the demographic transition and the position of women a marriage market perspective we present international evidence on the marriage market implications of cohort size growth and set out a theoretical model of how marriage markets adjust to imbalances since men marry younger women secular growth in cohort size in the second phase of the demographic transition worsens the position of women this e ect has been substantial in many asian countries earlier and continues to be true in sub saharan africa with fertility decline cohort are now shrinking in east asia improves the position of women these demographic trends can explain the increase and spread in dowries in south asia and the persistence of polygyny in sub saharan africa we show that the age gap at marriage will not adjust in order to equilibrate the marriage market in response to persistent imbalances even though it accommodates transitory shocks jel categories j12 j13 j16

optimal auction with resale this paper investigates the design of seller optimal auctions when winning bidders can attempt to resell the good in that case the optimal allocation characterized by myerson 1981 cannot be achieved without resale i find a sufficient and necessary condition for sincere bidding given the possibility of resale in two bidder cases i prove that the myerson allocation can be achieved under standard conditions supplemented with two assumptions with three or more bidders achieving the myerson allocation is more difficult i prove that it can be implemented in special cases in those cases the myerson allocation is generated through a sequence of resale auctions each optimally chosen by a reseller

the evolutionary theory of time preferences and intergenerational transfers at each age an organism produces energy by foraging and allocates this energy among reproduction survival growth and intergenerational transfers we characterize the optimal set of allocation decisions that maximizes fitness time preference the discount rate is derived from the marginal rate of substitution between energy obtained at two different times or ages holding fitness constant time preference varies with age in different ways depending on whether an individual is immature or mature and during the transition between these stages we conclude that time preference and discount rates are likely to be u shaped across age

a study of the internal organization of a bidding cartel this paper examines bidding in over 1 700 knockout auctions used by a bidding cartel or ring of stamp dealers in the 1990s the knockout was conducted using a variant of the model studied by daniel graham robert marshall and jean francois richard 1990 following a reduced form examination of these data damages induced inefficiency and the ring s benefit from colluding are estimated using a structural model in the spirit of emmanuel guerre isabelle perrigne and quang vuong 2000 a notable finding is that nonring bidders suffered damages that were of the same order of magnitude as those of the sellers

a bioeconomic view of the neolithic transition to agriculture adoption of agriculture at the expense of hunting and gathering was the dramatic precondition for all modern civilization recent data suggest that because of this transition humans initially were more disease prone smaller less nourished and shorter lived to explain why individuals chose agriculture over hunting and gathering this paper develops a simple model of the evolution of preferences over the quality and quantity of children as would have been generated by our long history as a species these preferences would have induced the choice of agriculture but also would have led to these otherwise puzzling health effects l adoption de l agriculture en remplacement de la chasse et de la cueillette a ete une condition prealable dramatique pour toutes les civilisations modernes des donnees recentes suggerent cependant que en consequence de cette transition les humains sont devenus dans les premiers temps apres la transition davantage vulnerables a la maladie ont vu leur esperance de vie diminuer ont ete moins bien nourris et sont devenus plus petits pourquoi alors est ce que des individus qui avaient le choix entre deux systemes economiques ont choisi l agriculture pour expliquer ce choix ce memoire developpe un modele simple de l evolution des preferences quant a la qualite et la quantite des enfants celles ci auraient ete engendrees par notre longue histoire en tant qu espece ces preferences auraient engendre le choix de l agriculture mais auraient aussi entraine d autre part ces effets deconcertants sur la sante

mortality reductions educational attainment and fertility choice this paper develops a model where reductions in mortality are the main force behind economic development the model generates a pattern of changes similar to the demographic transition where gains in life expectancy at birth are followed by reductions in fertility and increases in the rate of human capital accumulation the onset of the transition is characterized by a critical level of life expectancy at birth which marks the movement of the economy from a malthusian equilibrium to an equilibrium with investments in human capital and the possibility of long run growth

viewpoint sustainability malthus revisited the sustainability debate concerns whether the world will experience stable or improving living standards for the foreseeable future or whether the current trajectory will overtax the natural environment leading to a crash in living standards this paper selec tively reviews relevant research focusing on both ecological concerns and technological progress and asks whether sustainability would be problematic without rapid population growth i suggest that continued demographic transition to lower fertility is the primary requirement for achieving sustainable development this is effectively a modern transla tion of malthus 1798 the paper also discusses the role of the malthusian cycle in human evolution jel classification q56 j10

the demographic transition and the sexual division of labor this paper presents a theory in which increases in female labor force participation and reductions in the gender wage gap are generated as part of a single process of demographic transition initially characterized by reductions in mortality and fertility the paper suggests a relationship between gains in life expectancy and changes in the role of women in society that has not been identified before in the literature mortality reductions affect the incentives of individuals to invest in human capital and to have children with implications for female labor force participation and the wage differential between men and women the paper also presents some empirical evidence to support the predictions of the theory

a model of the demand for longevity and the value of life extension we specify a demand function for longevity or quantity of life along with corresponding demand functions for indicators of quality of life and a value of health and life extension function we show that the demand for health must be derived in conjunction with that for longevity and the related consumption plan and that all choices depend on initial individual endowments and terminal conditions our comparative dynamics predictions indicate that optimal health and longevity are increasing functions of endowed wealth rather than necessarily current income that improvements in opportunities to produce health can accentuate the differences between endowed health and attained longevity levels and that the value individuals ascribe to their health may be increasing over a good portion of their life cycle we use this model to analyze observed empirical variations in levels and trends of life expectancy and in exposure to health risks across different population groups

evolution of time preference by natural selection comment we reexamine alan r rogers 1994 analysis of the biological basis of the rate of time preference although his basic insight concerning the derivation of the utility function holds up the functional form he uses does not generate equilibrium evolutionary behavior moreover rogers relies upon an interior solution for a particular kind of intergenerational transfer we show such interior solutions need not generally arise hence rogers most striking prediction namely that the real interest rate should be about 2 percent per annum does not follow

time preference and life cycle consumption with endogenous survival we provide a structural theory of time preference and derive a functional form of intertemporal preferences by postulating that individuals make their life cycle consumption choices as if to maximize expected lifetime this yields a nontime separable expected utility representation where the inverse of the coefficient of intertemporal substitution exceeds the coefficient of relative risk aversion the rate of time preference depends on the inverse of expected remaining lifetime and the effect of age on the productivity of consumption in affecting health the preference formulation is applied in a standard intertemporal consumption model to illustrate the implied life cycle consumption choices

labor market dynamics and the business cycle structural evidence for the united states we use a 12 dimensional var to examine the aggregate effects of two structural technology shocks and two policy shocks for each shock we examine the dynamic effects on the labor market the importance of the shock for labor market volatility and the comovement between labor market variables and other key aggregate variables in response to the shock we document that labor market indicators display hump shaped responses to the identified shocks technology shocks and monetary policy shocks are important for labor market volatility but the ranking of their importance is sensitive to the var specification the conditional correlations at business cycle frequencies are similar in response to the four shocks apart from the correlations between hours worked labor productivity and real wages to account for the unconditional correlations between these variables a mixture of shocks is required

iq in the production function evidence from immigrant earnings the cross country growth literature especially sala i martin 1997 sala i martin doppelhofer and miller 2004 has found that traditional education measures rarely have a robust relationship with growth and productivity elementary education being a rare exception by contrast a new empirical growth literature jones and schneider 2006 lynn and vanhanen 2002 ram 2007 weede 2004 weede and kampf 2002 has shown that a nation s average iq has a remarkably robust relationship with its productivity figure 1 that a test designed by psychologists should have such a robust relationship with economic variables is a puzzle that demands explanation for instance jones and schneider showed that national average iq was more robust than other human capital variables and was statistically significant at the 1 level in all 455 growth regressions that controlled for all 18 factors that passed sala i martin doppelhofer and miller s 2004 robustness tests of course as with all the growth regression literature a key difficulty is disentangling cause and effect thus in this article we run no growth regressions whatsoever instead we perform a simple calibration of the iq productivity relationship based on widely agreed upon microeconomic parameters that means we can directly estimate one causal channel running from cognitive ability to productivity in the process we learn the following 1 if one knows the average iq of a nation s citizens as estimated by lynn and vanhanen 2002 2006 one can predict the average wages that immigrants from that country will earn upon their arrival in the united states whether or not one controls for immigrant education and even if the test is completely visual rather than verbal in other words national average iq predicts part of what hendricks 2002 calls unmeasured worker skill 2 we find that a 1 point increase in national average iq predicts 1 higher immigrant wages precisely the value found repeatedly in microeconometric studies note that by construction 1 iq point approximately equal to 1 15th of a standard deviation within any large national population together points 1 and 2 provide further evidence that cross country iq tests are valid predictors of worker productivity 3 when iq is added to the production function in the form implied by traditional externality free human capital theory differences in national average iq are quantitatively significant in explaining cross country income differences that said our productivity accounting exercise does not resolve the puzzle of why high iq countries are 15 times richer than low iq countries in a related vein hanushek and kimko 2000 use national math and science test scores to verify that cognitive skills appear to matter more for groups than for individuals like us they use immigrants to the united states as a way to test whether immigrants bring their home country productivity levels along with them when they immigrate to the united states when they interpret their results within a solow type framework they conclude that the cross country growth equation results are much larger than the corresponding results for individual earnings in sum our article rigorously explores the quantitative magnitude of the puzzle uncovered by hanushek and kimko 2000 and hanushek and woessman 2007 but by using iq tests rather than other widely used math and science test scores we can often double our sample size while simultaneously using the most widely analyzed best understood form of cognitive test we begin with an overview of the recent psychological literature on the validity of iq tests and then proceed to our discussion of the link between iq and immigrant wages the discussion of iq and immigrant wages yields a key parameter gamma the iq semi elasticity of wages which we use in our development accounting exercise we then discuss the questions of reverse causality and trends in the iq productivity relationship over the past 40 yr and conclude by discussing how our results fit into the growth literature

policy theory and the cycle the paper sets out some simple statistical models and shows that they are capable of generating the ob served characteristics of classical cycles in three countries australia the united kingdom and the united states both analytical and simulation work is used for this purpose these models emphasize the fact that to generate a realistic business cycle requires some deterministic trend growth near unit root behaviour in the deterministically detrended data and innovations of a certain magnitude with this information we examine some popular models of the cycle asking how they produce these features and then explore the implications of the analysis for economic policy

the evolution of strategic sophistication this paper investigates the evolutionary foundation for our ability to attribute preferences to others an ability that is central to conventional game theory we argue here that learning others preferences allows individuals to efficiently modify their behavior in strategic environments with a persistent element of novelty agents with the ability to learn have a sharp unambiguous advantage over those who are less sophisticated because the former agents extrapolate to novel circumstances information about opponents preferences that was learned previously this advantage holds even with a suitably small cost to reflect the additional cognitive complexity involved jel c73 d11 d83

evolution of time preference by natural selection this paper entertains the hypothesis that human time preferences are in evolutionary equilibrium i e that no mutation changing time preferences could be favored by natural selection this hypothesis implies that the marginal rate of substitution mrs holding darwinian fitness constant must equal the mrs holding utility constant furthermore in a market economy the latter must equal the mrs in exchange exploiting these principles the author finds that the long term real interest rate should equal ln 2 per generation about 2 percent per year and that young adults should discount the future more rapidly than their elders copyright 1994 by american economic association

viewpoint the economics of hunter gatherer societies and the evolution of human characteristics we argue for attention to the evolutionary origins of economic behaviour going beyond this we argue that the economy of hunting and gathering was the context in which evolution shaped human characteristics that underlie modern economic behaviour we first reconsider the basic biological question of why aging occurs at all we then illustrate the usefulness of considering foraging economics by asking why it is biologically advantageous for humans to live long after their reproductive career is over further we argue that foraging economics would have led to the simultaneous exaggeration of intelligence and of longevity that is characteristic of humans jel classification a12 j10 l economie des societes de chasseurs cueilleurs et l evolution des traits humains les auteurs suggerent qu on doit porter plus d attention aux origines evolutionnaires du comportement economique poussant un pas plus loin ils suggerent que l economie des chasseurs cueilleurs a ete le contexte ou l evolution a conforme les traits humains qui sous tendent le comportement economique moderne d abord ils reexaminent la question biologique de base a savoir pourquoi il y a vieillissement ensuite ils illustrent l utilite d une economie des activites de cueillette chasse et engrangement en posant la question a savoir pourquoi il est biologiquement avantageux pour les humains de bien vivre apres que leur periode de reproduction active est terminee finalement ils suggerent que ce type d economie aurait entraine simultanement une surestimation de l intelligence et de la longevite deux traits des humains

a theory of time preference grant a taylor this article proposes that people generally prefer present consumption to future consumption because their expected utility from consumption eventually falls as their mental and physical abilities eventually decline with age moreover contrary to the ubiquitous intertemporal formulation with a constant rate of time preference and contrary to three recent theories of time preference that predict decreasing discounting as people age this article asserts that discounting increases over the life cycle this hypothesis is supported by data from the panel study of income dynamics as well as evidence from numerous previous studies jel d91 1 introduction despite the almost universal assumption of time preference in models of intertemporal choice an adequate explanation of why people discount the future has not been provided 1 olsen and bailey 1981 make a convincing case for positive time preference by contradiction i e without time preference models of intertemporal choice do not yield predictions consistent with observed behavior but they do not explain why individuals would rationally discount the future 2 three recent studies have attempted to provide the explanation rogers 1994 argues that societies that discount the future at a rate of about 2 will be the long run survivors in an evolutionary fitness situation 3 posner 1995 argues that discounting occurs because individuals have multiple selves that is people are weighting their present consumption far more heavily than their future consumption because the present self and the future self are in some meaningful sense separate persons 92 becker and mulligan 1997 argue that discounting occurs because of a rational defective recognition of future utilities 730 but as will be shown these three theories are inconsistent with empirical evidence on consumption over the life cycle in at least one important aspect this article constructs and empirically supports a new theory of time preference the hypothesis is that people do not have an intrinsic preference for present consumption relative to future consumption instead the instantaneous utility function also known as the felicity function is expected to vary with age just as people s physical and mental abilities vary with age in other words the ability to enjoy consumption eventually deteriorates over the life cycle along with other abilities this life cycle view of the expected utility function causes people to rationally devalue consumption in periods of low expected felicity that is discount future consumption perhaps this is what is meant by the cliche don t wait until you are too old to enjoy it moreover this causes individuals implicit discount rates to vary systematically with age 4 in fact this provides the testable implication of the theory the standard specification of intertemporal preferences holds the discount rate constant over th e life cycle 5 to be more precise in the early stage of the life cycle the capacity to enjoy consumption may be expected to rise hence a young individual s discount rate may be negative figure 1 illustrates this possibility with a hypothetical adult life cycle marginal felicity function for a given level of consumption u sub c c a c denotes consumption and a denotes age and its corresponding discount rate function rho a the vast majority of wealth is held by older people that is those in the declining stage of their abilities thus the preference for present consumption over future consumption appears to hold in the aggregate this view of intertemporal preferences may at first seem inconsistent with practically all dynamic analyses which are based on the notion of stationary utility on further consideration however the hypothesis is quite consistent with modern consumer theory since becker 1965 it has been widely accepted that households derive utility from commodities that are produced with market goods combined with household time and skills i

measuring international business cycles by saving for a rainy day macroeconomics inevitably begins with a trend cycle decomposition of a nation s output we propose a decomposition in which consumption is the trend component and savings is the cycle component using data from the g 7 plus australia we show that this decomposition identifies international business cycles that are i more volatile ii of longer mean duration and iii less correlated across countries than the cycle component from the hodrick prescott filter we argue that this difference stems from the fact that our method imposes a basic theoretical restriction arising from the permanent income hypothesis similar to the restriction used in cochrane s 1994 decomposition resume mesurer les cycles d affaires internationaux par l epargne les travaux en macroeconomie commencent inevitablement par une decomposition du profil de la production nationale en tendance et cycles les auteurs proposent une decomposition ou la composante consommation est la tendance et l epargne est la composante cyclique utilisant les donnees du g 7 et de l australie on montre que cette decomposition identifie les cycles d affaires internationaux qui sont i plus volatiles ii d une duree moyenne plus longue et iii moins co relies entre pays que la composante cyclique a la hodrick prescott les auteurs suggerent que la difference provient du fait que leur methode impose une restriction theorique de base emergent de l hypothese du revenu permanent semblable a la restriction utilisee dans la decomposition a la cochrane 1994

the evolution of human life expectancy and intelligence in hunter gatherer economies the economics of hunting and gathering must have driven the biological evolution of human characteristics since hunter gatherer societies prevailed for the two million years of human history these societies feature huge intergenerational resource flows suggesting that these resource flows should replace fertility as the key demographic consideration it is then theoretically expected that life expectancy and brain size would increase simultaneously as apparently occurred during our evolutionary history the brain here is considered as a direct form of bodily investment but also crucially as facilitating further indirect investment by means of learning by doing

the origin of utility sexual selection and conspicuous consumption abstract this paper proposes an explanation for the universal human desire for increasing consumption and the associated propensity to trade survival opportunity off conspicuous consumption i argue that this desire was moulded in evolutionary times by a mechanism known to biologists as sexual selection whereby an observable trait conspicuous consumption in this case is used by members of one sex to signal their unobservable characteristics valuable to members of the opposite sex it then shows that the standard economics problem of utility maximisation is formally equivalent to the standard biology problem of the maximisation of individual fitness the ability to pass genes to future generations and thus establishes a rigorous theoretical foundation for including conspicuous consumption in the utility function

population technology and growth from malthusian stagnation to the demographic transition and beyond this paper develops a unied growth model that captures the historical evolution of population technology and output it encompasses theendogenous transitionbetween three regimes that have characterized economic development the economy evolves from amalthusianregime wheretechnologicalprogressis slow andpopulationgrowthprevents anysustainedriseinincomepercapita intoapost malthusianregime wheretechnological progress rises and population growth absorbs only part of output growth ultimately a demographic transition reverses the positive relationship between income and population growth andtheeconomyentersamoderngrowthregimewithreducedpopulationgrowth

permanent and transitory shocks and the uk business cycle in this paper the business cycle properties of uk data are investigated using a var technique a real business cycle rbc model is formulated the model includes both permanent and transitory shocks to technology the business cycle properties of the data and the model are investigated by deriving the expected changes over various forecast horizons from a var model it is found contrary to evidence in rotemberg and woodford 1996 that the model can account for many features of the data and that temporary shocks are pertinent in order to explain the business cycle moments the main difference between theory and data is present in hours worked c 1997 by john wiley sons ltd