external shocks adjustment policies and investment in a developing economy illustrations from a forward looking cge model of the philippines abstract the rapid increase in investment and external debt of middle income countries like the philippines during the 1970s was perfectly rational given existing policies however these countries could have done better with an appropriate mix of adjustment policies using a dynamic general equilibrium framework the paper examines the sensitivity of investment and growth to external shocks and adjustment policies it highlights the intertemporal trade offs of tariff reform a policy often recommended in the 1980s emphasizing the need for complementary measures to ease macro imbalances and short term dislocations of the protected sector

do too many cooks always spoil the stew an experimental analysis of rent seeking and the role of a strategic buyer laboratory methods are used to evaluate the effects of institutional arrangements and rent defending activity on rent seeking auction outcomes in part nash equilibrium predictions are a useful behavioral guide as predicted more rents are dissipated in perfectly discriminating auctions where the high bidder wins than in lotteries where relative bids determine the chance of winning also as predicted the introduction of a rent defending buyer reduces social costs nevertheless the social costs of rent seeking consistently exceed predicted levels moreover individual bidding especially by buyers deviates markedly from nash predictions

using water allocation in israel as a proxy for imputing the value of agricultural amenities this paper uses the water allocation economy in israel as a proxy for imputing the value of agricultural amenities a general equilibrium model is developed and incorporates agricultural amenities as byproducts of agricultural production water trade channels and multiple water types the premise is that until a decade ago water policy in israel was interlinked with agricultural land use policy integrating a monte carlo analysis the model searches for a baseline minimum value of agricultural amenity that makes household in the counterfactual scenario indifferent between the administrative and market mechanisms the minimum imputed value is around 109 agricultural output the intuition is that the gains in economic welfare from improved water use efficiency are offset by the losses in social welfare due to a reduction in available agricultural amenities

who does not respond in the household expenditure survey a nonparametric multiple regression method based on the extended gini that depends on one parameter v is investigated the parameter v enables production of infinite alternative linear approximations to the regression curve which differ in the weighting schemes applied to the slopes of the curve the method allows the investigator to stress different sections of one independent variable while keeping the treatment of the other independent variables intact as an application we investigate nonresponse patterns in a survey of household expenditures to learn about the relationship between nonresponse and income the empirical results show that the higher the income the higher the response rate and the larger the household the higher the response rate the arab population tends to respond more than the jewish one whereas the ultrareligious group tends to respond less than the rest of the population the implications on the bias in the estimates are discussed

the social costs of monopoly and regulation posner reconsidered focuses on social costs of monopoly and trade regulation in the united states benefit of marginal changes on antitrust activities equality of cost in obtaining monopoly and expected profit of monopolist elasticity of inputs in obtaining monopoly ebsco

economywide impacts of climate change on agriculture in sub saharan africa two possible adaptation scenarios to climate change for sub saharan africa are analyzed under the sres b2 scenario the first scenario doubles the irrigated area in sub saharan africa by 2050 compared to the baseline but keeps total crop area constant the second scenario increases both rainfed and irrigated crop yields by 25 for all sub saharan african countries the two adaptation scenarios are analyzed with impact a partial equilibrium agricultural sector model combined with a water simulation module and with gtap w a general equilibrium model including water resources the methodology combines the advantages of a partial equilibrium approach which considers detailed water agriculture linkages with a general equilibrium approach which takes into account linkages between agriculture and nonagricultural sectors and includes a full treatment of factor markets the efficacy of the two scenarios as adaptation measures to cope with climate change is discussed due to the limited initial irrigated area in the region an increase in agricultural productivity achieves better outcomes than an expansion of irrigated area even though sub saharan africa is not a key contributor to global food production rainfed irrigated or total both scenarios help lower world food prices stimulating national and international food markets

water markets and third party effects we examine potential third party effects arising from trading water from one region rural to another urban using labor water and heterogeneous land rural agents produce a traded agricultural good and nontraded service good absent job market frictions increased water trading improves per capita regional welfare but aggregate service income can increase decrease while individual land rents decrease increase if labor experiences job market frictions water trading can trigger socially inefficient land fallowing and a decrease in per capita regional welfare simulation results confirm the no job market friction model predictions

remittances and inequality in this paper the authors propose a framework and develop techniques for analyzing the impact of migrant remittances on the distribution of rural income by size and subsequently its impact on rural welfare household data are used to assign numerical coefficients to the impact of net remittances from both internal and international migrants on income inequality in 2 mexican villages the impact of migrant remittances on the distribution of rural income by size depends critically on the degree to which migration opportunities become diffused through the village population on the returns to human capital embodied in remittances and on the distribution of potentially remittance enhancing skills and education across village households our empirical findings demonstrate that in a village where many households contain internal migrants but few have experience migrating to the u s remittances from mexico to us migrants have an unequalizing impact on village incomes while remittances from internal migrants have a favorable effect on the village income distribution by contrast in a village with a long historyh of sending migrants to the us and hence a more ready access to us labor markets us to mexico remittances have an equalizing impact on incomes remittances from internal migrants in this village however embody a large human capital component and are highly correlated with household income hence internal migrant remittances account for a comparatively large share of inequalities in the 2nd village the overall effect of remittances on income inequality is favorable in both villages migration type migration stage and interaction terms all appear to play a role in this context the effects of small changes in remittances upon income inequality and rural welfare in the 2 villages are explored and some implications for migration and rural development policy are considered authors modified

the value of the high aswan dam to the egyptian economy the high aswan dam converted a variable and uncertain flow of nile river water into a predictable and controllable water supply stored in lake nasser we use a computable general equilibrium model of the egyptian economy to estimate the economic impact of the high aswan dam we compare the actual 1997 economy to the 1997 economy as it would have been if historical pre dam nile flows drawn from a 72 year portrait had applied i e the dam had not been built the steady water supply sustained by the high aswan dam increased transport productivity and year round availability of predictable and adequate water sustained a shift towards more valuable summer crops these static effects are worth egp 4 9 billion investments in transport and agriculture increased as a consequence these investments assuming that egypt is a small open economy added another egp 1 1 billion to the value of the dam the risk premium on the reduced variability is estimated to be egp 1 1 billion for a modest risk aversion and perhaps egp 4 4 billion for a high risk aversion the total gain of egp 7 1 billion to 10 3 egp billion equals 2 7 to 4 0 of annual gdp in 1997

almost stochastic dominance and stocks for the long run abstract the geometric mean argument and the recently developed almost stochastic dominance criterion have been employed to make the case for stocks for the long run we show that almost stochastic dominance and the geometric mean argument do not necessarily support long run investment in equities in fact for standard preferences bonds may be preferred to stocks for the long run while stocks are preferred for shorter horizons

regulation and rent seeking prices profits and third party transfers previous research formulated the regulatory process as a contest between consumer and producer groups to determine the regulated price empirical verification of this result has been provided by numerous studies modeling the regulatory process in this fashion results in a rent seeking game in which property rights granted in the original legislation are not exclusively assigned to one group and as a result rent seeking ensues on the relevant margin this study has addressed the issue of third party interest groups extracting transfer payments from the regulatory process by introducing third party interests as an argument in the regulator s majority function it was mathematically demonstrated and empirically verified that a higher regulated price can be expected this finding suggests that other opportunities exist for an enriched theory of regulatory behavior where the political context in which the regulator functions is more precisely defined and extended

water markets design and evidence from experimental economics market mechanisms are gaining increasing acceptance all over the world as a way of making more efficient use of scarce water resources designing regulatory frameworks that ensure both inter and intra temporal efficient allocations is a daunting task especially if supply is stochastic and there is ample storage capacity in addition to defining tradable rights specific provisions must regulate the use of reservoirs commonly water statutes include provisions that establish asymmetries regarding the allocation of water and market restrictions that ban water trading across different users in this article we use data collected in a laboratory to test two specific market regulations included in the 1999 water reform in spain first junior right holders are not allowed to buy water from senior users second the law does not explicitly define water rights over units left in reservoirs for the following season results suggest that trading restrictions among water right holders lead to welfare losses for senior users it is shown that removing this restriction would increase senior right holders benefits without reducing those of junior users results show that defining water rights over saved units across periods would increase the average stock levels of reservoirs and reduce market price instability the lessons learned from the spanish experience are applicable to settings characterized by unstable natural water supply and the availability of large storage facilities

enhancing efficiency or crying over spilled milk the benefits of reform we analyze the welfare gains from the reform of existinggovernment induced distortions our results provide support forpolicies aimed at eliminating monopoly and other types of economicdistortion welfare gains over the status quo exist wheneverderegulation occurs the threat of deregulation can induce amonopoly or cartel to modify its behavior so a reform policy canprove beneficial even if reform does not actually occur optimalpolicy with commitment in fact allows a monopoly to deterderegulation the possibility of reregulation does not reverse ourresults the per period welfare gain from reform remainsundiminished

dissipation of contestable rents by small numbers of contenders the theory of rent seeking with its origins in the observations of gordon tullock 1967 or to use jagdish bhagwati s 1982 proposed term the theory of directly unproductive profit seeking activities is concerned with the potentially adverse effects on resource allocation of incentives to cap ture and defend artificially contrived rents and transfers the scope for so cial loss proposed by the theory derives from the relation between the value of a contestable prize and the value of the resources attracted into the con test to determine the beneficiary of the prize underlying this social loss is a specification of how rational behavior by optimizing agents links the value of the prize sought to the resources expended it has been traditional to assume competitive behavior in describing the activities of lobbying and influence seeking then if some further condi tions are satisfied l the total value of the resources expended precisely equals the value of the prize sought so dissipation is complete 2 conse quently the social cost associated with contestability of a rent can be in ferred from the value of the rent itself and the detailed and hard to come by information on individual outlays made in the course of the contest be comes unnecessary by basing their analyses on competitive dissipation contributors to the rent seeking literature see the review by robert tollison 1982 have been able to presume that the observed value of a contested rent is an exact measure of the associated social cost of monopoly power or regu lation similarly in the trade theoretic literature where the rights contested are to quota premia or revenues from trade taxes krueger 1974 bhagwati

consumer expenditures and inequality an analysis based on decomposition inequality in u s consumption expenditures is examined using the lerman and yitzhaki covariance method for decomposing the gini coefficient by factors from the decomposition nonparametric estimates of elasticities with respect to total expenditures are derived using data from the 1987 u s consumer expenditure interview survey the overall gini based on total annual consumption expenditures is 0 33 consistent with parametric expenditure elasticities the gini expenditure elasticities for household operations apparel and services and entertainment are relatively high an implication of this result is that taxing such goods and services will increase the progressivity or reduce the regressivity of the tax system copyright 1993 by mit press

understanding rent dissipation on the use of game theory in industrial organization game theory has had a deep impact on the theory of industrial organization in a similar but less controversial way as the rational expectations revolution in macroeconomics the reason it has been embraced by a majority of researchers in the field is that it imposes some discipline on theoretical thinking it forces economists to clearly specify the strategic variables their timing and the information structure faced by firms as is often the case in economics the researcher learns as much from constructing the model the extensive form as from

integrated water and economic modelling of the impacts of water market instruments on the south african economy a static computable general equilibrium model of south africa is adapted to compare new taxes on water demand by two industries namely forestry and irrigated field crops comparisons are made with respect to both the short and the long run in terms of three target variables namely i the environment ii the economy and iii equity since the taxes on the two industries do not raise the same amount of revenue the target variables are calculated per unit of real government revenue raised by the new taxes also referred to as the marginal excess burdens of the taxes the model results are robust for moderate values of the water elasticity of demand in the two industries in both the long and the short run the tax on irrigated field crops performs better in terms of all three the target variables in the short run in the long run the tax on irrigated filed crops is better in terms of water saving but reduces real gdp and the consumption by poor households

on turkey s trade policy is a customs union with europe enough abstract turkey has decided to harmonize its tarification structure with that of the european union for the country s authorities this move to a customs union is only meant to be the first step toward integration in the european union there are signs however that political opposition to the government s procompetitive stance may be strong enough to block any further move toward fuller trade liberalization we show using applied intertemporal ge analysis that to be welfare improving the trade reform would have to be pursued further and nontariff barriers on european trade removed failure to do so could be more detrimental to domestic welfare than no reform at all

the design of rent seeking competitions in the standard tullock model of rent seeking as a noncooperative game aggregate expenditures by seekers can equal exceed or fall short of total rents depending on what is assumed about the number of seekers and the marginal return to a seeker s investment if the supply of an input into the rent seeking process is controlled by a politician who receives payment from seekers for it the indeterminacy of the process becomes a less serious problem he supplies it and designs the rent seeking game to maximize his wealth the author derives expressions for the number of seekers and the marginal return parameter which maximize the politician s wealth in one input and two input rent seeking processes

rationing and rent dissipation in the presence of heterogeneous individuals this paper discusses the implications of rationing by waiting when consumers have different time costs and personal valuations the joint distribution function of time costs and personal valuations is used to characterize market equilibrium it is argued that under certain conditions an increase in the variance of time costs will reduce the dissipation of rent furthermore it is shown that introducing a secondary market for a rationed good does not necessarily improve welfare because total surplus under rationing by waiting depends more on the variance than on the level of time costs and personal valuations the model is also used to discuss other institutions that involve rent seeking activities such as the patent system and import quotas

the robustness of risk return nonlinearities to the normality assumption in a recent study tinic and west 1986 empirically reexamine the risk return relationship posited by the traditional mean variance capm they find a positive nonlinear relationship between risk and return except during january when the market rewards bearing nonsystematic risk this study examines the hypothesis that nonnormality of re turn distributions may account for some of these anomalous results we compare shalit and yitzhaki s 1984 mean extended gini capm an equilibrium asset pricing relation that is independent of the form of the underlying asset distribution with the traditional capm our results indicate that the nonlinear risk return relationship and the size and january effects are robust to nonnormality of return distributions

rent seeking firms consumer groups and the social costs of monopoly i introduction when a positive monopoly rent is secured under government protection firms compete with one another to win the monopoly by expending resources the opportunity costs of such rent seeking activities the values of goods and services that could be produced with resources expended on such rent seeking activities are part of the social costs of monopoly many economists have examined the social costs of monopoly defining them as the sum of the deadweight loss and the firms rent seeking costs examples include tullock 1967 krueger 1974 posner 1975 rogerson 1982 and fisher 1985 1 recently several economists such as wenders 1987 ellingsen 1991 and schmidt 1992 have pointed out that consumers do not always allow government protection of a monopoly rather consumers often seek government protection of themselves they try to defend their consumer surplus against a monopoly by spending resources for example consumers often lobby politicians for government regulation that requires a natural monopolist to set its price below the unregulated profit maximizing level the opportunity costs of such consumer surplus defending henceforth cs defending activities are also part of the social costs of monopoly an interesting question then becomes whether consumers cs defending activities increase or decrease the social costs of monopoly as compared with those incurred in the case of inactive consumers wenders 1987 argues that consumers cs defending activities lead to higher social costs of monopoly on the other hand ellingsen 1991 and schmidt 1992 show that consumers participation to defend their consumer surplus lowers the social costs of monopoly this paper also addresses the question of whether consumers cs defending activities increase or decrease the social costs of monopoly but differs from previous research by analyzing a model in which the government decides first whether or not to regulate a monopoly and then decides which firm to be the monopolist 2 we compare the social costs of monopoly in the case of active consumers with those incurred in the case of inactive consumers we demonstrate that given just one rent seeking firm consumers cs defending activities generally increase the social costs of monopoly but given two or more rent seeking firms such activities generally reduce the social costs of monopoly section ii sets up the basic model we consider a rent seeking and cs defending henceforth rcs contest with one consumer group it has two stages in the first stage firms and the consumer group compete by expending outlays to win their prizes 3 the prize for each firm is an unregulated monopoly and that for the consumer group is a regulated monopoly each firm and the consumer group choose their outlays simultaneously and independently in the second stage after knowing the government s decision on the form of the monopoly the firms compete against each other to win the monopoly they expend their outlays simultaneously and independently at the end of the second stage the government chooses the winning firm ellingsen 1991 argues that his sequential move framework is more realistic than his simultaneous move framework since in most cases consumers compete against existing monopolists rather than potential ones over the forms of monopolies in his sequential move framework potential monopolists first compete to win the monopoly and then the winner and consumers compete over the form of the monopoly however consider a situation in which the government periodically reassigns a monopoly in this situation consumers compete against potential monopolists including the incumbent monopolist over the form of the monopoly and the firms periodically compete to be the monopolist the sequential move game in this paper is more appropriate for this situation than the sequential move game of ellingsen 1991

linking the price of agricultural land to use values and amenities the recent appreciation in agricultural land values across the united states has raised a number of important questions for farmers farmland owners lenders and policy makers while traditional economic theory suggests that farmland values are determined by the discounted stream of expected returns previous research has shown that agricultural land values are actually driven by a complex set of factors this study leverages the unique characteristics of a national land based usda survey on farmland values and cash rents to estimate broad national level determinants of the market value of cropland and pastureland our results support past research findings that indicate farmland values are only partially explained by agricultural returns we find that multiple nonagricultural attributes of farmland also contribute to the market value

capital accumulation and economic growth the case of the retail food industry in developing countries the share of resources allocated to food marketed through supermarkets and their marketing channels has grown at an unprecedented rate in developing countries during the 1990s this expansion has caused some resources to depart traditional channels differences in the relative capital intensity of the modern marketing channels in contrast to the traditional channels is shown to explain at least part of this evolution as the process of economic growth and capital deepening even when the food share of total expenditures declines in this case incomplete markets and policy distortions can exacerbate the effects of adjustment in traditional agriculture placing a greater need

empirical tests for stochastic dominance efficiency we derive empirical tests for the stochastic dominance efficiency of a given portfolio with respect to all possible portfolios constructed from a set of assets the tests can be computed using straightforward linear programming bootstrapping techniques and asymptotic distribution theory can approximate the sampling properties of the test results and allow for statistical inference our results could provide a stimulus to the further proliferation of stochastic dominance for the problem of portfolio selection and evaluation using our tests the fama and french market portfolio is significantly inefficient relative to benchmark portfolios formed on market capitalization and book to market equity ratio

vegetable spirits and energy policy this study investigates the extent to which the 2005 energy policy act specifically the ethanol mandate contributed to the rise in farmland values we use the location of new ethanol plants to identify the capitalization effect of the mandate by these spatially advantaged operations we use a difference in difference propensity score matching estimator to control for the non random selection of ethanol production facilities the empirical strategy uses farmland parcel values from the 2001 7 june agriculture survey we find that new ethanol facilities had no effect on nearby farmland values prior to the mandate but had statistically significant effects after the policy copyright 2013 oxford university press

dominant firms price leadership and the measurement of monopoly welfare losses abstract the possible welfare losses associated with monopoly power have been the subject of numerous studies over a number of decades recent estimates seem to confirm the earliest estimates which suggested that such losses were relatively trivial this paper suggests that the basis of such estimates is questionable in particular it is argued that the familiar dominant firm price leadership model is not well suited to the task of estimating monopoly welfare losses more appropriate assumptions are identified and their implications for assessing the magnitude of potential welfare losses are illustrated

mean gini portfolio theory and the pricing of risky assets this paper presents the mean gini mg approach to analyze risky prospects and construct optimum portfolios the proposed method has the simplicity of a mean variance model and the main features of stochastic dominance efficiency since mean gini is consistent with investor behavior under uncertainty for a wide class of probability distributions gini s mean difference is shown to be more adequate than the variance for evaluating the variability of a prospect the mg approach is then applied to capital markets and the security valuation theorem is derived as a general relationship between average return and risk this is further extended to include a degree of risk aversion that can be estimated from capital market data the analysis is concluded with the concentration ratio to allow for the classification of different securities with respect to their relative riskiness

illegal markets and the social costs of rent seeking this paper argues that making goods or services illegal results in an increase in the social costs associated with rent seeking the increased social cost is in the form of negative externalities that result from market participants use of coercion and violence in attempts to control trade in the illegal good consequently the social costs of rent seeking will exceed the value of resources dissipated in rent seeking competition and where the external costs exceed the undissipated portion of the tullock cost the social cost of rent seeking is greater than the sum of tullock and harberger costs

resale price maintenance output increasing or restricting the case of distilled spirits in the united states theories of resale price maintenance rpm differ strongly on the pro and a nti competitive effects on rpm there are few tests of the welfare ga ins or losses from rpm in industry case studies this paper tests rpm s welfare effects in the retail sale of distilled spirits in the u s using regression analysis to estimate demand comparing liquor stor e license values over time and analyzing political contributions th e study finds that efficiency arguments for rpm are unsupported with rpm leading to a reduction in distilled spirits consumption evidenc e shows substantial wealth transfers from consumers to retail liquor store owners due to rpm copyright 1987 by blackwell publishing ltd

stochastic dominance and expected utility survey and analysis while stochastic dominance has been employed in various forms as early as 1932 it has only been since 1969 1970 that the notion has been developed and extensively employed in the area of economics finance agriculture statistics marketing and operations research in this survey the first second and third order stochastic dominance rules are discussed with an emphasis on the development in the area since the 1980s

how do markets manage water resources an experiment we experimentally test how a private monopoly a duopoly and a public utility allocate water of differing qualities to households and farmers most of our results are in line with the theoretical predictions overexploitation of the resources is observed independently of the market structure stock depletion for the public utility is the fastest followed by the private duopoly and private monopoly on the positive aspects of centralized public management we find that the average quality to price ratio offered by the public monopoly is substantially higher than that offered by the private monopoly or duopoly

on perfect rent dissipation if economists are united on anything it is the proposition that monopoly prices reduce economic welfare by preventing the realization of the maximum gains from trade in any market the extent of such distortions to efficiency are often called harberger costs after arnold harberger s 1954 provocative attempt to measure the extent of these losses in the u s economy more recent analysis has revealed that when monopoly power is achieved via regulation at least part of the monopoly rents so gained will not be simple transfers from consumers to producers but will be dissipated by producers rent seeking activity since such activity employs real resources there are additional costs to monopolization beyond the harberger costs as emphasized by gordon tullock 1967 and richard posner 1975 indeed posner and others have argued that if competition for the monopoly rents is perfect all of the expected rents from regulation will be converted to welfare losses while franklin fisher s 1985 comment has qualified this conclusion somewhat the upshot of the debate is that the rent seeking or tullock costs may greatly exceed the harberger costs 1 another recent strand of the analysis concerns the time pattern over which monopoly returns are dissipated by competition to gain and hold the monopoly right robert mccormick et al 1984 emphasize that to the extent such expenditures are sunk they are forever lost and not recoverable by deregulation while conceding the point martin cherkes et al 1986 argue that most rentseeking expenditures are recurring not sunk and therefore large gains from deregulation remain the purpose of this essay is to point out that recurring or sunk even the largest specification of the harberger and tullock costs of regulatory monopolization may fall far short of the actual welfare costs this is because the analysis concentrates on the rent seeking tullock costs and largely ignores the parallel rent defending2 tullock costs a proper assessment of such rent defending tullock costs might more than double the maximum welfare costs of regulation suggested by posner

the profitability of canadian defence contractors abstract in this paper we employ a simultaneous equations approach to test the hypothesis that firm profitability is affected by or affects the degree to which a firm is involved in defence contracting we find no evidence of any link between corporate profitability and defence contracting activity in canada moreover our data do not support the hypothesis that a positive effect of defence contracting is offset by the government pursuing a bailout contract award strategy based on the nature of the canadian defence procurement system we argue that our results indicate that the government has used its monopsony powers to restrict the rate of return earned on defence contracts to equal that earned in commercial operations thus firms which earn excess profits in commercial markets will also earn excess profits in defence markets

current issues in the economics of groundwater resource management the issue of groundwater management remains a practical concern in many regions throughout the world while water managers continue to grapple with the question of how to manage this resource in this article we attempt to bring the most advanced and appropriate tools to bear on the issue of resource allocation involving groundwater our objective is to demonstrate the state of the art in the literature on ways to think about this complex resource and to deal with the important economic issues emanating from its complexity we present the conceptual framework within which economists examine the elements interacting in the management of groundwater resources indicate why the role of the market is limited with respect to the price of this very complex resource and point to the mechanisms that can pull competitive groundwater price and quality graded quantity of groundwater in line with their equilibrium levels in particular we critically review economic models of groundwater use examine the potential for groundwater management discuss the difficulties encountered in the estimation of the relevant control variables of such models and identify the advantages and limitations of the instruments devised for the efficient use allocation of this resource finally we argue that devised regulatory schemes usually ignore the information and knowledge needed for their implementation and we suggest a core of conditions necessary for successful groundwater management reforms

2006 presidential address water markets in the west prices trading and contractual forms rising urban and environmental demand for water has created growing pressure to reallocatewaterfromtraditionalagriculturaluses theevolutionofwatermarketshas beenmorecomplicatedthanthoseforotherresources inthispaper wefirstexplainthese differences by examining water rights and regulatory issues second we place our research in the context of the economics literature on water marketing third we present new comprehensive data on prices and the extent nature and timing of water transfers across 12 western states from 1987 to 2005 we find that prices are higher for agriculture to urban trades versus within agriculture trades in part reflecting the differences in marginal values between the two uses prices for urban use are also growing relative to agricultural use markets are responding in that the number of agriculture to urban transactions is rising whereas the number of agriculture to agriculture transfers is not further there is a shift from using shortterm leases to using multiyear leases of water and permanent sales of water rights this pattern underscores the need to consider the amounts of water obligated over time rather than examining only annual flows in assessing the quantities of water traded as is the common practice in the literature considering water obligated over time termed committed water we find significantly more is transferred and the direction of trading is different than if the focus is on annual flows finally the data reveal considerable variation in water trading across the states jel q2 n5 l5 k3

the impact of bad writing in economics we find significant style differences between articles written by economists for their professional journals and articles by the same economists in the wall street journal we find no evidence that style influences the professional success of economists which suggests that the private rewards to improving the quality of writing are low indeed each community of scholars has probably adopted a professionally correct writing style from which its members diverge little however scholars do alter their rhetorical style to communicate effectively with audiences other than the professional community this suggests that intra and inter group written communication by economists is efficient

the welfare impact of self supplied water pricing in canada a computable general equilibrium assessment this paper uses a computable general equilibrium model to assess the welfare cost of changing the method of water allocation in canada towards one that uses prices to ration demand we model the introduction of a price on both water that is abstracted as well as water that is consumed that is abstracted and not returned to the source we estimate that reducing water consumption by 25 would require imposition of a price on water consumption of around 0 21 text m 3 similarly introduction of a water abstraction charge of about 0 013 text m 3 would be sufficient to reduce water abstraction by 25 we find that if revenues from water pricing are returned in lump sum to households the introduction of water pricing would result in a modest welfare loss when revenues from water pricing are used to offset existing taxes we find a gain in welfare corresponding to a strong double dividend

risk management strategies via minimax portfolio optimization recent extreme economic developments nearing a worst case scenario motivate further examination of minimax linear programming approaches for portfolio optimization risk measured as the worst case return is employed and a portfolio from maximizing returns subject to a risk threshold is constructed minimax model properties are developed and parametric analysis of the risk threshold connects this model to expected value along a continuum revealing an efficient frontier segmenting investors by risk preference divergence of minimax model results from expected value is quantified and a set of possible prior distributions expressing a degree of knightian uncertainty corresponding to risk preference determined the minimax model will maximize return with respect to one of these prior distributions providing valuable insight regarding an investor s risk attitude and decision behavior linear programming models for financial firms to assist individual investors to hedge against losses by buying insurance and a model for designing variable annuities are proposed

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

migration growth distribution and welfare abstract in this note we argue that the inverted u curve of inequality is a technical derivative of the attributes of the conventional indices of inequality that these indices are inadequate measures of the change in welfare associated with the typical distributional consequences of rural to urban migration and that an explicit welfare judgment with respect to this process should and can be made

rent seeking rent defending and rent dissipation in the preceding analyses of rent defending the posner model yielded welfare losses in excess of the combined areas of the tullock rectangle and the harberger triangle in only one instance furthermore this particular circumstance necessitated voluntary participation in a game with a negative expected value 13 for the tullock rogerson model the explicit addition of rent defenders had no impact on aggregate dissipation

can a water market avert the double whammy of trade reform and lead to a win win outcome abstract this paper focuses on the linkages between water and trade policies using morocco as a case this country is typical of many in that policy protects its import competing agricultural and industrial sectors while water in irrigated agriculture is priced below its marginal value product changing water policy without correcting for these other distortions leads to a more inefficient allocation of water on the other hand reforming trade policy alone can make farmers growing crops protected pre reform worse off using an intertemporal applied general equilibrium model we find that trade reform actually creates an opportunity to pursue water policy reform creating a water user rights market post trade reform not only compensates for the decline in farmers profits caused by the trade reform but also raises the efficiency of water allocation and hence benefits the economy as a whole

diversification consistent data envelopment analysis with general deviation measures abstract we propose new efficiency tests which are based on traditional dea models and take into account portfolio diversification the goal is to identify the investment opportunities that perform well without specifying our attitude to risk we use general deviation measures as the inputs and return measures as the outputs we discuss the choice of the set of investment opportunities including portfolios with limited number of assets we compare the optimal values efficiency scores of all proposed tests leading to the relations between the sets of efficient opportunities strength of the tests is then discussed we test the efficiency of 25 world financial indices using new dea models with cvar deviation measures

water scarcity and the impact of improved irrigation management a computable general equilibrium analysis increasing water scarcity combined with an increasing demand for food and water for irrigation call for a careful revision of water use in agriculture currently less than 60 of all the water used for irrigation is effectively used by crops based on the new version of the gtap w model we analyze the effect of potential water savings and the welfare implications of improvements in irrigation efficiency worldwide the results show that a water policy directed to improve irrigation efficiency led to global and regional water savings but it is not beneficial for all regions the final effect on regional welfare will depend on the interaction of several different causes for instance higher irrigation efficiency changes opportunity costs and reverses comparative advantages modifying regional trade patterns and welfare for water stressed regions the effects on welfare are mostly positive for nonwater scarce regions the results are more mixed and mostly negative the results show that exports of virtual water are not exclusive of water abundant regions

the gini coefficient structure and its application for the evaluation of regional balance development in china abstract the evaluation of balanced regional development should consider not only the economic and ecological benefits but also regional differences a nongrouped gini index is constructed based on a continuous distribution function to evaluate the regionally balanced development of the economy and the environment and the applicability of the method is analyzed given the data characteristics combining the difference in the regional economic base and ecological carrying capacity a multigroup overall gini index mgo gini with regional spatial heterogeneity is further developed along with its decomposition structure this work evaluates and analyses the regional balance in china s development with regard to regional industrial output energy consumption and pollution emissions from 2000 to 2015 using both the nongrouped and the mgo gini the results show that the gini index constructed in this paper can be well adapted to fat tailed data which is a typical feature of china s regional economic and ecological benefits data the regionally balanced development of china does not obviously promote industrial output whereas the regional balance of energy consumption shows the same upward trend when evaluated with both the nongrouped and the mgo gini from 2000 to 2015 in recent years after a period of improvement the regional balance of pollution emissions has experienced a downward trend there is disparity in cleaner production efficiency between regions of china as well as an upward trend in this disparity in recent years china s interregional balance has been enhanced in terms of energy consumption and pollution emissions considering regional spatial heterogeneity whereas the balance of economic output has been further reduced the balance in regional energy consumption plays a supporting role in balanced development among regions the imbalance within developed areas is the main source of regional economic output and energy consumption imbalances and the imbalance in developing areas is the main source of the regional pollution imbalance in china

the impact of decoupled payments on u s cropland values an extensive literature has shown that various farm programs may influence the value of farmland but other studies have not examined the cropland price effects of direct or decoupled payments separate from countercyclical payments this study uses nationally representative confidential field level panel data with farmer reported per acre land values we analyze the impact of decoupled and other farm program payments on farmland values using a fixed effects model and controlling for various factors that influence farmland values we find that an additional dollar of decoupled payments has a large and statistically significant impact on farmland values of about 18 per acre these results are comparable with similar studies undertaken in europe

the economics of water scarcity and variability does the availability or variability of water matter for the economy does it meaningfully impact the growth and development trajectory of a country it may seem surprising that answers to these most basic of questions remain elusive the aim of this paper is to summarize recent work on the economic impacts of water scarcity and variability the paper finds that there is strong evidence that variations in rainfall and water availability have significant impacts on particular sectors such as agriculture human capital and even conflict but paradoxically evidence of impacts on economic growth and other measures of aggregate economic activity remains ambiguous the paper explains reasons for this anomaly and explores the pathways through which water impacts the economy the paper provides a synthesis of key developments in the literature identifies methodological gaps and suggests policy solutions

x efficiency rent seeking and social costs this paper investigates shifts in cost functions of monopoly and regulated firms operating under conditions of x inefficiency and rent seeking behavior we show that x inefficiency and rent seeking have significantly different implications for economic welfare distinctions are drawn between pecuniary and real x inefficiency and between sunk and continuing rent seeking costs in general for a given cost shift rent seeking behavior implies larger social costs than does x inefficiency theory however cost shifts caused by either x inefficiency or rent seeking are observationally equivalent this implies empirically measured cost shifts cannot unambiguously be attributed to either cause

rent seeking and the welfare cost of trade barriers this paper estimates the potential social cost of trade barriers using the harberger and the tullock posner approaches for a sample of u s food and tobacco manufacturing industries in addition it tests the relationship between the computed welfare losses and special interest political activity pac contributions if all rents were dissipated through rent seeking the social cost of trade barriers would be about 12 5 percent of domestic consumption and would be particularly large for sugar and milk products where quotas are the main instrument of protection furthermore the results indicate that welfare losses are positively associated with industry lobbying but the strength of such association is strongly dependent on industry concentration

marginal conditional stochastic dominance this paper introduces the concept of marginal conditional stochastic dominance mcsd which states the conditions under which all risk averse individuals when presented with a given portfolio prefer to increase the share of one risky asset over that of another mcsd rules also answer the question of whether all risk averse individuals include a new asset in their portfolio when assets returns are correlated mcsd criteria are expressed in terms of the probability distributions of the assets and of the underlying portfolio an empirical application of mcsd is provided using stocks traded on the new york stock exchange mcsd rules are used to show that in the long run one cannot assert that the market portfolio is inefficient

institutional path dependence in climate adaptation coman s some unsettled problems of irrigation districts that emerged in the american west in the late nineteenth and early twentieth centuries in response to aridity to facilitate agricultural water delivery use and trade raise the transaction costs today of water markets these markets are vital for smooth reallocation of water to higher valued uses elsewhere in the economy and for flexible response to greater hydrological uncertainty this institutional path dependence illustrates how past arrangements to meet conditions of the time constrain contemporary economic opportunities they cannot be easily significantly modified or replaced ex post