forest incomes and rural livelihoods in chiradzulu district malawi abstract this paper examines forest income among rural dwellers in one of malawi s most densely populated districts chiradzulu 160 households were interviewed in two sites only 20 km apart purposely selected on the basis of access to a forest reserve people are extremely poor with 97 having incomes of less than 1 usd day forest income constitutes around 15 of total income only non farm income 47 and agriculture 28 rank higher the poorest segment depends more on forest income than the least poor group but the medium income group exhibits the highest dependence fuelwood constitutes the major source of such income followed by fodder the incomes mainly support current consumption people with better access to the forest reserve have higher total income forest income and relative forest income as revealed through a gini coefficient analysis forest resources have an important income equalizing effect across rural households a particular group of resource poor farmers 8 1 of sample with little access to agricultural land and a high representation of female heads derives an average of 65 of their income from the forest an important policy lesson is that restricting people s access to forest resources can have substantial effects on household livelihoods and welfare and would serve to increase income inequalities in the area livelihood researchers should now recognize the substantial income from forest resources

the effective tax rate and the pretax rate of return abstract this paper presents new estimates of the taxes paid on nonfinancial corporate capital on the pretax rate of return to capital and on the effective tax rate the basic time series show that both the pretax rate of return and the effective tax rate have varied substantially in the past quarter century an explicit analysis indicates that after adjusting for different aspects of the business cycle pretax profitability was between one and 1 5 percentage points lower in the 1970s than in the 1960s the rate of profitability in the 1960s was also about one half of a percentage point greater than the profitability in the 7 years of the 1950s after the korean war changes in productivity growth in inflation in relative unit labor costs and in other variables are all associated with changes in profitability none of these variables however can explain the differences in profitability between the 1950s 1960s and 1970s looking at broad decade averages the effective tax rate and the pretax rate of return move in opposite directions lower pretax profits occuring when the tax rate is high there thus appears to have been no tendency for pretax profits to vary in a way that offsets differences in effective tax rates

does microfinance change informal lending in village economies evidence from bangladesh this paper examines how availability of microfinance influences households borrowing from informal sources in village economies it uses a unique household level panel data set which spans more than two decades 1987 2008 from rural bangladesh we find that households access to microfinance reduces the incidence of borrowing from informal sources but not the amount of borrowing we find that less poor households benefit more in terms of reducing their reliance on informal borrowing and that the benefit accrues over time we also find that having access to microfinance increases women s informal borrowing for small consumption usage without facilitating access to new business opportunities

intertemporal production and intertemporal substitution in output supply and input demand abstractthis article presents an intertemporal model of production with multiple inputs to investigate substitution opportunities facing firms over time the firm s intertemporal profit maximization problem is characterized with the familiar cost function and various intertemporal substitution elasticities are delineated for output supply and input demand the absence of intertemporal substitution in production can imply production smoothing and allowance for intertemporal substitution in labour demand reinforces the prediction of the real business cycle model for aggregate us manufacturing we find substantial substitution in output supply and labour demand over time due to intertemporal changes in output price and wage rates

intertemporal labor supply and long term employment contracts the authors compare the implications of a symmetric information contracting model and a dynamic labor supply model for changes in earnings and hours a simple test is whether earnings changes are more variable than hours changes as predicted by the labor supply model or less variable as predicted by the contracting model the authors apply this test to two longitudinal surveys of adult men and find that earnings are somewhat more variable than hours for men who never change employers the estimates suggest that changes in earnings and hours not associated with survey measurement error occur at fixed wage rates copyright 1987 by american economic association

a model of labor supply fixed costs and work schedules abstract to analyze labor supply allocations we propose a three dimensional labor supply framework that distinguishes between hours worked per day days worked per week and workweeks individuals make labor supply choices given heterogeneous schedule dependent fixed costs of work the three margins are not perfect substitutes leisure on days not worked in a workweek has the largest weight in preferences leisure on weeks off has the smallest weight we use the model to analyze heterogeneous response to changes in fixed costs schedule flexibility and restrictions on weekly hours fixed costs of work affect response to each policy and determine associated losses

a cross country comparison of rural income generating activities summary this paper uses a newly constructed cross country database composed of comparable income aggregates to examine the full range of income generating activities carried out by rural households the analysis paints a clear picture of multiple activities across rural space in countries on all four continents though less so in the included african countries for most countries the largest share of income stems from off farm activities and the largest share of households has diversified sources of income diversification not specialization is the norm nevertheless agricultural sources of income remain critically important for rural livelihoods in all countries

on intertemporal substitution and aggregate labor supply in this paper the author presents an econometric investigation of t he implications of the intertemporal substitution hypothesis for aggregate employment in the united states the tests are based on a version of the hypothesis with time separable preferences on the basis of the evidence produced the hypothesis is quite successful in explaining fluctuations in aggregate employment although almost totally unsuccessful in accounting for fluctuations in employee hours these findings suggest that the hypothesis might have an important role to play in macroeconomic modeling although they contradict attempts to account for aggregate fluctuations solely in terms of continuous competitive equilibrium in labor markets copyright 1987 by university of chicago press

new evidence on labor supply employment versus hours elasticities by sex and marital status using the tri annual micro panel data of the survey of income and program participation we estimate fixed effects labor supply models separating the extensive and intensive margins the employment elasticity is 0 6 for single men versus 1 1 for married men the employment elasticity is 2 4 for single women versus 1 8 for married women the compensated hours worked elasticity is 0 4 for employed single and married men and 0 7 for employed single and married women the implied aggregate employment elasticity of 1 5 and hours per employee elasticity of 0 5 indicate employment fluctuations account for three fourths of wage induced variation in labor hours

the economics of poverty traps and persistent poverty an asset based approach abstract longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty while a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty this paper develops an asset based approach to poverty analysis that makes it possible to distinguish deep rooted persistent structural poverty from poverty that passes naturally with time due to systemic growth processes drawing on the economic theory of poverty traps and bifurcated accumulation strategies this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term persistent structural poverty as well as relevant extensions of the popular foster greer thorbecke class of poverty measures the paper closes with reflections on how asset based poverty can be used to underwrite the design of persistent poverty reduction strategies

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

exposure to intimate partner violence and repayment of microcredit evidence from field experiments in bangladesh abstract this paper investigates the impact of intimate partner violence on poor women s repayment behavior in microcredit in a laboratory based field experiment we extended collateral free small loans to 485 currently married women in rural bangladesh and observed their repayment decisions over multiple loan cycles in a post experiment survey we asked subjects about their experience of spousal violence we find that women who experienced physical or sexual violence in the last 12 months are more likely to strategically default on their loans relative to those who did not experience such violence we conducted several robustness tests and the results suggest that the negative correlation between victimization and loan repayment rates is unlikely to be explained by selection into victimization non random underreporting of violence or the subjects attitude toward risk

money and the business cycle with one period nominal contracts a modified version of the nominal contract developed by j a gray 1976 and s fischer 1977 is introduced in a general equilibrium model with money which has been used in the real business cycle literature money is introduced in the model through cash in advance constraint two kinds of contracts are examined namely a nominal wage contract and a nominal price contract the nominal wage contract improves the fit of the model in many respects the nominal price contract increases the output volatility enormously but it has some unrealistic features

weekly employee hours weeks worked and intertemporal substitution abstract we show that the representative consumer model fits the aggregate consumption and employment data well if a choice of work is allowed both at the intensive and extensive margins the structural preference parameters recovered from the estimation of the euler equations of the model are economically meaningful and the null hypothesis of the overidentifying restrictions implied by our model is far from being rejected we find that the shares in preferences associated with leisure time in the weeks off and in the workweeks are quite large and about equal our estimates also uncover relatively large intertemporal substitution elasticities

on the possibility of an inverse relationship between tax rates and government revenues abstract when arthur laffer and other supply side advocates plot total tax revenue as a function of a particular tax rate they draw an upward sloping segment called the normal range followed by a downward sloping segment called the prohibitive range a brief literature review indicates that tax rates on the prohibitive range in theoretical and empirical models have been the result of particularly high tax rates high elasticity parameters or both the labor tax rate which maximizes total revenue for example will depend on the assumed labor supply elasticity this paper introduces a new curve which summarizes the tax rate and elasticity combinations that result in maximum revenues separating the normal area from the prohibitive area a general purpose empirical u s general equilibrium model is used to plot the laffer curve for several elasticities and to plot the newly introduced curve using the labor tax example results indicate that the u s could conceivably be operating in the prohibitive area but that the tax wedge or labor supply elasticity would have to be much higher than most estimates would suggest

dea and sfa research on the efficiency of microfinance institutions a meta analysis microfinance has played a key role in the fight against exclusion and the promotion of entrepreneurship in developing countries an important question today is how to increase the reach and profitability of microfinance in a context where subsidies are withdrawing to promote the viability and sustainability of microfinance institutions mfis efficiency analysis has found favor in this context and has attracted growing interest among professionals partners and researchers abundant empirical work has been conducted over the last ten years on this subject in very different contexts and with different methodologies the purpose of this article is to provide a meta regression analysis on parametric and nonparametric estimations of mean technical efficiency mte in microfinance using a data set of 262 observations from 38 studies the results show that in the microfinance industry mte scores have increased over time however with an mte rate of approximately 61 1 there is room for improving efficiency mfis use more resources than necessary for the results achieved in terms of outreach and revenue generated our results show heterogeneity of mte according to the methodological approach of the studies studies with a larger number of variables inputs and outputs produced higher mte scores than did those with a smaller number of variables studies using the variable returns to scale assumption resulted in higher mte scores than those using constant returns to scale in addition those with a production approach had higher mtes than did those using the intermediation approach while studies of a large number of mfis had lower scores than did those involving a small sample size moreover research estimating social efficiency generated lower mtes compared to those estimating financial efficiency studies using data from african mfis obtained lower mtes than did those on mfis in latin america and mena which confirms the poor performance of african microfinance

the labour market in an equilibrium business cycle model abstract this paper extends the basic multimarket model of lucas 1973 to explicitly consider the labour market it builds on an important distinction between the product wage entering the decision function of firms and the real wage entering the decision function of workers because of the unobservability of the price level workers make forecasting errors in trying to calculate their real wage despite having rational expectations this gives rise to a phillips curve the major new result of the paper is the demonstration that wages are less variable than prices which offers an equilibrium interpretation of wage stickiness

the dominance of inefficiencies over scale and product mix economies in banking abstract this study measures and analyzes inefficiencies for all u s banks in 1984 inefficiencies are measured relative to a thick frontier cost function and are found to dominate measured scale and product mix economies most inefficiencies are operational in nature involving the overuse of physical inputs rather than financial involving overpayment of interest also technical inefficiencies proportionate overuse of all inputs dominate allocative inefficiencies improper mix of inputs these results suggest that competitive pressures in banking from deregulation will be focused primarily on banks that do not control costs rather than on those of a particular size or product mix

how well have social economy financial institutions performed during the crisis period exploring financial and social efficiency in spanish credit unions as social economy financial institutions credit unions have traditionally been considered less efficient than traditional banking entities however like banks and savings banks they have to be as efficient and competitive as possible to survive in today s business environment especially at times of crisis to date there have been very few studies on their efficiency and practically none for the crisis period moreover almost all the existing studies assess only financial efficiency without considering their social function this study examines the levels of both financial and social efficiency in spanish credit unions as well as their main determinants during the recent crisis we apply the two stage double bootstrap data envelopment analysis dea methodology based on panel data corresponding to all the credit unions active in spain between 2008 and 2013 the empirical results indicate that financial and social efficiency achieved an acceptable level although on average the former was slightly greater than the latter we also find that both age and merger and acquisition activity were positively influential on the financial efficiency of credit unions but had a significant negative effect on their social efficiency moreover the regional location of such entities and the financial crisis were also crucial determinants of both types of efficiency our findings are therefore useful for all the stakeholders of credit unions to know if these entities have been efficient according to a double bottom line accounting in the crisis period and hence to maintain successful social management that is compatible with satisfactory financial efficiency

output effects of government purchases the theoretical analysis focuses on the distinction between temporary and permanent movements in government purchases under plausible conditions the temporary case involves an output response that is positive less than one to one with the change in government purchases and larger than that generated by an equal sized but permanent shift in purchase the equilibrium real rate of return rise in the temporary case but changes little in the permanent one defense purchases are divided empirically into permanent and temporary components by considering the role of temporary wars no temporary shifts in nondefense purchases were isolated empirical results verify an expansionary output effect for temporary purchases that exceeds that of permanent purchases the results for some other expectational hypotheses are found to be generally supportive of the theory

testing between competing models of real business cycles this paper tests a real business cycle model with efficient long term labor contracts the efficient long term contract model against a standard real business cycle model the intertemporal substitution model in the former model employment and real wages are determined by bilateral dynamic bargaining between firms and workers in the latter model employment and real wages are determined instead by the dynamic optimization of households within the competitive market framework we estimate each model using aggregate japanese data our results show that the data are consistent with the efficient long term contract model but are inconsistent with the intertemporal substitution model a business cycle phenomenon is typically found in time series data on employment and real wages according to the data of almost all developed countries employment fluctuations are considerably greater than wage fluctuations many recent economic studies have attempted to explain this phenomenon most of these studies fall into the equilibrium business cycle theory in which business cycles are the result of individual agents optimizing in a competitive environment among the most famous early examples of such a theory are the rational expectations general equilibrium models of lucas 1972 and barro 1976 which stress the role of nominal shocks in the presence of imperfect information more recently the predominant equilibrium business cycle theory has been the real business cycle model of kydland and prescott 1982 long and plosser 1983 and king and plosser 1984 which emphasizes the importance of real shocks to production technology real business cycle theory considers a model economy populated by a single infinitely lived individual with given initial resources production possibilities and tastes the representative individual chooses a preferred consumption production plan and the resulting allocation is pareto optimal the implications of real business cycle theory are thus derived from the pareto optimal equilibrium allocation as calculated from the planning problem of a social planner or representative agent a policy implication of this theory is that monetary policy has no significant effect

what has been learned about labor supply in the past twenty years the main advance in the study of labor supply in the past 20 years has come in recognizing and interpreting the variety of different labor supply functions that coexist in the empirical literature a crucial theoretical distinction with important empirical payoff is that between labor supply choices at the extensive margin i e labor force participation and employment choices and choices at the intensive margin i e choices about hours of work or weeks of work for workers another important distinction is the one between a descriptive labor supply function and a structural supply function that can be the basis for out of sample policy investigations concerning responses to tax and welfare programs and evaluations of welfare losses a full understanding of the participation hours dichotomy leads to an appreciation of the importance of the problem of selection bias what is the wage to impute to a nonworking person these distinctions are a legacy of the research conducted on labor supply over the past 20 years many important empirical questions have been addressed i how strong are the effects of taxes welfare and transfer programs on labor supply ii how important is intertemporal substitution can life cycle labor supply models explain business cycle labor supply behavior iii has the consensus view of the 1960 s of high labor supply elasticities for married women and low labor supply elasticities for married men held up all of the empirical evidence assembled on labor supply must be called into question in the light of important research on the basic quality of the data conducted by analysts at the university of michigan i discuss this evidence in a concluding section except for my discussion of measurement issues i focus only on the major discoveries about which a general consensus has emerged

intertemporal substitution and λ constant comparative statics abstract this paper characterizes intertemporal substitution along intertemporal consumption profiles a precise definition of the intertemporal elasticity of substitution is presented and compared to intertemporal analogs of the hicks allen and direct elasticities of substitution and the marginal utility of wealth or constant own price elasticity of demand in a model with perfect foresight i establish that constant comparative statics accurately characterizes intertemporal substitution if and only if lifetime utility is intertemporally additive i also demonstrate the usefulness of constant comparative statics in characterizing intertemporal substitution in models without time separability or perfect foresight

performance and governance in microfinance institutions accepted version of article published in the journal journal of banking finance published version available on science direct http dx doi org 10 1016 j jbankfin 2008 11 009

the intertemporal substitution model of labour market fluctuations an empirical analysis the paper uses two approaches to study whether aggregate fluctuations in employment and unemployment may be explained within a market clearing framework as intertemporal substitution in labour supply first log linear equations for labour supply and unemployment are estimated using a forecasting model to measure wage and price expectations second a utility function is used to derive and estimate an equation for labour supply as a function of the current real wage and consumption the influence of expected future real wages and interest rates is captured by the consumption variable the empirical results do not support the intertemporal substitution model

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

unemployment and other measures of labor market inefficiency a comparison of u k and u s labor markets 1931 96 unemployment is probably the most widely feared phenomenon of our times it represents an enormous waste of human resources reflects an important degree of inefficiency in economic systems and causes a disturbing degree of social distress organisation for economic co operation and development oecd 1994 pp 4 6 i introduction unemployment is undoubtedly one of the most researched areas of economics determinants of the number of unemployed and duration of unemployment the role of unemployment on the depreciation of human capital and on general life satisfaction the interrelationship of unemployment and inflation and unemployment and output okun s law and policies to reduce or even eliminate unemployment are just a few of the areas of research on unemployment the underlying assumption in many studies on unemployment is that there is a very close correspondence between unemployment and labor market inefficiency as witnessed in the quote by the oecd just given although rarely if ever stated there is also the assumption that a given unemployment rate indicates similar levels of inefficiency either across time and or regions or countries unfortunately and somewhat surprisingly this assumption has not been tested thus far 1 given the importance of comparisons of unemployment on the direction of macroeconomic policy of governments it is very important to determine whether unemployment is indeed a good proxy for labor market inefficiency the goal of the article therefore is to examine this issue thus we pose the following key questions 1 to what degree do unemployment rates reflect labor market efficiencies 2 if the goal is to measure relative labor market inefficiency is it meaningful to compare unemployment rates over time and 3 to what degree do differences in unemployment rates across countries reflect differences in labor market inefficiencies basic economic theory shows that inefficiency in any market depends not only on the wedge between supply and demand but also on the elasticities of demand and supply the calculation of so called harberger triangles harberger 1954 of deadweight loss dwl which has a long history in the industrial organization and public finance literatures indicates that for a given wedge between supply and demand the dwl can be very different depending on the elasticities of supply and demand interestingly however studies examining the costs of unemployment do not focus on this basic view of welfare loss studies such as gordon 1973 ahsenfelter 1980 hurd 1980 clark and oswald 1994 murphy and topel 1997 and leslie and blackaby 1999 among others examine the costs of unemployment from an individual perspective but do not measure inefficiency from a market perspective which is the focus of the harberger triangles except for a publication by fortin and bernier 1988 2 we know of no other application of calculating harberger triangles to determine the level of inefficiency in the labor market therefore this article uses labor market data from 1931 to 1996 in the united states and united kingdom to calculate the dwl of unemployment and then compares the estimates of dwl to the unemployment rate to determine how closely related inefficiency and unemployment are 3 the following section investigates the theoretical relationships between unemployment labor supply and demand elasticities and dwl from this discussion we propose two alternative measures of inefficiency the first is the unemployment loss index dwl divided by gross domestic product gdp which indicates how large labor market inefficiency is relative to total output in the economy the second measure is dwl per unemployed person a measure of the potential average gains to employing an unemployed individual section iii outlines the data and methodology used to estimate the elasticities of labor supply and labor demand over time in the united states and united kingdom allowing for changes in the elasticities over time

a simple nonadditive preference structure for models of household behavior over time intertemporal separability is an almost universal assumption in empirical work on household behavior but a good deal of recent work on consumption and labor supply suggests that it may not be tenable the traditional weakening of this assumption is to allow for habit formation i propose an alternative structure for intertemporal preferences that nests intertemporal additivity in a simple way and yields closed form solutions for demand functions this structure includes the neoclassical durables model as a special case i derive a demand system that nests the almost ideal system as its time separable counterpart this model is estimated on u k aggregate time series data for seven goods time separability is decisively rejected moreover i find that ignoring temporal dependencies leads to considerable bias in the estimates of elasticities of the seven goods durables display the strongest nonseparable effect the estimated reactions are consistent with the neoclassical durables model

on testing the intertemporal substitution theory of labor supply many empirical tests of the intertemporal substitution theory of labor market fluctuations have assumed that shocks to the labor demand curve are the sole source of variance in hours and wages we show that conclusions based on these tests are very sensitive to small deviations from this extreme case using data generated by a standard real business cycle model we show that standard methods incorrectly reject the intertemporal substitution theory even when demand curve shocks account for over 90 of the variance in wages and hours

environmental and market determinants of economic orientation among rain forest communities evidence from a large scale survey in western amazonia abstract large scale surveys of rain forest livelihoods open up new possibilities for understanding the role of forest resources in the well being of forest peoples but often overlook the factors that influence the diverse economic foci of forest based communities in this paper we describe the peruvian amazon rural livelihoods and poverty parlap project which seeks to identify the factors that contribute to rural poverty among indigenous and folk peoples through the first large scale survey conducted in this data poor region our paper draws upon a community census undertaken in four major river sub basins in eastern peru n 919 communities and asks the question how do environmental and market factors influence the economic orientation of rain forest communities recognizing that standard approaches that explain activity choice by current conditions are problematic because of potential endogeneity we propose a new analytical framework that examines how historical initial conditions determine current conditions and thus current economic activities our approach produces a rich array of results that point to the importance of initial environmental endowments and market access of communities in shaping their economic orientation interacting in different ways depending on the key natural resource upon which they rely

economic shocks diversification and forest use in uganda we investigate household outcomes arising from economic shocks in rural uganda focusing on patterns of income diversification and forest use and the role of assets in shaping ex post response to shocks income poor households and those with below average landholdings are observed to have more diversified income portfolios than their cohorts households encountering above average losses tend to have more diversified income portfolios subsequent to the losses larger negative shocks are associated with greater use of the forest in subsequent periods especially among asset poor households findings suggest that development of better safety nets would reduce both vulnerability and forest pressure

the economic importance of non timber forest products ntfps for livelihood maintenance of rural west african communities a case study from northern benin non timber forest products ntfps contribute significantly to a rural household s livelihood in the african semi arid tropics this study examines the income from ntfps and the dependency on these of different socio economic groups in northern benin using survey data from 230 households of two villages we firstly compared incomes of five different ethnic groups being differentiated by their traditional source of livelihood and regional provenance secondly we investigated disparities between three income groups on average income from ntfps accounted for 39 of total household income and had a strong equalizing effect on it however the economic relevance of ntfps differs between households poorer households are relatively more dependent on ntfps in order to fulfill basic needs than wealthier households however the latter extract more ntfps in quantitative terms and have significantly higher cash returns than poorer ones this is mainly due to a significant greater land holding moreover our study revealed that net income from ntfps reflects traditional sources of livelihoods of different ethnic groups in conclusion both conservation and development strategies should take into consideration the socio economic context of different beneficiaries of savanna woodland resources in order to apply appropriate measures to poverty reduction

the impact of liberalization on the productive efficiency of indian commercial banks abstract we examine the productive efficiency of 70 indian commercial banks during the early stages 1986 1991 of the ongoing period of liberalization we use data envelopment analysis to calculate radial technical efficiency scores we then use stochastic frontier analysis to attribute variation in the calculated efficiency scores to three sources a temporal component an ownership component and a random noise component we find publicly owned indian banks to have been the most efficient followed by foreign owned banks and privately owned indian banks we also find a temporal improvement in the performance of foreign owned banks virtually no trend in the performance of privately owned indian banks and a temporal decline in the performance of publicly owned indian banks we attempt to explain these patterns in terms of the government s evolving regulatory policies

comparative dynamic analysis of the full grossman model the paper applies the method of comparative dynamic analysis to the full grossman model for a particular class of solutions it derives the equations implicitly defining the complete trajectories of the endogenous variables relying on the concept of frisch decision functions the impact of any parametric change on an endogenous variable can be decomposed into a direct and an indirect effect the focus of the paper is on marginal changes in the rate of health capital depreciation it also analyses the impact of either initial financial wealth or the initial stock of health capital while the direction of most effects remains ambiguous in the full model the assumption of a zero consumption benefit of health is sufficient to obtain a definite for any direct or indirect effect

environmental income and rural livelihoods a global comparative analysis this paper presents results from a comparative analysis of environmental income from approximately 8000 households in 24 developing countries collected by research partners in cifor s poverty environment network pen environmental income accounts for 28 of total household income 77 of which comes from natural forests environmental income shares are higher for low income households but differences across income quintiles are less pronounced than previously thought the poor rely more heavily on subsistence products such as wood fuels and wild foods and on products harvested from natural areas other than forests in absolute terms environmental income is approximately five times higher in the highest income quintile compared to the two lowest quintiles

can a real business cycle model pass the watson test abstract watson 1993 measures of fit for calibrated models journal of political economy 101 6 1011 1041 proposes a procedure for evaluating the fit of a dynamic equilibrium business cycle model under watson s criterion the standard real business cycle rbc model fails dramatically in reconciling the dynamics of the model with the data this inability to account for the dynamics of us aggregate data remains a major challenge to rbc theory this paper demonstrates that reasonable modifications can bring rbc theory into closer conformity with the data the empirical results indicate that when habit formation on leisure choice and employment externality are incorporated into the analysis the striking spectral density differentials documented by watson virtually vanish at business cycle frequencies

intertemporal substitution in labor supply evidence from micro data the sensitivity of the supply of labor to intertemporal variation in the wage is an important issue in macroeconomics the analysis of social security and pensions and the study of life cycle patterns of work this paper explores two approaches to the measurement of intertemporal substitution that have appeared in the literature the first approach is to use consumption to control for wealth and unobserved expectations about future wages in the labor supply equation the second approach is to estimate a first difference equation for hours in which labor supply from the previous period serves as a control for wealth and wage expectations the results indicate that intertemporal substitution elasticity for married men is positive but small

ownership and technical efficiency of microfinance institutions empirical evidence from latin america by using stochastic frontier analysis this article examines the technical efficiency of different types of microfinance institutions in latin america in particular it tests whether differences in technical efficiency both intra and interfirm can be explained by differences in ownership with a focus on non governmental organizations cooperatives and credit unions non bank financial intermediaries and banks the data set contains 1681 observations from a panel of 315 institutions operating in 18 latin american countries the results show that non governmental organizations and cooperatives have much lower interfirm and intrafirm technical efficiencies than non bank financial intermediaries and banks which indicates the importance of ownership type for technical efficiency

determinants of the performance of microfinance institutions a systematic review microfinance institutions mfis generally aim at improving the access of the poor to financial services while at the same time being financially sustainable but what do we know about how mfis reach and combine these two goals we carry out a systematic review of close to 170 papers discussing the determinants of the financial and social performance of mfis the review shows that the most important determinants addressed in the literature are mfi characteristics size age and type of organization their funding sources the quality of organizational governance and the mfis external context such as macro economic institutional and political conditions the evidence on these issues is rather mixed moreover the direction of the relationship between these drivers and mfi performance depends on the context particularly the country specific context finally there is a lack of consensus in the literature on the measurement of financial and social performance due to the complexity of the concept we argue that social performance should only be assessed by using a multidimensional perspective this can be done either by applying recent and holistic social performance measures such as the spi4 or at least by using a combination of proxies such as outreach gender and rural measures

the challenge of rural financial inclusion evidence from microfinance financial inclusion is said to foster development and growth however progress in financial inclusion has been slow in rural areas where poverty is most pronounced this is often attributed to hig

on gradual disinflation the real exchange rate and the current account abstract we study the effects of a credible gradual exchange rate based disinflation program in a two sector economy after an initial exchange rate depreciation the reductions in the rate of devaluation reduce the monetary wedge generated by the cash in advance constraint leading to a gradual increase in absorption that yields progressive real exchange rate appreciations and current account deficits an initial boom in economic activity is not followed by a later contraction as labour supply expands during the whole length of the program many of the model s predictions are in accordance with the stylized facts on disinflation in chronic inflation countries in particular those of the mexican program of 1988 1992

efficiency in the savings and loan industry abstract the stochastic econometric cost frontier approach is modified to investigate efficiency in mutual and stock s ls using 1991 data on u s s ls this methodology allows both the cost frontier and error structures to differ between s ls of these two ownership forms a likelihood ratio test indicates that the data support this unrestricted model which implies efficient mutual and stock s ls use different production technologies various measures of inefficiency show that on average stock s ls are less efficient than mutual s ls the second part of the article relates the inefficiency measures to several correlates

safety nets gap filling and forests a global comparative perspective summary in the forest livelihoods literature forests are widely perceived to provide both common safety nets to shocks and resources for seasonal gap filling we use a large global comparative dataset to test these responses we find households rank forest extraction responses to shocks lower than most common alternatives for seasonal gap filling forest extraction also has limited importance the minority of households using forests for coping is asset poor and lives in villages specialized on forests in particular timber extraction overall forest resources may be less important as a buffer between agricultural harvests and in times of unforeseen hardship than has been found in many case studies 2014 published by elsevier ltd

microfinance institutions transparency in sub saharan africa this study analyses the impact of the ownership structure and macro level factors on microfinance institutions mfis transparency in sub saharan africa ssa using cross sectional data from 223

one kind of freedom poverty dynamics in post apartheid south africa abstract a 1993 south african living standards survey documented the legacy of apartheid in the form high levels of inequality and human insecurity drawing on a 1998 re survey of households in the 1993 study this paper explores whether this legacy has been superseded or whether apartheid s end has been only one kind of freedom that has left households in a poverty trap from which they cannot escape after proposing a theoretically grounded dynamic poverty typology that distinguishes stochastic from structural poverty transitions the paper goes on to estimate that significant numbers of the south african poor are potentially trapped in a structural poverty trap and lack the means to escape poverty over time

measuring the efficiency cost of taxing risky capital income this paper derives a measure of the efficiency cost of taxing risky capital income in an infinite horizon stochastic model the resulting expression differs from all those proposed in the existing literature the correct measure of efficiency cost will normally be smaller than any of those used in policy studies possibly dramatically so uncertainty changes the expression for efficiency cost through effects arising not only from stochastic capital gains on existing capital but also from stochastic costs of replacing existing capital the latter effect reduces efficiency costs and normally outweighs the first effect copyright 1989 by american economic association

rational habit formation abstract this paper discusses consumer demand under rational habit formation if consumer tastes change endogenously through habit stocks depending on past consumption the rational consumer will make allowance of the future habit forming effects of current consumption a model with rational habit formation is made formally equivalent to an intertemporal consumer model without habit formation by redefining the cost of consumption and wealth the cost of consumption is obtained by adding the cost of future induced consumption to the rental price of the commodity the extended wealth concept is obtained by subtracting the cost of the initial stocks of habits and the cost of future physically necessary consumption from wealth the paper also investigates the implication of rational habit formation for constructing one period cost of living indices

combining income and assets measures to include the transitory nature of poverty in assessments of forest dependence evidence from the democratic republic of congo abstract a considerable amount of research on poverty environment relations in developing countries under the cifor pen initiative focuses on household income generation from forests using total annual income as a measure of poverty however income alone produces a static picture in a snapshot of time while poverty is a dynamic state that can be a transitory phenomenon using income only also fails to consider that households can liquidate asset to overcome income shocks here we show that using asset quintiles measured by value of assets produce a distinctly different pattern than the commonly observed negative relation between income and forest dependence we then present an approach enabling categorization of households as chronic or transient poor transient rich and rich providing a more nuanced picture than that provided by cifor pen studies so far the validity of groupings is tested by comparing household characteristics and exposure to shocks we then show that the chronic poor are most reliant on forest income while the transient poor consume a higher share of harvested forest products the transient rich have higher agricultural productivity and absolute forest income rich households relies more on business based on the results we suggest recommendations for improving future studies on poverty environment relations

vulnerability seasonality and poverty in ethiopia most studies examining the dynamics of welfare have found large fluctuations in consumption over relatively short periods suggesting substantial short run movements in and out of poverty the consequence is that cross section poverty research may not be able to identify the poor in this study we explore this short run variability further we use a data set on a panel of 1450 households in different communities in rural ethiopia surveyed thrice over 18 months on average year to year poverty is very similar however we find high variability in consumption and poverty over the seasons and year by year econometric analysis suggests that consumption is affected by idiosyncratic and common shocks including rainfall and household specific crop failure while households respond to seasonal incentives related to changing labour demand and prices the results imply that a larger number of households are vulnerable to shocks than implied by the standard poverty statistics while some of the non poor in the

the duhem quine thesis lakatos and the appraisal of theories in macroeconomics the point of this paper is to outline the implications of the duhem quine thesis for the task of appraising theories in economics the duhem quine thesis dqfrom now on states that it is not possible to falsify single hypotheses because it is invariably conjunctions of hypotheses which are being tested thus if a particular hypothesis is found to be in conflict with some piece of empirical evidence all that we can say is that the conjunction of the particular hypothesis with a set of auxiliary hypotheses is false we can never be sure that it is not one or more of the auxiliary hypotheses which is responsible for the anomalous empirical evidence rather than the particular hypothesis in which we are most interested expressed in symbols this means that arguments of the form ho 0 0 ho are not justified where ho is a particular hypothesis o is the observational evidence and the symbols and mean imply conjoined with and not instead our arguments can only justifiably be phrased in the form g1 0 0 g1 where g1 is a conjunction of hypotheses which contains ho there could well be some different conjunction of hypotheses gn which contains ho which is consistent with the empirical evidence the contention of this paper is that many of the debates in macroeconomics have been misguided in that the jointness of hypothesis testing has been ignored by participants in the debates instead the focus of attention has been on the appraisal of single target hypotheses considered in isolation from supportive auxiliary hypotheses the implicit assumption being that it is possible to falsify single target hypotheses the latter assumption is wrong following the logic of the dq thesis we are obliged to conduct our appraisal at the level of groupings of hypotheses that is to appraise any target hypothesis in conjunction with its supportive auxiliary hypotheses the implications of this line of reasoning are perhaps best unravelled in the context of concrete examples from debates in macroeconomics over the last two decades before moving to this task we will in section i provide a brief outline of the history of the dq thesis section ii will then illustrate the misguidedness of appraising target hypotheses in isolation from their supportive auxiliary hypotheses with reference to the often heated and continuing debate regarding the stability of the demand for money function the question of how to appraise groupings of hypotheses is considered in section iii here we will centre the

the welfare cost of capital income taxation in a growing economy the welfare cost of capital income taxation is analyzed in a general equilibrium framework where the private sector is represented by a competitive household endowed with perfect foresight and an infinite life the value of the welfare cost depends essentially on the elasticity of substitution between capital and labor in the production function numerical estimates are presented for different values of the parameters of the model the welfare gain obtained by the abolition of the capital income tax is smaller when the private sector is not endowed with perfect foresight it is reduced by about 40 percent when expectations are myopic the allocation efficiency cost of the corporate tax dwarfs the intertemporal welfare cost

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

technical efficiency of european railways a distance function approach this study has two principal objectives the first objective is to measure and compare the performance of european railways the second objective is to illustrate the usefulness of econometric distance functions in the analysis of production in multioutput industries where behavioural assumptions such as cost minimization or profit maximization are unlikely to be applicable using annual data on 17 railways companies during 1988 1993 multioutput distance functions are estimated using corrected ordinary least squares cols the resulting technical efficiency estimates range from 0 980 for the netherlands to 0 784 for italy with a mean of 0 863 the distance function results are also compared with those obtained from single output production functions where aggregate output measures are formed using either total revenue or a tornqvist index the results obtained indicate substantial differences in parameter estimates and technical efficiency rankings casting significant doubt upon the reliability of

new estimates of intertemporal substitution abstract this paper estimates the intertemporal elasticity of substitution for married males taking into account that many individuals are at a corner solution for weeks worked by virtue of working year round the fact that these individuals do not choose to engage in much intertemporal substitution may simply indicate that the corner solution inhibits their ability to do so rather than indicating a low desire to intertemporally substitute our estimates are able to distinguish between these two cases with the results showing much higher intertemporal elasticities of substitution than reported in earlier studies

forest reliance across poverty groups in tanzania an emerging body of knowledge has established that poorer households in forest adjacent communities in developing countries are generally more forest reliant higher forest income share while richer households tend to extract more and generate higher absolute forest income these studies commonly categorize households based on observed income in cross section data presenting a snap shot reflecting both inter household and inter annual income variation in this paper we introduce a new approach to categorize households based on a combination of the observed one year income and predicted income by an augmented asset approach applying this approach on household data from tanzania we find forest reliance to be high among structurally poor households low observed income and assets the highest forest reliance is found among the stochastically non poor households high income and low assets and this group also has the highest absolute forest income

the welfare cost of factor taxation in a perfect foresight model this paper examines the marginal efficiency cost of various factor taxes in a dynamic general equilibrium model the au thor solves for the excess burden of anticipated and unanticipated t emporary and permanent tax policies using a range of estimates for taste and technology parameters he finds excess burdens larger than those indicated by previous studies that use static models these exc ess burdens are sensitive to parameter values and timing however th e rankings of alternative tax policies turn out to be insensitive to structural parameter values copyright 1987 by university of chicago press

measuring the average marginal tax rate from the individual income tax the economic effects of taxation depend on the configuration of marginal tax rates we consider here the appropriate measure of a marginal tax rate for the federal individual income tax which has a graduated rate structure and allows for numerous legal and illegal deductions from total income our conclusion is that the explicit marginal rate from the tax schedule is the right concept for many purposes hence we construct approximately weighted averages of these marginal tax rates for 1916 80 when weighted by adjusted gross income the arithmetic average of marginal tax rates is 5 in 1920 2 in 1930 6 in 1940 20 in 1950 23 in 1960 24 in 1970 and 30 in 1980 we also discuss the dispersion of marginal tax rates as well as the behavior of average tax rates and deductions from taxable income one noteworthy result concerns the fraction of adjusted gross income that accrues to families that face a marginal tax rate of at least 35 this fraction quadruples from 1964 to 1980 this abstract was borrowed from another version of this item

the efficient estimation of econometric models with rational expectations the efficient estimation of econometric models with rational expectations by the substitution method usually entails the use of a non linear simultaneous equations estimator and hence is not very attractive computationally it is shown that for a wide class of problems efficient estimates can also be obtained with standard estimation methods if instead an errors in variables approach is used for many other problems although not providing fully efficient estimates because rationality is not imposed the errors in variables method will still have a strong appeal because otherwise it uses all of the structural information in the model unlike the substitution method when an incomplete information set is used it guarantees consistent estimates and it is easy to compute

intertemporal substitution in macroeconomics consumption labor supply and money demand this paper introduces money into the consumption leisure based intertemporal substitution model the optimization problem poses that the household chooses consumption labor supply money demand and wealth holdings of real money balances along with consumption and leisure determine utility the constant decomposes wealth into money and an alternative asset the authors estimate the derived semireduced form equations using per capita u s data the findings indicate significant interest rate intertemporal substitution in labor supply but weak effects in consumption and money demand the empirical evidence supports contemporaneous nonseparability of consumption money and leisure within a well behaved underlying utility function copyright 1992 by mit press

determinants of margin in microfinance institutions abstractmicrofinance institutions mfis lend to the poor however microfinance clients suffer from high interest rates a type of poverty penalty this article analyses the margin determinants in mfis a banking model has been adapted to microfinance this model has been tested using 9 year panel data some factors explaining bank margin also explain mfi margin with operating costs being the most important factor specific microfinance factors are donations and legal status as regulated mfis can collect deposits it has also been found that mfis operating in countries with a high level of financial inclusion have low margins

empirical regularities in the poverty environment relationship of rural households evidence from zimbabwe abstract analysis of rural households and environmental resources is beset by inadequate data especially in africa using purpose collected panel data from zimbabwe we demonstrate seven empirical regularities in the rural poverty environment relationship most important environmental resources make a significant contribution to average rural incomes poorer households also depend heavily on these resources which contribute c 40 to their incomes richer households however use greater quantities of environmental resources in total finally considerable differentiation exists in the economic characteristics of environmental goods these results demonstrate the considerable economic significance of environmental resources to rural households surveys which ignore them miscalculate rural incomes and welfare

corrigendum on a life cycle model of female labour supply in the empirical work in our article on the intertemporal substitution of leisure time for married women heckman and macurdy 1980 we inadvertently constrained the estimated intertemporal substitution elasticity to be too high since this parameter plays a prominent role in discussions of equilibrium models of the business cycle and since our empirical work has been cited in discussions on this topic e g hall 1980 we would like to present a corrected set of empirical results for our model the period t utility function adopted in this note is in the notation of our original paper equation 15

intertemporal substitution risk aversion and economic performance in a stochastically growing open economy abstract the constant elasticity utility function implies that the intertemporal elasticity of substitution is the inverse of the coefficient of relative risk aversion with empirical evidence suggesting that this relationship may or may not hold studies of risk and growth should decouple these two parameters this paper provides an analytical characterization and numerical simulations of the equilibrium of a stochastically growing small open economy under general recursive preferences we show that errors committed by using the constant elasticity utility function even for small violations of the compatibility condition can be substantial our results suggest that the constant elasticity utility function should be employed with caution

backward and forward solutions for economies with rational expectations in models where anticipations of future endogenous variables influence current behavior there exists an infinity of solutions under the assumption of rational expectations this problem has been dealt with in the study of macro economic models by the implicit or explicit use of one of three additional requirements optimality consistency with alleged economic behavior or conformity of the endogenous variables to an imposed stationarity condition these requirements have coincided in existing models leading to the choice of a unique solution a forward solution the purpose of this paper is to review the problem characterize the solutions and examine whether these requirements are acceptable section i presents a simple model and derives the set of solutions the model makes no claim to generality but has the major advantage that the issues are easily understood in this simple case section ii discusses the requirement of consistency with economic behavior section iii discusses the requirement of stationarity and section iv provides some conclusions