a simple estimator for simultaneous models with censored endogenous reggressors this paper presents a simple two step estimator for models with censored endogenous regressors and sample selection bias the approach unifies the literature on censored endogenous regressors and sample selection bias and provides extensions the procedure employs generalized residuals to adjust for the inconsistency caused by the endogeneity of the censored regressors the paper also provides two new tests of weak exogeneity an empirical example examining the trade off between fringe benefits and wages indicates that the estimation procedure works well a monte carlo experiment suggests that the proposed tests have good power properties copyright 1993 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

assessing gas transit risks russia vs the eu abstract this paper proposes a transit risk index tri designed to assess the riskiness of pipeline gas imports and to study the effect of introducing new gas routes tri controls for gas dependency transit route diversification political risks of transit pipeline rupture probability and the balance of power between supplying and consuming countries along the transit route evaluating tri for the eu russia gas trade we show that the introduction of the nord stream pipeline would further widen already large disparities in gas risk exposure across the eu member states the gas risk exposure of the member states served by nord stream would decline in contrast eu countries not connected to nord stream but sharing other russian gas transit routes with the nord stream countries would face greater gas risk exposure we discuss the implications of our analysis for the design of the common energy policy in the eu

does smoking affect schooling evidence from teenagers in rural china youth smoking can biologically reduce learning productivity it can also reduce youths expected returns to education and lower their motivation to go to school where smoking is forbidden using rich household survey data from rural china this study investigates the effect of youth smoking on educational outcomes youth smoking is clearly an endogenous variable to obtain consistent estimates of its impact we use counts of registered alcohol vendors and a food price index as instrumental variables since the variable that measures smoking behavior is censored for non smoking adolescents we implement a two step estimation strategy to account for the censored nature of this endogenous regressor the estimates indicate that smoking one cigarette per day during adolescence can lower students scores on mathematics tests by about 0 08 standard deviations however we find no significant effect of youth smoking on either chinese test scores or total years of schooling

distinguishing between whole farm vs partial farm participation in the conservation reserve program by distinguishing between the decision to participate in the conservation reserve program crp and the decision for whole farm vs part farm participation we model participation as separate binary decisions our results suggest the farm characteristics and other factors affect the decision to participate in crp differently than the decision regarding whole farm vs part farm participation this model formulation also helps to clarify the conditions under which the effect of crp payments on the acreage enrolled in the program is positive or negative

supply side and demand side cost sharing in deregulated social health insurance which is more effective abstract microeconomic theory predicts that if patients are fully insured and providers are paid fee for service utilization of medical services exceeds the efficient level moral hazard effect in switzerland both demand side and supply side cost sharing have been introduced to mitigate this problem analyzing a panel dataset of about 160 000 adults we find both types of cost sharing to be effective in curtailing the use of medical services however when moral hazard mitigation is traded off against risk selection the minimum deductible supply side cost sharing option ranks first followed by the medium deductible demand side alternative making the supply side option somewhat more effective

unemployment assistance and transition to employment in argentina abstractin 2001 2 argentina experienced a wrenching economic crisis plan jefes implemented in may 2002 was argentina s institutional response to the increase in unemployment and poverty triggered by the crisis the program provided a safety net and appears to have protected some families against indigence despite this success the continued existence of the program which provides benefits to eligible unemployed individuals for an unlimited duration may have unappealing consequences reliance on the plan may reduce the incentive to search for work and in the long run may damage individual employability and perpetuate poverty motivated by these concerns this article examines the effect of participating in plan jefes on the probability of exiting unemployment regardless of the data set the specification and the empirical approach the article shows that plan enrollees are at least 14 percentage points less likely to transit to employment as compared to individuals who applied but did not join the

hmo plans self selection and utilization of health care services this study examines the effect of health maintenance organizations hmos on the use of health care services among the privately insured nonelderly population to consider jointly the possible self selection bias and high frequency of zero observations in the applied utilization measures we accommodate the endogeneity of health plan choice decisions in the censored regression model using data from the 2000 medical expenditure panel survey we find strong evidence for favourable self selection into hmo plans health maintenance organization enrollment is found to encourage greater use of office based and hospital outpatient services overall satisfaction with the quality of care among hmo members is relatively low compared to that among nonhmo members these findings suggest that more effort is needed to develop management strategies in hmos in order to contain the moral hazard in utilization and assure the quality of service provided within the network of hmo providers

strategic eurasian natural gas market model for energy security and policy analysis formulation and application to south stream abstract the mathematical formulation of a strategic eurasian natural gas market model is presented the model represents horizontal oligopolistic relationships among producers bilateral market power between producer russia and transit ukraine countries detailed transport constraints and operation decisions over a 20 year time horizon to demonstrate the model s capabilities a financial and market analysis of the proposed south stream gas pipeline from russia via the black sea to south europe is summarized insights obtained include the following first expectations of high demand growth in europe and or transit risks do not justify the construction of the south stream pipeline because under all demand and ukraine transit interruption scenarios the net benefits to the south stream participants are negative the npv ranges from 1 9 billion bn to 7 4 bn second ukraine s perception of high transit market power vis a vis russia may trigger the construction of the otherwise unprofitable south stream project thus under ukraine s high transit market power scenario the npv of south stream ranges between 2 4 bn and 24 5 bn third we find that the south stream investment increases the efficiency of the european gas market under the following conditions i when gas demand in europe grows 2 per year up to 2030 ii when ukraine poses high transit market power or iii under a combination of severe transit risks through ukraine and low demand scenarios in europe it should be noted that the value of south stream to both its project sponsors and the market as a whole is much higher when ukraine exercises transit market power than under the high demand scenario therefore whether ukraine is likely to wield market power is crucial to the success of the south stream project because that is the only scenario in which the project yields both a positive expected npv to its sponsors and the highest value to the market as a whole

organizational design and technology choice under intrafirm bargaining comment the authors consider a wide number of applications of an intrafirm bargaining game within organizations where employees and the firm engage in wage negotiations under their presumption that contracts cannot bind employees to the organization the resulting stable wage and profit profiles give rise to an objective function for the firm that places weight on inframarginal profits in an economically significant manner the authors in turn employ this methodology to explore applications of organizational design hiring and capital decisions training and cross training the importance of labor and asset specificity managerial hierarchies preferences for unionization responses to competition and internal capital budgeting copyright 1996 by american economic association

investment options and bargaining power the eurasian supply chain for natural gas we use cooperative game theory to analyze how the architecture of the pipeline network determines the power structure in the supply chain for russian gas if the assessment is narrowly focused on the abilities to obstruct flows in the existing system the main transit countries belarus and ukraine appear to be strong if investment options are accounted for however russia achieves clear dominance we show that options to bypass one of the transit countries are of little strategic importance compared to russia s direct access to its customers through the baltic sea comparing the results of our calibrated model with empirical evidence obtained from transit and import agreements we find that the shapley value explains the power of major transit countries better than the core and the nucleolus

bargaining foundations of shapley value1 a transferable utility economy in which each agent holds a resource which can be used in combination with the resources of other agents to generate value according to the characteristic function v is studied using a dynamic model of bargaining the main theorem establishes that the payoffs associated with efficient equilibria converge to the agents shapley values as the time between periods of the dynamic game goes to zero in addition it is demonstrated that an efficient equilibrium exists and is unique when an additivity condition is satisfied to demonstrate the sensitivity of the solution to the institutional detail we modify the model to allow for partnerships and show that the shapley value is no longer achieved

intra firm bargaining under non binding contracts we present a new methodology for studying the problem of intra firm bargaining based on the notion that contracts cannot commit the firm and its agents to wages and employment we develop and analyse a general non cooperative multilateral bargaining framework between the firm and its employees and consider outcomes which are immune to renegotiations by any party equilibrium firm profits are characterizable as both a weighted average of a neo classical non bargaining firm s profits and a generalization of shapley value for a corresponding cooperative game furthermore the resulting payoffs induce economically significant distortions in the firm s input and organizational design decisions

impact of off farm labor supply on food expenditures of the farm household abstract farm households diversify their income sources by working off the farm this is a risk management strategy that is used by farm households in both developed and developing countries income diversification via off farm work is associated with higher incomes and food consumption however little is known about the association between off farm work and farm household food expenditures in an effort to bridge this gap this study attempts to assess the impact of off farm work decisions by the operator and or the spouse on the food expenditures of the farm household using a nationwide farm household survey in the united states and new econometric method we find that the decisions of the operator and or the spouse to work off the farm are significantly interrelated 29 however these two decisions affect food expenditures in different ways the operator s off farm work decision is positively related to food expenditures while the spouse s decision is negatively associated with expenditures on food by the farm household

explaining smallholder maize marketing in southern and eastern africa the roles of market access technology and household resource endowments research on household food grain sales behavior in developing countries has tended to focus on the roles of market access and prices to explain why many rural households do not sell staple crops though recent literature suggests that low household asset endowments may also be key constraints we use econometric analysis of panel data from smallholders in kenya mozambique and zambia to inform the design of public investments that will enable smallholders to increase their maize sales results show that investments that raise farm level productivity and land access are an essential complement to investments that improve market access

why are power couples increasingly concentrated in large metropolitan areas using the panel study of income dynamics psid we test costa and kahn s colocation hypothesis which predicts that power couples couples in which both spouses have college degrees are more likely to migrate to the largest cities than part power couples or power singles we find no support for this hypothesis instead regression analyses suggest that only the education of the husband and not the joint education profile of the couple affects the propensity to migrate to large metropolitan areas the observed location trends are better explained by higher rates of power couple formation in larger metropolitan areas

hybrid seed and the economic well being of smallholder maize farmers in zambia abstractthe development and diffusion of hybrid maize in zambia since the 1970s is a major achievement in african agriculture but other than profitability studies analyses of how this process has affected the economic well being of smallholder farmers have been few we test the relationship of hybrid seed use with six indicators of economic well being after using the control function instrumental variables approach to test for the endogeneity of hybrid seed use we estimate correlated random effects cre fractional response cre tobit and fixed effects models with a panel of nationally representative data collected in 2002 3 and 2006 7 findings suggest that use of maize hybrids is associated with higher values of household income assets farm and processing equipment and livestock and less deprivation compared to other farmers in nearby villages

optimal dynamic durability abstract consider a firm that adjusts its production and the choice of durability for its products instantaneously we show that when the marginal cost with the respect to durability is nonincreasing a the optimal durability for both the competitive firm and the monopolist decreases over time and b the monopolist will produce a good with lower durability than the competitive firm we thus lend support for empirical findings and causal observations that found the phenomenon of declining durability over time

oligopolies and product durability abstract we analyze a simple two period quantity setting model where firms rent all of their output we compare the durability chosen by an oligopolist to the competitive socially optimal durability the model shows in subgame perfect equilibria the durability chosen by oligopolists will be cost minimizing independent of their output levels thus swan s independence result can be extended to oligopoly markets if the firms rent their output we also demonstrate the independence result can be extended to certain corner solutions

learning by doing and product durability many durable goods industries are industries that have significant learning affects i examine a monopolist s and social planner s cost minimizing durability choice in both the short and the long run when learning effects are present the model indicates that the relationship between durability and learning depends crucially upon whether or not knowledge decays and on learning s impact on the marginal cost of durability in particular this model demonstrates that swan s 1970 1971 independence result will hold in the long run if knowledge does not decay but will not hold if knowledge does decay thus whether or not monopolists will manufacture products with the same durability or quality as a social planner depends to a large extent on the type of learning process in the industry and on whether or not quality and durability directly influence this learning process

can cross border transmission expansion lead to fair and stable cooperation northeast asia case analysis abstract in this paper we present a framework for analyzing cross border power interconnection projects based on cooperative game theory compared to existing studies we not only quantify the benefits of interconnections and suggest cost benefit allocation techniques but also analyze the stability of the allocations which is a crucial aspect in regions where coordination and mutual trust between countries have not been built yet we apply our framework to the northeast asia where six countries china russia mongolia south korea north korea and japan are suggested for cross border transmission expansion planning cooperation cost benefits allocation of the interconnections is analyzed according to the marginal contribution of each country to the grand coalition and the minimal dissatisfaction of each coalition that ensures the stability of the solution accordingly game theory concepts the shapley value and the nucleolus are used in our analysis moreover we employ the core concept to further analyze the stability of the allocation solution and present a visualization of the feasible space formed by all stable allocations we found out that the grand coalition i e the scenario where all countries agree on the cooperation is the optimal and stable coalition with 7 1 billion total savings per year we also suggested a scheme of investment allocation and payments between the northeast asian countries in order to ensure that the proposed interconnections are plausible in practice

durable good monopoly and best price provisions best price provisions guarantee buyers that the prices they pay are the lowest available if the seller subsequently cuts price then each previous buyer is entitled to a refund a durable good monopolist who offers certain forms of these provisions can construct a consistent plan yielding the same profits as rental agreements and contracts with explicit quantity commitments the provisions require special circumstances to be practical but they are simple and effective and appear in a variety of economic settings three applications are discussed international commodity agreements markets for electric turbogenerators and markets for financial claims copyright 1990 by american economic association

monopolist pricing with dynamic demand and production cost this paper deals with pricing of a new product over time by a monopolist who maximizes the discounted profit stream the interdependency of cost and demand on cumulative production makes the problem inherently dynamic cost is assumed to be declining with cumulative production learning curve effect while demand is a function of price and cumulative sales representing word of mouth and saturation effects the paper addresses this problem in a general framework that includes several previous results as special cases and provides new insights in other situations while the learning curve and word of mouth effect cause prices to be lower than the price that maximizes immediate revenues the saturation factor has the opposite effect the price path over time is affected by these factors and the interest rate we characterize the price path under several different situations and interpret the results for policy guidelines

recent two stage sample selection procedures with an application to the gender wage gap recently developed two stage estimation methods of sample selection models are used in the context of data from the 1989 labor market activity survey to examine labor supply decisions and wage outcomes for employed men and women recent hypothesis test procedures are used to test for no sample selection and to test for a parametric against a semiparametric selection correction procedure we conclude that selection is indeed an issue for the sample at hand and that the semiparametric specification is appropriate we also present the standard decomposition of the gender wage gap into its explained and unexplained portions

returns to endogenous education the case of honduras the rapid expansion of the education sector in developing countries and the scarcity of public funds have increased the need for an accurate evaluation of educational policies estimates of rates of return to education have often been used as an integral part of cost benefit studies and programme evaluation efforts this study uses household survey data from honduras for 1990 to estimate returns to education that allow for worker heterogeneity and individual self selection in the education process a sequential estimation procedure is used that enables study of the interaction between educational attainment and earnings determination it is found that accounting for endogenous educational attainment leads to substantially higher estimated returns to education compared to traditional least squares estimates the possible magnitude of the bias underscores the importance of recognizing the role of self selection and comparative advantage in the education process

power in a theory of the firm transactions take place in the firm rather than in the market because the firm offers power to agents who make specific investments past literature emphasizes the allocation of ownership as the primary mechanism by which the firm does this within the contractibility assumptions of this literature we identify a potentially superior mechanism the regulation of access to critical resources access can be better than ownership because i the power agents get from access is more contingent on their making the right investment and ii ownership has adverse effects on the incentive to specialize the theory explains the importance of internal organization and third party ownership

estimating the effects of earnings uncertainty on families saving and insurance decisions this paper investigates whether families save partially to self insure against uncertain future earnings and estimates the extent to which pooled insurance substitutes for saving as a precaution against earnings risk an econometric model is estimated using unique household survey data from the nineteenth century to examine families joint saving and insurance decisions the historical microdata are of interest because they predate widespread social insurance programs which may stunt self insurance through private saving among contemporary families the econometric results imply that two independent measures of idiosyncratic earnings risk matter for families saving decisions additionally families whose primary wage earners belong to labor unions significantly save less frequently than others all else being equal but this tendency is not apparent among members of private benevolent societies

network access and market power abstract we use cooperative game theory to study the impact of the liberalization of eu natural gas markets on the balance of power between local champions customers and outside producers such as russian gazprom we calibrate a model of the eurasian gas network and distinguish between two steps of the reform first the opening of access to transit pipes and second the opening of access to distribution systems hence customers using the shapley value as a power index we find a modest and rather heterogeneous impact from the first step the impact of the second step is much larger and yields a clear pattern all local champions lose while all customers and all outside players gain as one third of the losses of champions within eu leaks to players abroad current reforms might enhance the dominance of already powerful outside producers when network power is assessed with the nucleolus in contrast full liberalization of access to customers does not benefit outside producers at all

value consistency and random coalition formation abstract given an n player cooperative game and a feasible age n vector suppose that the players in a cooperative game are randomly split into two coalitions each with a randomly chosen leader the two leaders bargain bilaterally and each pays out of his share a wage to each member of his coalition as specified by the wage vector the wage vector is said to be consistent with the above procedure if it is equal to the ex ante expected payoff vector we prove that if all 2 coalition partitions are equally likely and if the bilateral bargain splits the surplus equally then the unique consistent payoff vector is the shapley value an equivalent consistency result holds for partitions with more than two elements these results are related to gul s 1989 result on noncooperative implementation of the shapley value journal of economic literature classification number 026

transnational trafficking law enforcement and victim protection a middleman trafficker s perspective abstractwe explore two hitherto poorly understood characteristics of the human trafficking market the cross border ease of mobility of traffickers and the elasticity of buyers demand in a model of two way bargaining the exact configuration of these characteristics is shown to determine whether domestic and foreign crackdowns on illicit employment mutually reinforce or counteract one another in efforts to stem the tide of trafficking estimation results from a gravity model of trafficking present evidence consistent with the mutual reinforcement view indicating considerable ease of mobility and inelastic demand

child labor and schooling responses to access to microcredit in rural bangladesh microcredit has been shown to be effective in reducing poverty in many developing countries however less is known about its effect on human capital formation in this paper we develop a model examining the relation between microcredit and child labour we then empirically examine the impact of access to microcredit on children s education and child labour using a new and large data set from rural bangladesh we address the selection bias using the instrumental variable method where the instrument relies on an exogenous variation in treatment intensity among households in different villages the results show that household participation in a microcredit program may increase child labour and reduce school enrolment the adverse effects are more pronounced for girls than boys younger children are more adversely affected than their older siblings and the children of poorer and less educated households are affected most adversely our findings remain robust to different specifications and methods and when corrected for various sources of selection bias

the benefits of integrating european electricity markets this paper builds on and extends work under contract ener b1 491 1 2012 published as newbery et al 2013

market structure and the durability of goods a basic proposition in microeconomics is that a monopolist tends to produce less output than would be produced by a competitive industry with this proposition in mind it is tempting to suggest that monopolistic producers of durable goods will produce goods with less durability than would be produced by a competitive industry this result was derived by martin 1962 kleiman and ophir 1966 levhari and srinivasan 1969 and schmalensee 1970 however swan 1970 showed that monopolists would choose the same degree of durability for their goods as would competitive producers the reason that earlier writers had reached a different result was that they had focused on long run equilibrium profits and ignored the role of initial conditions in optimizing decisions the swan independence result that durability is independent of market structurewas first derived under the assumption of constant returns to scale specifically the average cost of production was assumed to be an increasing function of durability but independent of the level of output the constant returns to scale assumption was first relaxed by sieper and swan 1973 by introducing a fixed capacity cost they showed that with finitely lived capacity which required replacement the independence result continued to hold in the very long run although market structure could affect durability before attainment of long run equilibrium no systematic results were derived kamien and schwartz 1974 introduced rising average cost curves and resurrected the result of earlier writers that a monopolist would choose a lower durability than competitive firms however swan 1977 pointed out that the kamien schwartz analysis is flawed by not allowing the monopolist access to the same technology as the competitive industry if the monopolist is allowed to choose the optimal number of plants then swan s independence result holds finally auernheimer and saving 1977 introduced costs of adjusting the rate of output and the durability of output they showed that if long run increasing costs arise from pecuniary external diseconomies then the independence result is preserved as remarked by schmalensee 1979 in his survey the general message of

impacts of subsidized hybrid seed on indicators of economic well being among smallholder maize growers in zambia we test the hypotheses that subsidies on hybrid seed change maize production total household income the severity of poverty and relative deprivation among smallholder maize growers in zambia the analysis contributes to the literature by measuring the quantitative effects of seed as compared to fertilizer subsidies on indicators of household well being rather than input demand we apply a combination of econometric approaches to a nationally representative balanced panel of smallholder maize growing households and invoke the chain rule to generate quantitative estimates of impacts per kilogram of subsidized seed our findings demonstrate that in the initial years of the program subsidized seed enhanced the well being of smallholder maize growers according to each indicator but by small magnitudes simple calculations suggest high private and social benefit cost ratios when benefits are measured in terms of household income although magnitudes are sensitive to seed price and administrative costs

a network game analysis of strategic interactions in the international trade of russian natural gas through ukraine and belarus abstract natural gas is an important source of relatively low emission low cost non nuclear and abundant energy however the difficulty of storage and transportation adds geopolitical and geostrategic complexity to its international trade much of the global natural gas trade occurs through natural gas pipelines which as an infrastructure is strictly specific to the transportation of natural gas therefore the very structure of natural gas pipeline networks can dictate the strategic relationship among countries involved in its trade this paper applies a network game model where these pipeline networks are modeled as graphs and respective value functions and employs the link based flexible network allocation rule developed by jackson 2005 as a solution concept to measure the relative power structure among these natural gas trading countries the paper analyzes the case of trade between russia ukraine belarus and western europe and compares the results to existing analyses that employ a cooperative game model in characteristic function form and the shapley value as the solution concept whereas the results of the analysis conducted in the previous literature indicate that russia s relative power was significantly stronger than other players both before and after the construction of the nord stream pipeline the results provided in this paper draw a different conclusion ukraine s relative power was already equal to that of russia before the nord stream this may be understood as one of the underlying causes for the prolonged conflicts that occurred repeatedly in this region concerning natural gas trade

subsidies and crowding out a double hurdle model of fertilizer demand in malawi this article uses a double hurdle model with panel data from malawi to investigate how fertilizer subsidies affect farmer demand for commercial fertilizer the article controls for potential endogeneity caused by the nonrandom targeting of fertilizer subsidy recipients results show that on average 1 additional kilogram of subsidized fertilizer crowds out 0 22 kg of commercial fertilizer but crowding out ranges from 0 18 among the poorest farmers to 0 30 among relatively nonpoor farmers this indicates that targeting fertilizer subsidies to the rural poor is likely to maximize the contribution of the subsidy program to total fertilizer use

farm income variability and the supply of off farm labor if farmers are risk averse greater farm income variability should increase off farm labor supply this effect is confirmed for a sample of kansas farmers off farm employment of farmers and their spouses is also found to be significantly influenced by farm experience off farm work experience farm size leverage efficiency and farm specific education in addition farm operators and spouses who receive significant income support through government farm programs are less likely to work off the farm this may suggest that policy changes reducing farm income support payments may increase off farm employment of farmers and their spouses

effect of off farm income on smallholder commercialization panel evidence from rural households in ethiopia this article investigates how off farm income affects crop output market participation decisions and marketed surplus of smallholder farmers in ethiopia a double hurdle model is estimated using three waves of panel data from the ethiopian rural household survey unobserved heterogeneity is controlled for using a correlated random effect procedure and potential endogeneity of explanatory variables using a control function approach the results show that off farm income has no significant influence on household crop output market participation however conditional on market participation additional off farm earnings negatively affect the marketed surplus this indicates that farmers use off farm earnings for consumption rather than for investment in agricultural production policy measures that promote rural investment may help increase returns to labor for land poor households participating in off farm work in the process of agricultural commercialization

the dynamic adjustment of optimal durability and quality they don t make them like they used to is a well known adage which is investigated in this paper we show that when the marginal cost with respect to durability or quality per unit of production does not increase with production then a a competitive firm and a monopolist will choose an optimal durability or quality path that decreases over time b the more likely it is that quality and quantity are substitutes either in consumption or production the more likely it is that quality will deteriorate over time as the market approaches the steady state c substitutability of quality and durability will tend to drive quality down even faster when durability declines

disrupting demand for commercial seed input subsidies in malawi and zambia summary this study uses nationally representative household level panel data from malawi and zambia to identify the determinants of subsidized maize seed and fertilizer receipt and to estimate how input subsidies affect households commercial purchases of improved maize seed varieties in both countries we find that households in areas where the ruling party won the last presidential election acquire significantly more subsidized inputs than other households results also indicate that each additional kilogram of subsidized maize seed acquired by a household reduces its commercial improved maize seed purchases by 0 58 kg in malawi and by 0 49 kg in zambia on average

how do fertilizer subsidy programs affect total fertilizer use in sub saharan africa crowding out diversion and benefit cost assessments a major determinant of input subsidy programs effects on the achievement of national policy goals is the extent to which they raise total fertilizer use this study synthesizes recent literature on how the new generation of targeted input subsidy programs has affected national fertilizer use after accounting for crowding effects and derives benefit cost bc estimates of the fertilizer subsidy programs for kenya malawi and zambia after accounting for crowding out and diversion we highlight two major findings first accounting for the illicit diversion of program fertilizer can profoundly influence estimates of how fertilizer subsidy programs affect total fertilizer use and program impacts given recent evidence that 33 or more of total program fertilizer may be diverted before being received by intended beneficiary farmers the failure to account for program diversion is shown to overestimate the contribution of the subsidy programs to national fertilizer use by 67 3 in the case of malawi by 61 6 for zambia and by 138 0 for kenya the second major finding is that the incremental value of maize output produced from these subsidy programs is considerably less than their costs in most years except under unusually high maize price assumptions conventional bc analyses that do not account for crowding out and diversion may seriously overestimate the benefits of input subsidy programs greater attention to program design and implementation details to reduce problems of crowding out and diversion can substantially raise the returns to such programs

gender roles and human capital inverstment the relationship between traditional attitudes and female labour market performance this paper investigates the relationship between the labour market behaviour of females and their attitudes towards traditional gender roles an attitudes index is constructed by employing individuals responses to statements related to the role of women and examined to determine whether it is correlated with individual characteristics the paper examines whether these attitudes influence human capital attainment and whether they are weakly exogenous to educational attainment it also focuses on the impact of these traditio nal attitudes upon labour supply and the return to education the results are dramatic it is found that females attitudes towards working women are developed in their youth and result in substantial reductions in their human capital investment labour supply and rates of return to education furthermore it is found that these attitudes are determined outside the educational process

the value of the voting right a study of the milan stock exchange experience i study the large premium 82 percent attributed to voting shares on the milan stock exchange the premium varies according to the ownership structare and the concentration of the voting rights and it can be rationalized in the presence of enormous private benefits of control a case study seems to indicate that in italy private benefits of control can easily be worth more than 60 percent of the value of nonvoting equity a tentative explanation for these findings is provided traditional finance theory disregards the value of voting rights in pricing common stock in most cases this omission does not seem harmful many studies of differential voting stocks in different countries have indicated that voting rights are generally worth between 10 percent and 20 percent of the value of common stock the italian evidence i present differs sharply from this view in italy voting shares that have inferior dividend rights trade at an average premium

what drives natural gas prices a structural var approach abstract in this study we develop a structural vector autoregressive model var for the german natural gas market our setup allows us to analyze the determinants of the natural gas price in a comprehensive framework in particular we illustrate the usefulness of our approach by disentangling the effects of different fundamental influences on gas prices during three recent supply interruptions the russian ukrainian gas dispute of january 2009 the libyan civil war in 2011 and the withheld russian exports in february 2012 our results show that the natural gas price is affected by temperature storage and supply shortfalls in the short term while the long term development is closely tied to both crude oil and coal prices capturing the economic climate and the substitution relationship between the different energy commodities

the effects of adaptation measures on hurricane induced property losses which fema investments have the highest returns abstract this paper evaluates the relative effectiveness of fema expenditures on hurricane induced property losses we find that spending on fema ex ante mitigation and planning projects leads to greater reductions in property losses than spending on ex post adaptation programs specifically a one percent increase in annual spending on ex ante risk reduction and warning projects reduces damages by 0 21 percent while a one percent increase in ex post recovery and clean up spending reduces damages by 0 12 although both types of program spending are effective we find the marginal return from spending on programs that target long term mitigation and risk management to be almost twice that of spending on ex post recovery programs with the predicted increases in the frequency and severity of north atlantic hurricanes in the future our findings suggest there are important potential gains that could be realized from the further diversification of fema spending across project categories

publicity requirements in public procurement evidence from a regression discontinuity design abstract we document whether and how publicizing a public procurement auction causally affects entry and the costs of procurement we run a regression discontinuity design analysis on a large database of italian procurement auctions auctions with a value above the threshold must be publicized in the regional official gazette and two provincial newspapers we find that the increased publicity requirement induces more entry and higher winning rebates which reduces the costs of procurement and rationalizes public spending the evidence suggests that the number of bidders is the channel through which publicity affects rebates increased publicity also selects different winners it increases the likelihood that the winner hails from outside the region of the public administration and that the winner is a large company such companies tend to win repeated auctions gaining market share publicity seems to have no adverse effect on the ex post renegotiations of the works as measured by the percent of works delivered with delay or that are subcontracted estimates are robust to alternative measures of publicity alternative model specifications different sample selections to a falsification analysis at simulated thresholds and to the possibility that firms learn about auctions from a web based for profit information provider

optimal debt structure and the number of creditors within an optimal contracting framework we analyze the optimal number of creditors a company borrows from we also analyze the optimal allocation of security interests among creditors and intercreditor voting rules that govern renegotiation of debt contracts the key to our analysis is the idea that these aspects of the debt structure affect the outcome of debt renegotiation following a default debt structures that lead to inefficient renegotiation are beneficial in that they deter default but they are also costly if default is beyond a manager s control the optimal debt structure balances these effects we characterize how the optimal debt structure depends on firm characteristics such as its technology its credit rating and the market for its assets

information endogeneity and consumer health behaviour application to dietary intakes due to heightened public health interest a growing number of consumer health behaviour studies are focusing on the effect of health information on the demand for health inputs and outcomes many of these studies however have overlooked the potential endogeneity of information variables stemming from unobserved individual heterogeneity due to simultaneity bias ignoring endogeneity may lead to inaccurate estimates of informational effects on health behaviour using dietary intake data for fat saturated fat cholesterol and fibre this paper illustrates the pitfalls of treating health information related to these nutrients as exogenous variables in their demand equations in most of the estimated models the exogeneity of information is statistically rejected when the information variables are treated as exogenous variables their effects on dietary intakes are underestimated the estimated effects of key intake determinants such as income education ethnicity and race are also different in such a

imperfect competition in agricultural markets evidence from ethiopia abstract drawing upon unique transaction level data from rural ethiopia this paper tests for general forms of imperfect competition among rural wholesale traders these are key to the grain distribution system as they purchase from farmers and perform interregional trade tests show that traders in a typical source market engage in imperfectly competitive behavior in purchasing from farmers driving down the price paid to farmers approximately 3 in contrast there is no conclusive evidence of imperfect competition among traders in the larger more centrally located market studied thus efficiency losses due to market structure are likely to be greatest in markets which also have poor road links and lesser volumes of marketed grain

durable goods monopoly with discrete demand we analyze a dynamic game between consumers and the sole seller of a durable good unlike previous analyses we assume that there exists a finite collection of buyers rather than a continuum none of the main conclusions of the literature on durable goods monopoly survives this change in assumption coase s conjecture that a durable goods monopolist cannot earn supracompetitive profits in the continuous time limit bulow s proposition that renting a durable is always more profitable than selling it and stokey s proposition that precommitting to a time path of prices is always optimal are all false when the set of buyers is finite thus the assumption of a continuum of consumers so innocuous and useful a simplification in other contexts has proved misleading in the context of durable goods monopoly

regionalism in standards good or bad for trade regional agreements on standards have been largely ignored by economists and unconditionally blessed by multilateral trade rules the authors find theoretically and empirically that such agreements increase trade between participating countries but not necessarily with the rest of the world adopting a common standard in a region that is harmonization boosts exports of excluded industrial countries to the region but it reduces exports of excluded developing countries possibly because developing country firms are hurt more by an increase in the stringency of standards and benefit less from economies of scale in integrated markets mutual recognition agreements are more uniformly trade promoting unless they contain restrictive rules of origin in which case intra regional trade increases at the expense of trade with other especially developing countries the authors propose a modification of international trade rules to strike a better balance between the interests of integrating and excluded countries

are farmers decisions to work off the farm related to their decisions to participate in the conservation reserve program since both working off the farm and participating in the conservation reserve program crp remove important resources from us agricultural production we utilize two econometric specifications to test hypotheses regarding whether these two decisions by farmers are independent we find statistical evidence that decisions to participate in crp and work off the farm are correlated characteristics of farm households and farm operations affect both decisions directly and indirectly as do local economic conditions and participation in other farm programs to illustrate their importance we simulate the combined direct and indirect effects of changes in decoupled payments and farm size on the probabilities of farm households engaging in these two activities we also illustrate that the probability of engaging in these two activities depends on whether the farm is located in a state or local agricultural district or participates in a related farmland retention program

nonwage benefits in a simultaneous model of wages and hours labor supply functions of young females this article argues that the negative relationship between weekly hours worked and the gross hourly wage rate is due to the provision of fringe benefits as the total weekly wage increases employers and employees avoid taxation by substituting wages with nontaxable nonwage benefits i produce a wage that incorporates the benefit effects and estimate the corresponding labor supply elasticities an estimator is presented for the wage hours market locus and the structural labor supply function an empirical application indicates that an estimated negative labor supply elasticity associated with the observed gross wage is reversed when the adjusted wage is employed

the impact of microcredit borrowing on household consumption in bangladesh the rapid expansion of microcredit in recent years renders knowledge of its impact on poverty critical unfortunately empirical investigations have been limited by endogeneity issues and randomiz

public private sector wage gap by gender in egypt evidence from quantile regression on panel data 1998 2018 abstract this paper estimates the public formal private wage gap in egypt using egypt labor market panel survey for the 20 year period of 1998 2018 for men and women separately we estimate the public formal private sector wage gap with wage equations including a public sector indicator both at the mean and at different quantiles of the conditional wage distribution using the panel feature of the data we also address the endogenous employment and the sector of employment selection issue and find a persistent public wage penalty for the males and public wage premium for the females except at the top even after controlling for the observable and the time invariant unobservable characteristics we further examine the public wage gap over time and in different sub samples by potential experience skill levels and regions generally the results are consistent with a decrease in the public wage gap for both men and women over the period considered we further provide evidence on the quality of workers we find that the public sector fails to attract better quality men throughout the conditional wage distribution while it manages to attract better quality women in the lower parts of the conditional wage distribution but not at the top all on the basis of time invariant unobservable attributes these results indicate concern for the efficient provision of public services

trade quotas and buyer power with an application to the e u natural gas market we consider a market in which domestic buyers negotiate contracts with foreign sellers and explore how trade quotas can help to increase the buyers countervailing power we use the shapley value to describe bargaining power and the distribution of the trade surplus in such a bilateral oligopoly by exploiting strategic externalities among the buyers bilateral trade quotas can improve the buyers bargaining positions in contrast aggregate trade restrictions on all buyers trade never improve buyer surplus minimum quotas on imports from fringe suppliers can benefit nonaffected buyers as these enjoy positive externalities we apply these insights to the e u market for natural gas and show that the effects of trade quotas on e u gas importers power can be significant

central asian gas in eurasian power game abstract following the dissolution of the soviet union various gas pipeline projects have been proposed to diversify transit routes and export markets of the landlocked central asian states to evaluate the pipeline project s impact on the players bargaining power i apply the cooperate game theory to a quantitative model of the eurasian gas trade and quantify the bargaining power structure via the shapley value due to ample production capacities in central asia i observe little strategic interaction between the west and china thus demand competition with china is not necessarily a disadvantage for the west and the turkmenistan china pipeline does not affect the impact of the westbound projects aiming europe and turkey for turkmenistan i e the main supplier in the region a link via the caspian sea to turkey is the most beneficial westbound option although the projects carrying gas from azerbaijan and turkmenistan to europe enjoy the european commission s political support they yield marginal benefits to the european consumers thanks to its transit position turkey collects a large share of the benefits in the east west gas trade