a methodology for measuring food poverty applied to kenya abstract this paper proposes a new way of establishing a food poverty line taking into account regional food preferences and prices it uses this poverty line to derive a food poverty measure which satisfies the desirable fundamental properties of such measures and has the additional advantage of being additively decomposable the measurement of food poverty is further generalized to heterogeneous groups of households facing different sets of relative prices and exhibiting different food preferences finally the above methodology is applied to the empirical estimation of food poverty among kenyan smallholders and the results contrasted with those obtained by two other methods

how risk sharing may enhance efficiency of english auctions we investigate the possibility of enhancing efficiency by awarding premiums to a set of highest bidders in an english auction in a setting that extends maskin and riley 1984 econometrica 52 1473 1518 in three aspects i the seller can be risk averse ii the bidders can have heterogeneous risk preferences and iii the auction can have a binding reserve price our analysis reveals that the premium has an intricate joint effect on risk sharing and expected revenue which in general benefits risk averse bidders when the seller is more risk averse than the pivotal bidder a condition often verifiable by deduction prior to the auction the premium also benefis the seller and therefore leads to a pareto improvement of the english auction the advantage of such premium tactics is directly related to a the seller s degree of risk aversion b the reserve price c the riskiness of the object for sale d the degree of heterogeneity in risk preferences among the bidders and e the number of the potential bidders

the influence of household composition on household expenditure patterns theory and spanish evidence a concept of demographic separability is proposed that formalizes the notion that there are groups of goods adult goods that have little or no relationship to specific classes of household demographics the numbers or ages of children that there exist adult goods demographically separable from children is a necessary but not sufficient condition for the validity of rothbarth s method for measuring child costs we propose two different methods for testing demographic separability and present results from a 1981 survey of spain the econometric evidence is in fair agreement with the theoretical presuppositions

the shill bidding effect versus the linkage principle abstract the analysis of second price auctions with externalities is utterly modified if the seller is unable to commit not to participate in the mechanism for the general symmetric model introduced by milgrom and weber p milgrom r weber a theory of auctions and competitive bidding econometrica 50 1982 1089 1122 we characterize the full set of separating equilibria that are symmetric among buyers and with a strategic seller being able to bid in the same way as any buyer through a so called shill bidding activity the revenue ranking between first and second price auctions is different from the one arising in milgrom and weber the benefits from the highlighted linkage principle are counterbalanced by the shill bidding effect

nietzschean development failures government policies and substantial external resources and technical assistanceprovided over the course of decades have neither eliminated broad poverty nor resulted inequitable income distributions in the poorer countries of the world this paper explains thedevelopment failures with reference to nietzschean behavior where the strong act withoutethical restraint and the rule of law does not protect the weak while nietzschean behaviorviolates principles of social justice there are also inefficiencies the nietzschean strong whorule have no incentive to adopt efficiency enhancing policies efficiency in a nietzscheansociety is also greater the higher the leisure preference of the weak and the less the weakare capable of producing labor productivity is low because the weak do not consistentlywork these are the outcomes when the strong behave as roving bandits when the strongbehave as stationary bandits efficiency is enhanced but income distribution can be expectedto remain unequal the nietzschean perspective on development failure is compared withalternative explanations for the sustained plight of the poor in poor countries and the unequaldistributions of income and wealth

food consumption in mexico demographic and economic effects abstract disaggregated demand analysis is beginning to receive increased importance in food policies for developing countries using household data from the mexican expenditure survey we estimate the income and demographic effects on expenditures for nine aggregate food categories in addition we use a probit model to explore the effect of these variables on the purchase decision for five high protein supplying goods the results indicate that demographic variables as well as income have important effects in determining food expenditures we analyse these effects and indicate the role they might play in food policy programmes such as pronal

the testing and estimation of complete demand systems on household budget surveys a recent demand system aids is extended to include family size explicitly and then estimated on indian budget data the estimation using non linear fiml is performed first on pure time series and then on pooled cross section data within and across equation restrictions are imposed and tested the principal results include u a significant price and family size effects on the budget share of an item b sensitivity of test results on homogeneity and symmetry to i rural urban data ii time series cross section and iii inclusion omission of family size c considerable difference between pure time series and pooled cross section estimates and d difference between the expenditure responses of the rural and urban consumer

rent seeking and institutional stability in developing countries although developing countries are most often associated with institutional instability most are fairly stable and may be considered extremely stable if one takes into account the fact that policies adopted by many of these nations are highly inefficient in a large number of cases post independence economic policies adopted by developing countries have resulted in very slow stagnant or even negative economic growth in more advanced and democratic countries such policies would prevent the reelection of leaders although a small fraction of the population enjoys an extremely high standard of living the majority of the population in developing countries have not experienced any significant gains in their standard of living since independence yet while there have been several coups and attempted coups many governments have remained relatively stable with some leaders remaining in power for over a quarter of a century in other cases leaders have served until their death and successors have continued uninterrupted with remarkable stability even when such leaders adopt what may be considered extremely inefficient policies why then have many institutions remained so stable the present paper argues that the stability observed in many developing countries is a result of a rent seeking equilibrium between well organized interest groups in the population that compete for wealth transfers generated by the relatively weaker and more poorly organized groups in this equilibrium the military is one of the most important interest groups that benefit from the transfers because rent seeking in these countries often involves violence the

asymmetric auctions with resale an experimental study we study auctions with resale based on hafalir and krishna s 2008 6 model as predicted weak bidders bid more with resale than without so that average auction prices tend to increase when the equilibrium calls for weak types to bid higher than their values with resale they do but not nearly as much as the theory predicts in other treatments outcomes are much closer to the risk neutral nash model s predictions bid distributions for weak and strong types are more similar with resale than without in line with the theory

can affirmative action be cost effective an experimental examination of price preference auctions one of the most controversial questions facing our economy and society in recent years is the question of affirmative action the debate centers around an issue of minority representation in which the rights of the majority are depicted as being compromised by affirmative action programs set up to increase the welfare of minorities implicit in this discussion is the assumption that all affirmative action programs must be cost increasing this result it is claimed follows trivially from economic theory since any interference into the competitive process which prevents the most capable from being chosen must be wasteful and costly in this paper we challenge this claim with experimental results demonstrating that pricepreference auctions in which high cost minority firms are given preferential treatment in the awarding of contracts in such a way that it is possible for these firms to win a contract but not have submitted the lowest bid can be programs that both enhance minority representation and are cost effective in that they decrease the cost of government procurement in the theoretical literature on asymmetric auctions eric maskin and john riley 1995 and the optimal auction literature roger myerson 1981 it has been shown that in asymmetric auctions in which firms draw their costs from

uniqueness of equilibrium in sealed high bid auctions abstract for the case of two buyers we show that equilibrium in the sealed high bid auction is unique when i buyers reservations prices are drawn independently from distributions with finite support and positive mass at the lower endpoint ii buyers have private values and iii buyers preferences are log supermodular for more than two buyers we obtain the same result under the additional assumptions that iv buyers with the same reservation price have the same preferences v buyers are risk neutral or risk averse with non increasing absolute risk aversion and vi the supports of the different buyers distributions of reservation prices have the same upper endpoint

economic and security consequences of supreme values islamic societies have in contemporary times lagged western societies in income growth and human development indicators the supreme values of radical islam further de prioritize economic achievement and impose self deprivation on own populations this paper investigates the reasons for economic outcomes under islam contemporary illustrations are also provided of the self deprivation predicted from pursuit of the supreme value objectives of radical islam the self deprivation is placed in a rent seeking context

premium auctions and risk preferences an experimental study in premium auctions the highest losing bidder receives a reward from the seller this paper studies the private value english premium auction epa for different risk attitudes of bidders we explicitly derive the symmetric equilibrium for bidders with cara utilities and conduct an experimental study to test the theoretical predictions in our experiment subjects are sorted into risk averse and risk loving groups we find that revenues in the epa are significantly higher when bidders are risk loving rather than risk averse these results are partly consistent with theory and confirm the general view that bidders risk preferences constitute an important factor that affects bidding behavior and consequently also the seller s expected revenue however individual subjects rarely follow the equilibrium strategy and revenue in our experiment is lower than in the symmetric equilibrium

directly unproductive profit seeking dup activities this paper propses directly unproductive profit seeking dup activities as a general concept that embraces a wide range of recently analyzed economic activities including the subset of rent seeking activities considered by krueger it then proceeds to provide a synthesis and generalization of the welfare theoretic analysis of such activities by developing a fourfold categorization of cases depending on the levels of distortions before and after the dup activity thus a unification and overview of the subject are achieved

government procurement and international trade abstract we model the bidding for a government contract in which there is imperfect competition each bidder is better informed about his own costs than either his rival bidders or the government and the distribution of the domestic firms costs differs from the distribution of foreign firms costs because of comparative advantage effects we find that the government minimizes its expected procurement cost by operating a price preference policy not necessarily purchasing from the lowest bidder

demographic variables in demand analysis in this paper the authors discuss five procedures for incorporating demographic variables into theoretically plausible demand systems translating scaling and the gorman reverse gorman and implicit prais houthakker procedures these five procedures are used to incorporate a single demographic variable the number of children in a household into the generalized ces demand system using household budget data for the united kingdom for the period 1966 1972 excerpt

measurement and determinants of rural poverty household consumption patterns and food poverty in rural sudan abstract a logit model and engel curves are used to study the determinants of food poverty and composition of household consumption among the tenant farmers of the rahad scheme in sudan where land is equally distributed the data support the permanent income hypothesis whereas engel s assumption of declining food shares with increased total spending did not hold for the present sample the logit analysis provides strong evidence for the important influences of better access to productive assets other than land smallersized families higher non farm earnings and farming experience on reducing the probability of food poverty on the scheme policies directed towards the provision of better family planning education extension increased on and off farm employment and improved infrastructure for higher labour mobility can make for effective poverty alleviation programmes in this sector

production prices and poverty in rural india this paper challenges the view that increases in agricultural production have reduced poverty in rural india rural poverty is related directly to the consumer price index number for agricultural labourers and inversely to agricultural production the underlying time trend term indicates a residual rising trend in rural poverty after accounting for the influence of these two factors there are plausible though conjectural reasons for believing that to a significant extent the price factor as well as the variables implicit in the time trend term both derive their strength if not their existence from the nature of the growth processes which have generated the observed growth in agricultural production these results contradict ahluwalia s earlier conclusions even though they are themselves based on essentially the same data set

will developing country nutrition improve with income a case study for rural south india aggregate estimates of food expenditure are consistent with such a possibility implying income expenditure elasticities close to one however the high degree of aggregation at which such estimates are made means that the considerable increase in price per nutrient as income increases is ignored and the nutrient elasticities are therefore overstated estimates for a rural south indian sample indicate that this bias is considerable and that the true nutrient elasticities with respect to income may be close to zero

bid preference programs and participation in highway procurement auctions we use data from highway procurement auctions subject to california s small business preference program to study the effect of bid preferences on auction outcomes our analysis is based on an estimated model of firms bidding and participation decisions which allows us to evaluate the effects of current and alternative policy designs we show that incorporating participation responses significantly alters the assessment of preferential treatment policies

the power of the vegetable patch how home grown food helps large rural households achieve economies of scale escape poverty this paper explores how the household s capacity to grow food impacts their ability to achieve economies of scale in food consumption and how this impacts the geographic distribution of poverty across rural and urban areas an accurate understanding of consumption economies of scale is vital for comparing poverty levels across households of varying size using sri lankan data on home grown food consumption we empirically confirm that such economies of scale exist and that large households tend to consume relatively more home grown food than smaller households the magnitude of these scale economies are found to be larger than those in market purchased food but smaller than those found in housing expenditure consuming more home grown food is also found to be positively correlated with per capita calories consumed taking these effects into account in poverty estimates leads to a 15 per cent decline in the number of household who fall below the poverty line in rural regions

the political economy of distribution in developing countries a rent seeking approach economic development in many third world countries after independence has been biased in the sense that some mainly urban social groups have gained much more than the majority of the population who lives in rural areas or urban shantytowns that bias is to a large extent caused by government policy and accordingly by an uneven distribution of political influence this paper contains an analytical model reflecting the bias in the distribution of the benefits and costs of public sector activities where those activities are determined by the distribution of political influence the main elements of the distribution of political influence are determined in a rent seeking game between society different social groups

political instability in africa a rent seeking approach the foregoing analysis developed the paradigm of self interest motivated revolutionary activities in effect the construct presented differs from the by product theory developed by tullock only in its specific modeling of government created rents as the engine which drives the violent political behavior the empirical test of the positive relationship between rent creation by the government and the amount of destabilizing political activity yields strong support for the structuring of politically destabilizing activities as rent seeking in nature it is the authors hope that further empirical investigation and a more general and rigorous modeling of revolution as a rent seeking activity will become an important part of the literature in public choice

unequal wealth accumulation and income inequality in a unimodal agriculture sudan s radad irrigation scheme patterns of income savings and wealth accumulation of tenant farmers in the rahad irrigation scheme of sudan were examined although land and irrigation water are publicly owned and equally distributed in these schemes unequal access to capital was found to influence strongly the distribution of family income and the saving and accumulation capacities of the tenant farmers analysis using lorenz curves and gini coefficients revealed a high positive correlation between wealth and family income the average wealth gap between poor and rich households increased by 28 per cent over the year of the study to reduce relative poverty improved credit and marketing systems plus more research and extension support to enhance productivity and create higher on farm incomes for the poorer tenants are needed in addition macro and sector policies that subsidise labour saving technologies and lower incentives for export and domestic crop production need to be reformed to promote greater employment and higher off fa

optimal auctions with asymmetric financial externalities abstract this paper studies optimal auction design with asymmetric linear financial externalities among bidders when the matrix that relates bidders payoffs to their payments is nonsingular the payment related component in the design objective must equal a unique linear combination of its counterparts in bidder s payoffs if all multipliers of the linear combination are nonnegative a modified myerson procedure is discovered for deriving the optimal design if any multiplier is negative an arbitrarily high value can be achieved for design objective by setting proper fixed transfers to bidders when the matrix is singular the unbounded optimum result typically prevails we applied our method to auctions with cross shareholdings and charity auctions for revenue maximizing and efficient designs

premium auctions and risk preferences abstract in a premium auction the seller offers some payback called premium to a set of high bidders at the end of the auction this paper investigates how the performance of such premium tactics is related to the bidders risk preferences we analyze a two stage english premium auction model with symmetric interdependent values in which the bidders may be risk averse or risk preferring upon establishing the existence and uniqueness of a symmetric equilibrium we show that the premium causes the expected revenue to increase in the bidders risk tolerance a net premium effect is key to this result

rent seeking political influence and inequality a simple analytical example a simple model allowing an analysis of the interaction between economic policy decisions and rent seeking by private agents competing for political influence is developed rent seeking may be of the directly unproductive type requiring resources that are withdrawn from productive activities or it may manifest itself as income transfers corruption to political decisionmakers

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

poverty technology and infrastructure in rural india poverty is often viewed as a direct consequence of the development strategies pursued by many developing countries khan and griffin 1977 for instance on the basis of selec ted observations for some asian countries argue that development of the type experienced by these economies in the last quarter century has meant increased impoverishment of very large numbers of people indeed it has been suggested that one of the most glaring examples of this third world paradigm is the experience of india lifschultz 1981 the analyses of the indian experience provoked by the khan and griffin conjecture have yielded mixed results while ahluwalia s 1980 analysis sug gests an inverse relationship between rural poverty and an index of agricultural output i e output per head at the all india level the state level results present a somewhat different picture the inverse relationship between the index of agricultural output and rural poverty is observed in some states but there is also evidence that there are processes at work which tend to increase the incidence of poverty independently of variations in the index of agricultural output 1 the view that increases in agricultural production have reduced rural poverty was challenged by saith 1981 saith s contention rests on the fact that while rural poverty is directly related to the cost of living index and inversely to agricultural production the underlying time trend term indicates a residual rising trend in rural poverty after accounting for the influence of these two factors 2

notes and comments the amsterdam auction the amsterdam auction has been used to sell real estate in the dutch capital for centuries by awarding a premium to the highest losing bidder the amsterdam auction favors weak bidders without having the implementation difficulties of myerson s 1981 optimal auction in a series of experiments we compare the standard first price and english auctions the optimal auction and two variants of the amsterdam auction with strongly asymmetric bidders the second price amsterdam auction raises substantially more revenues than standard formats and only slightly less than the optimal auction

poverty and unemployment in india an analysis of recent evidence a careful analysis of the data for two states of india shows that the incidence of unemployment was markedly higher among those whose usual activity was casual labour the self employed and family helpers reported a much less than average level of unemployment or underemployment the casual labourers were over represented among the bottom deciles in terms of their per capita expenditure they reported a lower than average level of literacy and education and were generally younger than other workers those in rural areas were predominantly agricultural labourers with no land or very small land holdings two distinct groups among urban casual labourers were agricultural labourers and miscellaneous workers in the not elsewhere classified category the incidence of unemployment in 17 major states of india shows a statistically significant positive association with the percentage of casual labourers in the rural labour force and in the urban male labour force the importance of casual labourers if the labour force seems to explain a good part of the interstate variance in unemployment rates

fighting collusion in auctions an experimental investigation the danger of collusion presents a serious challenge for auctioneers in this paper we compare the collusive properties of two standard auctions the english auction and the first price sealed bid auction and a lesser known format the amsterdam second price auction in the amsterdam auction the highest losing bidder earns a premium for stirring up the price we study two settings in one all bidders can collude and in another only a subset is eligible the experiments show that the amsterdam auction triggers less collusion than the standard auctions we compare experimental results to theoretical predictions and provide an explanation where they differ