seasonal migration to mitigate income seasonality evidence from bangladesh in northwest bangladesh some 36 percent of poor households migrate every year during the lean monga period to cope with seasonal deprivation analysis of household survey data shows that the probability of seasonal migration is high for households with a high dependency ratio high dependency on wage employment and in villages with high unemployment but low in villages with microcredit access findings show that seasonal migration helps households to smooth consumption and those non migrant households who suffer during monga will likely benefit from deciding to migrate but the cost of migration and lack of networking are potential barriers the paper is structured as follows section one gives introduction the second section discusses the data and its major characteristics such as the incidence of seasonal migration as a coping strategy and its relation to seasonal hardships measured by starvation and meal rationing the third section presents an analytical framework of how seasonal migration can help smooth consumption during the lean season the fourth section analyses the determinants of seasonal migration while the fifth section assesses the potential effect of seasonal migration on rural households consumption smoothing behavior finally section six summarizes the study findings and their policy implications

how social capital influences medical choices a study of colonoscopy decision making while many studies have focused on the aggregate effect of social relationships on economic outcomes this study identifies how social relationships are likely to motivate individual decision makin

addressing social dilemmas with mascots information and graphics acknolwedgements this research was supported by funding from the national science foundation for the north east water resources network newrnet grant iia 1330406 and from the center for behavioral and experimental agri environmental research cbear which is supported by the u s department of agriculture economic research service we are grateful for comments received during the 2015 northeastern agricultural and resource economics association annual meeting and the 2015 behavioral and experimental economists of the mid atlantic conference authors listed in alphabetical order

tariffs versus quotas with strategic investment the relative efficiency of tariffs versus quotas is analyzed in a cournot oligopoly with strategic investment introducing quota licence fees to neutralize the international distributional effect when such licence fees remove quota rents from foreign firms then for the case of constrained entry with a sufficiently large number of firms quotas frequently hold a welfare advantage since tariffs relatively aggravate the inefficiency from overinvestment in the case of free entry and exit however tariffs hold a welfare advantage since there is greater benefit of increasing returns to scale to the economy by avoidance of excessive entry of firms

private provision of public goods and information diffusion in social groups i describe a dynamic model of costly information sharing where private information affecting collective value actions is transmitted by social proximity individuals make voluntary contributions toward the provision of a pure public good and information transmission about quality of provision is a necessary condition for collective provision to take place in a stationary equilibrium i show that unlike in the case of private goods better informed individuals face positive incentives to incur a cost to share information with their neighbors and that these incentives are stronger and provision of the pure public good greater the smaller are individuals social neighborhoods

infrastructure and public utilities privatization in developing countries should governments in developing countries promote private ownership and deregulated prices in noncompetitive sectors or should they run publicly owned firms and regulate prices at the expense of rents to insiders a theoretical model is used to answer these normative questions the analysis focuses on the tradeoff between fiscal benefits and consumer surplus during privatization of noncompetitive sectors privatization transfers control rights to private interests and eliminates public subsidies yielding benefits to taxpayers at the cost of increased prices for consumers in developing countries where budget constraints are tight privatization and price liberalization may be optimal for low profitability industries but suboptimal for more profitable industries and once a market has room for more than one firm governments may prefer to regulate the industry without a credible regulatory agency regulation is achieved through public ownership

migration with endogenous moving costs we study a dynamic model of labor migration in which moving costs decrease with the number of migrants already settled in the destination this assumption is supported by sociological studies of migrant networks with endogenous moving costs migration occurs gradually over time once it starts it develops momentum and migratory flows may increase even as wage differentials narrow in addition migration tends to follow geographical channels and low moving cost individuals migrate first these patterns are consistent with historical evidence from the great black migration of 1915 1960 in the united states much of which cannot be reconciled with existing migration models excerpt

monopoly and soft budget constraint a benevolent government may decide to subsidize an unprofitable monopoly whose profits do not capture all the social surplus from its production anticipating this the firm may underinvest in order to become unprofitable and extract state subsidies the resulting welfare loss may exceed by many times the deadweight cost of monopoly pricing committing the firm to a price ceiling may soften its budget constraint and thus reduce welfare competition can harden budget constraints in industries in which free entry is socially excessive

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

infrastructure privatization and changes in corruption patterns the roots of public discontent abstract this paper offers a theory of how the degree of corruption that prevails in a society responds to changes in the ownership structure of major public service providers we show that there are cases in which privatization even though it fosters investments in infrastructure also opens the door to more corruption the public dissatisfaction towards privatization is then crucially affected by the changes in the degree and pattern of corruption our model thus helps understand the seemingly paradoxical situation prevailing in latin america where most studies find that privatizations have been efficiency enhancing and have fostered investments and at the same time popular dissatisfaction with the process is extremely high especially among the middle class we show that this line of explanation is consistent with the evidence from surveys in the region

sectoral shocks learning and aggregate fluctuations we present a model in which sectoral shocks have aggregate consequences the model relies on irreversible investment and imperfect information to slow the adjustment of expanding industries we show that this gradual expansion is sub optimal

relational altruism and giving in social groups much fundraising is done by individuals within existing social groups exploiting a unique dataset we demonstrate i a positive relationship between social group size and the number of donations ii a negative relationship between group size and the size of individual donations iii no clear relationship between group size and the total amount raised free riding with respect to the activity being funded cannot explain the relationship between group size and donation size since the number of social group members is only a subset of total contributors instead the findings are consistent with the notion that giving in social groups is motivated by relational altruism

brother can you spare a dime peer pressure in charitable solicitation abstract while the effects of peer pressure in charitable giving have been of considerable interest to social scientists there is little empirical evidence on the magnitude of these effects a correlation between giving or volunteering by one s peers and one s own giving can be driven by self selection into groups common shocks that inspire both the solicitor to ask and the individual to give or social influence using data from a university this paper analyzes whether alumni are more likely to give and give larger amounts when they are solicited by someone with whom they have social ties freshman year roommate assignments and the structure of the university s giving campaigns are used to overcome problems of selection and common shocks social ties play a strong causal role in the decision to donate and the average gift size additionally a solicitor s request is much more effective if he or she shares characteristics such as race with the alumnus being solicited

understanding the soft budget constraint we propose a clarification of the notion of a soft budget constraint a concept widely used in the analysis of socialist transitional and market economies our interpretation is broad enough to embrace most existing approaches to soft budget constraint phenomena and provides a classification of their causes and consequences in light of this interpretation we then review the theoretical literature on the subject and compare it with those on other dynamic commitment problems in economics

short term labour migration from the republic of armenia to the russian federation we explore the determinants of short term labour migration from armenia to russia based on a unique panel dataset a dynamic switching regression model with endogenous switching is applied our evidence pinpoints migration experience the expected individual income gap from migration low job opportunities in armenia and the possibility of diversifying income risks as the most important determinants family ties turn out to be insignificant the hypothetical income gap is about 280 per cent several explanations are provided for the fact that some individuals do not migrate in spite of a large income gap

international migration remittances and household investment evidence from philippine migrants exchange rate shocks how do households respond to overseas members economic shocks overseas filipinos in dozens of countries experienced sudden heterogeneous changes in exchange rates during the 1997 asian financial crisis appreciation of a migrant s currency against the philippine peso leads to increases in household remittances from overseas the estimated elasticity of philippine peso remittances with respect to the exchange rate is 0 60 positive migrant shocks lead to enhanced human capital accumulation and entrepreneurship in origin households child schooling and educational expenditure rise while child labour falls households also work more hours in self employment and become more likely to start relatively capital intensive household enterprises

excess entry vertical integration and welfare this article provides a systematic analysis of the welfare effects of vertical integration by a monopolist input supplier into a monopolistically competitive downstream industry we give sufficient conditions on consumer preferences that lead to pareto improving vertical integration and demonstrate a close relationship between assumptions on preference for variety excess entry in monopolistically competitive markets and the welfare effects of vertical integration excess entry in downstream markets tends to give rise to pareto improving vertical integration we extend the analysis to vertical oligopoly and access price regulation

poverty and famines an essay on entitlement and deprivation this book focuses on the causes of starvation in general and famines in particular the traditional analysis of famines is shown to be fundamentally defective and the author develops an alternative analysis

government outsourcing public contracting with private monopoly the article studies the impact of the government budget constraint on the regulation of natural monopolies in adverse selection contexts the government maximises total surplus but incurs some cost of public funds a la laffont and tirole 1993 government outsourcing is proposed as an alternative to regulation in which firms freely enter the market and choose their prices and output levels however government can contract ex post with the private firms this ex post contracting set up allows more flexibility than regulation where governments commit to both investment and operation cash flows this is especially relevant in case of high technological uncertainties

the economics of casino taxation in this article a model of the costs of a casino is developed that focuses on the implications for economic welfare of different taxation schemes for casinos the situation being considered is in a country where casinos cater exclusively to foreign tourists the goal of the country is to determine the maximum amount of taxes that can be extracted from the activities of this sector under different systems of taxation when the price of gambling is set by regulation above its competitive level the economic losses created by excessive investment in the sector can be reduced by taxation a turnover tax on the amount gambled can maximize both tax revenue and the economic welfare of the country due to administrative constraints a number of countries rely on the taxation of the casinos fixed assets or a combination of a turnover tax and a tax on fixed costs the model is applied to the situation in north cyprus the annual economic efficiency loss from its poorly designed tax policies on casino gambling is

federalism and the soft budget constraint the government s incentives to bail out inefficient projects are determined by the trade off between political benefits and economic costs the latter depending on the decentralization of government two effects of federalism are derived first fiscal competition among local governments under factor mobility increases the opportunity costs of bailout and thus serves as a commitment device the competition effect second monetary centralization together with fiscal decentralization induces a conflict of interests and thus may harden budget constraints and reduce inflation the checks and balance effect the authors analysis is used to interpret china s recent experience of transition to a market economy copyright 1998 by american economic association

endogenous timing with infinitely many firms abstract a model with constant marginal costs is considered where firms choose first a period for production and then the amount to produce when competing in the market according to the resulting timing decisions multiple equilibria arise allowing for infinitely many industry output configurations encompassing one limit output dominant firm and the cournot equilibrium with free entry as extreme cases at each of these equilibria a firm produces a positive amount only if this firm commits to produce at period one both stackelberg and cournot like outcomes are sustainable as equilibria however when the number of leaders is given production at subsequent periods is always prevented and industry output is sometimes larger than the entry preventing level

privatization and efficiency from principals and agents to political economy ad i pavia abstract we survey the theoretical literature on privatization and efficiency by tracing its evolution from the applications of agency theory to recent contributions in the field of political economy the former extend the theory of regulation with incomplete information to address privatization issues comparing state owned enterprises with private regulated firms the benefits of privatization may derive either from the constraints it places on malevolent agents or from the impossibility of commitment by a benevolent government because of incomplete contracts contributions dealing with political economy issues separate privatization from restructuring decisions they either explore bargaining between managers and politicians or analyse the impact of privatization shaped by political preferences on efficiency the theoretical results regarding the relation between privatization and efficiency do not lead to any definitive conclusion privatization may increase productive efficiency when restructuring takes place whereas its effects on allocative efficiency still remain uncertain

credit and efficiency in centralized and decentralized economies we study a credit model where because of adverse selection unprofitable projects may nevertheless be financed indeed they may continue to be financed even when shown to be low quality if sunk costs have already been incurred we show that credit decentralization offers a way for creditors to commit not to refinance such projects thereby discouraging entrepreneurs from undertaking them initially thus decentralization provides financial discipline nevertheless we argue that it puts too high a premium on short term returns the model seems pertinent to two issues soft budget constraint problems in centralized economies and differences between anglo saxon and german japanese financing practices

hardening the budget constraint the experience of the post socialist countries abstract the study surveys the typical manifestations of the softness of the budget constraint such as state subsidies soft taxation non performing loans the accumulation of trade arrears between firms and the build up of wage arrears in the various post socialist countries it was widely maintained at the outset of the post socialist transition that the holy trinity of liberalization privatization and stabilization would suffice to produce an efficient market economy since then it has become clear that hardening the budget constraint needs to be given equal priority with these unless this occurs the effects of privatization will fall short of expectations as they have in russia

credit availability and internal migration evidence from thailand this study investigates the relationship between borrowing and internal migration exploiting the micro finance scheme village fund in thailand it investigates the short and medium term effects o

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

on the virtues of privatization when government is benevolent abstract this paper shows that privatizing a public firm can be welfare improving even if the government is a welfare maximizer we consider a setup where the firm s owner a profit maximizing entrepreneur or a benevolent government employs a manager who can invent and implement an innovative production technology wage arrangements are optimal given the verifiable information all parties behave rationally and the information structure is the same in both governance modes nevertheless privatization turns out to be preferable in a wide variety of situations government ownership yields the first best if producing under the old technology is not viable

seasonality of income and poverty in bangladesh abstract seasonal food deprivation in bangladesh locally known as monga sometimes rises to the level of famine during the pre harvest period of aman rice an analysis of household income and expenditure survey data shows that income and consumption are lower during monga than in other seasons and that seasonal income greatly influences seasonal consumption econometric estimates reject the hypothesis of perfect consumption smoothing in the northwestern region of greater rangpur rural households suffer disproportionately from monga seasonal differences in poverty across regions are due mainly to differences in household specific seasonality of income and consumption income diversification explains the lower incidence of income seasonality observed in non rangpur regions to contain seasonal hunger in greater rangpur public policies should promote rural income diversification together with seasonal migration a flexible microfinance scheme that provides both production and consumption loans on flexible repayment terms could help diversify income and reduce seasonality of income and poverty

a signaling explanation for charity this article examines a novel but plausible motive for charitable giving charitable donations which are observable can signal wealth or income the signaling equilibrium of charitable donations has attractive properties donations increase proportionally with population size governmental funding for public goods affects private charity only through an income effect crowding out need not be complete income redistribution is generically nonneutral increasing the spread between the poorest and richest person in a community tends to increase private donations our theory are based on the assumption that people are willing to make charitable donations even if they will not increase provision of the public good the data on charitable giving support the hypothesis that donors donate at least partly for signaling purposes rather than only to aid the recipient or to obtain satisfactions unrelated to status though charitable organizations usually report donations within categories thus not allowing perfect revelation for analytical tractability we shall consider an equilibrium with perfect revelation and a continuum of types as characterized in george j mailath 1987 and norman j ireland 1994

competition and regulation in vertically related markets in an industry where naturally monopolistic and competitive activities are vertically related should the natural monopolist be allowed also to operate in the deregulated competitive sector unlike much of the literature on vertical integration this paper assumes that monopoly pricing behaviour is regulated and therefore the effect of vertical integration on the task of regulation is central to the analysis in the model there is both imperfect information and imperfect competition when vertical integration by the monopolist is allowed the regulator s task is made harder insofar as the monopolist has anticompetitive incentives to raise rivals costs on the other hand integration may lead to there being fewer firms in the deregulated sector and hence less duplication of fixed costs the overall welfare comparison between separation and integration is ambiguous as two simple examples illustrate various extensions to the analysis are also considered one of the central questions in debates on regulatory reform is how to organize industries that contain both naturally monopolistic and potentially competitive activities electricity transmission and distribution are characterized by natural monopoly cost conditions but electricity generation is not in the gas industry pipeline services may be naturally monopolistic but supply to larger customers is not in telecommunications natural monopoly is more a feature of local network operations than of long distance operations and is not present in apparatus manufacture and supply or in the provision of value added services in railways while the infrastructure of track and stations is naturally monopolistic the supply of train services might not be policy developments notably those associated with privatization in britain and deregulation in the united states have sometimes led to radical structural reform in these industries at t for decades a vertically integrated monopolist was required under the 1982 settlement of its long running antitrust case against the u s government to divest itself of its local network operations the central electricity generating board cegb in england and wales was restructured both vertically transmission grid activities were separated from generation and horizontally before privatization in 1990 1991 by contrast british telecom was privatized as a vertically integrated dominant firm bt now faces competition from mercury and others especially in the long distance market but its dominance of local network operations might affect competition there and in other areas such as apparatus supply the local network monopoly would of course have to be regulated in any event but its link via ownership to vertically related and potentially competitive activities poses additional regulatory questions many of the efforts of the regulatory body oftel notably in relation to interconnection between bt s and rivals 1 for a general account of the theory and british experience of regulatory reform in the utility industries

a tale of two market failures technology and environmental policy abstract market failures associated with environmental pollution interact with market failures associated with the innovation and diffusion of new technologies these combined market failures provide a strong rationale for a portfolio of public policies that foster emissions reduction as well as the development and adoption of environmentally beneficial technology both theory and empirical evidence suggest that the rate and direction of technological advance is influenced by market and regulatory incentives and can be cost effectively harnessed through the use of economic incentive based policy in the presence of weak or nonexistent environmental policies investments in the development and diffusion of new environmentally beneficial technologies are very likely to be less than would be socially desirable positive knowledge and adoption spillovers and information problems can further weaken innovation incentives while environmental technology policy is fraught with difficulties a long term view suggests a strategy of experimenting with policy approaches and systematically evaluating their success

market structure and casino taxation in tourist resorts this article examines the association of tax effects with market structure for casino gaming we show that if market structure is uncompetitive much of casino taxation falls on tourists whose demand is inelastic relative to supply the tax is likely to be efficient under strong external demand if imposed on oligopoly casinos with a monopoly location in a cross border market the likelihood of economically good taxation is greater under oligopoly than under competition but lower than under monopoly casino taxes should be lowered in a more competitive market with weaker external demand our prediction is consistent with the evidence found from casino tourism development in macao with high gambling taxes

seasonal hunger and its mitigation in north west bangladesh seasonal hunger may result from seasonality of agriculture when households fail to smooth income and consumption using household survey data from the northwest region of bangladesh this paper examines alternative measures of seasonal hunger and provides some evidence to support policies and programs needed to mitigate seasonal hunger the results suggest that a large majority of food vulnerable households are the perpetual poor as opposed to a small percentage of households who are subject to food deprivation only during the lean period findings suggest that government safety net programs and microcredit provide a cushion for the poor to stave off seasonal hunger