expected utility chebichev bounds mean variance analysis this paper deals with and answers the following question what are the best upper and lower bounds on expected utility when we know the mean and variance of the random variable involved some applications are also indicated

where does microfinance flourish microfinance institution performance in macroeconomic context abstract we study whether and how the success of microfinance institutions mfi s depends on the country level context in particular macroeconomic and macro institutional features understanding these linkages can make mfi evaluation more accurate and further can help to locate microfinance in the broader picture of economic development we collect data on 373 mfis and merge it with country level economic and institutional data evidence arises for complementarity between mfi performance and the broader economy for example mfis are more likely to cover costs when growth is stronger and mfis in financially deeper economies have lower default and operating costs and charge lower interest rates there is also evidence suggestive of substitutability or rivalry for example more manufacturing and higher workforce participation are associated with slower growth in mfi outreach overall the country context appears to be an important determinant of mfi performance mfi performance should be handicapped for the environment in which it was achieved

the medicaid notch labor supply and welfare participation evidence from eligibility expansions i assess the impact of losing public health insurance on labor market decisions of women by examining a series of medicaid eligibility expansions targeted toward young children these targeted expansions severed the historical tie between afdc and medicaid eligibility the reforms allowed a mother s earnings to increase without losing public health insurance for her young children increasing the income limit for medicaid resulted in a decrease in afdc participation and an increase in labor force participation among these women the effects were large for ever married women and negligible for never married women

the empirics of microfinance what do we know microfinance has received a lot of attention recently both from policy makers as well as in academic circles two of the main topics that have been hotly debated are explaining joint liability group lending and its implications for reducing information asymmetries and the trade off between the financial sustainability and outreach of microfinance programmes this feature contains three novel empirical contributions providing new insights with respect to why and how joint liability group lending works it also contains the first large scale systematic analysis of the trade off between financial performance and outreach of microfinance institutions

does public insurance crowd out private insurance the cost of expanding public sector health programs depends critically on the extent to which public eligibility will cover just the uninsured or will crowd out existing private insurance coverage we estimate the extent of crowd out arising from the expansions of medicaid to pregnant women and children over the 1987 1992 period we estimate that approximately 50 percent of the increase in medicaid coverage was associated with a reduction in private insurance coverage this occurred largely because employees took up employer based insurance less frequently there is also some evidence that employers contributed less for insurance and that workers dropped coverage of dependents

capital structure and sustainability an empirical study of microfinance institutions abstract the capital structure of lending institutions has become an increasingly prominent issue in the world of finance contemporaneously microfinance institutions mfis have risen to the forefront as invaluable lending institutions in the development process since capital constraints have hindered the expansion of microfinance programs and microfinance organizations have had various degrees of sustainability the question of how best to finance these organizations is a key issue this paper explores how changes in capital structure could improve mfi efficiency and financial sustainability i find causal evidence supporting the assertion that increased use of grants by large mfis decreases operational self sufficiency

factors influencing microfinance engagements by formal financial institutions the commercialization of microfinance brings formal financial institutions into the microfinance landscape yet little is known about the forces that lead to this phenomenon this paper is the first dedicated to this topic using a hand collected dataset of 112 institutions from 34 countries covering the period from 2008 to 2012 based on institutional theory and resource based argument we empirically assess the effects of institutional environment factors including regulative normative and cognitive elements as well as resource based factors including practice model and multinational diversity on the intensity of engagements to do so we define the roles as capital related product related and service delivery and calculate engagement intensity using a scoring method which reflects an organization s extent of presence in the microfinance value chain the analysis takes the engaging location domestic or overseas and engaging model connected or unconnected to core business into account we find that the two logics together can explain such involvement legal compliance is identified as most relevant for domestic players while resource based factors are more relevant for overseas players in addition to regression analysis many cases are identified to support the arguments

mainstreaming microfinance social performance management or mission drift summary what scope is there for the pursuit of explicit development goals in the context of increasing integration of specialized microfinance and commercial banking sectors this question and the idea of mission drift is first analyzed using a model that distinguishes between institutions financial and social performance possibilities preferences and assessment systems the model is used to review findings from action research with an international sample of poverty oriented microfinance institutions that suggest some simple steps for improved social performance management it is then used to illustrate the relationship between social and financial performance more widely across the retail financial services sector and to offer pointers for more policy analysis at this level

the rationale of the mean standard deviation analysis skewness preference and the demand for money publisher summary this chapter discusses the rationale of the mean standard deviation analysis skewness preference and the demand for money in january 1969 issue of the review of economic studies karl borch and martin feldstein separately criticized the widely used mean variance analysis of portfolio selection borch contended that any system of upward sloping mean standard deviation e s indifference curves can be shown to be inconsistent with the basic axiom of choice under uncertainty he pointed out that one can always pick any two points on an upward sloping indifference curve to represent two bernoulli distributions with probability 1 p of gaining the same amount x in both the cases and probability p of gaining y1 in the case of one distribution and y2 in the case of the second distribution with y2 y1 if the second distribution represents the point to the northeast of the other point then by the dominance axiom the second distribution must be preferred to the first which contradicts the basic meaning of indifference curves feldstein by using a log utility function and a lognormal distribution for investment outcome showed that e s indifference curves for a risk averter need not be convex downwards though upward sloping they would change from convex to concave once the standard deviation of the outcome exceeds the mean multiplied by on the face of it this seems to suggest that risk aversion might decrease as risk is increased beyond a certain extent

microfinance performance and social capital a cross country analysis in recent years the microfinance industry has received a substantial amount of cross border funding from both public and private sources this funding reflects the increasing interest in microfinance as part of a more general trend towards socially responsible investments in order to be able to secure sustained interest from these investors it is important that the microfinance industry can show evidence of its contribution to reducing poverty at the bottom of the pyramid for this it is crucial to understand under what conditions microfinance institutions mfis are able to reduce poverty this paper contributes to this discussion by investigating the relationship between the extent to which social capital formation is facilitated within different societies and the financial and social performance of mfis this focus on social capital formation is important because in many cases mfis use group loans with joint liability to incentivize asset poor borrowers to substitute the lack of physical collateral by their social capital hence the success of a large part of the loan relationship between mfis and their borrowers depends on the social capital those borrowers can bring into the contract we carry out a cross country analysis on a dataset containing 100 countries and identify different social dimensions as proxies for how easy social capital can be developed in different countries we hypothesize that microfinance is more successful both in terms of their financial and social aims in societies that are more conducive to the development of social capital our empirical results support our hypothesis

a social and environmental approach to microfinance credit scoring microfinance institutions provide loans to low income individuals their credit scoring systems if they exist are strictly financial although many institutions consider the social and environmental impact of their loans they do not incorporate formal systems to estimate these social and environmental impacts this paper proposes that their creditworthiness evaluations should be coherent with their social mission and accordingly should estimate the social and environmental impact of microcredit thus a decision support system to facilitate microcredit granting is proposed using a multicriteria evaluation the assessment of social impact is performed by calculating the social net present value the system captures credit officers experience and addresses incomplete and intangible information the model has been tested in a microfinance institution the paper shows how a small institution can include social and environmental issues in its decision making systems to evaluate credit applications a gap in the preferences was found between members of the board who are socially driven and managers and credit officers who are financially drifted this mission drift was corrected the approach followed contributed to creating a culture of social and environmental assessment within the institution especially among credit officers thereby translating microfinance institutions social mission into numbers

before microfinance the social value of microsavings in vincentian poverty reduction the purpose of this article is to present and discuss the values and limits of microfinance within the context of poverty reduction international development and community empowerment the main thesis is that microfinance requires a more complex strategy than simply the provision of credits the development of financial capital depends on the increase in human capacity and social capital microfinance is revisited under the ethical lenses of global responsibility for alleviating poverty and developing community sustainability through a critical review of the literature and case studies from the philippines the author suggests a value based vincentian approach to integrate microfinance into community empowerment in connection with the main thesis the author argues that the achievement of economic self reliance through microfinance is contingent upon the development of capacity building social capital and empowerment at the individual collective and systemic levels

microfinance mission drift summary claims have been made that microfinance institutions mfis experience mission drift as they increasingly cater to customers who are better off than their original customers we investigate mission drift using average loan size as a main proxy and the mfis lending methodology main market and gender bias as further mission drift measures we employ a large data set of rated multi country mfis spanning 11 years and perform panel data estimations with instruments we find that the average loan size has not increased in the industry as a whole nor is there a tendency toward more individual loans or a higher proportion of lending to urban costumers regressions show that an increase in average profit and average cost tends to increase average loan and the other drift measures more focus should be given to cost efficiency in the mfi

the rise in the disability rolls and the decline in unemployment between 1984 and 2001 the share of nonelderly adults receiving social security disability insurance income di rose by 60 percent to 5 3 million beneficiaries rapid program growth despite improving aggregate health appears to be explained by reduced screening stringency declining demand for less skilled workers and an unforeseen increase in the earnings replacement rate we estimate that the sum of these forces doubled the labor force exit propensity of displaced high school dropouts after 1984 lowering measured u s unemployment by one half a percentage point steady state calculations augur a further 40 percent increase in the rate of di receipt

depth of outreach and financial sustainability of microfinance institutions the primary justification for subsidizing microfinance institutions mfis is their enhancement of social welfare by extending credit to the poor households therefore recent emphasis on their financial self sufficiency has created concern that this may adversely affect the mission of social outreach utilizing data from 702 mfis operating in 83 countries this study shows empirical evidence of a positive complementary relationship between financial sustainability and depth of outreach

financial performance and outreach a global analysis of leading microbanks microfinance contracts have proven able to secure high rates of loan repayment in the face of limited liability and information asymmetries but high repayment rates have not translated easily into profits for most microbanks profitability though is at the heart of the promise that microfinance can deliver poverty reduction while not relying on ongoing subsidy the authors examine why this promise remains unmet for most institutions using a data set with unusually high quality financial information on 124 institutions in 49 countries they explore the patterns of profitability loan repayment and cost reduction the authors find that institutional design and orientation matter substantially lenders that do not use group based methods to overcome incentive problems experience weaker portfolio quality and lower profit rates when interest rates are raised substantially for these individual based lenders one key to achieving profitability is investing more heavily in staff costs a finding consistent with the economics of information but contrary to the conventional wisdom that profitability is largely a function of minimizing cost

putting responsible finance to work for citi microfinance this paper develops an ethical framework for responsible finance and then applies it to citigroup citi a major financial actor in the microfinance sector to see whether it meets with such obligations the framework consists of two categories of responsibility the first category is the special social responsibility of financial institutions and the second is the fundamental principles of ethical behavior in financial services from citigroup s microfinance model scope of business and multiple roles in the market the company seems to be fulfilling its responsibility in inclusive finance however judged in term of the principles of integrity objectivity fairness professionalism and diligence it falls short of its ethical responsibility in view of this shortcoming citigroup should recall its obligation to avoid conflicts of interest to provide responsible advice to protect clients from over indebtedness and most importantly to act with integrity

should access to credit be a right discussion on financial ethics increasingly includes the problem of exclusion of the poorer segments of society from the financial system and access to credit this paper explores the ethical dimensions surrounding the concept of a human right to credit if access to credit is directly instrumental to economic development poverty reduction and the improved welfare of all citizens then one can proclaim as nobel prize laureate m yunus has done that it is a moral necessity to establish credit as a right arguments both supporting and opposing the concept of a right to credit are presented while there may be general agreement that access to financial services may provide a pathway out of poverty granting a universal right could induce perverse effects such as overindebtedness bearing in mind the ultimate goal of proponents of this right as well as the potential harmful consequences this paper offers a new perspective on the question of access to credit based on a goal right system

outreach sustainability and leverage in monitored and peer monitored lending abstract i study the contract design problem facing microfinance lending organizations mfos that want to maximize the impact and outreach of their lending activities to a target population of poor borrowers while remaining financially sustainable tradeoffs between outreach sustainability and financial leverage are shaped by the endogenous monitoring and delegation costs that arise within a chain of agency relationships subject to moral hazard between borrowers loan staff mfo equity owners and outside investors all else equal sustainable mfos that target poorer borrowers must charge higher interest rates have higher staff costs per dollar loaned and are less leveraged analysis of data for 72 mfos tends to support the findings

financial efficiency and social impact of microfinance institutions using self organizing maps summary this paper contributes to the literature by investigating whether the increased focus on financial self sustainability of microfinance institutions has been disadvantageous to the target audience we investigate the association between social efficiency and financial performance using a comprehensive data set that includes 650 microfinance institutions a self organizing map methodology is used to fully capture the existing heterogeneity among institutions the results show that we cannot support the hypothesis that there exists a trade off on the contrary we find evidence of a significant positive relationship between social efficiency and financial performance

outreach and performance of microfinance institutions a panel analysis using a panel of 764 microfinance institutions mfis from 87 countries this study analyses the possible trade off between outreach and performance and shows that greater depth of outreach has a positive impact on the financial performance of an mfi the empirical results of this study should dispel the widely held apprehension that the recent emphasis on attainment of financial sustainability by the mfis could seriously impair their outreach efforts and shows that outreach to the poor can actually bolster financial performance

practice what you preach microfinance business models and operational efficiency the microfinance sector has room for pure for profit microfinance institutions mfis non profit organizations and social for profit firms that aim to pursue a double bottom line depending on their business model these institutions target different types of borrowers change the size of their loans and adjust their loan pricing we introduce a simple approach that accommodates a wide range of business models and allows us to estimate the operational efficiency of mfis our empirical results show that mfis with a high depth of outreach are most efficient resulting in higher levels of outreach and profits for the same input mix

women and repayment in microfinance a global analysis notice this is the author s version of a work that was accepted for publication in world development changes resulting from the publishing process such as peer review editing corrections structural formatting and other quality control mechanisms may not be reflected in this document changes may have been made to this work since it was submitted for publication a definitive version was subsequently published in world development 39 5 758 772 http dx doi org 10 1016 j worlddev 2010 10 008

mission drift and ethical crisis in microfinance institutions what matters abstract in recent years financial interests have increasingly influenced microfinance institutions mfis with financial gain overshadowing service to the poor this phenomenon which we can term mission drift has caused apprehension among academicians as well as policy makers for its negation of the fundamental social ethos of mfis and the mandate of sustainable financial inclusion hence this study aims to identify the factors of mission drift with special emphasis on the role of funding sources we collect data from a sample of 169 mfis in bangladesh from the period of 2009 2014 and deploy static and dynamic panel data estimation techniques the results suggest that commercial fund is susceptible to mission drift as average loan size over gni per capita increases when mfis use more commercial fund in their operation the finding also revealed that when mfis focus more on commercial interest return on assets and operational sustainability they tend to depart further from the original aim of serving the poorest of the poor the findings further suggest that mission drift is influenced by other factors such as macroeconomic conditions and regulatory environment this study underscores the importance for policy to ensure that poor people have viable access to financial services from mfis toward promoting long term sustainable development

designing credit agent incentives to prevent mission drift in pro poor microfinance institutions abstract credit agents in microfinance institutions mfis must be given incentives to acquire information on potential borrowers and select them in accordance with the mfi s objectives we show that while giving incentives has no cost in for profit mfis it is costly in pro poor mfis when repayment and wealth are positively correlated a pro poor mfi cannot obtain the selection of poor clients in the proportion it wishes with incentives based solely on repayment it then becomes necessary to audit the share of very poor borrowers selected by an agent in order to provide the latter with adequate incentives when audit costs are large pro poor mfis may have to forego selection on wealth and use other targeting devices such as working in impoverished geographical locations driven by donor concerns with mission drift away from the poor audits on the wealth status of clients have been introduced at the level of mfis we show that introducing pro poor incentives requires extending such audits to the level of credit agents

employment separation and health insurance coverage abstract we study the interrelationship between employment separation and insurance coverage we first document that employment separation is associated with large reductions in insurance coverage even conditioning on underlying tastes for insurance we then show that reducing the cost of insurance through state laws mandating continued access to employer provided health insurance for the non employed increases the likelihood of having insurance after separating from a job by 6 7 these mandates also increase the number of individuals who separate and the total amount of time spent jobless finally at least some of this increased non employment appears to be spent in productive job search as the availability of continuation coverage is related to significant wage gains among those who separate from their jobs

a study of codes of ethics for mexican microfinance institutions most scholarly interest in codes of ethics or conduct has focused on traditional companies little is known about the codes of social enterprises or hybrid organizations such as microfinance institutions mfis our paper provides a comparative case study of the codes of a mexican microfinance network and seven mfis using the corporate integrity model we analyze the content of mfis codes compared to those of traditional organizations we then examine to what extent some specific features of mfis such as their mission target group and applied credit methodologies are factors that determine the content of their code we find that mfis codes like those of traditional companies include traditional stakeholder principles nevertheless they put greater emphasis on socially oriented principles or on terms such as people and common good mfis codes differ with respect to the items they include and exclude and the size of the covered sections we also find that these codes attempt to address prevailing concerns in microfinance but rarely tackle two critical debates namely levels of interest rates and of profitability we finally argue that it is difficult to move toward a global code owing to regional disparities and the variety of organizational models and missions

public health insurance labor supply and employment lock we study the effect of public health insurance on labor supply by exploiting a large public health insurance disenrollment in 2005 approximately 170 000 tennessee residents abruptly lost medicaid coverage using both across and within state variation in exposure to the disenrollment we estimate large increases in labor supply primarily along the extensive margin the increased employment is concentrated among individuals working at least 20 hours a week and receiving private employer provided health insurance we explore the dynamic effects of the disenrollment and find an immediate increase in job search behavior and a steady rise in both employment and health insurance coverage following the disenrollment our results are consistent with a significant degree of employment lock workers who are employed primarily to secure private health insurance coverage jel codes i1 j22 h75