growth paths and survival chances an application of gambler s ruin theory this paper links new firm survival with growth with a focus on the patterns in firms growth paths we theorise a gambler s ruin framework by arguing that new firm performance is best modelled as a random walk process but that survival is nonrandom and depends primarily on the stock of accumulated resources a firm s resources are either there when the business begins or are generated by successful periods wins the empirical section tracks over six years the sales and survival non survival of 6247 uk start ups which all began trading in the same quarter of 2004 we do not find strong evidence in favour of a taxonomy of growth paths because we observe that every possible growth path seems to occur with roughly equal probability however we observe that growth paths influence subsequent survival controlling for lagged size we observe that longer lags of growth and even start up size have significant effects on survival

the demographic transition and the position of women a marriage market perspective we present international evidence on the marriage market implications of cohort size growth and set out a theoretical model of how marriage markets adjust to imbalances since men marry younger women secular growth in cohort size in the second phase of the demographic transition worsens the position of women this e ect has been substantial in many asian countries earlier and continues to be true in sub saharan africa with fertility decline cohort are now shrinking in east asia improves the position of women these demographic trends can explain the increase and spread in dowries in south asia and the persistence of polygyny in sub saharan africa we show that the age gap at marriage will not adjust in order to equilibrate the marriage market in response to persistent imbalances even though it accommodates transitory shocks jel categories j12 j13 j16

winners losers and the nuclear waste dilemma this paper explores how property right assignment affects social efficiency when a public program has both public good and public bad components we show that when willingness to accept a public bad exceeds the willingness to pay the net benefit is unambiguously lower when the property right supports the status quo institutional structure thus kaldor hicks efficiency tests tend to favor public programs and mitigation over the status quo even when mitigation negatively affects another group to illustrate the result we develop social cost estimates for moving nuclear waste from current temporary storage facilities to a permanent central repository at yucca mountain nv usa for a representative city with a population of 226 195 the present value of the external cost of shipping waste is 1 42 billion when those living near temporary nuclear waste storage facilities are assigned the property right to health and safety that number swells to 5 95 billion when those living near the transport route are assigned the property right thus property right assignment affects the efficient level of nuclear waste and thus nuclear energy produced

preference uncertainty in stated preference studies facts and artefacts the ordinal scale and polychotomous choice methods are two widely used techniques for estimating preference uncertainty in stated preference studies this article presents the results of two experiments that apply these estimation techniques the first experiment was designed to compare and contrast the scores of the ordinal scale and polychotomous choice method the second experiment was conducted to test a scale that combines verbal expressions with numerical and graphical interpretations a composite scale the results of the study can be summarized in three key findings first the polychotomous choice method generates a higher proportion of yes responses than the conventional dichotomous choice elicitation format second the composite scale generates a significantly higher proportion of certain responses finally the ordinal scale performs poorly on the ground of construct validity

children as collective goods and divorce settlements the failure of many divorced fathers to comply with court mandated child support awards has been identified as a major reason why a growing number of children live in poverty in female headed households this paper presents a model that seeks to explain why so many divorced fathers allow their children s welfare to suffer as a consequence of divorce the point of departure is the recognition that children are collective consumption goods from the point of view of the father and mother within marriage proximity and altruism serve to overcome the free rider problem associated with the provision of public goods however on divorce the noncustodial parent suffers a loss of control over the allocative decisions of the custodial parent and it is not feasible for the couple to achieve a pareto optimal allocation of their joint resources a model of optimal marriage contracts is constructed in which a couple decides on the allocation of resources within marriage and on the terms of a settlement in the event

do men with higher wages marry earlier or later using data from taiwan this paper shows that marriage age is negatively positively related to the wage rate in the sample with nonworking working wives the results reconcile the two contrasting hypotheses on the relation between wages and marriage age for men

preferences for environmental quality under uncertainty abstract although the expected effects of environmental policies and interventions are rarely known with certainty stated preference surveys rarely elicit preferences over uncertain environmental outcomes this article presents empirical results challenging the view that ignoring such uncertainty during preference elicitation is of no consequence so long as people only care about final environmental states we show that measured preferences for final environmental states water quality in this case depend on whether people choose between final states or between lotteries over final states in contrast to the typical finding for monetary lotteries we find significant under weighting of low probability events related to water quality

understanding hurricane evacuation decisions under contingent scenarios a stated preference approach we conduct a stated preference analysis to understand the factors that individual households take into consideration to evacuate during hurricanes in designing the contingent scenarios for evacuation we randomly assign varying levels of hurricane characteristics wind speed lead time for landfall and the height of storm surge combined with different types of emergency management options voluntary versus mandatory evacuation order and a voucher with varying amounts to cover evacuation expenses findings indicate that individual households respond in a non linear fashion to the intensity of hurricanes when making evacuation decisions respondents are also more likely to evacuate when the storm surge reaches a certain threshold in terms of policy interventions mandatory evacuation orders are more effective to increase the likelihood of evacuation the potential intervention in the form of providing evacuation vouchers to assist households to cover their expenses e g for food water transportation and lodging also seems effective we discuss policy implications of our findings

persistence survival and growth a closer look at 20 years of fast growing firms in austria for survival persistence and growth hifs show a much higher persistence than hgfs the average growth rate after the high growth episode is quite modest for both hifs and hgfs policy implications of the ndings are discussed

the value of youth equalizing age differentials in marriages the objective of this paper is to present a model of constrained utility maximizing behaviour which is able to explain serveral features of marriage the model predicts that individuals meet in the

individual option prices for climate change mitigation abstract willingness to pay for climate change mitigation depends on people s perceptions about just how bad things will get if nothing is done individual subjective distributions for future climate conditions are combined with stated choices over alternative climate policies to estimate individual option prices the appropriate ex ante welfare measure in the face of uncertainty for climate change mitigation we find statistically significant sensitivity of estimated option prices to both expected future conditions and uncertainty about future conditions

black hole tariffs and endogenous policy theory political economy in general equilibrium preface acknowledgments list of results 1 a preview of the results 2 endogenous policy theory a diagrammatic approach part i endogenous policy theory with specific factors the theory of industry tariffs in partial equilibrium 3 the probabilistic voting model of political efficiency and powerless politicians 4 endogenous lobbying theory and the contribution specialization theorem 5 endogenous tariff theory 6 the power function model of endogenous industry lobbying 7 three simple tests of the stolper samuelson theorem 8 the invisible foot and the waste of nations lawyers as negative externalities part ii endogenous policy theory in general equilibrium a long run theory of national tariff levels 9 the 2 x 2 x 2 x 2 model of endogenous redistribution theory 10 a prisoner s dilemma theory of endogenous protection the leontief model 11 the compensation effect and the multiple equilibrium trap 12 increasing returns to politics and factor endowments economic development and brazilian vitality versus the indian disease 13 endogenous protection in the united states 1900 88 14 a cobb douglas model 15 black hole tariffs 16 the endowment effect cross national evidence on endogenous tariffs part ii postscript 17 the senile industry argument for protection 18 optimal obfuscation and the theory of the second worst the politically efficient policy mathematical appendices references author index subject index

are high growth firms one hit wonders evidence from sweden most firms do not grow and a small number of high growth firms seem to create most new jobs these firms have therefore received increasing attention among policymakers the question is whether high growth tends to persist we investigate this question using firm level data from sweden during 1997 2008 we find that high growth firms had declining growth rates in the previous 3 year period and their probability of repeating high growth rates was very low thus these are essentially one hit wonders and it is doubtful whether policymakers can improve economic outcomes by targeting them

valuing public acceptance of alternative fuel buses using a latent class tobit model a case study in valencia abstract the introduction of hybrid electric technology for urban public transportation can be considered a valuable stepping stone to low carbon mobility using the contingent valuation method a sample of 427 respondents were asked about their willingness to pay for the air pollution reductions associated to a scenario of gradual introduction of hybrid electric buses in valencia spain results show that 67 of the respondents are willing to pay extra for the adoption of this electric hybrid technology being the mean willingness to pay 0 33 per single bus fare this would imply a 22 hypothetical increase in current bus fares and shows that public acceptance is critical for the successful introduction of these new low emissions vehicles further this paper differs from previous research in that it addresses the issue of heterogeneity among respondents thus using latent class analysis based on questions about environmental concerns we identify three different classes of respondents high medium and low environmentally concerned mean willingness to pay for each class ranges from 0 25 to 0 38 then we analyze willingness to pay determinants through the estimation of a tobit model for each class of respondents this reaffirms the existence of heterogeneity and accordingly suggests that treating the population as a single homogeneous group of respondents as is common in the existing literature may lead to biased parameter estimates and flawed decision making regarding climate change action

accounting for the timing of first marriage among first marriages in the united states grooms are on average 1 7 years older than their brides traditionally this fact is explained by sex differences in income we use a general equilibrium overlapping generations search model economy to show instead that sex differences in fecundity are essential to account for the age gap at first marriage whereas sex differences in income play a secondary role our model economy also accounts for other facts on the timing of first marriages that the literature has overlooked

distributional preferences and the incidence of costs and benefits in climate change policy we explore the relationship between willingness to pay wtp for climate change mitigation and distributional preferences by which we mean individuals opinions about who should be responsible for climate change prevention and whether the share of climate change impacts borne by the poor is a cause for concern we use 1 770 responses to an online stated preference survey the domestic costs in our survey s policy choice scenarios are expressed as a set of randomized shares across four different payment vehicles and the international cost shares are randomized across four groups of countries we also elicit respondents perceptions of the likely regressivity of climate change impacts under a policy of business as usual wtp is higher when larger cost shares are borne by parties deemed to bear a greater responsibility for mitigation and when respondents believe and care that the impacts of climate change may be borne disproportionately by the world s poor that wtp for an environmental policy depends on the distributional consequences of the policy is an unsettling result efficiency assessments are typically assumed to be separate from equity considerations in most benefit cost analyses

how do long shot outcomes affect preferences for climate change mitigation this article takes a fresh look at how public uncertainty influences willingness to pay wtp for climate change mitigation programs i elicit subjective distribution functions over future global mean temperatures and wtp for mitigation i find not surprisingly that subjects on average view climate change as a bad and the higher the expected temperature increase they perceive the more they are willing to pay for mitigation subjects are generally risk averse so that they are wtp more for mitigation programs when the outcome of the program is more certain the skew of the subjective climate change distribution also affects preferences so that aversion to catastrophic outcomes is an important component of wtp for mitigation i find that models that ignore skew are likely to underestimate the influence of uncertainty on willingness to pay for climate change mitigation

corporate growth and industrial structures some evidence from the italian manufacturing industry this work analyses the properties of corporate growth in a large longitudinal sample of italian manufacturing firms in particular it focuses on the statistical properties of growth rates and on the influence of proxies for relative efficiency upon relative growth in line with previous work the emergence of fat tails in growth rate distributions and the idiosyncratic nature of autocorrelation coefficients confirm the existence of a structure in the growth process richer than the one normally assumed by the gibrat law hypothesis and suggest the presence of firm specific drivers of growth at the same time there is a remarkable puzzle concerning the absence of any negative relationship between size and growth variance and only weak influences of relative efficiencies upon growth dynamics

fertility shocks and equilibrium marriage rate dynamics why did the marriage probability of single females in france after world war 1 rise 50 above its pre war average despite a 33 drop in the male female singles ratio we conjecture that war time disruption of the marriage market generated an abnormal abundance of men with relatively high marriage propensities our model of matching over the lifecycle when calibrated to pre war data and two war time shocks succeeds in matching the french time path under the additional assumption of a pro natalist post war preference shock we conclude that endogeneity issues make the sex ratio a potentially unreliable indicator of female marriage prospects

welfare effects of changes in environmental quality under individual uncertainty about use we adapt the theoretical state preference model to value nonmarket public goods under individual uncertainty about use illustrating with an assessment of willingness to pay to prevent acid rain lake damage in the northeast united states individual usage uncertainty is modelled via probabilities of participation in trout fishing changes in environmental quality are valued using a random utility model to explain yes no responses to a contingent valuation question we produce quantitative welfare measures individual fitted and simulated passiveand active use values individual expected consumer surplus option price option value and complete individual willingness topay loci

waiting or acting now the effect on willingness to pay of delivering inherent uncertainty information in choice experiments abstract this paper analyzes the effect of inherent uncertainty on the willingness to pay wtp for a policy aimed at reducing expected climate change impacts to do this it relates outcome uncertainty to the probability of occurrence of one of these impacts within a given time horizon unlike the existing studies this paper links outcome uncertainty to the uncontrollable component of environmental uncertainty derived from the stochastic nature of an ecosystem s behavior results show that the wtp for the policy in the presence of uncertainty does not decrease compared to the scenario where climate change impacts are assumed to occur with certainty this suggests individuals are adopting a precautionary attitude when stating their wtp thus the paper provides economic justification for preventive measures in highly uncertain contexts however findings are not conclusive with respect to the influence of the degree of uncertainty on the support for such measures

risk perception in psychology and economics abstract the concept of rationality has been basic to most economic analysis its content has been successively refined over the generations as applied to the static world of certainty it has turned out to be a weak hypothesis not easily refuted and therefore not very useful as an explanation though not literally a tautology but recent decades have seen the development of stronger versions applied to a world in which time and uncertainty are real among its most important manifestations have been criteria for consistency in allocation over time the expected utility hypothesis of behavior under uncertainty and what may be termed the bayesian hypothesis for learning that is the consistent use of conditional probabilities for changing beliefs on the basis of new information these hypotheses have been used widely in offering explanations of empirically observed behavior though as not infrequently in economics the theoretical development has gone much further than the empirical implementation these hypotheses have also been used increasingly in normative analysis as a component of benefit cost studies therefore frequently referred to as benefit risk studies the value of reducing mortality rates from diseases for example has been studied by assuming that choice of occupations is made inter alia by comparing wage differences with mortality differences

a theory of prostitution prostitution is low skill labor intensive female and well paid this paper proposes a marriage market explanation to this puzzle if a prostitute compromises her marriage market prospects she will have to be compensated for forgone marriage market opportunities we discuss the link between poverty and prostitution and show that prostitution may decrease with male income if wives and prostitutes are drawn from the same pool of women we point to the role of male sex ratios and males in transit in sustaining high levels of prostitution and we discuss possible reasons for its low reputation and implications for marriage patterns

corporate growth and industrial dynamics evidence from french manufacturing this work explores basic properties of the size and growth rates distributions of firms at the aggregate and disaggregate levels using an extensive dataset on french manufacturing firms we investigate which properties of firm size distributions and growth dynamics characterize the aggregate dynamics and are at the same time robust under disaggregation our analysis is based on non linear robust regression methods which have never been applied before to this kind of data the growth rates distributions we observe are well described by a subbotin distribution with a shape parameter significantly lower than 1 suggesting a noticeable departure from the laplace behavior reported in previous works on italian and us data at the same time the variance of growth rates depends negatively on size and the relationship does not seem to be linear with larger firms possibly displaying lower variability in their growth dynamics at the disaggregate level we observe significant heterogeneity in the firm size distributions across sectors while the shape of the sectoral growth rates density displays a surprising degree of homogeneity

willingness to pay and policy instrument choice for climate change policy in the united states abstract this paper provides the first willingness to pay wtp estimates in support of a national climate change policy that are comparable with the costs of actual legislative efforts in the u s congress based on a survey of 2034 american adults we find that households are on average willing to pay between 79 and 89 per year in support of reducing domestic greenhouse gas ghg emissions 17 by 2020 even very conservative estimates yield an average wtp at or above 60 per year taking advantage of randomized treatments within the survey valuation question we find that mean wtp does not vary substantially among the policy instruments of a cap and trade program a carbon tax or a ghg regulation but there are differences in the sociodemographic characteristics of those willing to pay across policy instruments greater education always increases wtp older individuals have a lower wtp for a carbon tax and a ghg regulation while greater household income increases wtp for these same two policy instruments republicans along with those indicating no political party affiliation have a significantly lower wtp regardless of the policy instrument but many of these differences are no longer evident after controlling for respondent opinions about whether global warming is actually happening

the impact of global warming on agriculture a ricardian analysis reply we measure the economic impact of climate on land prices using cross sectional data on climate farmland prices and other economic and geophysical data for almost 3 000 counties in the united states we find that higher temperatures in all seasons except autumn reduce average farm values while more precipitation outside of autumn increases farm values applying the model to a global warming scenario shows a significantly lower estimated impact of global warming on u s agriculture than the traditional production function approach and in one case suggests that even without co sub 2 fertilization global warming may have economic benefits for agriculture 16 refs 5 figs 5 tabs

differential fecundity and child custody abstract despite u s child custody laws favoring joint custody since the mid 1970s mother sole custody is still the main custody arrangement this paper proposes that differences in fecundity between men and women play a role in accounting for this fact men are more likely to have more children after a divorce because they are fertile for more years than women this acts as an incentive for couples to agree on mothers sole custody i build a general equilibrium model of endogenous marriage divorce and remarriage with differential fecundity between women and men where couples choose custody allocation custody depends on the fecundity differential and father s time spent with children i calibrate my model to be consistent with observed u s child custody arrangements and marriage statistics and using changes over time in assisted reproductive technology art and father s time spent with children i quantify the effect of the fecundity differential on child custody results show that if assisted reproductive technology was not available the current share of couples with joint custody would be 15 67 lower considering that fathers time with children has also changed over time i find that a reduction in the fecundity differential accounts for an increase in the share of couples with joint custody of 4

small firms in economic theory this is the fourth of a series of critical survey articles the aim of the series is to report on recent developments to provide an assessment of alternative approaches and to suggest lines of future inquiry it is intended that the articles will be accessible not only to other academic researchers but also to students and others more practically involved in the economy future survey articles will include warren samuels on institutional economics and philip arestis on post keynesian

on the emergence of toyboys the timing of marriage with aging and uncertain careers we explore how gender bias in career opportunities affects matching in a marriage market with search frictions and where an individual s fitness decays with age we document a being left on the shelf effect where young singles who find the marriage market rapidly thins with age rush into early partnership singles with stronger career opportunities however have a greater option value to defer marriage more equal career opportunities for women captured by greater schooling and better occupations potentially explain the recent emergence of toyboy unions in which the woman is at least 5 years older than her partner 2011 by the economics department of the university of pennsylvania and the osaka university institute of social and economic research association

whom do new firms hire using the matched employer employee data set for denmark and information on the founders of new firms we analyze the hiring choices of all new firms that entered from 2003 to 2010 we develop a theoretical model in which the quality of a firm s employees determines its average cost a firm s productivity is based on its pre entry experience and persistent shocks and over time firms learn about their productivity the model predicts that more productive firms are larger and hire more talented employees which gives rise to various predictions about how pre entry experience firm growth rates and firm size influence the wages firms pay to their early hires we find that beginning with the time of entry larger firms consistently pay higher wages to their new hires these are firms with greater survival prospects at the time of entry based on the pre entry backgrounds of their founders and that grow at greater rates over time both of which are predictive of the wages paid to new hires from the time of entry onward our findings suggest workers are allocated to firms according to their abilities which can give rise to enduring firm capabilities

the demand for environmental quality in driving transitions to low polluting energy sources the purpose of this paper is to understand the long run demand for energy related environmental quality its influence on legislation and on transitions to low polluting energy sources it starts by presenting a simple framework of the relationship between the demand for and supply of environmental quality environmental legislation and energy this forms the structure for presenting a series of episodes in british history where a demand for improvements in energy related environmental quality existed this analysis proposes that markets can drive transitions to low polluting energy sources in specific economic conditions however most probably governments will need to push them and this cannot be expected without strong and sustained demand for environmental improvements yet while demand is a prerequisite it is not enough it must also be spearheaded by strong creative and sustained pressure groups i e powerful lobbying and the weakening of the counter lobby to introduce legislation to enforce it and to avoid it being over turned by future governments

paying for mitigation a multiple country study a contingent valuation study conducted in china sweden and the united states was used to investigate citizens willingness to pay wtp for reducing co2 emissions we find that a majority of the respondents in all three countries believe that the mean global temperature has increased over the last 100 years and that humans are responsible for the increase the share of americans that believes these statements is smaller and a relatively larger share of americans also believes that nothing can be done to stop climate change sweden has the highest wtp while china has the lowest jel q51 q54

growth processes of high growth firms as a four dimensional chicken and egg this article investigates whether high growth firms grow in different ways from other firms specifically we analyze how firms grow along several dimensions growth of sales employment assets and operating profits using structural vector autoregressions causal relations are identified by using information contained in the non gaussian growth rate distributions for most firms the growth process starts with employment growth which is then followed by sales growth then growth of operating profits and finally growth of assets in contrast high growth firms put more emphasis on growth of operating profits driving other dimensions of growth with employment growth occurring at the end

explaining the distribution of firm growth rates empirical analyses on aggregated datasets have revealed a common exponential behavior in the shape of the probability density of corporate growth rates we present clear cut evidence on this topic using disaggregated data we explain the observed regularities proposing a model in which firms ability to take up new business opportunities increases with the number of opportunities already exploited a theoretical result is presented for the limiting case in which the number of firms and opportunities go to infinity moreover using simulations we show that even in a small industry the agreement with asymptotic results is almost complete

in the name of the son and the daughter intergenerational mobility in the united states 1850 1940 this paper estimates historical intergenerational elasticities between fathers and children of both sexes in the united states using a novel empirical strategy the key insight of our approach is that the information about socioeconomic status conveyed by first names can be used to create pseudo links across generations we find that both father son and father daughter elasticities were flat during the nineteenth century increased sharply between 1900 and 1920 and declined slightly thereafter we discuss the role of regional disparities in economic development trends in inequality and returns to human capital and the marriage market in explaining these patterns jel d63 j12 j16 j24 j62 n31 n32 the degree to which economic status is passed along generations is key to under standing differences across societies and over time in the extent of inequality a low degree of intergenerational mobility can undermine the notion of equality of opportunity and may lead to persistent inequality recent research reveals that today intergenerational mobility in the united states is lower than in most other developed countries corak 2013 this finding stands in contrast with the national ethos of the united states as the land of unlimited opportunity was this view ever justified in this paper we provide a new perspective on the evolution of intergenerational mobility in the united states in the late nineteenth and early twentieth centuries we extend the existing literature by looking at the intergenerational elasticity in economic status between fathers and children of both sexes focusing only on father son cor relations may miss part of the picture daughters should be included if we want to know how the average well being of a generation correlates with that of their parents

the voyage of the beagle into innovation explorations on heterogeneity selection and sectors the aim of the paper is to assess heterogeneity of the innovation process using exploratory factor analysis on micro data from the third community innovation survey in 13 countries we identify four patterns that can be interpreted as research user external and production ingredients of innovation all too often it is assumed that how firm innovate can be represented by differences across sectors and or countries to put this proposition under scrutiny we partition variability of the factors scores into components identified by these higher levels sectors and countries matter to a certain extent but far more of the variance is given by heterogeneity among firms within both of them however groups of firms produced by cluster analysis account for much higher share of the variance which indicates that the most relevant stratification of the data cuts across the established sectoral and national boundaries we discuss implications of these findings for understanding of selection in evolutionary economics and for the literature on innovation systems

do firm sizes and profit rates converge evidence on gibrat s law and the persistence of profits in the long run three panel unit root tests are applied to a 31 year firm size growth and profit rate data set for 96 large quoted uk firms all tests reject the unit root null for log size if the augmented dickey fuller autoregressions exclude a linear time trend if a linear trend is included the results are more ambiguous and appear to differ systematically between tests the view that firm growth is either random or near random does not receive unequivocal support in all tests there is however strong and consistent evidence of mean reversion in profit rates

high growth firms introduction to the special section high growth firms hgfs have attracted considerable attention recently as academics and policymakers have increasingly recognized the highly skewed nature of many metrics of firm performance a small number of hgfs drives a disproportionately large amount of job creation while the average firm has a limited impact on the economy this article explores the reasons for this increased interest summarizes the existing literature and highlights the methodological considerations that constrain and bias research this special section draws attention to the importance of hgfs for future industrial performance explores their unusual growth trajectories and strategies and highlights the lack of persistence of high growth consequently while hgfs are important for understanding the economy and developing public policy they are unlikely to be useful vehicles for public policy given the difficulties involved in predicting which firms will grow the lack of persistence in high growth levels and the complex and often indirect relationship between firm capability high growth and macro economic performance

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

what happens to gazelles the importance of dynamic management strategy the starting point of this study is gibrat s law which is contrasted with strategic management this logic is subsequently applied to a group of remarkably dynamic high growth firms gazelles strategic management theory emphasises the importance of firms adjusting strategies in response to changes in the external environment in our study it is used to explain several key empirical findings using a novel british data set containing information on more than 100 gazelles these findings help explain 1 why gibrat s law of random firm growth processes does not generally hold 2 which strategy and environmental variables have a predictable influence on firm performance and 3 why routine application of best practice strategies is unlikely to foster firm growth in a changing economic environment in so doing this paper contributes to the large body of literature on small firm growth

will you marry me a perspective on the gender gap abstract this paper develops a general equilibrium model of the gender wage gap the difference in earnings is a consequence of a demographic regularity that men tend to marry younger women which may limit women s labor mobility and hence their average earnings however couples are always free not to marry and do so only if it is in each s self interest the intrafamily allocation of resources is determined via non cooperative bargaining this leads to interesting interactions between the game played by husband and wife on the one hand and the competitive environment in which they are immersed on the other the predictions resulting from this model s interplay between locational choice and family bargaining are consistent with the observation that the increasing stress put by women on their careers over the past 30 years has been contemporaneous with reductions in both marriage rates and the gender gap the model provides insight into the consequences of this for the relative welfare of men and women as well as exploring its wider economic implications

what determines urban households willingness to pay for co2 emission reductions in turkey a contingent valuation survey abstract this paper explores turkish urban households willingness to pay wtp for co2 emission reductions expected to result from improvements in power production a face to face questionnaire with a contingent valuation cv module prepared using the double bounded dichotomous choice elicitation framework was administered to 2422 respondents representative of urban turkey a developing country with low but rapidly increasing greenhouse gas emissions the determinants of wtp were identified by considering not only the impact of standard socio economic factors but also the effects of environmental knowledge attitudes and behaviour the relevance of the identity of the collection agent national versus international institutions in terms of trust people have towards them and the degree of perceived participation of others in the realization of the project our study confirms the existing literature in demonstrating that wtp figures reported by young and educated people that are active on environmental issues and who also possess material security and environmental knowledge are more likely to be high however their willingness to make contributions is hampered significantly by their belief that their fellow citizens will not contribute and the general lack of trust in institutions overall this study may be taken as a call to eliminate governance related uncertainties in climate change deals

must contingent valuation surveys cost so much abstract in 1989 the exxon valdez ran aground and spilled 11 million gallons of oil in alaska great controversy has surrounded the assessment of monetary damages for this oil spill the source of this controversy has been the use of hypothetical contingent valuation surveys to assess damages to individual households and the aggregation of these survey values over all households in the united states the assessment prepared for the state of alaska is reported to have cost several million dollars to undertake we show that considerable economy can be effected in the elicitation of such survey responses our approach is to use a cheaper convenience sample to generate a statistical model of behavioral responses to the valuation questions and then to use sample averages of population characteristics to predict the behavior of the population thus we use a model of the behavior of students to predict the behavior of all of the adult citizens of the united states we find that we can obtain essentially the same damage estimates as a more expensive probability sample of the entire nation

accounting for age in marital search decisions spouse quality measured by educational attainment varies significantly with the age at which an individual marries peaking in the mid twenties then declining through the early forties interestingly this decline is much sharper for women than men meaning women increasingly marry less educated men as they age moreover quality has worsened for educated women over several decades while it has improved for men using a non stationary sequential search model we identify and quantify the search frictions that generate these age dependent marriage outcomes we find that single life utility is typically the dominant friction though college women in the 1950 and 1970 cohorts are affected even more by deteriorating suitor quality regardless of educational status individual choice as opposed to pure luck is pivotal in explaining marriage market outcomes earlier in life

the growth profit nexus in this paper we investigate the relative importance of firm and market effects on the profitability of a sample of independent unquoted u k firms over the period 1991 1993 specifically we attempt to isolate the effects of internal governance given that the typical firm is closely held in terms of its shareholdings and has a high degree of owner control our findings suggest that there is no short run growth profit trade off of the type outlined by marris in fact growth and profits move in parallel further there is a significant degree of profits persistence

evaluating change in objective ambiguous mortality probability valuing reduction in ambiguity size and risk level this article develops a valuation model to evaluate mortality probability changes under objective ambiguity where multiple mortality probabilities are exogenously given we construct the valuation model based on upalpha maxmin expected utility to evaluate the reduction in ambiguity size and risk level as well as estimate the subjects ambiguity attitude our model can bring an interesting policy implication if the subjects are ambiguity averse a reduction in ambiguity size with a constant risk level can increases welfare thus even if risk level cannot be lowered reduction in ambiguity size can also be used as a measure toward increasing welfare our model can empirically estimate this welfare change resulting from the reduction in ambiguity size to demonstrate how our model works we apply it to survey data on a public program that reduces mortality probability in accidents caused by wildlife

how does the marriage market clear an empirical framework the paper surveys the choo and siow 2006a cs marriage matching model and its extensions cs derives a behavioural marriage matching function the collective model of intra household allocations can be integrated into this framework spousal labour supplies respond to changing marriage market conditions marriage market tightness the ratio of unmarried type i men to unmarried type j women is a sufficient statistic for marriage market conditions for those types of individuals the hypothesis that spousal labour supplies vary to equilibrate the marriage market has overidentifying restrictions the framework extends to a dynamic marriage matching environment empirically this paper shows how the famine caused by the great leap forward in sichuan affected the marital behaviour of famine born cohorts marriage market tightness is shown to be a useful statistic for summarizing marriage market conditions in the united states marriage market conditions in the contemporary united states primarily affect spousal labour force participation rather than hours of work ce texte examine le modele de choo et siow et ses extensions ce modele derive une fonction comportemental d arrimage sur le marche du mariage le modele d allocation intra menage des t ches peut s integrer a ce cadre d analyse les offres de travail des epoux repondent aux conditions changeantes du marche du mariage un marche du mariage serre un ratio d hommes celibataires de type i par rapport a un nombre de femmes celibataires de type j constitue une statistique suffisante pour etablir les conditions de marche de ces types d individus l hypothese que les offres de travail des epoux varient pour equilibrer le marche du mariage engendre des restrictions de sur identification le cadre d analyse couvre le cas d un environnement dynamique d arrimage empiriquement ce memoire montre comment la famine causee par le grand saut en avant de sichuan a affecte le comportement de mariage des cohortes qui en sort sorties on montre aussi que le caractere serre du marche du mariage aux etats unis fournit une statistique utile pour prendre le pouls des conditions du marche du mariage ces conditions dans le monde contemporain aux etats unis ont un impact sur la participation des epoux au marche du travail plutot que sur les heures travaillees

exploring the processes of firm growth evidence from a vector auto regression this article offers many new insights into the processes of firm growth by applying a vector autoregression model to longitudinal panel data on french manufacturing firms we observe the coevolution of key variables such as growth of employment sales gross operating surplus and labor productivity growth preliminary results suggest that employment growth is succeeded by the growth of sales which in turn is followed by growth of profits generally speaking however growth of profits is not followed by much employment growth or sales growth quantile regressions highlight some asymmetries between negative growth and fast growth firms

uncertainty and measurement error in welfare models for risk changes abstract most welfare models of environmental or mortality risk reductions assume that risks are exogenously determined and known with certainty however a growing body of research suggests that uncertainty about risks can affect choices over risky prospects i present a decision weighted random utility model that decomposes welfare losses into those attributable to an increase in the deterministic component of risk and those attributable to uncertainty about risk i apply the model to an illustrative dataset of subjects perceived mortality risk and willingness to accept the risk of nuclear waste transport i estimate the model using lewbel s 2000 strictly exogenous regressor approach to account for endogeneity bias and measurement error subjects display aversion to both risk and uncertainty about the risk of a transport accident so that increases in either leads to social welfare losses roughly 12 of the external cost of nuclear waste transport is attributable to the public s uncertainty about transport risk

cost benefit analysis under uncertainty reply robert mendelsohn and william strang raise a number of issues which require clarification their misrepresentations of my results in several cases are easily corrected the analytical flaws in their own arguments are more difficult turning first to the issue of misrepresentations they incorrectly assert that i recommended the use of the maximum expected value of alternative contingent payment schemes as the measure of project benefits even a cursory reading of my introduction reveals that option price which does not maximize the expected value of revenue is the appropriate measure of benefit in situations involving similar individuals collective risk and certain costs despite their claims to the contrary i have not suggested that option price is an underestimate of the true value of project benefits option price is precisely the true value of project benefits in this case contradicting themselves in their first footnote they assert that i recommend the use of option price for cases involving certain costs and collective risks thus ignoring the crucial role of similar preferences other examples could be mentioned but it is perhaps sufficient to suggest that any reader wishing to know what i actually said would do well to review my paper the appropriate measure of benefits is the subject of the third section of my paper no mention is made in this general argument of expected value calculations similar preferences certain costs or any of the other special cases that are considered in the fourth section of my paper these special cases are exactly that situations in which the general answer because of the special circumstances takes a relatively simple form it is of course crucial not to forget the special circumstances when considering these results although mendelsohn and strang do not mention the distinction between collective and individual risks save for a passing reference in their first footnote this issue is central to the consideration of the appropriate measure of project benefits while the general procedure developed in my third section is compatible with any joint distribution of individual states option price measures the benefit to similar individuals of a project involving a collective risk when cost is certain expected value calculations on the other hand are only appropriate in situations involving individual risks these issues were examined in detail in my fourth section in dealing with the special case involving individual risks i argued that the magnitude of aggregate payments would be equal to the sum of the expected values of the individual payments with virtual certainty this was hardly a profound observation but it led to the result that if contingent payments are to be collected in such circumstances one should consider those payments that have the largest expected value since all contingent payment schemes including that associated with expected surplus involve the same difficulties of adverse selection moral hazard and so forth mendelsohn and strang in expressing the view that for the government to collect more revenue than the sum generated by the expected value of surplus the government must provide an additional service p 1098 fail to recognize that collecting the wrong contingent payments those associated with the surplus point involve the same difficulties as collecting the right contingent payments those associated with the fair bet point this mistake is not eliminated by their argument that when fair insurance is available the individual s willingness to pay locus becomes linear the presence of such a market makes it possible for an individual to trade a given payment liability in the market for contingent claims for another professor of economics duke university durham nc 27706

canadian contributions to family economics canadian scholars have made substantial contributions to the relatively new field of family economics these include new models of how men and women match in marriage markets and of how decisions are made in multi person households several were early contributors to the literature on married women s labour supply and labour supply in a family context and helped to develop empirical methods in this area a particular focus has been on the impacts of policy relevant parameters such childcare costs on family labour supply and child well being new work on child development the impact of early life conditions and the processes of intergenerational transmission also highlight the importance of family context in determining economic well being

choice under uncertainty problems solved and unsolved ffifteen years ago the theory of choice under uncertainty could be considered one of the success stories of economic analysis it rested on solid axiomatic foundations it had seen important breakthroughs in the analytics of risk risk aversion and their applications to economic issues and it stood ready to provide the theoretical underpinnings for the newly emerging information revolution in economics 1 today choice under uncertainty is a field in flux the standard theory is being challenged on several grounds from both within and outside economics the nature of these challenges and of our profession s responses to them is the topic of this paper

cross border marriage costs and marriage behavior theory and evidence this article analyzes cross border marriages between mainland china and hong kong hk we examine the effects of a reduction in cross border marriage costs following an increase in marriage migration quotas and the handover of hk to china we find that cross border marriages mainly involve men from the low tail of the hk attribute distribution we also find that hk women s position in the marriage market and within households deteriorated following the reduction in cross border marriage costs and that their disadvantaged position exerts an incentive effect on their labor market behavior these outcomes are consistent with our matching model

cost benefit analysis under uncertainty comment decision makers performing cost benefit analysis must often deal with the problem of how to aggregate the benefits across states of nature accruing from an uncertain public investment project option price and the expected value of consumer s surplus are two potential measures of these aggregate benefits 2 the expected value of surplus has been proposed because it is readily measured and because risk pooling paul samuelson william vickrey 1964 and risk spreading kenneth arrow and robert lind 1970 tend to encourage risk neutral behavior option price has been favored on the vague notion that people would be willing to pay something extra above expected surplus to preserve the opportunity to purchase a good burton weisbrod 1964 as daniel graham cogently argues in this review 1981 however option price is but one of an infinite number of contingent payment schemes the literature has provided no justification for focusing upon it as an ideal measure of benefits under individual risk graham further argues that policymakers ought to adopt the compensating contingent payment plan which maximizes expected revenue this maximum payment plan by definition is never less and will often exceed any other contingent payment scheme consequently graham argues that both the expected value of surplus and option price are underestimates of the true value of project benefits our purpose in this comment is twofold first we show the role of project and nonproject insurance in a model of individual risk and second we argue that option price not the maximum payment plan is the optimal rule when no fair insurance is available in section ii we show that if fair insurance is available against all risks all contingent payment plans yield identical revenue a similar result holds if insurance is available for nonproject risks and the effect of the project to an individual is small the arrow lind model in section iii we explore the case where either the project has a large uninsurable effect on the individual or there is no insurance against even nonproject risks we argue that the very phenomena moral hazard adverse selection and complexity that eliminate the market for private insurance also prevent the government from making otherwise desirable contingent payments if contingent payments are too costly the government s only remaining choice is to collect payments that are constant across states which makes option price the relevant measure of benefits

do liquidity constraints matter in explaining firm size and growth some evidence from the italian manufacturing industry the paper investigates whether liquidity constraints affect firm size and growth dynamics using a large longitudinal sample of italian manufacturing firms we run standard panel data gibrat regressions suitably expanded to take into account liquidity constraints proxied by cash flow scaled by firm sales moreover we characterize the statistical properties of fi rms size growth age and scaled cashflow distributions pooled data show that i liquidity constraints engender a negative statistically significant effect on growth once one controls for size ii smaller firms grow more and experience more volatile growth patterns after controlling for liquidity constraints iii the stronger liquidity constraints the more size negatively affects firm growth we find that pooled size distributions depart from log normality and growth rates are well approximated by fat tailed tent shaped laplace densities we also study the evolution of growth size distributions over time our exercises suggest that the strong negative impact of liquidity constraints on firm growth which was present in the pooled sample becomes ambiguous when one disaggregates across years finally firms who were young and strongly liquidity constrained at the beginning of the sample period grew persistently more than those who were old and weakly liquidity constrained

uncertainty benefit cost analysis and the treatment of option value abstract this paper proposes a new conceptual framework for defining welfare measures under uncertainty the planned expenditure function this function describes the locus of expenditures on contingent claims that are required to realize a given level of expected utility to illustrate the convenience of the framework it is used to consider the definition of the option price the appropriate treatment of option value the valuation of risk changes and the definition of non use benefits under uncertainty

alternative australian climate change plans the public s views climate change has come to the forefront of australian politics and there is now an active on going policy debate about how to best reach a commonly agreed long term goal this paper looks at five major dimensions of this debate and constructs policy options based on them a discrete choice experiment approach was used with a representative sample from a major internet panel provider survey respondents made choices between pairs of policy options with different characteristics they favored policies starting in 2010 rather than 2012 and spending 20 of revenue raised on energy related r d they were almost evenly split on whether the plan should initially exempt the transport sector and two competing approaches that redistribute revenue from the plan and they opposed plans giving special treatment to energy intensive sectors of the economy a number of other policy relevant questions related to understanding australian views and knowledge related to climate change also were asked

differntial fecundity markets and gender roles women are fecund for a shorter period of their lives than men this paper investigates how differential fecundity interacts with marriage labor and financial markets to affect gender roles the main findings of the paper are as follows i fecund women are relatively scarce men will behave differently than women in response to this scarcity in the most fundamental way demand and supply conditions in the marriage market affect gender roles ii differential fecundity does not have any market invariant gender effect gender roles depend on the way in which marriage labor and financial markets interact iii gender differences in the labor market can occur without corresponding differences in labor market opportunities productivities in child rearing or social norms iv with uncertainty in human capital accumulation and no insurance against this uncertainty the model s predictions are consistent with observed gender roles

on the existence of persistently outperforming firms this study analyses persistence in growth rates for a data set of manufacturing firms of all sizes previous quantile autoregressions of firm growth rates show that extreme growth events are likely to be negatively correlated over time thus questioning the existence of persistent outperformers by supplementing the quantile regression analyses with transition probability matrices our study shows that bouncing firms coexist with persistent outperformers this result is shown to be robust for all size classes as well as for the exclusion of firms who experienced acquisitions or spin offs

implicit contracts a survey 7mplicit contracts resolve the distribution of uncertainty and utilization of specific human capital between risk averse workers and less risk averse firms incomplete contracts are required to yield involuntary layoffs in contract markets otherwise contracts are efficient and pareto optimal by construction there is a close relation between contract theory and neoclassical labor market theory contracts smooth consumption but increase the volatility of labor supply and labor utilization to demand disturbances because contractural insurance eliminates the income effects of socially diversifiable risks this result is similar to the intertemporal substitution hypothesis however the price mechanism in a contract is substantially different contracts embody a nonlinear two part pricing scheme the lump sum part allocates the income consumption consequences of risks and the marginal pricing part allocates production and labor utilization this implicit pricing mechanism is in all respects flexible though the observed average hourly wage combines both parts and may give the outward appearanceof rigidity furthermore the observed average wage rate in a contract does not reflect marginal conditions necessary for structural econometric estimation indivisibilities appear necessary to account for the split between work sharing and layoffs contracts with private information are also considered in the nonlinear pricing context this abstract was borrowed from another version of this item

conditional cooperation and climate change it is widely believed that international cooperation can arise through strategies of reciprocity in this paper we investigate whether citizens in the united states and 25 other countries support reciprocity to deal with climate change we find little public enthusiasm for intrinsic reciprocity in which countries restrain their consumption of fossil fuels if and only if other countries do the same in contrast we find significant support for extrinsic reciprocity in which countries enforce cooperation by linking issues citizens support economic sanctions against polluters and are willing to shame them in international forums especially when the polluters are violating a treaty cooperation could therefore emerge from efforts to link climate with other issues and to embed climate commitments in international law

heterogeneous preferences regarding global climate change we examine the structure of preferences for mitigating impacts of global climate change that will not occur during the lifetimes of most who are alive today because no market data exist for such distant markets a statedpreference approach is used the analysis is based on the random parameters logit model and the results indicate substantial heterogeneity in respondent preferences that mean willingness to pay is a significant and increasing function of the scope of the impact and provocatively that respondents have the same preferences over the two very different time horizons that we consider e examine the structure of preferences for mitigating impacts of global climate change that will not occur during the lifetimes of most who are alive today studies using current market data have estimated the potential costs of climate change on agriculture mendelsohn nordhaus shaw 1994 and on other aspects of measured production nordhaus 1994 but market data can not reveal the willingness of those currently alive to pay for measures to mitigate impacts that may not happen for 100 years or more there is serious public discussion involving diplomats at the highest levels about measures to mitigate emissions that would cost the united states alone 100 to 200 billion dollars annually therefore estimating the willingness of those currently alive to pay for mitigation measures is not a fanciful exercise but rather a crucial effort to determine how much mitigation should be undertaken it is the preferences of those alive today regarding acceptable levels of climate impacts and not the unknowable preferences of those who do not yet exist that will ultimately determine how much mitigation we pursue in the next quarter century as this question cannot be answered with market data we use the stated preference sp approach and elicit preferences for preventing climate change induced impacts a host of climate change impacts have been enumerated this study focuses on one type of impact that may be important but has received little attention from economists scientists have predicted that widespread ecosystem shifts may accompany changes in climate vemap 1995 ecosys tem shifts are likely to evolve slowly indicating that lost use values are likely to be small for those alive today yet the public may still be willing and asked to pay for mitigation measures that are designed to slow the transformation of ecosystems the current debate over climate change demon strates two things the first is that some people do care about long term changes that will never affect them or perhaps even their children the second is that preferences regarding the impacts of climate change are very heterogeneous as other members of the public appear much less concerned long term horizons combined with heterogeneous prefer ences makes ecosystem shifts a useful place to begin analyzing preferences for mitigating climate change im pacts a stated preference survey was designed that asked respondents to choose their most preferred program to reduce ecological impacts from a set menu of five or six different programs the programs varied in terms of costs the degree of ecosystem change and in the mitigation method four different menus provided to each respondent yielded four distinct valuation responses section ii de scribes the random parameters logit model for repeated choices that allows for a flexible correlation structure based on heterogeneous preferences the ecosystem change and the stated preference survey are discussed in section iii in section iv we estimate the random parameters model and estimate the willingness to pay to prevent various levels of ecosystem change section v concludes with a discussion of how the scope of the impact preference heterogeneity and the time horizon affect willingness to pay

biological basics and the economics of the family many economic models of the family are based on a generic person one person two household or parent child family rather than their anatomically correct counterparts sons and daughters fathers and mothers and grandfathers and grandmothers these economic models can offer powerful insights into family behavior but also can leave certain patterns unexplained and neglect potentially important crosscurrents melding biological insights with family economics can cast new light on existing knowledge and open up novel paths for research for example study after study has found that putting family income in the hands of mothers rather than fathers tends to increase the consumption of children as noted in this journal in lundberg and pollak 1996 yet the way such results are usually described might strike a noneconomist as exceedingly circumspect economists point out that these findings reject the common preference model of household decision making in favor of one with independent decisionmaking spouses but usually make little mention of motherhood or fatherhood per se or consider the dramatic expansion of south african government pension programs in the early 1990s which put lots of extra money in the hands of grandparents many of whom lived with their grandchildren in a compelling and oft cited study duflo 2003 found evidence of pension spillovers to grandchildren but the most intriguing patterns were demographic pensions to maternal grandmothers redounded to the benefit of granddaughters economic analysis uncovers the income effects but turns out to be of little help for explaining why these particular gender effects predominated

requiem for option value as freeman 1984 accurately notes a lot of ink has been spilled over the concept of option value during the last two decades graham in his seminal 1981 article outlined the specific conditions under which option price is and more significantly is not an appropriate and relevant measure of value under demand uncertainty while graham s article demonstrates that option value is relevant only under restrictive assumptions regarding preferences and the nature of the uncertainty both the tone and contents of recent articles on the

polygyny fertility and savings sub saharan africa has a high incidence of polygyny it is also the poorest region of the world in this paper i ask whether banning polygyny could play any role for development using a quantitative model of polygyny i find that enforcing monogamy lowers fertility shrinks the spousal age gap and reverses the direction of marriage payments polygyny leads to high bride prices to ration women which makes buying wives and selling daughters a good investment thus crowding out investment in physical assets for reasonable parameter values i find that banning polygyny decreases fertility by 40 percent increases savings by 70 percent and increases output per capita by 170 percent

technological regimes and sectoral patterns of innovative activities this paper focuses on the relationships between observed patterns of innovative activities within a sector and the related context and underlying microeconomic processes that might account for them it claims that there are some invariant features with respect to relative prices and incentives mechanisms of learning and knowledge accumulation that greatly affect the rate and structure of innovative activity these features are different across sectors the paper proposes that the specific pattern of innovative activity of a sector can be explained as the outcome of different technological regimes that are implied by the nature of technology and knowledge the notion of technological regime provides a synthetic representation of some of the most important economic properties of technologies and of the characteristics of the learning processes that are involved in innovative activities copyright 1997 by oxford university press

the choice of a welfare measure under uncertainty use of option price as a welfare measure when conducting a benefit cost analysis under uncertainty is appropriate only if the project under consideration will have no impact on the allocation of risk among individuals use of the willingness to pay locus as a benefit measure is appropriate only if the project will result in an efficient allocation of risk a more general welfare measure is proposed maximum agreeable payment that correctly measures the benefits and costs of any project

respondent experience and contingent valuation of environmental goods abstract respondent experience i e a respondent s information set has long been suspected to influence contingent valuation estimates of environmental values we assess the influence of experience by explicitly modeling the relationship between respondent experience and both fitted individual resource values and the conditional variance of these estimated values using three different joint specifications for experience and wtp normal censored normal poisson censored normal and zero inflated poisson censored normal we find discrete jumps in resource values as experience increases from zero and that more experienced respondents have smaller conditional variances simulation of arbitrary levels of experience allows standardization of the amount of information when developing welfare estimates