gender bias and the availability of business loans abstract social structure values and gender socialization have undoubtedly disadvantaged women in the process of preparing for a career in business and there is a widely held view that women are subject to discrimination by financial institutions however the evidence to verify this belief has largely been from studies where women have claimed that they were subject to discrimination in the loan situation without either supporting evidence or control data from a sample of male loan applicants two experiments were carried out using a goldberg type procedure to test the belief that women are unfairly discriminated against when seeking a loan to establish a business venture carefully constructed scenarios of an application for loan finance to purchase a commercial enterprise were mailed to loan officers of major trading bank branches the scenarios were identical in all respects except for the sex and education level of applicants loan officers were asked whether or not they would approve loan finance for the proposed business purchase and to indicate factors that contributed to their decisions significant differences in response to female and male applicants were observed in both experiments in experiment i university education both sexes were equally likely to obtain a loan but education was considered a more important factor for the female applicant than for the male in experiment ii high school education the female applicant was less likely to obtain a loan than the male applicant the results support the widely held perception that women can experience gender discrimination when seeking start up capital such discriminatory behavior by loan officers may not be and probably is not intentional rather the pervasiveness of the social construction of differential gender roles in western culture is such that it is more likely that discrimination is unconscious and consequently more difficult to change

the effect of uncertainty on the demand for medical care health capital and wealth we analyze the effect of the uncertainty of the incidence of illness on the demand for medical care and on the accumulation of health capital and wealth over the retirement years we use a simplified version of a dynamic grossman household production model to characterize patterns of an individual s precautionary behavior elderly individuals respond to uncertainty by smoothing their expected utility over time by making specific patterns of purchases of medical care and consumption we examine these patterns for individuals with different degrees of risk aversion

women business owners and terms of credit some empirical findings of the canadian experience abstract most previous studies of this topic have followed a methodology of selecting a sample of women business owners and then questioning them on their experience with their own business es although financing frequently is noted as a major problem previous studies suffer from the absence of a control group a corresponding group of male business owners with whom to compare experiences furthermore previous studies have tended to ask the respondent if she believes that she was treated any differently because she was a woman a leading question which could potentially bias the conclusions previous work reveals a pervasive perception that there is discrimination by bankers against women business owners a conclusion based on a widespread but subjective perception by some women owners however there also appears to be a lack of real statistical evidence moreover it is not clear that personal feelings of apparent reluctance displayed by some bankers carry over to professional judgements and to systematically different terms of credit one of the contributions of this paper is that a comparison of the actual experiences of both female and male business owners in their relationship with financial institutions are compared over a fixed period of time every attempt has been made to carry out these comparisons in a rigorous statistical manner another contribution arises because the findings to be described here are based on a broad and comprehensive study of the small business banking relationship and did not exclusively focus on the male female issues thus any bias that could have occurred in other studies by focusing on women business owner problems is likely to be minimized the findings described in this study are based on a total of 3 217 business principals responses to a national survey the number of women business owners in the sample was 153 in aggregate it was found that the financing conditions for women principals are less favorable than those for male business owners however it was also found that female owned firms tend to be both younger and smaller than male owned firms in the sample moreover woman business owners were more likely to be proprietors than their male counterparts and were less likely to be incorporated businesses in addition a statistically significant tendency for businesses owned by women to be characterized by lower rates of sales growth than those owned by men was also identified these differences between patterns of small business ownership between men and women allow alternative explanations of what might at first seem to be an apparent gender bias in order to separate the effects of ownership patterns from potential gender bias it was necessary to focus on the effect of the gender of the owners by holding constant those factors which provide alternative explanations of the aggregate results this was accomplished by creating benchmark subsamples of male respondents by matching women respondents with male respondents on the basis of age size industry growth rate and organization form of the businesses when this was done one area was identified in which statistically significant gender related differences remained that of collateral requirements for a line of credit apparent gender related differences in the other aspects of banking practices rates of loan approvals cosignature requirements requirements for loan collateral and interest rates on loans and lines of credit can be accounted for by the differences in the characteristics of male and female owned businesses the difference in the collateral required of men and women owners is an important difference collateral requirements were identified as a major concern by a high proportion of all survey respondents in fact collateral requirements appear to be the major banking related concern of small businesses the line of credit is viewed to be essential to growth and survival yet a lower proportion of women owners than men owners report having a line of credit thus it seems that development of the banking relationship including the establishment of a line of credit has proven more difficult for women than for men

habit formation interdependent preferences and demographic effects in the almost ideal demand system the authors model myopic habit formation interdependence of preferences among consumers and demographic effects as taste shifters in a micro consumer demand model of the almost ideal demand variety the model is estimated for dutch micro data the authors investigate the dynamic properties of the model and find that it behaves very differently from models without interdependence of preferences the implications for micro macro modeling are discussed copyright 1991 by royal economic society

rent seeking in general equilibrium a didactic illustration in the first part of the paper a simple general equilibrium model is developed which allows a graphic illustration of some of the basic ideas in rent seeking literature general equilibrium means that the alternative uses of available resources for both consumers and producers are made explicit the standard partial analysis of rent seeking is re interpreted in a general welfare theoretic framework thereby clarifying such diverse terms as consumer and producer surplus profits and rents to be captured the initial models of tullock and krueger are used to describe the social harm done by rent seeking activities in terms of a social cost benefit calculus

adjusting to changes in health implications for cost effectiveness analysis this article introduces a model in which individuals incur adjustment costs associated with adaptations made following changes in their health with adjustment costs patients preferences for health states depend on their initial health in such a way that improvements have lower values than corresponding deteriorations improvement and deterioration must therefore be treated asymmetrically in cea the inclusion of adjustment costs also has other consequences it produces a more stringent cea criterion and may affect the relative rankings of interventions in addition when health is multi dimensional and adjustment costs are incorporated we show that a consensus on even ordinal rankings of health states becomes impossible

interdependent preferences an econometric analysis the theoretical model of gaertner 1974 and pollak 1976 for the interdependence of preferences in the linear expenditure system is estimated for a cross section of households the interdependence of consumption of different households has implications for the stochastic structure of the model and for the identifiability of its parameters both aspects are dealt with the empirical results indicate a significant role played by the interdependence of preferences one of its implications is that predictions of the effects of changes in a household s exogenous variables differ according to whether the exogenous variable only changes for this household or for all households jointly c 1997 john wiley sons ltd

evaluation of the subjective probabilities of survival in the health and retirement study in the health and retirement study respondents were asked about the chances they would live to 75 or to 85 we analyze these responses to determine if they behave like probabilities of survival if their averages are close to average probabilities in the population and if they have correlations with other variables that are similar to correlations with actual mortality outcomes we find that generally they do behave like probabilities and that they do aggregate to population probabilities most remarkable however is that they covary with other variables in the same way actual outcomes vary with the variables for example respondents with higher socioeconomic status give higher probabilities of survival whereas respondents who smoke give lower probabilities we conclude that these measures of subjective probabilities have great potential use in models of intertemporal decision making under uncertainty

some simple geometry of the welfare loss from competitive monopolies in the standard neoclassical approach to analyzing monopoly monopolies are merely assumed to exist this assumption has never set well with many economists who argue that there should be competition for monopolies just as there is competition within an industry the issue has been considered recently within what has come to be known as rent seeking literature 1 while the rent seeking literature has many dimensions one of its central arguments is that the competition for monopolies increases the welfare loss resulting from them 2 the rent seeking model argues that the welfare loss from monopoly is not only the harberger triangle it also includes an amount related to the monopolist s profit and in the special case of competitive rent seeking the welfare loss from rent seeking equals the entire monopoly profits thus in the special case of competitive rent seeking the total welfare loss from monopoly is given by the shaded trapezoid in figure 1

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

free entry and efficient rent seeking this paper concerns rent seeking and the extent to which rents are dissipated under various circumstances gordon tullock s 1967 insight that expenditures made to capture an artificially created transfer represent a social waste suggested that the cost to the economy of monopoly and regulation is greater than the simple harberger 1954 deadweight loss indeed under tullock s original formulation and in the extensions of his work by krueger 1974 and posner 1975 rents are exactly dissipated at the social level 1 is spent to capture 1 so that the total welfare loss from such activities is equal to the harberger triangle plus the rectangle of monopoly profits

the dynamics of health in the british household panel survey this paper considers the dynamics of a categorical indicator of self assessed health using eight waves 1991 1998 of the british household panel survey bhps our analysis has three focal points the relative contributions of state dependence and heterogeneity in explaining the dynamics of health the existence and consequences of health related sample attrition and the investigation of the effects of measures of socioeconomic status with a particular focus on educational attainment and income to investigate these issues we use dynamic panel ordered probit models there is clear evidence of health related attrition in the data but this does not distort the estimates of state dependence and of the socioeconomic gradient in health the models show strong positive state dependence and heterogeneity accounts for around 30 of the unexplained variation in health copyright 2004 john wiley sons ltd

the demand for health with uncertainty and insurance this paper develops michael grossman s demand for health model by letting the depreciation rate depend upon the level of health by letting the incidence and size of illness be uncertain and by investigating how the individual s demand for health would be affected by the introduction of insurance beside the more theoretical results there are also some results with important policy implications when formulating the hypothetical scenario in willingness to pay wtp studies it is important whether the individual believes that the level of health is uncertain or not the existence of insurance could also affect the stated wtp amount taking this into account could therefore explain some of the differences in the wtp for seemingly identical health care programs in different countries or different areas in the same country

transfer seeking and avoidance on the full social costs of rent seeking we would like to thank gordon tullock and an anonymous referee of this journal for their helpful comments and suggestions this abstract was borrowed from another version of this item

gender borrowing patterns and self employment some evidence for england the purpose of this paper is twofold first we try to identify whether women have different borrowing patterns from men when trying to get into self employment along with the factors that explain these different propensities second we try to quantify the impact of these differences in borrowing propensity on women s willingness to become self employed the empirical analysis is carried out on a sample of individuals drawn from the english household survey of entrepreneurship 2003 our results show that 1 women are less likely than men to seek external finance and that 2 gender differences in access to finance are affecting adversely the transition into self employment

seeking rents by setting rents the political economy of rent seeking in recent years there has been a large number of papers on the subject of rent seeking most such works on rent seeking have taken the rent as exogenously determined by regulators regulators howeve r may also be expected and indeed have been shown to be rent seeke rs and hence the determination of the rent itself should be endogeniz ed to reflect the fact that the rent setters are themselves rent se ekers in this paper the authors do this by presenting an analysis o f the interaction of regulators firms and consumers within a rent s eeking framework where all three groups are assumed to be self motiva ted the analysis is carried out under alternative assumptions regard ing the nature of the market and the reaction functions of the partic ipants policy implications are drawn where appropriate copyright 1987 by royal economic society

the retirement health nexus a new measure of an old puzzle traditional empirical models of retirement which use a self assessed health measure have often found that the wage rate has a surprisingly small effect on retirement using both a self reported health measure and one not based on self report subsequent mortality experience in a more general reduced form joint demand framework we test the importance of the interaction effects of health and retirement our findings are consistent with a joint determination of health and retirement the wage elasticity using either health measure is about equal to that found in a single equation model when a mortality measure is used but all three elasticities are five times greater than one found using self reported health in a traditional single equation model

rent seeking from a property rights perspective james buchanan 15 15 has suggested that rent seeking analysis can readily be incorporated within the property rights approach and as with public choice the theory of rent seeking can be interpreted as an appropriate extension yet no one has really explored rent seeking or revenue premium tariff or directly unproductive profit seeking from a property rights perspective buchanan 14 15 16 17 clearly indicated that property rights assignments actually underlie the rent seeking process and others have also recognized this 4 20 23 28 but there are further insights into the workings of the political economy which can be derived for instance lobbying activities with nonpecuniary goals clearly fit into the rent seeking framework when viewed through the property rights paradigm this contrasts strikingly with the perception of rent seeking held by some writers 9 10 11 12 13 furthermore a property rights approach to rent seeking provides predictions of a spiraling process of government growth since successful rent seeking by one interest group generally requires expansion of bureaucratic powers while at the same time creating incentives for the formation of additional rent seeking interest groups legislative responses to these new groups requires further expansion of the bureaucracy and creates incentives for more rent seeking so the growth process continues in this paper a brief summary of the conclusions of the rent seeking literature will be presented followed by an explanation of how the same conclusions have been deduced using the property rights paradigm various extensions of the rent seeking concept such as those alluded to above are then obtained by emphasizing a property rights approach following this the terms used to describe rent seeking e g directly unproductive profit seeking etc will be discussed to determine which if any is the most appropriate characterization of the phenomenon

comparative dynamic analysis of the full grossman model the paper applies the method of comparative dynamic analysis to the full grossman model for a particular class of solutions it derives the equations implicitly defining the complete trajectories of the endogenous variables relying on the concept of frisch decision functions the impact of any parametric change on an endogenous variable can be decomposed into a direct and an indirect effect the focus of the paper is on marginal changes in the rate of health capital depreciation it also analyses the impact of either initial financial wealth or the initial stock of health capital while the direction of most effects remains ambiguous in the full model the assumption of a zero consumption benefit of health is sufficient to obtain a definite for any direct or indirect effect

conflict and rent seeking success functions ratio vs difference models of relative success the rent seeking competitions studied by economists fall within a much broader category of conflict interactions that also includes military combats election campaigns industrial disputes lawsuits and sibling rivalries in the rent seeking literature each party s success pi which can be interpreted either as the probability of victory or as the proportion of the prize won has usually been taken to be a function of the ratio of the respective resource commitments alternatively however pi may instead be a function of the difference between the parties commitments to the contest the contest success function csf for the difference from is a logistic curve in which as is consistent with military experience increasing returns apply up to an inflection point at equal resource commitments a crucial flaw of the traditional ratio model is that neither onesided submission nor two sided peace between the parties can ever occur as a cournot equilibrium in contrast both of these outcomes are entirely consistent with a model in which success is a function of the difference between the parties resource commitments

long run equilibrium and total expenditures in rent seeking a comment although corcoran is mathematically correct i believe his comment is not very helpful in order to discuss the matter in some detail the reader should consult table 7 1 from my original efficient rent seeking reproduced on page 92 1 this shows the equilibrium investment of each individual different numbers of individuals playing the game n and differing values of r table 7 2 also reproduced on page 93 shows the total investment

efficient rents 1 rent seeking behavior in the long run we have analyzed long run behavior in rent seeking under several conditions and behavioral hypotheses the question of interest is whether or not the long run expenditures will exactly equal the value of the rents our results depend on the type of competitive response which is assumed to exist in the long run and on the r value governing the probability of winning

risk averse rent seekers and the social cost of monopoly power there is now quite general recognition that the social cost of monopoly power encompasses the resources expended by individuals seeking to become the beneficiaries of monopoly rents however since the activity of rent seeking is generally not observable direct estimates of resources expended in quests to acquire monopoly power are usually impossible to come by 1 as a consequence the indirect approach of taking the observed value of monopoly rents as indicative of the unobserved value of the resources expended in rent seeking is quite generally adopted in approaches to evaluation of the social cost of such activity

long run equilibrium and total expenditures in rent seeking the lure of excess profits or rents associated with monopoly power gives rise to expenditures to obtain these rents competitive rent seeking behavior is recognized as a factor which must be included among the wastes associated with monopoly power tullock 1967 posner 1975 1 the expenditures are aimed at transferring wealth rather than its creation and the use of resources to obtain this transfer is a loss to society how important rent seeking is as a part of the total monopolistic waste hinges on the size of the total expenditures induced by a given level of excess profits

rent seeking with non identical sharing rules the primary object of this paper is to examine the role of differential sharing rules within a collective rent seeking setting on the possible non existence of nash equilibrium focusing on groups that distribute part of the rent equally among their members and the residual according to relative effort we show that in rent seeking societies applying the two polar sharing rules equilibrium never exists in the general case where groups apply different but not necessarily the polar sharing rules we study the relationship between group variability in distributing rents and the problem of non existence of equilibrium in the rent seeking game

health status and health dynamics in an empirical model of expected longevity expected longevity is an important factor influencing older individuals decisions such as consumption savings purchase of life insurance and annuities claiming of social security benefits and labor supply it has also been shown to be a good predictor of actual longevity which in turn is highly correlated with health status a relatively new literature on health investments under uncertainty which builds upon the seminal work by grossman grossman m 1972 on the concept of health capital and demand for health journal of political economy 80 223 255 has directly linked longevity with characteristics behaviors and decisions by utility maximizing agents our empirical model can be understood within that theoretical framework as estimating a production function of longevity using longitudinal data from the health and retirement study we directly incorporate health dynamics in explaining the variation in expected longevities and compare two alternative measures of health dynamics the self reported health change and the computed health change based on self reports of health status in 38 of the reports in our sample computed health changes are inconsistent with the direct report on health changes over time and another 15 of the sample can suffer from information losses if computed changes are used to assess changes in actual health these potentially serious problems raise doubts regarding the use and interpretation of the computed health changes and even the lagged measures of self reported health as controls for health dynamics in a variety of empirical settings our empirical results controlling for both subjective and objective measures of health status and unobserved heterogeneity in reporting suggest that self reported health changes are a preferred measure of health dynamics

the early retirement decision new empirical evidence on the influence of health many studies have examined the influence of health on retirement but there may be problems with the various health measures used a major criticism of the most frequently used variables is that they may reflect ex post rationalizations of retirement in this paper i examine a variety of health variables focusing directly on the health measurement issue as it relates to retirement research new measures of health are developed with individual self evaluations of health status unlike most previous findings the empirical results suggest that economic variables play a more important role than health in retirement decisions

the rationality of retirement expectations and the role of new information this paper tests the rationality of retirement expectations controlling for sample selection and reporting biases we find that retirement expectations in the health and retirement study are consistent with the rational expectations hypothesis we also analyze how new information affects the evolution of retirement expectations and discover that on average individuals correctly anticipate most uncertain events when planning their retirement except for some health shocks the need for additional private health coverage and the probability of a job change our results support a wide variety of models in economics that assume rational behavior

rent seeking behaviour of retaliating agents this paper has examined a rent seeking game where the players take a more sophisticated approach to evaluating the potential strategies and counter strategies of their rivals than in the standard nash case we have derived the conditions for the existence of symmetric and nonsymmetric equilibria for the game and derived the properties of these equilibria three results merit repeating first we find that rent dissipation will not in general be complete second and in contrast to much of the traditional literature we find that the socially optimal result of zero rent seeking is sometimes a feasible equilibrium outcome for our game finally there exist rent seeking configurations in which the best play of one of the rivals is to withdraw from the game or alternatively stated where it is not optimal for a rival to contest the rent by entering the game in these nonsymmetric cases it would appear that tullock s conjecture about the value of preemptive moves remains valid this is true even when the strategies and counter strategies available to the players are much more complex than in the traditional nash approach

a theory of discouraged borrowers this paper examines the implications for the sme financing market of application costs that vary between firms and of imperfect screening of applicants by banks under these conditions discouraged borrowers can exist these are good borrowers who do not apply for a bank loan because they feel they will be rejected the paper shows that under a range of assumptions the scale of discouragement in an economy depends upon the screening error of the banks the scale of application costs and the extent to which the bank interest rate differs from that charged by the moneylender discouragement is shown to be at a maximum where there is some but not perfect information

the dynamics of lobbying a differential game this paper presents a dynamic model on lobbying the interactions between two competing lobbies who attempt to influence regulations and legislation are modelled as a differential game we consider for this game first a time consistent and then a subgame perfect equilibrium in linear markov strategies the subgame perfect equilibrium lowers considerably lobbying activity and expenses this provides a partial explanation of the puzzle that rent seeking expenses are often small compared with the prize sought

efficient rents 2 free entry and efficient rent seeking in the competition for a monopoly right in which the number of bidders is fixed tullock and others have found the value of the resources spent in the aggregate to capture the transfer to be sometimes less than and sometimes greater than the value of the monopoly we think this approach to be incomplete since it leaves unanswered the question of what determines the number of individuals who will vie for the right to be the monopolist it is unsatisfactory to imagine for example that the franchisor sets the number of contestants one could then foresee that rent seeking would arise to influence the permissible number of bidders and this merely moves the rent seeking dissipation question one step back