supply chain relationships and contracts the impact of repeated interaction on capacity investment and procurement consider a firm developing an innovative product due to market pressures production must begin soon after the product development effort is complete which requires that an upstream supplier invests in capacity while the design of the product and production process are in flux because the product is ill defined at this point in time the firms are unable to write court enforceable contracts that specify the terms of trade or the supplier s capacity investment however the firms can adopt an informal agreement relational contract regarding the terms of trade and capacity investment the potential for future business provides incentive for the firms to adhere to the relational contract we show that the optimal relational contract may be complex requiring the buyer to order more than her demand to indirectly monitor the supplier s capacity investment we propose a simpler relational contract and show that it performs very well for a broad range of parameters finally we identify characteristics of the business environment that make relational contracting particularly valuable

determinants of women s health status and health care utilization in a developing country a latent variable approach a latent variable representation of health is used in a system that determines health and various indicators of health and health care utilization for nicaraguan women estimates differ somewhat from standard estimates they imply that women s schooling increases health care utilization literate women report less disease incidence women s childhood backgrounds affect their adult health and health care utilization and general resources favor childbirth related care but women s full income favors general care the most significant result is that several important characteristics usually associated with development women s schooling household resources and women s labor force participation have inverse or no associations with women s health health status is hypothesized to be important in developing countries both as a direct indicator of welfare and because of its possible impact on productivity health care utilization also is of interest both because of its relation to health status and because it is a particular manifestation of demand and supply for a 1 modem service work on the determinants of health status and health care utilization in developing economies however is flawed because true health status is not directly observable the indicators of health status that have been used in empirical studies anthropometric measures days ill self reported or clinical disease records inputs such as nutrients and health care utilization indicesare imperfect indicators of underlying health status and generally do not give a congruent representation of that status thereby they may not measure adequately health status and their use may lead to biases in estimates and incorrect interpretations we use a latent variable methodology for the first time to explore health status and health care utilization in a developing country this approach employs systematic relations between various indicators of health status and health status itself and between health status and various related outcomes so that it is possible to estimate the determinants of health status and control for health status in other relations even though health status is not directly observed by using this methodology we obtain more satisfactory estimates of the determinants of health status and of health care utilization in a developing country context than previous estimates using direct but imperfect proxies this should improve the empirical bases for evaluating health and related policies in the developing world i latent variable model of health status and health care utilization in the human capital tradition of analysis of health individual health status is viewed as determined by individual demand factors given supply prices environment age and resources including genes health care utilization is a derived demand for a service which is used to produce better health to incorporate the latent variable representation of the unobserved health status we assume that the demand supply health status and health care utilization interactions as well as the relation of other health indicators to health status can be represented by the following linear system of relations

planning under incomplete information and the ratchet effect abstract central planning of production is usually performed under asymmetric information the firm in general has more information about its productive possibilities than the central planner from now on for short cp this justifies the use of incentives schemes in which the cp does not directly fix activity levels casual observation of such existing schemes suggests that the time dimensions is crucial for their working typically the cp revises the incentive scheme over time to take into account the information provided by the firm s performance managers of centrally planned economies as well as economists have long recognized that this revision induces firms to underproduce in order to avoid demanding schemes in the future this is the ratchet effect it is purpose of the present paper to study the ratchet effect under the non commitment assumption which we believe to be more realistic the inadequacy of conceptual tools made if difficult in the past to consider such an assumption now basic research on dynamic games with incomplete information recently resulted in new ideas which look particularly relevant for a theoretical analysis of the problem

designing supply contracts contract type and information asymmetry this paper studies the value to a supplier of obtaining better information about a buyer s cost structure and of being able to offer more general contracts we use the bilateral monopoly setting to analyze six scenarios three increasingly general contracts wholesale pricing schemes two part linear schemes and twopart nonlinear schemes each under full and incomplete information about the buyer s cost structure we allow both sides to refuse to trade by explicitly including reservation profit levels for both for the supplier this is implemented through a cutoff policy we derive the supplier s optimal contracts and profits for all six scenarios and examine the value of information and of more general contracts our key findings are as follows first the value of information is higher under two part contracts second the value of offering two part contracts is higher under full information and third the proportion of buyers the supplier will choose to exclude can be substantial

a probit latent variable model of nutrition information and dietary fiber intake nutrition information and intake data for a sample of u s household meal planners are used to estimate the effects of fiber specific information on dietary fiber intake the information variables are measured using survey questions on fiber content of foods attitude toward consuming fiber rich foods and awareness of fiber health links the evidence confirms the influence of nutrition information on fiber intake household income meal planner age smoking status vegetarian status race and ethnicity are major determinants of both information and intake education exerts a sizable intake effect by enhancing the information level direct and indirect effects of exogenous variables are reported

econometric studies in health economics a survey of the british literature this paper provides a survey of british applied econometric work in the field of health economics as well as reviewing the literature it suggests some avenues for future research it covers six main areas the supply of health care the demand for health care non medical influences on health market and non price rationing evaluation of health care systems and planning budgeting and monitoring mechanisms

wages and hazardous working conditions the purpose of this paper is to provide a new empirical test for the existence of wage premiums paid to workers who are exposed to dangerous or unhealthy working conditions prior empirical studies have encountered problems with omitted ability data omitted working conditions data and measurement error the empirical model presented in this paper uses a difference specification to eliminate bias from omitted ability data by assuming that all hazardous working conditions are measured by a single endogenous unobserved variable this empirical model also eliminates bias due to omitted working conditions and measurement error the empirical model is estimated using the 1973 7 version of the quality of employment survey the unique data in this survey facilitate estimation of a model in which working conditions are assumed to be unobservable using a two stage technique for consistent and efficient estimation the empirical results reported in this paper show that a compensating difference for hazardous work

alcohol consumption and human capital a retrospective study of the literature grossman proposed an individual s health can be viewed as one aspect of their human capital following this line of thought a number of recent papers have reported a positive impact of alcohol consumption on earnings the rationale for the existence of such a relationship is the positive impact of alcohol on physical and mental health we conduct a meta analysis to determine whether such factors as the estimation technique the presence of ex drinkers in the sample possible sample selection bias and publication bias may all contribute to these findings an additional suggestion for the positive relationship between alcohol and wages is the presence of a common set of personality traits that determines drinking behaviour and also leads to higher earnings we examine this relationship by reviewing the literature that investigates if the personality influencing aspects of alcohol consumption influences measures of human capital we also survey the significant body of research that has examined how alcohol consumption has been found to influence educational outcomes and the work force participation of problem drinkers

estimating the intrahousehold incidence of illness child health and gender inequality in the allocation of time in this paper the authors develop and implement a method for estimating the effects of infant morbidity on the differential allocation of time of family members based on discrete indicators of health and activity participation commonly available in survey data and within the context of a household model in which health is determined endogenously their estimates that take into account the simultaneity of health activity associations indicate that increased levels of infant morbidity significantly exacerbate existing differentials in the accumulation of human capital across teenage boys and girls in indonesia copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

substantive issues in the definition of localities evidence from sub group local labour market areas in the west midlands coombes m g green a e and owen d w 1988 substantive issues in the definition of localities evidence from sub group local labour market areas in the west midlands reg studies 22 303 318 local labour market areas llmas are now widely accepted as the most appropriate areal units for analyses of spatial patterns of employment and unemployment the most commonly used set of llmas in britain are the travel to work areas ttwas of the department of employment these areas are increasingly being used for locality studies that encompass not only labour and demand trends but also their social and political implications however ttwas are defined on the basis of aggregate commuting patterns which generalize substantial differences in the journey to work behaviour of different sections of the workforce this paper compares the ttwas as revised in 1984 with llmas defined using the same methodology for four sub groups of the labour force with differing skill levels in the west midlands the numb

schooling and economic well being the role of nonmarket effects standard estimates of the economic value of additional schooling based on earnings differences associated with differences in the level of schooling attained cover only a portion of the total effects of education that are valued by citizens we first identify a catalog of nonmarketed effects many of which have been recently studied by economists and then propose a procedure for estimating a willingness to pay value for these effects using empirical estimates of the magnitude of a selection of these effects found in the literature we calculate willingness to pay values using our proposed procedure these illustrative calculations suggest that standard estimates of the benefit of incremental schooling substantially understate the full value of such investments

hourly earnings in the united states another look at unionization schooling sickness and unemployment using psid data this paper makes use of panel data to consider the effects of unionization schooling sickness and unemployment on individual earnings our results may be summarized as follows the unionization effect is around 15 20 this measure is consistently estimated controlling for both fixed individual attributes and serially uncorrelated measurement error sickness has little immediate impact but there is some indication that after 4 years earnings have fallen permanently by around 8 consequent on a 10 week spell of sickness a spell of unemployment on the other hand leads to a sharp fall in earnings but this effect decays rapidly leaving the possibility of a small permanent impact finally controlling for all fixed individual attributes we are unable to pin down the schooling effect with any accuracy owing to the absence of instruments that are both valid and effective within the data set

wage and labor supply effects of illness in cote d ivoire and ghana instrumental variable estimates for days disabled abstract sickness should make individuals less productive but there are problems in measuring this effect first how is adult morbidity measured in a household survey second how is the impact or morbidity on productivity inferred if earning is partly used to improve health self reported functional activity limitation due to illness is considered an indicator of morbidity for wage earners and self employed people to deal with both the measurement and joint determination problems an instrumental variable estimation approach is used where local food prices and health services instrument for disability days that reduce wages by at least 10 and hours by 3 or more

the geographical concentration of labour market disadvantage this paper argues that british welfare to work policies are inadequate given the geographical concentration of worklessness in northern regions and in cities and former coalfields while unemployment has been converging geographically inactivity has not all the welfare to work target groups youth unemployed long term unemployed lone parents the long term sick and partners of the unemployed have closely similar geographical distributions official arguments that there are adequate job vacancies everywhere are shown to be flawed the geography of worklessness is largely explained by the weakness of adjustment through migration and commuting to the loss of jobs in manufacturing and mining the cities being particularly affected by urban rural manufacturing shift policy needs to promote more relevant employment in high unemployment areas through increased spending on derelict land reclamation transport and other infrastructure the case for more supportive policies towards manufacturing should also be considered

information distortion in a supply chain the bullwhip effect this article originally appeared in management science april 1997 volume 43 number 4 pp 546 558 published by the institute of management sciences consider a series of companies in a supply chain each of whom orders from its immediate upstream member in this setting inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions this paper claims that the information transferred in the form of orders tends to be distorted and can misguide upstream members in their inventory and production decisions in particular the variance of orders may be larger than that of sales and distortion tends to increase as one moves upstream a phenomenon termed bullwhip effect this paper analyzes four sources of the bullwhip effect demand signal processing rationing game order batching and price variations actions that can be taken to mitigate the detrimental impact of this distortion are also discussed

the dynamics of incentive contracts the paper studies a simple two period principal agent model in which the principal updates the incentive scheme after observing the agent s first period performance the agent has superior information about his ability the principal offers a first period incentive scheme and observes some measure of the agent s first period performance cost or profit which depends on the agent s ability and unobservable first period effort the relationship is entirely run by short term contracts in the second period the principal updates the incentive scheme and the agent is free to accept the new incentive scheme or to quit the strategies are required to be perfect and updating of the principal s beliefs about the agent s ability follows bayes rule the central theme of the paper is that the ratchet effect leads to much pooling in the first period first for any first period incentive scheme there exists no separating equilibrium second when the uncertainty about the agent s ability is small the optimal scheme must involve a large amount of pooling the paper also gives necessary and sufficient conditions for the existence of partition equilibria and looks at the effect of cost uncertainty

measuring the effect of disability on labor force participation this paper estimates the effect of disability on labor force participation by using symptoms or diseases as instruments in a simultaneous equations model of endogenous reported disability and labor force participation the results show that each measure of disability explains a significant amount of variation in labor force participation though the two are not perfect substitutes there is only weak evidence of endogeneity of the disability variables for cases where there is evidence of endogeneity the bias it causes has the opposite effect of that hypothesized in the literatute i e stress causes health to deteriorate with labor force participation furthermore it has only insignificant effects on the coefficients for other variables

delimitation and coherence of functional and administrative regions corvers f hensen m and bongaerts d delimitation and coherence of functional and administrative regions regional studies the paper tests whether functional regions in the netherlands show more labour market coherence between the municipalities included in them than the dutch administrative regions it turns out that regional disparities are not significantly smaller within functional than within administrative regions with respect to income level housing prices employment rate and unemployment rate it is argued that the numerous functional delimitations of the labour market that have been made for many countries in other studies are only useful for policy making if they clearly outperform the administrative delimitations with respect to some relevant indicators of labour market coherence or regional disparities corvers f hensen m et bongaerts d delimitation et coherence des regions fonctionnelles et administratives regional studies nous verifions si les regions fonctionnelles des pays bas

contract renegotiation and coasian dynamics consider a long term relationship between a seller and a buyer whose valuation for a per period service or a durable good is private as trade progresses the valuation will be partially revealed and it may be impossible for the parties to commit ex ante not to take advantage of this we analyse this situation first by supposing that the parties can sign a sequence of short term contracts and secondly by supposing that they can sign a long term contract but cannot commit not to renegotiate it later we find a close relationship in the second case between the optimal long term contract and the non commitment outcome in the standard coasian durable good model our results also have implications for hidden information principal agent models

health and wage a simultaneous equation model with multiple discrete indicators in this article we propose all econometric approach for estimating the simultaneouls effects of health and wages in a structural equations framework in the theoretical works of grossmana 1972a 1972b health is viewed as anl elldogen1oulsly determined capital stock the demand for health should rise with the wage rate as the rate of return to health investment increases with wage onl the other hand better health should raise market productivity and hence wages since health capital is an abstract theoretical concept it can hardly be measured quantitatively however most population surveys include various health indicators these indicators are usually discrete variables in the empirical work of grossman and benham 1974 these qualitative indicators are treated as continuous variables and two stage least squares estimation techniques are used this specification raises various econometric problems see e g goldberger 1964 pp 248 255 domencich and mcfadden 1975 and nerlove and press 1973 a satisfactory specification should take into account the discrete nature of the indicators our specification generalizes the dummy variables simultaneous equations system of heckman 1978 the measurement models of joreskog and goldberger 1975 and is closely related to the models of muthe n 1976 1979 muthen studies full information maximum likelihood procedures for estimation except for very simple cases this does not generally yield feasible or tractable procedures in this article we introduce a tractable procedure for statistical estimation and testing this specification and the estimation procedure is then applied to study the joint dependence of health and wages another departure of our approach from others is that we will test and correct the possible incompatibility of the various health capital indicators in the population surveys one may have subjective health indicators such as self evaluation of health which may reflect different populations perception of health we propose a statistical procedure for testing measurement compatibility and if required for correcting this problem this article is divided into two parts initially we describe the model specification estimation and statistical tests in a general simultaneous equation model with multiple discrete indicators in the second part of the paper we consider specification of a simultaneous equation model for health and wages the model

work and the accommodation of chronic illness a re examination of the health labour supply relationship this study uses a data set of over 14000 households from the state of new jersey in the usa to estimate the impact of specific chronic health conditions on the probability of employment and finds wide variation of employment impacts across chronic conditions additionally the elasticity of the employment response is generally greater for women and lower skilled workers most notable is the role of comorbidity individuals with multiple conditions have markedly lower probability of employment and chronic illness explains virtually all of the large gap in employment probability for those who have multiple conditions this is shown using a summary index of disease status that correlates closely with employment rates across age groups in the aggregate chronic disease striking in adulthood explains about 10 of the total non employment in the new jersey among those aged 35 74 finally cross sectional evidence gives little support for health as a primary determinant of the aggregate age employment profile

husband s health and wife s labor supply this paper examines the labor supply response of the wife to deterioration in the husband s health unlike past cross sectional studies responses over time are directly examined through the use of longitudinal data the empirical results suggest that the magnitude and direction of the response depend crucially on the attractiveness of transfers which the family may qualify for when the husband s health deteriorates when no transfers are available the wife increases her market work in order to replace the lost earnings of the husband however as transfers become more attractive the wife begins to reduce her labor supply enabling her to spend more time at home caring for her husband

health as an unobservable a mimic model of demand for health care abstract this paper develops a model to analyze the demand for health care it differs from current practice in that 1 it deals explicitly with the complex relation between income health health insurance and the demand for health care and 2 health is treated as an unobservable variable we present the maximum likelihood estimates of an eleven equation simultaneous multiple indicator multiple causes mimic model containing two simultaneously determined unobservables and in total nine indicators data used stem from a health care survey among 8000 households in the netherlands the results show among other things that health and permanent income have mutual positive impacts both age and education have important direct and indirect via permanent income effects on health the estimated impact of the availability of health care on individual demand confirms similar results based on aggregated data

stalking information bayesian inventory management with unobserved lost sales retailers are frequently uncertain about the underlying demand distribution of a new product when taking the empirical bayesian approach of scarf 1959 they simultaneously stock the product over time and learn about the distribution assuming that unmet demand is lost and unobserved this learning must be based on observing sales rather than demand which differs from sales in the event of a stockout using the framework and results of braden and freimer 1991 the cumulative learning about the underlying demand distribution is captured by two parameters a scale parameter that reflects the predicted size of the underlying market and a shape parameter that indicates both the size of the market and the precision with which the underlying distribution is known an important simplification result of scarf 1960 and azoury 1985 which allows the scale parameter to be removed from the optimization is shown to extend to this setting we present examples that reveal two interesting phenomena 1 a retailer may hope that compared to stocking out realized demand will be strictly less than the stock level even though stocking out would signal a stochastically larger demand distribution and 2 it can be optimal to drop a product after a period of successful sales we also present specific conditions under which the following results hold 1 investment in excess stocks to enhance learning will occur in every dynamic problem and 2 a product is never dropped after a period of poor sales the model is extended to multiple independent markets whose distributions depend proportionately on a single unknown parameter we argue that smaller markets should be given better service as an effective means of acquiring information

dynamic supplier contracts under asymmetric inventory information in this paper we examine a supply chain in which a single supplier sells to a downstream retailer we consider a multiperiod model with the following sequence of events in period t the supplier offers a contract to the retailer and the retailer makes her purchasing decision in anticipation of the random demand the demand then unravels and the retailer carries over any excess inventory to the next period unmet demand is lost in period t 1 the supplier designs a new contract based on his belief of the retailer s inventory and the game is played dynamically we assume that short term contracts are used i e the contracting is dynamically conducted at the beginning of each period we also assume that the retailer s inventory before ordering is not observed by the supplier this setting describes scenarios in which the downstream retailer does not share inventory sales information with the supplier for instance it captures the phenomenon of retailers distorting past sales information to secure better contracting terms from their suppliers we cast our problem as a dynamic adverse selection problem and show that given relatively high production and holding costs the optimal contract can take the form of a batch order contract which minimizes the retailer s information advantage we then analyze the performance of this type of contract with respect to some useful benchmarks and quantify the value of prudent contract design and the value of inventory information to the supply chain markovian adverse selection models in which the state and action in a period affect the state in the subsequent period are recognized as theoretically challenging and are relatively less understood we take a nontrivial step towards a better understanding of such models under short term contracting

health and wages panel data estimates considering selection and endogeneity this paper complements previous studies on the effects of health on wages by addressing the problems of unobserved heterogeneity sample selection and endogeneity in one comprehensive framework using data from the german socio economic panel gsoep we find the health variable to suffer from measurement error and a number of tests provide evidence that selection corrections are necessary good health leads to higher wages for men while there appears to be no significant effect for women contingent on the method of estimation healthy males are estimated to earn between 1 3 and 7 8 more than those in poor health

corporate social responsibility in the banking industry motives and financial performance abstract the current study investigates the association between corporate social responsibility csr and financial performance fp and discusses the driving motives of banks to engage in csr three motives namely strategic choices altruism and greenwashing suggest that the relationship between csr and fp is positive non negative and non existent respectively we obtained our sample which covered 2003 2009 from the ethical investment research service eiris databank and bankscope database the data consists of 162 banks in 22 countries we then classified the banks into four types based on their degree of engagement in csr this study proposes the use of an extended version of the heckman two step regression in which the first step adopts a multinomial logit model and the second step estimates the performance equation with the inverse mills ratio generated by the first step the empirical results show that csr positively associates with fp in terms of return on assets return on equity net interest income and non interest income in contrast csr negatively associates with non performing loans hence strategic choice is the primary motive of banks to engage in csr

the impact of farmers health and nutritional status on their productivity and efficiency evidence from ethiopia this article focuses on the link between agricultural productivity and health and nutrition status of peasants in ethiopia the data come from the first round of the ethiopian rural household survey conducted in 1994 the sites selected were those in which farmers practice ox plow cultivation of cereals a stochastic frontier approach was adopted for the agricultural production the findings of the study show that the distance to the source of water as well as nutrition and morbidity status affect agricultural productivity the market wage rate is also very responsive to the weight for height as well as the body mass index and height in a context where separability between consumption and production decisions of the household is rejected elasticities of labor productivity with respect to nutritional status are noted to be strong and similar in technology estimates and wage equations moreover returns to investment in nutrition are clearly high in the ethiopian context overall the results indicate substantial loss in output due to technical inefficiency even after accounting for the health and nutrition of workers

gender differences in wage losses from impairments estimates from the survey of income and program participation this article develops a model of the relationships among functional impairments work disability employment participation and wage offers the model is estimated separately for males and females with data from the 1984 survey of income and program participation using estimates of disability and wage equations we rank 25 functional impairments by severity of disability and estimate the wage penalty associated with each impairment the results show that limitations to mobility and strength are relatively more disabling for males than for females while the opposite is true for limitations to sensory capacities and appearance

the role of economic incentives in teenage nonmarital childbearing choices abstract in this paper we explore whether behaviors of youths that are likely to result in a teen nonmarital birth event are influenced by their expectations of the net economic benefits or costs associated with the occurrence of such a birth we posit and find that an increase in the perceived costs associated with the occurrence of a nonmarital birth would lead to a reduction in these risky behaviors and to a lower probability of a nonmarital birth event we represent these economic incentives by the income expectations of young women conditional on either giving birth as an unmarried teen or forgoing childbearing while unmarried and an adolescent we also measure the effects of an extensive list of other factors including the characteristics of the girl s family and its choices the social and economic environment in which she lives including policy related factors such as expenditures by states on family planning programs and the generosity of aid to families with dependent children and her own prior choices