repudiation risk and restitution costs toward understanding premiums on insured deposits this paper contains a theoretical development of the relationship of cd premiums to both the risks of the cd issuer and the third party government guarantor of those deposits the theoretical development shows that the risk of the guarantor derives from the possibility that the guarantee could be repudiated and or the restitution of the depositor s claim could be costly the empirical analysis of the premiums for insured cds indicates that during the years preceding the ultimate collapse of the fslic the market priced the risk of both the guarantor as well as the firm the guarantor risk pricing was responsive to the insolvency of the guarantor the attempts to recapitalize the guarantor and the efforts to resolve the insolvent thrifts during this eventful time period cd premiums rose to 187 basis points and averaged 79 and 54 basis points copyright 1994 by ohio state university press

where has all the bias gone detecting gender bias in the intrahousehold allocation of educational expenditure abstract the reliability of the household consumption based engel curve methodology in detecting gender bias has been called into question because it has generally failed to confirm bias even where it exists this article seeks to find explanations for this failure by exploiting a data set that has educational expenditure information at the individual level and also by aggregation at the household level i find that in the basic education age groups the discriminatory mechanism in education is via differential enrollment rates for boys and girls education expenditure conditional on enrollment is equal for boys and girls the engel curve method fails for two reasons first it models a single equation for the two stage process second even when we make individual and household level expenditure equations as similar as possible the household level equation still fails to pick up gender bias in about one third of the cases where the individual level equation shows significant bias this article

excise taxes with multiproduct transactions i examine excise taxes levied on multiproduct retailers excise taxes reduce equilibrium output and decrease equilibrium product variety in the short run but taxes can raise output per product in the long run and induce entry excise taxes are overshifted into prices in a wide range of cases including under linear and concave demand conditions and excise taxes shift less than one for one into prices only when demand is highly convex multiproduct transactions substantively alter the efficiency of ad valorem and specific forms of excise taxes and affect the comparison of relative tax performance over short run and long run time horizons jel h25 h32 l11 l13 l81

demand information and competition why do food prices fall at seasonal demand peaks prices for seasonal food products fall at demand peaks price declines are not driven by falling agricultural input prices indeed farm to retail margins narrow sharply i use electronic scanner data from a sample of us supermarkets to show that seasonal price declines are closely linked to market concentration and are much larger in markets with several rivals than where a single brand dominates seasonal demand increases reduce the effective costs of informative advertising and increased informative advertising by retailers and manufacturers in turn may allow for increased market information and greater price sensitivity on the part of buyers

pricing risk adjusted deposit insurance an option based model this paper presents a methodology for arriving at empirical estimates of deposit insurance premiums from market data by using isomorphic relationships betweeen equity and a call option and insurance and a put option the data utilizes the market value of equity to solve for the asset value and its volatility market perceptions of fdic bailout policies are explicitly modeled so as to eliminate the bias in inverted values of assets and their volatility sensitivity analyses are performed to show that rank orderings based on premiums are robust to changes in specification thus facilitating allocation of aggregate premium across banks while economists have long argued in favor of risk adjusted deposit insurance as both more equitable and more efficient than the current system of flatrate premiums various recent developments have further contributed to an increasing dissatisfaction with the current system first both the banking industry and the government seem to be tending to the view that deregulation of the banking industry would be necessary in order to meet more sophisticated future demands on the industry as well as desirable as a policy means of stimulating greater competition among banks moreover a sudden rise in the incidence of bank failures 1 and the vulnerability of the u s banks to the socalled international debt crisis have served to bring to the fore concern about the health of the banking industry in the absence of deposit insurance riskier banks will be able to attract deposits only at higher rates and these higher costs of funding serve as built in market regulated incentives to limit excessive risk taking by banks as introduction of deposit insurance makes deposits equally risk free across banks these incentives disappear and regulation and close supervision of the banking industry must necessarily replace them as deterrents to excessive risk taking thus when insurance is offered at a flat premium regulation is designed to ensure that the risk posed to the insurer both asset and financial risk is appropriately uniform

federal financial guarantees and the occasional market pricing of default risk evidence from insured deposits abstract this paper develops a two date state preference model which demonstrates that investors valuation of third party guaranteed debt depends on the financial condition of the guarantor as the solvency ratio of the guarantor declines investors demand higher promised rates on the firm s debt securities and price the firm risk variables more sensitively the empirical results are derived from sample data of fslic guaranteed obligations from the late 1980s evidence shows differences in the market s perception of fsllc s insolvency between 1987 and 1988 the market response to a decline in the financial condition of the guarantor affected the value of insured cds raising cd rates in relation to the treasury curve and firm risk pricing of insured deposits emerged

intrahousehold resource allocation in rural pakistan a semiparametric analysis we estimate semiparametric engel curves for rural pakistan using a large household survey this allows us to obtain consistent estimates of the effects of household size and composition on consumption patterns even when these demographic variables are correlated with an unknown function of income the coefficients on the household composition variables are used to infer patterns of intrahousehold allocation while there is little evidence of gender bias amongst children adult males appear to get more than adult females there is a tendency amongst males for workers to get more than dependents there is no evidence of differential treatment of the elderly and higher birth order children we identify substantial economies of size in food consumption we also find that engel curces for food adult goods and child goods are nonlinear which suggests that the piglog class of demand models in inappropriate

the progress of school education in india this paper provides an overview of school education in india first it places india s educational achievements in international perspective particularly against countries with which it is now increasingly compared especially china second the paper examines schooling access in terms of enrolment and school attendance rates and schooling quality in terms of literacy rates learning achievement levels school resources and teacher inputs third the paper investigates the role of private schooling in india examining the extent of growth of private schooling and surveying evidence on the relative effectiveness and unit costs of private and public schools last the paper discusses some major public education initiatives the concluding section suggests a future research agenda and appeals for rigorous evaluation of the impacts and costs of the numerous existing educational interventions in order to learn about their relative cost effectiveness for evidence based policy making

is it better to be a boy a disaggregated outlay equivalent analysis of gender bias in papua new guinea the demographic evidence of gender bias in many countries has provided an impetus for finding ways to study the status of women in developing countries because of the lack of accurate intra household data deaton 1989 introduced a method for using household expenditure data to infer discrimination in the allocation of goods between boys and girls few studies of discrimination using the method however have detected bias even though alternative indicators suggest it is a serious problem in this paper we study the case of papua new guinea a country in which there are many indicators of severe gender bias discrimination in the allocation of goods between boys and girls within households in papua new guinea is examined using deaton s outlay equivalent ratio method adding a boy to the household reduces expenditure on adult goods by as much as would a nine tenths reduction in total outlay per member but girls have no effect on adult goods expenditure the hypothesis of haddad and reardon 1993 that

reconsidering gender bias in intrahousehold allocation in india abstract finding evidence of gender discrimination among children in the intrahousehold allocation of goods has often proven to be difficult this article uses data on education expenditures in india to test whether data aggregation data reliability and the statistical method used help explain this pattern results suggest that discrimination against girls is increasing in age and robust to the statistical method and the expenditure measure at the all india level although state level results are more sensitive i find that data aggregation and statistical method are important factors in detecting gender bias while data reliability does not seem to play a major role

gender and household education expenditure in pakistan pakistan has very large gender gaps in educational outcomes one explanation could be that girls receive lower educational expenditure allocations than boys within the household but this has never convincingly been tested this article investigates whether the intra household allocation of educational expenditure in pakistan favours males over females it also explores two different explanations for the failure of the extant engel curve studies to detect gender differentiated treatment in education even where gender bias is strongly expected using individual level data from the latest household survey from pakistan we posit two potential channels of gender bias bias in the decision whether to enrol keep sons and daughters in school and bias in the decision of education expenditure conditional on enrolling both sons and daughters in school in middle and secondary school ages evidence points to significant pro male biases in both the enrolment decision as well as the decision of how much to spend conditional on enrolment however in the primary school age group only the former channel of bias applies results suggest that the observed strong gender difference in education expenditure is a within rather than an across household phenomenon

the effects of the gender of children on expenditure patterns in rural china a semiparametric analysis we analyse expenditure patterns for rural china focusing on differences between families with boys and girls the sample includes more than 5000 nuclear families from 19 chinese provinces following the existing literature we estimate engel curves for food and for alcohol a typical adult good we use a flexible partially linear specification and allow for endogeneity of total expenditures the results are similar to those of other studies not providing much evidence of gender differentials we then focus on the decision to send a child to school and on the budget share spent on educational goods using both parametric and semiparametric estimates we find evidence that boys are more often sent to school and that expenditures on a boy that goes to school are larger than for a school going girl of the same age copyright 2005 john wiley sons ltd

gender bias credit constraints and time allocation in rural india this paper examines the impact of a child s gender on the time allocation of rural indian households for the five year period subsequent to its birth a theoretical model generates predictions for the effect of the birth of a boy relative to a girl i e the gender shock on household behaviour when the household is liquidity constrained and when it is not the results from the empirical analysis are consistent with the case in which poorer households are liquidity constrained and less poor households are not the interpretation of the finding that women in both groups of households work less subsequent to the birth of a boy relative to a girl differs in these two cases

search with learning from prices does increased inflationary uncertainty lead to higher markups aggregate cost uncertainty arising from real shocks or unanticipated inflation reduces the informativeness of prices by scrambling relative and aggregate variations but when agents can acquire additional information such increased noise may in fact lead them to become better informed and price competition will intensify we examine these issues in a model of search with learning where consumers search optimally from an unknown price distribution while firms price optimally given consumers search rules we show that the decisive factor in whether inflation variability increases or reduces the incentive to search and thereby market efficiency is the size of informational costs

looking for boy girl discrimination in household expenditure data the ability to test for discrimination in the allocation of goods between boys and girls is hampered by a lack of data on intrahousehold distribution the analysis presented here allows inferences about intrahousehold allocation to be made from householdlevel expenditure data for a given level of income families with children will spend less on adult goods in order to purchase children s goods if household purchasing favors boys over girls smaller expenditures on adult goods would be made by families with boys as compared with those with girls a method for determining adult goods is described and the procedure for detecting gender bias is applied to data from c6te d lvoire and thailand the data show no evidence of discriminatio n between boys and girls in c6te d lvoire and a small and statistically insignificant bias in favor of boys in thailand how commodities are allocated among the members of a household has recently occasioned a good deal of interest assessments of poverty and income distribution based on household incomes or expenditures will be misleading if allocation within the household is unequal the position of women and girls has been of particular concern and there is a considerable amount of empirical evidence much of it from the indian subcontinent that documents discrimination against females see in particular bhagwati 1973 sen 1984 sen and sengupta 1983 miller 1981 bardhan 1982 and kynch and sen 1983 as well as survey papers by behrman 1987 and harriss 1987 much of the evidence is concerned with measurements of nutritional outcomes mortality and health status rather than with the direct allocation of goods by gender the difficulty in trying to determine the intrahousehold allocation of goods is that household budget surveys the obvious source of data record consumption not of individuals but of households and while attempts can be made to the author is a professor of public affairs and of economics and international affairs at princeton university and is a consultant to the population and human resources department of the world bank the author thanks dwayne benjamin who provided for excellent research assistance he is grateful to him and to members of the economic growth center at yale university for helpful comments this is a revised and shortened version of living standards measurement study working paper 39 the allocation of goods within the household adults children and gender june 1987 the results from thailand were not included in the working paper 1989 the international bank for reconstruction and development the world bank

son preference and household income in rural china why is it that couples who have a son or whose last child is a son earn higher conditional income to solve this curious case we tell a detective story evidence of a phenomenon to be explained a parade of suspects a process of elimination from the enquiry and then the denouement given the draconian family planning policy and a common perception that there is strong son preference in rural china we postulate two main hypotheses income based sex selection making it more likely that richer households have sons and an incentive for households with sons to raise their income tests of each hypothesis are conducted taken as a whole the tests cannot reject either hypothesis but they tend to favour the incentive hypothesis and there is evidence in support of the channels through which the incentive effect might operate to our knowledge this is the first study to test these hypotheses against each other in rural china and more generally in developing countries

investigation of production sales and inventory relationships using multicointegration and non symmetric error correction models the accumulated sum of a stationary series is called integrated if a linear combination of some of the integrated series is stationary it is said to be cointegrated this paper presents empirical results on inventories to consider the possibility of a deeper form of cointegration called multicointegration which is introduced in granger and lee 1989 a vector integrated series is multicointegrated if the accumulated sum of its stationary cointegrated linear combination is again cointegrated with itself inventory which is the accumulated sum of production minus sales is probably cointegrated with production and sales the empirical results generally support the presence of multicointegration of production and sales in many u s industries and industrial aggregates the results also favour the non symmetric error correction model providing evidence that the strength of attraction is different on both sides of the attractor a modified s s rule for inventory control is investigated in the context of a non symmetric error correction model and the results generally do not support the s s rule sufficient evidence is found to conclude that multicointegration is a useful concept in the area of inventory determination

measuring market power in the ready to eat cereal industry the ready to eat cereal industry is characterized by high concentration high price cost margins large advertising to sales ratios and numerous introductions of new products previous researchers have concluded that the ready to eat cereal industry is a classic example of an industry with nearly collusive pricing behavior and intense nonprice competition this paper empirically examines this conclusion in particular i estimate price cost margins but more importantly i am able empirically to separate these margins into three sources i that which is due to product differentiation ii that which is due to multi product firm pricing and iii that due to potential price collusion the results suggest that given the demand for different brands of cereal the first two effects explain most of the observed price cost margins i conclude that prices in the industry are consistent with noncollusive pricing behavior despite the high price cost margins leading firms are able to maintain a portfolio of differentiated products and influence the perceived product quality it is these two factors that lead to high price cost margins

cost pass through in differentiated product markets the case of u s processed cheese in this paper we estimate a mixed logit model for demand in the u s processed cheese market the estimates are used to determine pass through rates of cost changes under different behavioral regimes we find that under collusion the pass through rates for all brands fall between 21 and 31 while under nash bertrand price competition the range of pass through rates is between 73 and 103 the mixed logit model provides a more flexible framework for studying pass through rates than the logit model since the curvature of the demand functions depends upon the empirical distribution of consumer types

a note on the effect of cost changes on prices in a recent article in this journal sumner 1981 took an ingenious approach to estimating the level of monopoly power in the cigarette industry he noted that differences in marginal costs exist in the industry due to varying levels of state taxes the sales prices established will satisfy the equation p i liq l mr mc where p price and q the elasticity of demand for the product in question if elasticity is a constant observing the change in marginal cost and the change in price enables one to infer the elasticity of demand perceived by the firm elasticity could then be used as a proxy for the firm s market power this technique turns out to be of very limited applicability however because it is extremely sensitive to the functional form assumed for the demand curve consider the general problem of a firm facing constant marginal costs of c in maximizing profits the firm solves

economies of scale household size and the demand for food household scale economies are plausibly attributed to shared household public goods that make larger households better off at the same level of per capita resources larger households should therefore have higher per capita consumption of private goods such as food provided that they do not substitute too much toward the effectively cheaper public goods the evidence shows exactly the opposite data from rich and poor countries indicate that at constant per capita total expenditure the per capita demand for food decreases with household size and that it does so most in the poorest countries where substitution should be the least

the 1985 ohio thrift crisis the fslic s solvency and rate contagion for retail cds this paper uses both an arima transfer function intervention model and a panel data analysis to examine the effect of the ohio deposit insurance crisis in 1985 on the pricing of six month retail certificates of deposit cds for federally insured ohio banks and savings and loans adjusting for pricing reactions due to changes in market rates we find a significant unanticipated rise in cd rate premiums on the initial event week of the crisis that continued for approximately seven weeks consistent with a contingent insurance guarantee hypothesis rate premiums are found to be risk based from both a regulator s and a bank manager s perspective it is important to understand the nature of depositors reactions to a depository institution crisis recent events including large real estate loan losses for major banks the rhode island deposit insurance crisis and the general accounting office s gao announcement that a large bank failure or a severe recession could jeopardize the solvency of the federal deposit insurance corporation fdic have renewed debate over the potential for a widespread loss of confidence in the banking system in particular concern has been expressed over the potential for instability in retail deposit markets in a deregulated environment see smith 1984 1

loan sales and the cost of bank capital this paper considers a model where banks may improve the returns on loans by monitoring borrowers bank regulation together with competitive deposit and equity financing can give banks an incentive to sell loans but the extent of their loan selling is limited by a moral hazard problem a solution is given for the optimal design of the bank loan buyer contract that alleviates this moral hazard problem an explanation is also given as to why some banks might buy loans and why loan sales volume has recently increased banks practice of making loans and then selling them to other institutions and individuals has grown in popularity an important example in the development of loan selling has been the increase in banks mortgage loans that are insured and pooled under the authority of the government national mortgage association gnma and then sold to secondary market investors recently however there has been a dramatic rise in the volume of other types of loans being sold especially by money center banks portions of commercial loans originated by these larger banks are being sold to smaller banks foreign banks and other financial and nonfinancial institutions in addition banks car loans and credit card receivables have also been pooled and sold to institutions and individuals selling loans that were once considered nonmarketable assets a process that has been termed asset securitization may be signalling the start of a fundamental change in the commercial banking business the leading banks in loan selling operations now view themselves more as originators and distributors of loans rather than as institutions holding loans as assets the potentially large impact of loan sales on the future of commercial banking naturally evokes the question of what incentives exist for banks to sell loans in this paper we show that loan sales allow some banks to finance loans less expensively than by traditional deposit or equity issue because bank funds received via loan sales can avoid costs associated with required reserves and

intrahousehold allocation of education expenditure the case of sri lanka abstract this article uses conventional engel curve demand analysis as well as a double hurdle model to explore whether there are intrahousehold differentials in the allocation of education expenditure between boys and girls in rural sri lanka contrary to the case in most developing countries in sri lanka there was a significant bias favoring girls for 1990 91 and 1995 96 for age group categories 8 9 14 16 and 17 19 and in 2000 for age group categories 14 16 and 17 19 significant differences in enrollment favoring girls aged 17 19 explain part of the girl bias observed in 1990 91 and 2000 2001 but most of the bias is driven by positive expenditure given enrollment the biases favoring girls are observed at critical stages of the schooling career in the run up to key national exams the 8 9 age group captures the run up to the year 5 scholarship exams that are used to gain entry to the better performing secondary schools the 14 16 and 17 19 age groups capture those who read for important nationa

econometric models of asymmetric price transmission abstract in this paper we review the existing empirical literature on price asymmetries in commodities providing a way to classify and compare different studies that are highly heterogeneous in terms of econometric models type of asymmetries and empirical findings relative to the previous literature this paper is novel in several respects first it presents a detailed and updated survey of the existing empirical contributions on price asymmetries in the transmission mechanism linking input prices to output prices second this paper presents an extension of the traditional distinction between long run and short run asymmetries to new categories of asymmetries such as contemporaneous impact distributed lag effect cumulated impact reaction time equilibrium and momentum equilibrium adjustment path regime effect regime equilibrium adjustment path each empirical study is then critically discussed in the light of this new classification of asymmetries third this paper evaluates the relative merits of the most popular econometric models for price asymmetries namely autoregressive distributed lags partial adjustments error correction models regime switching and vector autoregressive models finally we use the meta regression analysis to investigate whether the results of asymmetry tests are not model invariant and find which additional factors systematically influence the rejection of the null hypothesis of symmetric price adjustment the main results of our survey can be summarized as follows i each econometric model is specialized to capture a subset of asymmetries ii each asymmetry is better investigated by a subset of econometric models iii the general significance of the f test for asymmetric price transmission depends mainly on characteristics of the data dynamic specification of the econometric model and market characteristics overall our empirical findings confirm that asymmetry in all its forms is very likely to occur in a wide range of markets and econometric models

asset returns and economic disasters evidence from the s l crisis abstract this paper shows that depositors lost confidence in fslic during the two years prior to passage of firrea legislation which recapitalized the deposit insurance fund in 1989 during this period promised returns on retail cds reflected the expected loss and return standard deviation on these securities in the absence of government insurance cross sectional analysis is used to estimate both the probability and the conditional price of risk associated with fslic default the results suggest that increased uncertainty about both output and inflation in this disaster scenario drove the price of fslic default risk to extremely high levels the results also indicate that the market for retail deposits is characterized by less than perfect arbitrage across geographical regions

vertical relationships between manufacturers and retailers inference with limited data in this paper different models of vertical relationships between manufacturers and retailers in the supermarket industry are compared demand estimates are used to compute price cost margins for retailers and manufacturers under different supply models when wholesale prices are not observed the purpose is to identify the set of margins compatible with the margins obtained from estimates of cost and to select the model most consistent with the data among non nested competing models the models considered are 1 a simple linear pricing model 2 a vertically integrated model and 3 a variety of alternative strategic supply scenarios that allow for collusion non linear pricing and strategic behaviour with respect to private label products using data on yogurt sold in several stores in a large urban area of the u s the results imply that wholesale prices are close to marginal cost and that retailers have pricing power in the vertical chain this is consistent with non linear pricing by the manufacturers or high bargaining power of the retailers

commodity prices and food inflation commodity prices rose at unprecedented rates between 2007 and 2008 in the year between july 2007 and july 2008 corn prices rose 51 9 soybean prices 74 4 wheat prices 104 5 and milk prices by 41 4 as farm prices reached their peaks policy makers became concerned over the potential impact on retail food price inflation and when farm prices be gan to fall in late 2008 interest shifted to how fast or whether retail prices followed boyle 2009 leibtag 2008 argues that the surge in commodity prices had little impact on con sumer prices because commodity inputs form a small part of the final product although true for some highly processed foods such as break fast cereals cookies and breads farm prices form a significant part of the retail price for fresh produce meat and dairy products in fact pass through rates from farm to retail prices are likely to vary depending on the nature of the production process gardner 1975 the competitiveness of the vertical supply channel bulow and pfleiderer 1983 kim and cotterill 2008 the number of products sold hamil ton 2009 and even the direction of the price change frey and manera 2007 the pass through rate is a simple and important concept but highly complex to measure previous research on this issue assumes

evaluating price transmission between global agricultural markets and consumer food price indices in the european union this paper uses error correction models to evaluate the extent to and speed at which world agricultural commodity price movements affect consumer food prices in the european union member states we consider three types of world commodity price indices each containing different commodities and weighting criteria results reveal a long run relationship between world agricultural commodity and consumer food prices in over half of the member states consumer prices in different member states and categories of member states respond differently to specific world price indices suggesting that there are disparities in the structure and the efficiency of their food markets the eurozone founders generally have lower transmission elasticities this should be taken into account when predicting the impacts of extreme world price volatility and consumer food price rises prompting governments to pay attention to the most vulnerable households

natural natural experiments in economics the recent literature exploiting natural events as natural experiment instruments is reviewed to assess to what extent it has advanced empirical knowledge a weakness of the studies that adopt this approach is that the necessary set of behavioral market and technological assumptions made by the authors in justifying their interpretations of the estimates is often absent the methodology and findings from twenty studies are summarized and simple economic models are used to elucidate the implicit assumptions made by the authors and to demonstrate the sensitivity of the interpretations of the findings to the relaxation of some of these assumptions