the distribution of income in china preface notes on the contributors introduction k griffin z renwei part 1 the distribution of income household income and its distribution a r khan k griffin c riskin z renwei three features of the distribution of income during the transition to reform z renwei part 2 income and wealth in rural china the determinants of household income in rural china a r khan the distribution of wealth in rural china t mckinley income distribution and poverty in rural china c riskin part 3 employment and human capital workers in china s rural industries j knight s lina why urban wages differ in china j knight s lina the determinants of educational attainment j knight l shi annex the 1988 household sample survey m eichen z ming index

capital utilization and capital accumulation theory and evidence a firm may acquire additional capital input by purchasing new capital or by increasing the utilization of its current capital the margin between capital accumulation and capital utilization is studied in a model of dynamic factor demand where the firm chooses capital labour and their rates of utilization a direct measure of capital utilization the work week of capital is incorporated into the theory and estimates the estimates imply that capital stock is costly to adjust while the work week of capital is essentially costless to adjust the estimated response of the capital stock to changes in its price and in the required rate of return is more rapid than found in other estimates

do relative income and income inequality affect consumptionq evidence from the villages of rural china abstract this article examines how a household s consumption rate is affected by its relative income and income inequality within a community based on the theory of social status seeking in consumption we test hypotheses related to these factors using a unique panel data set of rural households in china observed within a few hundred villages between 2003 and 2006 we find that the household s consumption rate is negatively related to the relative income position after controlling for the absolute income and positively related to the income inequality of the village we confirm these with different measurements of relative position

relative deprivation and internal migration in the united states a comparison of black and white men while the link between geographic and social mobility has long been a cornerstone of sociological approaches to migration recent research has cast doubt on the economic returns to internal u s migration moreover important racial disparities in migration patterns remain poorly understood drawing on data from the 2000 census the author reappraises the link between migration and social mobility by taking relative deprivation into consideration she examines the association between migration disaggregated by region of origin and destination and absolute and relative earnings and occupational prestige separately by race findings lend new insight into the theoretical and stratification implications of growing racial disparities in migration patterns while both blacks and whites who move north south generally average lower absolute incomes than their stationary northern peers they enjoy significantly higher relative social positions moreover the relative gains to migration are substantially large

on the economic architecture of the workplace repercussions of social comparisons among heterogeneous workers we analyze the impact on a firm s profits and optimal wage rates and on the distribution of workers earnings when workers compare their earnings with those of coworkers we consider a low productivity worker who receives lower wage earnings than a high productivity worker when the low productivity worker derives dis utility not only from his own effort but also from comparing his earnings with those of the high productivity worker his response to the sensing of relative deprivation is to increase the optimal level of effort consequently the firm s profits are higher its wage rates remain unchanged and the distribution of earnings is compressed

national accounting and the valuation of ecosystem assets and their services there has long been interest in integrating the value of environmental stocks and flows into standard measures of economic activity and wealth in particular through the development of adjusted measures of gdp and extended measures of national wealth this paper examines how the valuation of ecosystem services and ecosystem assets can be undertaken in an integrated national accounting setting we clarify the relevant valuation principles most significantly the need to apply the concept of exchange values and explain why the integration of ecosystem services necessitates an extension of the standard production boundary used in economic measurement the main implications of an accounting approach are discussed including the need to distinguish benefits from services the need for valuation methods that exclude consumer surplus and the importance of aligning measures of income and degradation remaining challenges include the treatment of low or negative rents accounting for ecosystem disservices and the derivation of values for ecosystem assets meeting these challenges and advancing work in this area should be the joint focus of economists ecologists and accountants

counterfactual decomposition of changes in wage distributions using quantile regression we propose a method to decompose the changes in the wage distribution over a period of time in several factors contributing to those changes the method is based on the estimation of marginal wage distributions consistent with a conditional distribution estimated by quantile regression as well as with any hypothesized distribution for the covariates comparing the marginal distributions implied by different distributions for the covariates one is then able to perform counterfactual exercises the proposed methodology enables the identification of the sources of the increased wage inequality observed in most countries specifically it decomposes the changes in the wage distribution over a period of time into several factors contributing to those changes namely by discriminating between changes in the characteristics of the working population and changes in the returns to these characteristics we apply this methodology to portuguese data for the period 1986 1995 and find that the observed increase in educational levels contributed decisively towards greater wage inequality copyright 2005 john wiley sons ltd

tax evasion on a social network abstract we relate tax evasion behavior to a substantial literature on social comparison in judgements taxpayers engage in tax evasion as a means to boost their expected consumption relative to others in their social network the unique nash equilibrium of the model relates optimal evasion to a bonacich measure of network centrality more central taxpayers evade more given that tax authorities are now investing heavily in big data tools that aim to construct social networks we investigate the value of acquiring network information we do this using networks that allow for celebrity taxpayers whose consumption is seen widely and who are systematically of higher wealth we show that there are pronounced returns to the initial acquisition of network information especially in the presence of celebrity taxpayers

great expectations the subjective well being of rural urban migrants in china summary this paper is among the first to link the literatures on migration and on subjective well being in developing countries it poses the question why do rural urban migrant households settled in urban china have an average happiness score lower than rural households three basic hypotheses are examined migrants had false expectations about their future urban conditions or about their future urban aspirations or about their future selves estimated happiness functions and decomposition analyses based on a 2002 national household survey indicate that certain features of migrant conditions make for unhappiness and that their high aspirations in relation to achievement influenced by their new reference groups also make for unhappiness although the possibility of selection bias among migrants cannot be ruled out it is apparently difficult for migrants to form unbiased expectations about life in a new and different world

media exposure and internal migration evidence from indonesia abstract this paper investigates the impact of television on internal migration in indonesia we exploit the differential introduction of private television throughout the country and the variation in signal reception due to topography to estimate the causal effect of media exposure our estimates reveal important long and short run effects an increase of one standard deviation in the number of private tv channels received in the area of residence as an adolescent reduces future inter provincial migration by 1 7 2 7 percentage points and all migration inter and intra provincial by 3 9 6 8 percentage points short run effects are similar in magnitude we also show that respondents less exposed to private television are more likely to consider themselves among the poorest groups in society as we discuss in a stylized model of migration choice under imperfect information these findings are consistent with indonesian citizens over estimating the net gains from internal migration when access to television is limited

a concern about low relative income and the alignment of utilitarianism with egalitarianism a utilitarian social planner who maximizes social welfare assigns the available income to those who are most efficient in converting income into utility however when individuals are concerned about their income falling behind the incomes of others the optimal income distribution under utilitarianism is equality of incomes

migrations risks and uncertainty a field experiment in china abstract we report data from the first incentivized artefactual field experiment conducted in china to understand whether chinese migrants differ from non migrants in terms of preferences regarding risk and uncertainty in various contexts we find that compared to non migrants migrants are significantly more likely to enter competitions when they expect competitive entries from others however migrants are not different from non migrants in risk and ambiguity preferences where strategic uncertainty is absent our results suggest that migration may be driven more by a stronger belief in one s chance of succeeding in an uncertain competitive environment than by differences risk attitudes related to state uncertainty

political economy of growth with a taste for status abstract this paper investigates the political economy of growth when individuals prefer high levels of relative consumption a pivotal voter determines the equilibrium tax on capital the revenues from which fund the provision of productive public goods the taste for status and the distributions of wealth and political power interact to generate stylized versions of oligarchies middle class democracies and populist democracies a rise in the taste for status increases the role of distributional concerns in policy preferences lowering growth in an oligarchy or populist democracy but increasing it in a middle class democracy in addition the egalitarian redistribution of wealth or political power causes growth to first rise and then fall as the equilibrium tax rate approaches and then exceeds its growth maximizing level generating inverse u shaped relationships between democracy and growth and inequality and growth

changes in the u s wage structure 1963 1987 application of quantile regression the 1980 s witnessed rapid changes in the structure of wages in the united states in this study recently developed techniques for quantile regression are applied to every march current population survey since 1964 and changes in the return to schooling and experience at different points of the wage distribution are examined the quantile regression technique parsimoniously describes the entire conditional wage distribution this conditional distribution is used to examine changes in within group wage inequality as measured by the difference between conditional quantiles two linear models are considered a simple one group model and a 16 group model the results suggest that the returns to schooling and experience differ across quantiles of the wage distribution but their patterns of change are similar significant differences in wage inequality are also found across the various skill groups the paper also presents a new imputation method for cps data

does relative deprivation induce migration evidence from sub saharan africa this analysis revisits the decades old relative deprivation theory of migration in contrast to the traditional view that migration is driven by absolute income maximization we test whether relative deprivation induces migration in the context of sub saharan africa taking advantage of the internationally comparable longitudinal data from integrated household and agriculture surveys from tanzania ethiopia malawi nigeria and uganda we use panel fixed effects to estimate the effects of relative deprivation on migration decisions using per capita consumption expenditure and multidimensional wealth index as well being measures we find that a household s migration decision is based not only on its absolute well being level but also on the relative position of the household in the well being distribution of the community in which it resides we also discover that the effect of relative deprivation on migration is amplified in rural agricultural and male headed households results are robust to alternative specifications including the use of hausman taylor instrumental variable htiv estimator and pooled data across the five countries results confirm that the migration relative deprivation relationship also holds in the context of sub saharan africa we argue that policies designed to check rural urban migration through rural transformation and poverty reduction programs should use caution because such programs can increase economic inequality which further increases migration flow

in defense of health based standards abstract this paper explores the utilitarian ethical foundations underlying two standards for pollution control an efficiency standard and a health based standard the main point is that a health based standard can be defended quite easily on utilitarian grounds safety proponents need not be self serving irrational nor ignorant criticism of health based standards as too costly is not always persuasive since material consumption is not the only component of social welfare nor do consumption increases necessarily increase social welfare

informal insurance arrangements with limited commitment theory and evidence from village economies recent work on consumption allocations in village economies finds that idiosyncratic variation in consumption is systematically related to idiosyncratic variation in income thus rejecting the hypothesis of full risk pooling we attempt to explain these observations by adding limited commitment as an impediment to risk pooling we provide a general dynamic model and completely characterise efficient informal insurance arrangements constrained by limited commitment and test the model using data from three indian villages we find that the model can fully explain the dynamic response of consumption to income but that it fails to explain the distribution of consumption across households

weakly relative poverty prevailing measures of relative poverty are unchanged when all incomes grow or contract by the same proportion this property stems from seemingly implausible assumptions about the disutility of relative deprivation and the cost of social inclusion the authors propose weakly relative lines that relax these assumptions on calibrating our measures to national poverty lines and survey data we find that half the population of the developing world in 2005 lived in poverty only half of whom were absolutely poor the total number of poor rose over 1981 to 2005 despite falling numbers of absolutely poor with sustained economic growth the incidence of relative poverty became less responsive to further growth the number of relatively poor rose just as the numbers of absolutely poor fell

a decomposition method on employment and wage discrimination and its application in urban china 2002 2013 abstract labor market discrimination is an important issue in developing countries where path dependent institutions have been dominant while effective institutional arrangements and policies have been hidden by local customs and culture however the existing applications of classical blinder oaxaca decomposition face criticism for their imprecise understanding of the factors affecting institutional discrimination in labor markets as well as for their lack of power in formulating well targeted anti discrimination policies following oaxaca 1973 we propose a new method to decompose the total discrimination index tdi to analyze employment and wage discrimination in the labor markets of developing countries the tdi is decomposed into the employment discrimination index edi and the wage discrimination index wdi then into the underpayment index to majorities upi and the overpayment index to minorities opi we apply this method to the institutional discrimination against rural migrants in china s urban areas using national representative data from 2002 to 2013 we have found that 1 the tdi increased quickly after china entered the wto then dropped after anti discrimination policies were implemented 2 the tdi is mainly determined by the upi while the tdi s fluctuation is mainly determined by the wdi our method provides insights into the changing composition of employment and wage discrimination and their respective labor market outcomes in developing countries as a result appropriate policy measures may be developed accordingly

measuring sustainability in the un system of environmental economic accounting the adoption of the system of environmental economic accounting 2012 central framework as a un statistical standard is a landmark in environmental accounting the seea has the same authority and weight as the system of national accounts in the pantheon of official statistics the seea defines the unit value of depletion of an exhaustible resource to equal the average unit value of the asset the total asset value divided by the physical stock of resource by applying this definition to a non optimal dasgupta heal solow model of an extractive economy we show that depletion adjusted net saving as defined in the seea supports a generalized version of the hartwick rule this measure of saving can guide policies for sustainable development in extractive economies in particular fiscal policies concerning consumption and investment expenditures funded by resource rents the conditions required to support this finding are i that extraction declines over time at a constant rate and ii that the marginal cost of resource extraction is constant a less general result holds in the case of increasing marginal extraction costs

what is social inequality and why does it matter evidence from central and eastern europe as distinct from income or wealth inequality social inequality is currently poorly understood and at best unevenly measured we conceptualize social inequality as the relative position of individuals along a number of dimensions that measure achieved outcomes and innovatively expectations about future outcomes using data from 12 central and eastern european countries we find that cross national patterns of social inequality differ significantly from patterns derived from income inequality measures moreover our measure of social inequality is much better correlated than income inequality with other country differences such as higher levels of economic performance and human development and stronger political institutions

social status in economic theory social distinction or status is an important motivation of human behaviour this paper provides a selective survey of recent advances in the economic analysis of the origins and consequences of social status concerns first a selection of empirical research from a variety of scientific disciplines is discussed to underpin the further theoretical analysis i then consider the origins and determinants of tastes for status discuss the endogenous derivation of such preferences for relative standing and assess the different formalizations of these preferences subsequently the consequences of preferences for status are studied for a variety of problems and settings the last section discusses a number of implications of status concerns for normative economics and public policy

guestworker migration remittances and the extended family evidence from pakistan the paper places migration in the context of the extended family it models informal loans between migrant and extended family for financing the costs of international labor migration to show repayments to extended family is important we trace the effects of such loans on migrant savings and remittance to the immediate family we employ a standard life cycle approach which predicts that the demand for extended family financing rises with migration costs and falls with pre migration wealth remittance to the immediate family and savings retained abroad both fall with the pre migration loan these hypotheses are tested using data from a survey of return migrants to pakistan carried out in 1986

effort and comparison income experimental and survey evidence the authors test the hypothesis that individual effort on the job depends both on one s own income and on the individual s position in the relevant income distribution combining experimental evidence from a gift exchange game with multi country issp survey data they analyze the extent to which relative income affects an individual s effort finding that an individual s rank in the income distribution more strongly determines effort than does others average income which suggests that comparisons are more ordinal than cardinal their experiment also reveals that comparisons over time affect effort individuals who received higher income offers or enjoyed higher income rank in the past exerted lower levels of effort for a given current income and rank

choosing the joneses endogenous goals and reference standards a growing economic literature stresses the importance of relative comparisons e g for savings and consumption or happiness in this literature it is usually assumed that reference standards against which people compare themselves are exogenously given in contrast findings from social psychology suggest that people play an active role in determining their reference standards we introduce a social comparison model where people choose their reference standards to serve motives of self improvement and self enhancement the model predicts that reference standards increase in individuals abilities and that people thus tend to compare themselves to similar others the results of a questionnaire study confirm the prediction of the model

household consumption smoothing through ethnic ties evidence from cote d ivoire abstract this paper investigates the hypothesis that households in cote d ivoire take part in spatially diversified risk sharing arrangements with members of their own ethnic group empirical tests are presented using several estimation methods to deal with heteroscedasticity measurement error and extreme value problems to examine whether results are robust across estimation procedures the hypothesis of complete risk sharing within ethnic groups is rejected however there appears to be some partial insurance performed by individual households with other members of the same ethnic group particularly for the households residing in the regions least likely to have access to formal financial arrangements

community comparisons and subjective well being in a divided society using a south african data set the paper poses six questions about the determinants of subjective well being much of the paper is concerned with the role of relative concepts we find that comparator income measured as average income of others in the local residential cluster enters the household s utility function positively but that income of more distant others others in the district or province enters negatively the ordered probit equations indicate that as well as comparator groups based on spatial proximity race based comparator groups are important in the racially divided south african society it is also found that relative income is more important to happiness at higher levels of absolute income potential explanations of these results and their implications are considered

relative poverty as a determinant of migration evidence from poland we explore the relationship between aggregate relative poverty and migration we draw upon polish regional data and use a measure of aggregate relative poverty that is functionally related to the gini coefficient we find that the gini coefficient and migration are positively correlated holding the population s per capita income constant

a theory of market transition from redistribution to markets in state socialism state socialist redistributive economies are characterized by the allocation and distribution of goods through central planning this paper develops a theory of market transition which argues that in reforming socialist economies the transition from redistributive to market coordination shifts sources of power and privilege to favor direct producers relative to redistributors the shit improves incentives for direct producers stimulates the growth of private markets and provides to entrepreneurs an alternative path for socioeconomic mobility a set of hypotheses test the market transition theory with householdand village level data

backward and forward looking shadow prices in inclusive wealth accounting an example of renewable energy capital abstract attaching weights to the list of capital assets is crucial in inclusive wealth accounting and sustainability assessments these weights or shadow prices can be constructed in theory by looking prospectively at future social profits that the capital in question is expected to yield in practice however both backward and forward looking shadow prices are used this study confirms that these two approaches are theoretically equivalent under strong assumptions and reviews how and why the two approaches are taken the two approaches are then applied to renewable energy capital rec which has rarely been done in either produced or natural capital accounting and sustainability assessments renewable energy capital provides an ideal example with which to compare the two approaches as it is a class of produced capital that substitutes both produced and natural capital the numerical results of both approaches demonstrate that renewable energy capital starts to account for as large a share as natural capital does if not produced capital or inclusive wealth in those countries where natural capital is poorly endowed and investment in renewable energy capital has been witnessed

the economics of communist party membership the curious case of rising numbers and wage premium during china s transition abstract as the chinese communist party has loosened its grip in a more market oriented economy why have membership and the economic benefits of joining risen we use three national household surveys over 11 years to answer this question for wages in urban china individual demand for party membership is treated as an investment in political capital that brings monetary rewards in terms of a wage premium that has risen in recent years however this does not explain why the wage premium is higher for the personal characteristics that reduce the probability of membership rationing with a scarcity value for members with those characteristics provides an explanation

migration for degrading work as an escape from humiliation this paper develops a model of voluntary migration into degrading work the essence of the model is a tension between two bads that which arises from being relatively deprived at home and that which arises from engaging in humiliating work away from home balancing between these two bads can give rise to an explicit voluntary choice to engage in humiliating work the paper identifies conditions under which a migrant will choose to engage in degrading work rather than being forced into it to work abroad as a prostitute say rather than on a farm the paper delineates the possible equilibria and finds that greater relative deprivation will make it more likely that the equilibrium outcome will be engagement in prostitution it is shown that under well specified conditions every individual will work as a prostitute yet every individual would be better off working on a farm put differently when specific conditions are satisfied there is a possibility of a coordination failure if individuals believe that everyone else will choose to be a prostitute this belief will be self fulfilling in this case all the individuals choose to engage in prostitution which renders each of them worse off the paper discusses various policy implications it is shown that a policy intervention a crackdown on migrants engagement in prostitution if implemented strictly can increase everyone s welfare but when the policy is implemented loosely cracking down on prostitution will only reduce individuals welfare without reducing their engagement in prostitution

valuing nature lessons learned and future research directions this paper critically reviews the literature on environmental valuation of ecosystem services across the range of global biomes the main objective of this review is to assess the policy relevance of the information encompassed by the wide range of valuation studies that have been undertaken so far published and other studies now cover most ecosystems with aquatic and marine contexts attracting the least attention there is also a predominance of single function valuation studies studies valuing multiple functions and uses and studies which seek to capture the before and after states as environmental changes take place are rare by and large it is the latter types of analyses that are most important as aids to more rational decision taking in ecosystem conservation versus development situations involving different stakeholders local national and global aggregate global scale estimates of ecosystems value are problematic given the fact that only marginal values are consistent with conventional decision aiding tools such as economic cost benefit analysis in general valuation data provide prima facie support for the hypothesis that net ecosystem service value diminishes with biodiversity and ecosystem loss balmford et al 2002 science 297 p 950 future research effort should include complementary research on multiple ecosystem services that seeks to capture the temporal disturbance profile and its causal factors the explicit recognition of multiple interdependent ecosystem services and values poses both conceptual and empirical research challenges it would serve to transform the practice of research in this sub field via the a priori assumption of multiple and inter dependent use instead of independent single use this line of reasoning can then be extended to the institutional arrangements that determine which values are captured new institutional processes and arrangements are probably required in order to best realise benefit streams from multiple ecosystem use and non use provision across a range of different stakeholders

capitals and capabilities a framework for analyzing peasant viability rural livelihoods and poverty abstract on the basis of themes emerging in current debates on rural development in latin america this paper develops an analytical framework for analyzing rural livelihoods in terms of their sustainability and their implications for rural poverty the framework argues that our analyses of rural livelihoods need to understand them in terms of a people s access to five types of capital asset b the ways in which they combine and transform those assets in the building of livelihoods that as far as possible meet their material and their experiential needs c the ways in which people are able to expand their asset bases through engaging with other actors through relationships governed by the logics of the state market and civil society and d the ways in which they are able to deploy and enhance their capabilities both to make living more meaningful and to change the dominant rules and relationships governing the ways in which resources are controlled distributed and transformed in society particular attention is paid to the importance of social capital as an asset through which people are able to widen their access to resources and other actors

migration when social preferences are ordinal steady state population distribution and social welfare this paper adds three dimensions to the received literature it models migration when the individuals preferences regarding their relative incomes are ordinal it works out the resulting spatial steady state distribution of the individuals and it shows that the aggregate of the individuals migration choices in the spatial steady state distribution sums to the social optimum this finding does not apply when the individuals preferences regarding their relative incomes are cardinal we highlight the importance of the assumption about the nature of the individuals social preferences whether ordinal or cardinal to studying and predicting their migration behaviour and to elucidating the consequences of that behaviour for social welfare

the relationship between job satisfaction and managerial remuneration in small and medium sized enterprises an empirical test of comparison income and equity theory hypotheses the relationship between job satisfaction levels and the remuneration of non owner managers employed by a sample of 97 uk small and medium sized enterprises smes is investigated the main empiric

migration trade and foreign direct investment in mexico part of the rationale for the north american free trade agreement nafta was that it will increase trade and foreign direct investment fdi flows creating jobs and reducing migration to the united states u s since poor data on illegal migration to the united states make direct measurement difficult data on migration within mexico where census data permit careful analysis are used instead to evaluate the mechanism behind predictions on migration to the united states specifications are provided for migration within mexico incorporating measures of cost of living amenities and networks contrary to much of the literature labor market variables enter very significantly and as predicted once possible credit constraint effects are controlled for greater exposure to fdi and trade deters outmigration with the effects working partly through the labor market finally some tentative inferences are presented about the impact of increased fdi on mexico u s migration on average a doubling of fdi inflows leads to a 1 5 to 2 percent drop in migration

the less extreme the more you leave radical islam and willingness to migrate summary this paper studies radical islam as a determinant of individuals willingness to migrate surprisingly despite its relevance in the political debate this topic has not been investigated empirically in the literature in order to fill this gap we develop a model of the decision to migrate focusing in particular on the role played by cultural traits more specifically we focus on radical islam as a deterrent for migration following berman 2003 we define radical islam as a set of ideologies also referred to as political islam holding that islam should guide not only personal life but also social and political life in our model more radical values imply a higher psychological cost of migrating this cost derives from the fact that connections with socio religious friends and neighbors are generally not maintained after migration thus deterring individuals from migrating mayers 2000 we then test empirically the predictions of the model using individual level data from the second 2010 11 and third 2012 14 waves of the arab barometer our results suggest that ceteris paribus more radical individuals are less willing to migrate this finding is robust to alternative specifications of the model and to the use of instrumental variables and propensity score matching aimed at addressing the potential endogeneity of radical islam the result is also qualitatively unchanged when using aggregate data on actual outflows of migrants

the ecological economics of land degradation impacts on ecosystem service values abstract we use two datasets to characterize impacts on ecosystem services the first is a spatially explicit measure of the impact of human consumption or demand on ecosystem services as measured by the human appropriation of net primary productivity hanpp derived from population distributions and aggregate national statistics the second is an actual measure of loss of productivity or a proxy measure of supply of ecosystem services derived from biophysical models agricultural census data and other empirical measures this proxy measure of land degradation is the ratio of actual npp to potential npp the hanpp dataset suggests that current demand for npp exceeds supply at a corresponding ecosystem service value of 10 5 trillion per year the land degradation measure suggests that we have lost 6 3 trillion per year of ecosystem service value to impaired ecosystem function agriculture amounts to 2 8 of global gdp with global gdp standing at 63 trillion in 2010 all of agriculture represents 1 7 trillion of the world s gdp our estimate of lost ecosystem services represent a significantly larger fraction 10 of global gdp this is one reason the economics of land degradation is about a lot more than the market value of agricultural products alone

genuine savings and sustainability genuine savings gs has emerged as the leading economic indicator of sustainable economic development at the country level it derives from the literatures on weak sustainability wealth accounting and national income accounting we discuss the theoretical underpinnings of gs focusing on the relationship between changes in a nation s extended capital stock and the future path of consumption the indicator has entered widespread use propelled by the world bank s publications despite its varying performance as a predictor for future consumption notwithstanding the extensive body of literature reviewed promising future research avenues are identified

persistent parochialism trust and exclusion in ethnic networks decentralized groups such as close knit residential neighborhoods and ethnically linked businesses often achieve high levels of cooperation while engaging in exclusionary practices that we call parochialism we investigate the contribution of within group cultural affinity to the ability of parochial groups to cooperate in social dilemmas we analyze parochial networks in which the losses incurred by not trading with outsiders are offset by an enhanced ability to enforce informal contracts by fostering trust among insiders we show that there is a range of degrees of parochialism for which parochial networks can coexist with an anonymous market offering unrestricted trading opportunities

the persistence of subjective poverty in urban ethiopia using panel data spanning 15 years this paper investigates the persistence and correlates of subjective and consumption poverty in urban ethiopia despite the decline in consumption poverty in recent years which has been linked to rapid economic growth subjective poverty has remained largely unchanged dynamic probit regression results show that households with a history of past poverty continue to perceive themselves as poor even if their material consumption improves our results also suggest that the relative economic position of households is a strong determinant of subjective poverty and having at least some type of employment reduces the likelihood that households will perceive themselves as poor even if they remain in objective poverty receiving remittances from abroad on the other hand does not reduce perceived poverty even if it raises material consumption we argue that any analysis to measure the impact of growth on welfare should encompass subjective measures as well

available capital utilized capital and shadow prices in inclusive wealth accounting abstract previously accounting for comprehensive or inclusive wealth has focused on the supply side of capital assets however human well being created by capital assets inherently depends on the demand side as well in particular if capital is not utilized at its full capacity then realized or actual human well being may be less affected by available capital than by effective or utilized capital in principle this notion is embodied in a shadow price which is defined as the marginal contribution of capital assets to social well being the shadow price becomes higher if the underlying resource allocation mechanism improves in practice one can account for such underutilization by adjusting shadow prices to reflect only the utilized quantity of the capital in question furthermore capital utilization has different nuanced implications for produced human and natural capital and its implications even vary across some classes of natural capital within this line of theoretical thought we provide empirical estimates of the changes in inclusive wealth and sustainability of selected developing countries in recent years by comparing available and utilized capital assets we find that sustainability assessments may be revised based on utilized capital due to among others human capital underemployment and non renewable natural capital accessibility

are wages habit forming evidence from micro data although utility functions play a central role in economics the axiom that utility depends only on the absolute levels of its arguments is rarely tested this paper uses panel data on 2000 british employees who remain with the same employer and who are not promoted from one wave to the next it is shown that one important measure of well being overall job satisfaction is strongly positively correlated with the change in the worker s pay between waves but is unrelated to the current level of pay empirical tests suggest that a reference dependent satisfaction function where individual well being depends on current pay relative to past pay is more consistent with these regression results than are productivity or agency explanations of increasing wage profiles some evidence is presented of greater job satisfaction effects of pay rises for lower paid less well educated and younger workers these results provide some micro evidence consistent with the theory widespread in social science of habituation individuals may become used to any given level of consumption or income as such they tie in with the finding that a country s well being as measured by the average happiness of its citizens is only weakly correlated with its per capita gnp

the welfare economic theory of green national accounts this paper takes a critical look at the literature on green national accounts the problem studied is to find a linear index of economic variables that responds to perturbations in the same direction as social well being the thesis of a large literature that net national product which is a flow is that index in closed economies is shown in some interpretations to be simply false and in others to suffer from deep estimation problems it is argued that capital depreciation using shadow prices should certainly be included in national accounts but that the right welfare index is a comprehensive measure of wealth defined as the shadow value of an economy s stock of all capital assets it is shown that comprehensive wealth is usable as a criterion for policy evaluation as well as for determining sustainable economic development

job satisfaction and co worker wages status or signal we use matched employer employee panel data to show that individual job satisfaction is higher when other workers in the same establishment are better paid this runs counter to substantial existing evidence of income comparisons in subjective well being we argue that the difference hinges on the nature of the reference group we here use co workers their earnings not only induce jealousy but also provide a signal about the worker s own future earnings in our data this positive future earnings signal outweighs any negative status effect this phenomenon is stronger for men and in the private sector but weaker for those nearer retirement

happiness and job satisfaction in urban china a comparative study of two generations of migrants and urban locals this study investigates determinants of happiness and job satisfaction of urban locals first generation migrants and new generation migrants in china s urban workforce we present evidence to suggest that new generation migrants are less satisfied with their jobs and lives than first generation migrants despite having higher income this finding is consistent with aspirations rising faster than income in china s fast growing urban economy

job recruitment networks and migration to cities in india abstract economists have focused on job search and supply side explanations for network effects in labour transactions this paper develops and tests an alternative explanation for the high prevalence of network based labour market entry in developing countries in our theoretical framework employers use employee networks as screening and incentive mechanisms to improve the quality of recruitment our framework suggests a negative relationship between network use and the skill intensity of jobs a positive association between economic activity and network use and a negative relationship between network use and pro labour legislation furthermore social identity effects are expected to intensify when compared to information sharing and other network mechanisms using data from an all india employment survey we implement a novel empirical strategy to test these relationships and find support for our demand side explanation

domestic governance and international migration abstract with growing disparities between the levels of material wealth in rich and poor countries migration appears to be a attractive option for inhabitants of less developed countries simultaneously there has been a growing interest in the potential contribution of good governance to economic development this paper explores the link between governance and migration and concludes on the basis of cross sectional empirical evidence that governance may indeed be a significant factor in determining the rates of emigration from poor countries to wealthy ones

rural to urban migration in ldcs a relative deprivation approach ithe basic premises of this paper are a given a person s own current income his satisfaction or deprivation is some function of income statistics other than this income e g a statistic based on the incomes of some not necessarily all other persons and b that rural to urban migration is undertaken in order to improve a person s position in terms of the latter statistic as is often the case when an old approach relative deprivation is applied to a new area migration the ideas presented here are exploratory and illustrative and have not yet been subjected to complete and formal empirical verification nonetheless the usefulness of this approach in offering novel explanations to migration related phenomena opens a promising avenue of research in a field where empirical work abounds but theory is still fairly weak and all too often somewhat ad hoc premise a builds on the notion that people are engaged in interpersonal income comparisons which are internalized thus generating psychic costs or benefits frustrations or elations relative deprivation or satisfaction viewing migration as an act of choice premise b builds on the notion that these factors motivate locational decisions relative deprivation is an important factor affecting people s choices which has been overlooked by the received migration theory working through a large number of village studies 2 i have observed several interesting and largely unexplained regularities 1 rural to urban migration rates are not highest from the poorest villages 2 migration rates are higher from villages where the distribution of income by size is more unequal and 3 from these villages it is the very poor whose propensity to migrate is highest conventional migration theory linking migration propensities causally and positively to intersectoral income differentials fails to predict 1 nor does it offer

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

the possibility of social choice the subject of social choice includes within its capacious frame various problems with the common feature of relating social judgments and group decisions to the views and interests of the individuals who make up the society or the group some challenges and foundational problems faced by social choice theory as a discipline are discussed social choice theory is a subject in which formal and mathematical techniques have been very extensively used voting based procedures are entirely natural for some kinds of social choice problems such as elections referendums or committee decisions they are however altogether unsuitable for many other problems of social choice impossibility results in social choice theory led by the pioneering work of arrow 1951 have often been interpreted as being thoroughly destructive of the possibility of reasoned and democratic social choice including welfare economics that view is argued against

evaluating projects and assessing sustainable development in imperfect economies we are interested in three related questions 1 how should accounting prices be estimated 2 how should we evaluate policy change in an imperfect economy 3 how can we check whether intergenerational well being will be sustained along a projected economic programme we do not presume that the economy is convex nor do we assume that the government optimizes on behalf of its citizens we show that the same set of accounting prices should be used both for policy evaluation and for assessing whether or not intergenerational welfare along a given economic path will be sustained we also show that a comprehensive measure of wealth computed in terms of the accounting prices can be used as an index for problems 2 and 3 above the remainder of the paper is concerned with rules for estimating the accounting prices of several specific environmental natural resources transacted in a few well known economic institutions

caste comparisons in india evidence from subjective well being data this paper evaluates how caste influences economic comparisons in india using happiness data from an original panel survey we find that both within caste comparisons and between caste comparisons reduce well being between caste comparisons reduce well being three times more than within caste comparisons in absolute terms an increase in rival caste expenditures affects well being as much as primary expenditure these findings highlight the strong influence that comparisons between rival castes have on well being yet this comparison scheme turns out to be asymmetrical only low caste individuals are affected by the economic successes of their rivals whereas only higher caste individuals compete with their fellows

the effect of religiosity and religious festivals on positional concerns an experimental investigation of ramadan this article examines the effect of religion on positional concerns using survey experiments we focus on two of the dimensions of religion degree of religiosity and religious festivals by conducting the experiments during both the most important day of ramadan the night of power and a day outside ramadan we find that ramadan overall has a small and negative impact on positional concerns detailed analyses based on the sorting of individuals degree of religiosity reveal that the decrease in the degree of positional concerns during ramadan is mainly explained by a decrease in positionality among individuals with a low degree of religiosity

relative deprivation and migration preferences in this letter we overcome the existing shortages with respect to the assignment of individuals to reference groups and are the first to show that individual aversion to relative deprivation plays a decisive role in shaping migration preferences

what s driving mexico u s migration a theoretical empirical and policy analysis using data gathered in 25 mexican communities the authors link individual acts of migration to 41 theoretically defined individual household community and macroeconomic level predictors the indicators vary through time to yield a discrete time event history analysis over the past 25 years probabilities of first repeat and return migration have been linked more to the forces identified by social capital theory and the new economics of migration than to the cost benefit calculations assumed by the neoclassical model the authors find that mexico u s migration stems from three mutually reinforcing processes social capital formation human capital formation and market consolidation

a theory of migration as a response to occupational stigma a theory is developed of labor migration that is prompted by a desire to avoid social humiliation in a general equilibrium framework it is shown that as long as migration can reduce humiliation sufficiently migration will occur even between two identical economies migration increases the number of individuals who choose to perform degrading jobs and consequently migration lowers the price of the good produced in the sector that is associated with low social status moreover the greater an individual s aversion to performing degrading jobs the more likely it is that he will experience a welfare gain when the economy opens up

oil palm adoption household welfare and nutrition among smallholder farmers in indonesia summary oil palm is one of the most rapidly expanding crops throughout the humid tropics in indonesia the expansion is largely driven by smallholder farmers while recent research has studied effects for the environment and climate change socioeconomic impacts in the small farm sector have hardly been analyzed here we address this research gap by analyzing effects of oil palm adoption on farm household living standards and nutrition in sumatra using survey data and econometric models we estimate average impacts impact pathways and impact heterogeneity results show that oil palm adoption improves household living standards and nutrition mean impacts on food and non food expenditures as well as on calorie consumption and dietary quality are all positive and significant a sizeable part of the total effects is attributable to oil palm adopters expanding their farm size rather than realizing higher profits per hectare oil palm has lower labor requirements than alternative crops especially rubber so that adopting farmers are able to manage larger land areas labor saved through switching from rubber to oil palm is also used to increase off farm incomes impact heterogeneity is analyzed with quantile regressions we find positive effects of oil palm adoption across the entire expenditure distribution however the absolute gains in total expenditures and non food expenditures are larger for the better off suggesting that oil palm may contribute to rising inequality

production factor returns the role of factor utilization abstract short term increasing returns to production factors are usually found in empirical studies we argue they can be due to omitted variables particularly the intensity of factor utilization thanks to original french firm level data 1992 2008 we show how increasing returns to scale disappear when working time capacity utilization rate and particularly capital operating time are introduced in the production function

global inequality when unequal countries create unequal people abstract current global inequality measures assume that national mean income does not matter to economic welfare at given household income as measured in surveys the paper questions that assumption on theoretical and empirical grounds and finds that prominent stylized facts about global inequality are not robust at one extreme theories of relative deprivation yield nationalistic measures whereby global inequality is average within country inequality which is rising however other theories and evidence point instead to the benefits of living in a richer country parameter values consistent with research on global subjective wellbeing imply higher inequality than prevailing measures though falling since 1990

income redistribution going awry the reversal power of the concern for relative deprivation abstract we demonstrate that a rank preserving transfer from a richer individual to a poorer individual can exacerbate income inequality when inequality is measured by the gini coefficient this happens when individuals preferences depend negatively not only on work time effort but also on low relative income it is rigorously shown that the set of preference profiles that gives rise to this perverse effect of a transfer on inequality is a non empty open subset of all preference profiles a robust example illustrates this result

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

wealth natural capital and sustainable development contrasting examples from botswana and namibia theoretical work has demonstrated that sustainable development requires non declining per capita wealth where wealth is defined to include produced natural human and social capital several studies have attempted to measure total national wealth or changes in wealth but have been seriously hampered by a lack of data especially for natural and human capital to address this problem the un and other international statistical agencies developed a standardized framework for environmental accounts the system of integrated environmental and economic accounts seea using the newly available asset accounts for natural capital national wealth accounts are constructed and used to assess the contrasting development paths of botswana and namibia botswana with an explicit policy of reinvestment of resource rents has roughly tripled per capita wealth and national income over the past two decades namibia with no explicit policy to use natural capita to build wealth has seen per capita wealth and income decline

understanding urban wage inequality in china 1988 2008 evidence from quantile analysis this paper examines change in wage gaps in urban china from 1988 to 2008 by estimating quantile regressions on chips data it applies the machado and mata 2005 decomposition finding sharp increases in inequality largely due to changes in the wage structure during 2002 08 changes in the returns to education and experience have been equalizing however changes in other categories of wage differential by sex occupation ownership industrial sector and province widened inequality the gender gap continued to rise as did the gap between white collar and blue collar workers and between manufacturing and other sectors

people do not adapt new analyses of the dynamic effects of own and reference income on life satisfaction abstract do people adapt to changes in income in contradiction to much of the previous literature i find no evidence of adaptation to income in gsoep 1984 2015 and ukhls 1996 2017 data furthermore i find that people also do not adapt to changes in reference income instead reference income effects may be subject to reinforcement over time following the empirical approach of vendrik 2013 i obtain these findings by estimating life satisfaction equations in which contemporaneous and lagged terms for a respondent s own household income and their estimated reference income are simultaneously entered additionally i instrument for own income and include lags of a large set of controls what was found to be adaptation to raw household income in previous studies turns out to have been driven by reinforcement of an initially small negative effect of household size that grows large over time implications of this result for the estimation of equivalence scales with subjective data are discussed

foreign direct investment and income inequality in mexico 1990 2000 in this article we explore the relationship between the investments of multinational corporations foreign direct investment and income inequality in mexico we argue that mexico s liberalization of foreign direct investment fdi inflows in the 1990s provides a natural experiment to test how fdi affects income inequality in a middle income country we use an instrumental variables approach as our identification strategy to mitigate problems of endogeneity and omitted variable bias in an empirical test of the determinants of changes in income inequality from 1990 to 2000 we find that increased fdi inflows are associated with a decrease in income inequality within mexico s thirty two states the authors would like to thank lawrence broz john freeman matt gabel geoff garrett quan li eddy malesky layna mosley katie ridgeway pablo pinto john stringer and andy sobel for comments and suggestions jacob gerber and mariana medina provided excellent research assistance thanks also to patricio aroca gonzalez for generously providing us with his data we acknowledge the financial support of the weidenbaum center on the economy government and public policy nate jensen s contribution to this article was written as a global fellow at ucla s international institute

the impact of rural urban migration on subjective well being in south africa abstractthis paper quantifies the short to medium term impact of rural urban migration on an individual s subjective well being in south africa between 2008 and 2012 we work through different econometric specifications using instrumental variables to control for endogeneity caused by shock induced self selection and propensity score matching to control for migration self selection bias we find that rural urban migration leads to a decrease in subjective well being by 8 3 per cent we suspect that the decreased well being is a result of false expectations and changing relative groups used to peg aspirations as well as the emotional cost of being away from family and a home environment

climate change and labour allocation in rural mexico evidence from annual fluctuations in weather this paper evaluates the effects of annual fluctuations in weather on employment in rural mexico to gain insight into the potential labour market implications of climate change using a 28 year panel on individual employment we find that years with a high occurrence of heat lead to a reduction in local employment particularly for wage work and non farm labour extreme heat also increases migration domestically from rural to urban areas and internationally to the u s a medium emissions scenario implies that increases in extreme heat may decrease local employment by up to 1 4 and climate change may increase migration by 1 4 this article is protected by copyright all rights reserved

symmetric tragedies commons and anticommons an anticommons problem arises when there exist multiple rights to exclude in a lengthy law review paper michael a heller has examined the tragedy of the anticommons especially in regard to disappointing experiences with efforts to shift from socialist to market institutions in russia in an early footnote heller suggests that a formal economic model of the anticommons has not been developed this paper responds to heller s challenge we analyze the anticommons problem in which resources are inefficiently underutilized rather than overutilized as in the familiar commons setting the two problems are shown to be symmetrical in several respects we present an algebraic and geometric illustration and extend the discussion to several applications of greater importance we suggest that the construction is helpful in understanding the sources of major value wastage in modern regulatory bureaucracy the navigation of the danube is of very little use to the different states of bavaria austria and hungary in comparison of what it would be if any of them possessed the whole of its course till it falls into the black sea adam smith the wealth of nations 1776 bk 1 ch 3

the inclusive wealth index a critical appraisal abstract among recent high profile propositions to revise national accounts and to provide new indicators of sustainability and well being the inclusive wealth framework and the related inclusive wealth index iwi undoubtedly stand out as one of the most promising endeavours built up at the confluence of welfare development and sustainability economics the indicator has been designed to bring information about the wealth of nations and their sustainability in a comprehensive way the inclusive wealth framework is nevertheless fraught with limitations due to questionable theoretical assumptions gaps in data availability unrealistic assumptions about the future and inability to account for distributional issues we propose a non exhaustive critical appraisal of the index and its underlying framework we conclude that these limitations undermine its capacity to fulfil the requirements of a satisfactory sustainability indicator we argue that most problems lie in the substantial discrepancy between the inclusive ambition of the indicator and the scarce means to implement it whereas the interconnectedness of the various assets that constitute wealth as well as their complex evolution through time are acknowledged by the proponents of inclusive wealth the way the iwi is computed is rather a mere addition of layers of actuarial like monetary values for a not inclusive yet range of capital assets caution is thus warranted while using such an approach and shorter range alternatives to pursue similar goals are proposed

immigration and inequality immigration is often viewed as a proximate cause of the rising wage gap between highand low skilled workers nevertheless there is controversy over the appropriate theoretical and empirical framework for measuring the presumed effect and over the precise magnitudes involved this paper offers an overview and synthesis of existing knowledge on the relationship between immigration and inequality focusing on evidence from cross city comparisons in the u s while some researchers have claimed that a cross city research design is inherently flawed i argue that the evidence from cross city comparisons is remarkably consistent with recent findings based on aggregate time series data in particular cross city and aggregate time series comparisons provide support for three key conclusions 1 workers with below high school education are perfect substitutes for those with a high school education 2 high school equivalent and college equivalent workers are imperfect substitutes with an elasticity of substitution on the order of 2 3 within education groups immigrants and natives are imperfect substitutes together these results imply that the average impacts of recent immigrant inflows on the relative wages of u s natives are small the effects on overall wage inequality including natives and immigrants are larger reflecting the concentration of immigrants in the tails of the skill distribution and higher residual inequality among immigrants than natives even so immigration accounts for a small share 5 of the increase in u s wage inequality between 1980 and 2000

undocumented mexico u s migration and the returns to households in rural mexico this paper presents estimates of net income gains to a sample of households in rural mexico from sending migrants illegally to the united states correcting for sample selectivity bias and it examines the role of expected income gains in driving illegal mexico u s migration there is no evidence that people who migrate illegally to the united states are above average contributors to household income either as workers in mexico or as mexico u s migrants however other things being equal villagers who are in the best position to contribute to household income as workers in mexico are positively selected not to migrate to the united states

job satisfaction and preference drift most empirical studies do not find that higher wages lead to more job satisfaction in this paper we argue that the insignificant effect of wages on job satisfaction is due to preference drift we adapt the standard ordered response model to allow for preference shifts the empirical results support the hypothesis of preference drift in job satisfaction

migration incentives migration types the role of relative deprivation the authors explore the role of relative deprivation versus absolute income as an incentive for migration in developing countries in section i of this paper we outline the relative deprivation model of migration and present an illustration of the divergent policy implications of a relative deprivation model versus an absolute income model an attempt is made to identify distinct empirical implications of relative and absolute income motives for migrating in section ii a migration decision model is estimated and is used to explore absolute and relative income motives for internal and international migration in a sample of rural mexican households as well as to test the extent to which discontinuity in labour markets shapes the choice of migrant destination in section iii we present our conclusions excerpt