collective labor supply and household production this paper emphasises the importance of incorporating household production into the collective model of the household and considers how and to what extent the results of chiappori 1992 can be extended to this case this abstract was borrowed from another version of this item

climate change uncertainty irreversibility and the precautionary principle this paper begins with a critique of the option value argument used by economists to explain and justify the precautionary principle the argument is shown to misrepresent both uncertainty and irreversibility an alternative justification of the precautionary principle is discussed under conditions of keynesian uncertainty and irreversibility interpreted in terms of incommensurability recent formal decision theories under keynesian uncertainty are reviewed and their limitations explored with particular reference to the insights that decision theory can bring to understanding the precautionary principle throughout the decision problems under consideration are those faced by climate change policy makers copyright oxford university press

introducing household production in collective models of labor supply in a recent paper chiappori 1992 i proposed a model of labor supply based on a collective representation of household behavior in this framework each household member is characterized by his or her own utility function and decisions are only assumed to result in pareto efficient outcomes i showed that these simple assumptions were sufficient to i generate testable restrictions on labor supply functions and ii recover individual preferences and the outcome of the decision process from observed behavior for the sake of simplicity the results were derived in the simplest possible case namely a static labor supply model with private consumptions such a framework was appropriate only for the purpose of the paper that is a preliminary exploration of the properties of collective models of labor supply the next step is to evaluate the robustness of the results to various extensions of the basic model this opens a general research program and generates a wide range of particular problems that it is hoped will be considered in the future among the most serious shortcomings of the 1992 model is the absence of household production as in most labor supply models agents were assumed to divide their time between market activities and leisure as apps and rees 1997 in this issue very rightly point out in their comment the absence of domestic production is far from innocuous as soon as welfare issues are considered for instance a low level of market labor supply will automatically be interpreted as a large consumption of leisure whereas it may in fact reflect the specialization of one of the members in domestic

off farm work decisions of husbands and wives joint decision making theoretical and econometric models are developed to examine joint wage labor participation and hours decisions of a husband and wife in farm households the econometric model is multiple equation and recursive the specification of the off farm labor supply equation of the husband wife depends on whether his her wife husband does or does not work off the farm and this structure is endogenous the model is fitted to data for iowa farm households the main conclusion is that the off farm labor supply equation of a married individual differs significantly depending on whether his or her spouse also works for a wage copyright 1989 by mit press

non additive beliefs and strategic equilibria abstract this paper studies n player games where players beliefs about their opponents behaviour are modelled as non additive probabilities the concept of an equilibrium under uncertainty which is introduced in this paper extends the equilibrium notion of dow and werlang 1994 j econom theory 64 305 324 to n player games in strategic form existence of such an equilibrium is demonstrated under usual conditions for low degrees of ambiguity equilibria under uncertainty approximate nash equilibria at the other extreme with a low degree of confidence maximin equilibria appear finally robustness against a lack of confidence may be viewed as a refinement for nash equilibria journal of economic literature classification numbers c72 d81

gender time use and change the impact of the cut flower industry in ecuador this article uses survey data from ecuador to examine the effects of women s employment on the allocation of paid and unpaid labor within the household the reader compares a region with high demand for female labor with a similar region in which demand for female labor is low the comparison suggests that market labor opportunities for women have no effect on women s total time in labor but increase men s time in unpaid labor the increase in men s time in unpaid work reflects women s increased bargaining power in the home

changes in the u s wage structure 1963 1987 application of quantile regression the 1980 s witnessed rapid changes in the structure of wages in the united states in this study recently developed techniques for quantile regression are applied to every march current population survey since 1964 and changes in the return to schooling and experience at different points of the wage distribution are examined the quantile regression technique parsimoniously describes the entire conditional wage distribution this conditional distribution is used to examine changes in within group wage inequality as measured by the difference between conditional quantiles two linear models are considered a simple one group model and a 16 group model the results suggest that the returns to schooling and experience differ across quantiles of the wage distribution but their patterns of change are similar significant differences in wage inequality are also found across the various skill groups the paper also presents a new imputation method for cps data

optimists pessimists and the precautionary principle the precautionary principle has emerged as a leading guide to public decision making about environmental risks under irreversibility and uncertainty in this paper we adopt a two period model with irreversibility and agents differentiated by their degree of optimism to characterize the conditions under which the precautionary principle applies we show in particular that it is more often applied if the decision maker has an intermediate optimism index if scientific research is more effective at reducing uncertainty and if the same decision maker makes the decisions for both periods moreover we show that socially optimal decisions lead to apply the precautionary principle more often than an elected decision maker does

capital markets urban unemployment and land abstract this paper shows that the remarkable result by khan and naqvi that a reduction in the capital rental differential always improves welfare despite the presence of a rigid urban wage can be obtained only for the 2 2 harris todaro model in an extended harris todaro framework incorporating a third specific factor a decrease in a distortion may not necessarily be welfare improving

some simple results on the gains from trade from growth and from public production abstract a simple compact but general revealed preference type of argument is used to derive results on the gains from trade from terms of trade changes and from exogenous resource growth the approach extends to the welfare evaluation of public sector production the relation between the sufficiency conditions for welfare improvement derived from this approach and the necessary and sufficient conditions derived in an alternative approach are briefly discussed most of the argument is conducted in the context of a representative individual economy though it is shown to extend in an essentially unchanged way to cases where redistribution is an issue

gender and trade aspects of labour markets we provide a comprehensive up to date review of the large body of theory and evidence on the linkages between trade liberalisation and gender inequality in income as well as two of the latter s key underlying determinants wages and employment on balance the evidence for developing countries points to an overall beneficial impact of trade expansion on female employment both relative to male employment and in absolute terms although largely concentrated in unskilled manufacturing by contrast the bulk of the evidence suggests a widening gender wage gap as a result of freer trade

precautionary principle as a rule of choice with optimism on windfall gains and pessimism on catastrophic losses abstract the paper investigates a decision making process involving both risk and ambiguity differently from existing papers basili m chateauneuf a fontini f 2005 choices under ambiguity with familiar and unfamiliar outcomes theory and decision 58 195 207 chichilnisky g 2000 axiomatic approach to choice under uncertainty with catastrophic risks resources and energy economics 22 221 231 chichilnisky g 2002 in el shaarawi a h piegorsch w w eds catastropic risks encyclopedia of environmetrics vol 1 john wiley sons ltd chichester uk pp 274 279 we assume that in a choquet expected utility framework the decision maker is pessimistic with respect to unfamiliar catastrophic losses optimistic with respect to unfamiliar windfall gains and ambiguity neutral with respect to the familiar world a representation of the decision maker s choice is obtained that mimics the restricted bayes hurwicz criterion in this way a characterization of the precautionary principle is introduced for decision making processes under ambiguity with catastrophic losses and or windfall gains

growth and welfare in a small open economy the literature on trade and growth provides several examples in which factor augmentation or technical progress can reduce the welfare of an open economy the most famous example of such immiserizing growth is bhagwati s 1958 demonstration that growth that expands the export industry can reduce welfare by causing the terms of trade to deteriorate more recently examples have been provided in which growth due to either factor expansion or technical progress in the presence of domestic distortions can be immiserizing even in a small open economy johnson 1967 for example shows that technical progress in the import competing industry or growth of the factor used intensively in that industry can reduce welfare if the industry is protected by a tariff similarly bhagwati 1969 shows that the presence of factor market distortions also introduces the possibility of immiserizing growth he concludes more generally that growth may be immiserizing in the presence of any of several types of distortions while the possibility of immiserizing growth in the presence of distortions has been recognized little has been said about conditions under which growth is necessarily non beneficial or non harmful the present paper derives sufficient conditions for growth in the form of either factor augmentation or technical progress not to immiserize a small open economy characterized by variable returns to scale vrs production and consumption taxes tariffs and factor market distortions moreover in each case we provide an explicit condition for the effect of growth on welfare when growth takes the form of an infinitesimal increase in a factor supply or improvement in technology 1 our analysis departs from previous treatments of immiserizing growth by considering growth in an m factor n 1 commodity context with non traded goods rather than in the standard two factor two commodity model 2 this generalization allows us to consider for example the welfare effect of growth in the presence of tariffs when not all imports are affected in the same direction 3 we do however provide some additional results for the 2 x 2 case section i sets forth the general model that we use throughout our analysis here we show that under constant returns to scale crs in production and in the absence of commodity or factor market distortions growth cannot immiserize a small open economy while this result is not entirely new the proof provides a useful benchmark for our subsequent analysis section ii introduces vrs in production and considers their implications for the effect of growth on welfare a discussion of these results for the two commodity one factor case follows in section iii here we examine the relationship between factor growth or technical progress and the composition of output in section iv we return to the mr factor n 1 commodity model to analyse the implications of taxes for the relationship between growth and welfare

efficient intra household allocations a general characterization and empirical tests the neoclassical theory of demand applies to individuals yet in empirical work it is usually taken as valid for households with many members this paper explores what the theory of individuals implies for households that have more than one member we make minimal assumptions about how the individual members of the household resolve conflicts all we assume is that however decisions are made outcomes are efficient we refer to this as the collective setting we show that in the collective setting household demands must satisfy a symmetry and rank condition on the slutsky matrix we also present some further results on the effects on demands of variables that do not modify preferences but that do affect how decisions are made we apply our theory to a series of surveys of household expenditures from canada the tests of the usual symmetry conditions are rejected for two person households but not for one person households we also show that income pooling is rejected for two person households we then test for our collective setting conditions on the couples data none of the collective setting restrictions are rejected we conclude that the collective setting is a plausible and tractable next step to take in the analysis of household behavior

prospect theory much ado about nothing prospect theory is a paradigm challenging the expected utility paradigm one of the fundamental components of prospect theory is the s shaped value function the value function is mainly justified by experimental investigation of the certainty equivalents of prospects confined either to the negative or to the positive domain but not of mixed prospects which characterize most actual investments we conduct an experimental study withmixed prospects using for the first time recently developed investment criteria called prospect stochastic dominance psd and markowitz stochastic dominance msd we reject the s shaped value function showing thatat least 62 76 of the subjects cannot be characterized by such preferences we find support for the markowitz utility function which is a reversed s shaped function exactly the opposite of the prospect theory value function it is possible that the previous results supporting the s shaped value function are distorted because the prospects had only positive or only negative outcomes presenting hypothetical situations which individuals do not usually face and which are certainly not common in financial markets

scientific progress and irreversibility an economic interpretation of the precautionary principle abstract we consider the problem of the optimal use of a good whose consumption can produce damages in the future scientific progress is made over time that provides information on the distribution of the intensity of damages we show that this progress induces earlier prevention effort only if prudence is larger than twice absolute risk aversion this paper thus identifies the class of quite restrictive but plausible conditions such that scientific uncertainties justify an immediate reduction of the consumption of a potentially toxic substance

justifying precautionary policies incommensurability and uncertainty abstract when decisions are taken in conditions of keynesian or knightian uncertainty and when there is a threat of serious or irreversible environmental damage the precautionary principle is often recommended to guide decision making however the precautionary principle has been widely criticised in response to these criticisms a qualitative version of the precautionary principle is developed which draws its normative content from a blend of formal decision theory and political philosophy it is argued that precautionary action can be justified by some flexible combination of uncertainty and incommensurability the greater the uncertainty the less incommensurability is required to justify precautionary action and vice versa throughout the paper the arguments are explored using the example of climate change decision problems

nash equilibrium under knightian uncertainty breaking down backward induction abstract we define nash equilibrium for two person normal form games in the presence of knightian uncertainty using the formalization of schmeidler and gilboa we show that nash equilibrium exists for any degree of uncertainty aversion that maxmin behaviour can occur even when it is not rationalizable in the usual sense and that backward induction breaks down in the twice repeated prisoners dilemma we relate these results to the literature on cooperation in the finitely repeated prisoners dilemma and the literature on epistemological conditions underlying nash equilibrium the knowledge notion implicit in this model of equilibrium does not display logical omniscience journal of economic literature classification numbers c72 d81

choice under uncertainty with the best and worst in mind neo additive capacities the concept of a non extreme outcome additive capacity neo additive capacity is introduced neo additive capacities model optimistic and pessimistic attitudes towards uncertainty as observed in many experimental studies moreover neo additive capacities can be applied easily in economic problems as we demonstrate by examples this paper provides an axiomatisation of choquet expected utility with neo capacities in a framework of purely subjective uncertainty

determinants of women s time allocation in rural bangladesh time allocation patterns of women in developing countries have received attention due to interest in 2 problems the 1st is whether womens time is governed by economic constraints or by local customs and patriarchy 2nd is the question of whether these women have a 2 way to work or not to work or a 3 way to work inside or outside the family or not to work choice structure an economic framework is outlined that elucidates how jointly made decisions on labor force participation and hours of work affect womens time allocation decisions this econometric model of womens time allocation is based on a random sample of 500 households in different regions of rural bangladesh market production is defined as work for cash income whether inside or outside the home the study focused on married women aged 15 49 of whom 195 out of 444 engaged in market production these women tended to be younger live closer to market centers and have more schooling than those not participating in market production time use by these women was influenced by individual and household economic factors and was not rigidly set by local customs thus women in rural bangladesh will probably respond to market opportunities as development proceeds there the husbands educational level also had a large effect on time allocation and this may have been due to a spouse selection bias rather than the husband determining his wifes time use

the value and allocation of time in rural botswana abstract time use data indicate that there is substantial surplus labor in rural areas of botswana with the incidence of underutilization varying by age sex and asset position time allocations are influenced by economic incentives i e income and productivity effects the more productive capital the household has the more productive work its members perform particularly its children the positive productivity effect of capital on economic work somewhat outweighs its negative income effect time allocations also are constrained by a culturally determined division of labor by age and sex which however shows some flexibility at the margin

labor market opportunities and intrafamily time allocation in rural households in south asia this paper utilizes a time allocation survey of a four year panel of households from six villages in semi arid tropic rural india estimates of the inter relationships between adult male female and child market wage rates and time allocated to the market domestic production leisure and schooling by boys and girls are presented the role of individual unobservable heterogeneity and self selection into activity participation is also accounted for the overall results suggest the importance of the opportunity cost of time in intrafamily time use