer a model of equality of opportunity that encompasses different conceptions expressed in the public and philosophical debates in addition to circumstances whose effect on outcome should be compensated and effort which represents a legitimate source of inequality we introduce a third factor luck that captures the random factors whose impact on outcome should be even handed for equality of opportunity to be satisfied then we analyze how the various definitions of equality of opportunity can be empirically identified given data limitations and provide testable conditions definitions and conditions resort to standard stochastic dominance tools lastly we develop an empirical analysis of equality of opportunity for income acquisition in france over the period 1979 2000 which reveals that the degree of inequality of opportunity tends to decrease and that the degree of risk of income distributions conditional on social origin appears very similar across all groups of social origins

economic growth and equality of opportunity the paper proposes an approach to understand the relationship between inequality and economic growth obtained by shifting the analysis from the space of final achievements to the space of opportunities to this end it introduces a formal framework based on the concept of the opportunity growth incidence curve this framework can be used to evaluate the income dynamics of specific groups of the population and to infer the role of growth in the evolution of inequality of opportunity over time the paper shows the relevance of the introduced framework by providing two empirical analyses one for italy and the other for brazil these analyses show the distributional impact of the recent growth experienced by brazil and the recent crisis suffered by italy from both the income inequality and opportunity inequality perspectives

on the measurement of inequality under uncertainty abstract to take into account both ex ante and ex post inequality considerations one has to deal with inequality and uncertainty simultaneously under certainty much of the literature has focused on comonotonically linear indices functionals that are linear on cones of income profiles that agree on the social ranking of the individuals this family generalizes both the gini index and the egalitarian index minimal income however it does not include functionals such as the average of expected gini and gini of expectation in contrast the family of min of means functionals is rich enough for this purpose journal of economic literature classification numbers d31 d63 d81

unequal uncertainties and uncertain inequalities an axiomatic approach abstract in this paper we provide an axiomatic characterization of social welfare functions for uncertain incomes our most general result is that a small number of reasonable assumptions regarding welfare orderings under uncertainty rule out pure ex ante as well as pure ex post evaluations any social welfare function that satisfies these axioms should lie strictly between the ex ante and the ex post evaluations of income distributions we also provide an axiomatic characterization of the weighted average of the minimum and the maximum of ex post and ex ante evaluations

impacts of derivative markets on spot market volatility and their persistence in this article we investigate the impacts of futures and options markets on the volatility of the underlying market unlike earlier studies the focus is on their persistence over time tests on the hang seng index yield several interesting results that often contrast with previous findings empirical results suggest that the quality of new information generated by derivative trading determines the impacts on the spot market volatility the futures market provides new material information reducing spot market volatility the options market on the other hand generates noisy information and distorts price which is followed by an increase in volatility and a decrease in its sensitivity to price change while the impact of futures persists that of options mostly disappears as the market matures our conjecture is that the futures market is mainly driven by informed experienced participants while the options market attracts new inexperienced investors

more equal but less mobile education financing and intergenerational mobility in italy and in the us a centralised and egalitarian school system reduces the cost of education for poor families and so it should reduce income inequality and make intergenerational mobility easier in this paper we provide evidence that italy compared to the usa displays less income inequality as expected given the type of school system but also less intergenera tional upward mobility between occupations and between education levels we explore some of the reasons which can explain this puzzling result and conclude that in a world in which family background is important for labor market success a centralised and egalitarian tertiary education does not necessarily help poor children and may take away from them a fundamental tool to prove their talent and to compete with rich children 1999 elsevier science s a all rights reserved

trickling down the rising tide new estimates of the link between poverty and the macroeconomy this paper uses pooled time series regressions of regional data to reexamine the link between poverty and the macroeconomy the use of disaggregated data provides additional degrees of freedom and permits the inclusion of controls for demographic changes and increased income inequality the results indicate a stronger relationship between poverty rates and the macroeconomy in the 1980s than that found in prior research and confirm that the dramatic reduction in unemployment during the late 1990s was instrumental in reducing poverty rates the estimated results for the 1990s imply a 0 4 0 9 increase in the poverty rate for each 1 increase in the unemployment rate

statistical inference for the measurement of the incidence of taxes and transfers we establish the asymptotic sampling distribution of general functions of quantile based estimators computed from samples that are not necessarily independent the results provide the statistical framework within which to assess the progressivity of taxes and benefits their horizontal inequity and the change in the inequality of income which they cause by the same token these findings characterise the sampling distribution of a number of popular indices of progressivity horizontal inequity and redistribution they can also be used to assess welfare and inequality changes using panel data and to assess poverty when it depends on estimated population quantiles we illustrate these results using micro data on the incidence of taxes and benefits in canada

futures trading activity and stock price volatility we examine whether greater futures trading activity volume and open interest is associated with greater equity volatility we partition each trading activity series into expected and unexpected components and document that while equity volatility covaries positively with unexpected futures trading volume it is negatively related to forecastable futures trading activity further though futures trading activity is systematically related to the futures contract life cycle we find no evidence of a relation between the futures life cycle and spot equity volatility these findings are consistent with theories predicting that active futures markets enhance the liquidity and depth of the equity markets

developments in non expected utility theory the hunt for a descriptive theory of choice under risk this article reviews recent developments in the economic theory of individual decision making under risk since the 1950s it has been known that individual choices violate the standard model of expected utility in predictable ways considerable research effort has now been devoted to the project of developing a superior descriptive model following an overview of non expected utility theories which distinguishes between conventional and non conventional approaches the paper seeks to assess these alternative models in terms of empirical success using laboratory and field data and theoretical usefulness the closing sections reflect on some new directions emerging in this literature

preferences for redistribution in the land of opportunities this paper explores how individual preferences for redistribution depend on future income prospects in addition to estimating the impact of individuals socioeconomic background and of their subjective perceptions of future mobility we employ panel data to construct dobjectivet measures of expected gains and losses from redistribution for different categories of individuals we find that such measures have considerable explanatory power and perform better than dgeneral mobilityt indexes we also find that preferences for redistribution respond to individual beliefs on what determines one s position in the social ladder ceteris paribus people who believe that the american society offers equal opportunities are more averse to redistribution d 2004 published by elsevier b v

intergenerational earnings persistence and economic inequality in the long run evidence from french cohorts 1931 75 this paper analyses long term trends in intergenerational earnings persistence in france for male cohorts born between 1931 and 1975 this time period has witnessed important changes in the french labour market and educational system in particular an important compression of earnings differentials as well as a large expansion in access to secondary and higher education using a two sample instrumental variables approach i estimate two measures of intergenerational economic persistence the intergenerational earnings elasticity ige and the intergenerational correlation igc over the period the ige exhibits a v shaped pattern it falls from a high of value of 0 6 for cohorts born in the 1930s to around 0 4 for those born in the 1950s but subsequently rises to a level close to that at the beginning of the period in contrast the igc remains relatively stable over the period this suggests that changes in the ige are partly driven by transitory responses to changes in cross sectional inequality rather than long term changes in the degree of intergenerational persistence

nutrition and nonparticipation in the us food stamp programme microdata from the national food consumption survey are used to test for differences in caloric and protein intake distributions we compare poor households that participate in the us food stamp programme to eligible households that do not participate tests for stochastic dominance provide unambiguous evidence that eligible nonparticipants suffer from relative undernutrition compared to participating households probit analysis is used to identify characteristics of participating and nonparticipating households

ex ante inequality of opportunity in health decomposition and distributional analysis of biomarkers abstract we use a set of biomarkers to measure inequality of opportunity iop in the risk of major chronic conditions in the uk applying a direct ex ante iop approach we find that inequalities in biomarkers attributed to circumstances account for a non trivial part of the total variation for example observed circumstances account for 20 of the total inequalities in our composite measure of multi system health risk allostatic load we propose an extension to the decomposition of ex ante iop to complement the mean based approach analysing the contribution of circumstances across the quantiles of the biomarker distributions shapley decompositions show that for most of the biomarkers the percentage contribution of socioeconomic circumstances education and childhood socioeconomic status relative to differences attributable to age and gender increase towards the right tail of the biomarker distribution where health risks are more pronounced

equality of opportunity policy and measurement paradigms abstract equality of opportunity is a widely accepted principle of distributive justice and it is the leading idea of most political platforms in several countries according to this principle a society might institute policies that secure an equal distribution of the means to reach a valuable outcome among its members once the set of opportunities have been equalized which particular opportunity the individual chooses from those open to her is outside the scope of justice ex ante inequalities and only those inequalities should be eliminated or compensated for by public intervention the recent literature on the opportunity egalitarianism often merges these questions introducing two different economic issues on one side the design of a public policy intended to implement the equality of opportunity view and on the other side the problem of measuring the degree of opportunity inequality in a society we describe the basic setting and assumptions of some different approaches derived by roemer s algorithm for public policy and then we discuss some theoretical and empirical studies to separate and test alternative paradigms on the measurement of inequality of opportunity accordingly an extended critique on the causality issue on policies and measurements is taken into account

robust inequality of opportunity comparisons theory and application to early childhood policy evaluation this paper develops a criterion to assess equalization of opportunity that is consistent with theoretical views of equality of opportunity we characterize inequality of opportunity as a situation

convergence of the south and non south income distributions 1969 1979 income distribution and inequalities in the southern united states are analyzed and compared with data for the rest of the country the evidence presented in this paper reveals that in the 1970s the souths income distribution either converged or moved significantly closer to the income distribution of the rest of the country the degree of convergence depends on the definition of the recipient unit and to a degree on the particular cost of living index used to deflate southern and non southern incomes the convergence is attributed in part to the labor unionization in the northeast and the resulting relocation of companies to the south data are from the 1970 and 1980 censuses and concern total household income excerpt

assessing risky social situations this paper reexamines the welfare economics of risk it singles out a class of criteria the expected equally distributed equivalent as the unique class that avoids serious drawbacks of existing approaches such criteria behave like ex post criteria when the final statistical distribution of well being is known ex ante and like ex ante criteria when risk generates no inequality the paper also provides a new result on the tension between inequality aversion and respect of individual ex ante preferences in the vein of harsanyi s aggregation theorem

intraday price change and trading volume relations in the stock and stock option markets this study investigates intraday relations between price changes and trading volume of options and stocks for a sample of firms whose options traded on the cboe during the first quarter of 1986 after purging the price change series of the effects of bid ask spreads multivariate time series analysis is used to estimate the lead lag relation between the price changes in the option and stock markets the results indicate that price changes in the stock market lead the option market by as much as fifteen minutes the analysis of trading volume indicates that the stock market lead may be even longer the intense trading activity in and in fact the very existence of organized stock option markets attest to the economic benefits that these financial contracts provide reduced transaction costs and increased financial leverage are two reasons why trading in the stock option market may be more attractive than trading in the market for the underlying stock in addition these cheaper and more flexible trading opportunities attract new and differently informed investors to the marketplace the resulting increase in trading activity together with the inextricable arbitrage linkage between stock and option prices imply an increase in market efficiency this study investigates empirically the intraday price change and trading volume relations between stocks and options for a sample of firms whose options were actively traded on the chicago board options exchange during the first quarter of 1986 in particular intraday call option price changes are translated into implied stock price changes using the american call option pricing model these intraday implied stock price changes are then compared with the actual stock price changes to identify which if either market leads the other in perfectly functioning capital markets there should be complete simultaneity between the series that is new information disseminating into the marketplace should be reflected in the prices and the trading activity of both securities simultaneously institutional factors however may make the stock option market more attractive to information traders this may cause price changes and trading activity due to new information to be observed in the option market first followed by price

to what extent do fiscal regimes equalize opportunities for income acquisition among citizens to what extent do fiscal regimes equalize opportunities for income aquisition among citizens journal of public economics

the inheritance of inequality how level is the intergenerational playing field what are the causal mechanisms that underlie the intergenerational transmission of economic status are these mechanisms amenable to public policies in a way that would make the attainment of economic success more fair these are the questions we will try to answer

long term trends in fair and unfair inequality in the united states abstractthis article analyses the microeconomic sources of wage inequality in the united states from 1967 2012 decomposing inequality into factors categorized by degree of personal responsibility education explains over twice as much of inequality today as 45 years ago however neither hours worked nor education industry marital status or geographical location can explain the rise in income inequality in fact unfair inequality income disparity derived from non responsibility factors has risen faster than fair inequality income disparity derived from responsibility factors regardless of the set of variables chosen as fair sources of inequality we further examine income inequalities within gender and racial groups finding substantial heterogeneity overall using micro data to understand the sources of inequality and how these changes over time can provide better information for policymakers motivated to combat rising inequality

information remedies for consumer protection consumer protection regulation has come under increasing fire from the congress courts and the business community in response regulators have begun to innovate with market interventions that are more compatible with economic incentives these incentive compatible techniques include establishing property rights mandating performance standards instead of design standards increasing competition and encouraging and mandating information disclosure information disclosure allows consumer self protection compatible with individual preferences information is also compatible with sellers incentives inducing them to compete on the basis of information disclosed in addition this competition increases the incentive to generate and disseminate additional product information thereby repeating the cycle in this way information remedies rely on private economic incentives to achieve regulatory goals rather than on expensive direct enforcement by the regulator diagnosis of an information problem and evaluation of alternative remedies requires a number of steps analysis of information production and distribution identification of market failures and their implications for resource allocation in the information and product markets and analysis of alternative remedies in light of these market failures

three meanings of intergenerational mobility we axiomatize three different motivations for being concerned about intergenerational mobility mobility as a description of movement as an indication of equality of opportunity and as an indication of equality of life chances these three motivations are shown to be incompatible none of the existing measures is acceptable as an indicator of equality of opportunity or equality of life chances we propose two new measures of intergenerational mobility which more adequately reflect these concerns

ex ante versus ex post equality of opportunity we study the difference between the ex post and ex ante perspectives in equality of opportunity we show that the well documented conflicts between compensation and reward are but an aspect of a broader conflict between ex ante and ex post perspectives the literature that takes the goal of providing equal opportunities as the guiding principle generally considers that this is implemented only when ex post all individuals with the same effort obtain equal success it is easy to believe that ex ante compensation is another natural embodiment of the same idea we show that this is not true