sequential labor decisions under uncertainty an estimable household model of west african farmers this paper reports estimates of the structural parameters of a stochastic control model that describcs the labor decisions of small farmers in burkina faso west africa the focus of the estimation is on measuring flexibility in production and intertemporal substitutability in consumption full information maximum likelihood estimates of the primitive parameters of the model are computed even though optimal labor decision rules cannot be derived analytically vuong s non nested model specification test shows that this method yields parameter estimates that are superior to those derived by assuming that farmers solve a deterministic control problem the low levels of agricultural labor effort commonly observed in the survey area are shown to be a consequence both of the low productivity of labor in archaic rainfed agriculture and of farmers awareness that in the absence of a labor market overly ambitious production plans lead to seasonal manpower constraints to meet rainfed farmers concerns agricultural research institutes and extension services should factor flexibility into their research agendas

an empirical analysis of life cycle fertility and female labor supply this paper examines us household fertility and female labor supply over the life cycle using data from the panel study of income dynamics the authors investigate how maternal time inputs and market expenditures on offspring as well as the benefits they yield their parents vary with ages of offspring and influence female labor supply and contraceptive behavior the econometric framework combines a female labor supply model and a contraceptive choice index function it also accounts for the fact that conceptions are not perfectly controllable events using longitudinal data on married couples the authors estimate these equations and test alternative specifications of the technologies governing child care the findings suggest that while parents cannot perfectly control conceptions variations in child care costs do affect life cycle spacing of births furthermore the results demonstrate the gains of modeling the linkages between female labor supply and fertility behavior at the household level authors modified

identifying the response of fertility to financial incentives summary while using financial incentives to increase fertility has become relatively common the effects of such policies are difficult to assess we propose an identification strategy that relies on the fact that the variation in wages induces variation in benefits and tax credits among comparable households we implement our approach by estimating a discrete choice model of female participation and fertility using individual data from the french labor force survey and a detailed representation of the french tax benefit system our results suggest that financial incentives have had a significant effect on fertility decisions in france as an example we simulate the effects of an additional unconditional child credit of 150 euros per month the effects are strongest for the third child copyright 2013 john wiley sons ltd

on the dynamics of demand for leisure and the production of health our article develops and estimates a structural model of household health production that jointly determines the demand for leisure and the demand for consumption for elderly males we use a stochastic dynamic programming framework based on the assumption that an individual maximizes lifetime utility subject to budget and time constraints and a health production function by choosing hours of leisure and levels of consumption of health related and health neutral goods and services moreover we use a very comprehensive health index that combines four scales measuring a variety of dimensions in the quality of life the euler equations derived from our model are estimated using data from six biennial panels of the retirement history survey

credit market constraints consumption smoothing and the accumulation of durable production assets in low income countries investments in bullocks in india in this paper we formulate and estimate a finite horizon structural dynamic model of agricultural investment behavior that incorporates the major features of low income agricultural environments income uncertainty constraints on borrowing and rental markets and the use of investment assets to generate income and smooth consumption the model is fit to longitudinal indian household data on farm profits bullock stocks and pump sets the estimated structural parameters are used to assess the effects on the life cycle accumulation of bullocks agricultural profits and welfare associated with complete markets and bullock liquidity and with second best policies that provide assured sources of income to farmers and weather insurance

monotone stochastic choice models the case of risk and time preferences suppose that when evaluating two alternatives x and y by means of a parametric utility function low values of the parameter indicate a preference for x and high values indicate a preference for y

female labour supply and marital status decisions a life cycle model this paper studies the interdependence between and the determinants of life cycle marital status and labour force participation decisions of women a dynamic utility maximization model is presented and estimated using longitudinal data on women from the panel study of income dynamics the mle method employed involves solving a dynamic programming problem further a minimum distance estimator is proposed which allows for the incorporation of wage data in a computationally simple way the estimates are used to predict changes in the life cycle patterns of employment marriage and divorce due to differences in education race the female s earnings and her potential husband s earnings the estimation results indicate that the utility gains to marriage are decreasing in the female s wage rate and increasing in her potential husband s earnings while the opposite is found for gains to working ignoring the endogeneity of marital status decisions is shown to lead to an underestimation of own and husband s wage effects on female labour supply

mergers acquisitions and innovation performance in the telecommunications equipment industry the worldwide telecommunications equipment industry has experienced an enormous number of mergers and acquisitions m a this article examines the innovation determinants of m a activity a

a joint dynamic model of fertility and work of married women this article estimates a dynamic model of fertility and labor supply of married women drawn from the national longitudinal survey of young women 1968 91 it distinguishes part time and full time employment sectors which differ by pecuniary and nonpecuniary returns and transferability of human capital the model with unobserved heterogeneity in earning ability and preferences for children fits the data and produces reasonable forecasts of labor force participation in decisions the estimates unpack important features of the persistence in labor market decisions intertemporal substitution of leisure over the life cycle and the effect of work interruptions due to childbirth on lifetime utility

the effect of work experience on female wages and labour supply this paper develops and implements a semiparametric estimator for investigating with panel data the importance of human capital and time nonseparable preferences to females when aggregate shocks are present it provides a set of conditions for making statistical inferences about agents expectations of their correlated future choices from a short panel under the assumption that observed allocations are pareto optimal a dynamic model of female labour supply and participation is estimated in which experience on the job raises future wages and time spent off the job in the past directly affects current utility or indirectly through productivity in the nonmarket sector

advertising learning and consumer choice in experience good markets an empirical examination this article empirically analyzes different effects of advertising in a nondurable experience good market a dynamic learning model of consumer behavior is presented in which i allow both informative effects of advertising and prestige or image effects of advertising this learning model is estimated using consumer level panel data tracking grocery purchases and advertising exposures over time empirical results suggest that in this market advertising s primary effect was that of informing consumers the estimates are used to quantify the value of this information to consumers and evaluate the welfare implications of an alternative advertising regulatory regime

estimating a market equilibrium search model from panel data on individuals from albrecht and axell 1984 and is based on workers who are homogeneous in terms of market productivity and heterogeneous in terms of nonmarket productivity and on firms which are heterogeneous in terms of productive efficiency the equilibrium model is contrasted in terms of its fit to the data with an unrestricted version of the model which is based on a mixture of negative binomial distributions the equilibrium model fails to conform to the data in exactly the dimension of its major focus namely it implies that measurement error accounts for almost all of the dispersion in observed wages the equilibrium model also does not do well in fitting the unemployment duration distribution compared to the unrestricted model the problem is that the duration distribution itself does not support the existence of significant heterogeneity as evidenced by the estimates of the unrestricted model the paper also illustrates the use of such models for policy analysis by simulating the welfare effects of a minimum wage

the career costs of children this paper analyzes the life cycle career costs associated with child rearing and decomposes their eects into unearned wages as women drop out of the labor market loss of human capital and selection into more child friendly occupations we estimate a dynamic life cycle model of fertility occupational choice and labor supply using detailed survey and administrative data for germany for numerous birth cohorts across dierent regions we use this model to analyze both the male female wage gap as it evolves from labor market entry onward and the eect of pro fertility policies we show that a substantial portion of the gender wage gap is explainable by realized and expected fertility and that the long run eect of policies encouraging fertility are considerably lower than the short run eects typically estimated in the literature

structural estimation of real options models we propose a numerical approach for structural estimation of a class of discrete markov decision processes emerging in real options applications the approach is specifically designed to account for two typical features of aggregate data sets in real options the endogeneity of firms decisions the unobserved heterogeneity of firms the approach extends the nested fixed point algorithm by rust 1987 optimal replacement of gmc bus engines an empirical model of harold zurcher econometrica 55 5 999 1033 1988 maximum likelihood estimation of discrete control processes siam journal of control and optimization 26 5 1006 1024 because both the nested optimization algorithm and the integration over the distribution of the unobserved heterogeneity are accommodated using a simulation method based on a polynomial approximation of the value function and on recursive least squares estimation of the coefficients the monte carlo study shows that omitting unobserved heterogeneity produces a significant estimation bias because the model can be highly non linear with respect to the parameters

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

obstacles to school progression in rural pakistan an analysis of gender and sibling rivalry using field survey data abstract this paper aims to identify the obstacles to school progression by using field surveys that were conducted in twenty five pakistani villages the full information maximum likelihood fiml estimation of the sequential schooling decision model reveals important dynamics of the gender difference in educational attainment intrahousehold resource allocation patterns and transitory income and wealth effects in the descriptive statistics as well as the econometric analyses we find a high educational retention rate and observe that school progression rates between male and female students after secondary school are comparable in particular we find gender specific and schooling stage specific birth order effects on education our overall findings are consistent with the implications of optimal schooling behavior under binding credit constraints and the self selection of education friendly households finally we find serious supply side constraints which might arise from a village level lack of demand for primary schools for girls

uncertain infant mortality learning and life cycle fertility this article examines the links between infant mortality and fertility in an environment with unobserved heterogeneity in infant mortality risk across mothers in such an environment replacement behavior i e the fertility response to an experienced child death might be influenced by mothers learning about a family specific component of infant mortality risk i explicitly introduce learning by mothers in a dynamic stochastic model of life cycle marital fertility and i estimate the model s structural parameters using malaysian panel data the framework is used to estimate replacement rates and to correct for birth selectivity in the estimation of the relationship between infant mortality risk and health inputs

land use change with spatially explicit data a dynamic approach most of the economic literature that uses spatially explicit data to estimate the determinants of land use change is limited to static models and cross sectional data sets recent attempts to move to a more dynamic analysis include using panel data sets and survival analysis in this study we use a discrete choice dynamic model of land use where the agent s choices are regarded as the solution to a dynamic optimization problem the irreversibility of some decisions expectations about future prices and forward looking behavior of the land operator can all be accounted for our results show that a model specification that incorporates some of the complexities of the decision process improves upon results found in the existing literature first prediction accuracy of land use change is superior to any of the existing models second we demonstrate that models that do not account for transactions costs tend to overestimate the effects of changes in transportation costs

what have we learned from the economics of the family the family is distinguished from other social institutions such as firms by its crucial role in the production and nurture of children and its rationale is ultimately to be found in the preferences of individuals for own children sexual reproduction means that the production of one s own child requires the participation of another person of the opposite sex the production of a child who will survive become a successful adult and produce his or her own children requires the expenditure of both personal and purchased resources over a lengthy period of time although interesting insights on the family can be culled from the classics systematic development of the economics of the family is a recent phenomenon beginning in the late 1950 s when harvey leibenstein 1957 and gary becker 1960 attempted to address the determinants of fertility behavior within the framework of consumer theory in this paper i provide a brief overview of the history of family economics since 1960 and along the way offer a selective assessment of what has been learned from it i attempt this assessment by asking how far we have progressed in answering a few of the larger theoretical empirical and policy questions that have motivated economists interests in an area customarily studied by sociologists and demographers or that have caused economists dealing with more traditional subject matter to incorporate the family into their work among the set of questions that have been addressed within the literature during the past twenty five years are 1 what are the causes of the historical association between economic growth and development and demographic transition from high to low levels of fertility and mortality of what relevance is the historical experience of currently developed countries to contemporary ldcs should fertility reduction be a primary goal of policy in the developing countries are the developed countries in danger of extinction because of fertility below replacement levels 2 what was the cause of the post world war ii baby boom and subsequent baby bust was the baby boom a one time aberration from a secular decline in fertility or can we expect substantial fluctuations in the birth rate in the future what are the consequences of the baby boom for the economic welfare of cohorts born during and after the boom 3 is the traditional family dead in the united states and other developed countries why did the divorce rate double in a decade why the growth in female headed households why do so many divorced fathers fail to support their children has the sexual division of labor within the family changed as a consequence of the growth of female labor supply to what extent are these changes in the family caused by social policy and to what extent are they a product of basic market forces associated with modern economic development what are the consequences of these changes for the welfare of future generations i attempt to touch on some issues from each of the three areas in which the questions are grouped however constraints imposed by limitations of space time and most imtdiscussants kenneth wolpin ohio state university robert pollak university of pennsylvania t paul schultz yale university

the return to schooling in structural dynamic models a survey this papers contains a survey of the recent literature devoted to the returns to schooling within a dynamic structural framework i present a historical perspective on the evolution of the literature from early static models set in a selectivity framework willis and rosen 1979 to the recent literature stimulated by keane and wolpin 1997 and which uses stochastic dynamic programming techniques after reviewing the literature thoroughly i compare the structural approach with the iv experimental approach i present their commonalities and i also discuss their fundamental di8erences to get an order of magnitude most structural estimates reported for the us range between 4 and 7 per year on the other hand iv estimates between 10 and 15 per year are often reported the discrepancy prevails even when comparable if not identical data sets are used the discussion is focussed on understanding this divergence the distinction between static and dynamic model specifications is a recurrent theme in the analysis i argue that the distinction between the iv approach and the structural approach may be coined in terms of a trade o8 between behavioral and statistical assumptions for this reason and unless one has very specific knowledge of the true data generating process it is neither possible nor sensible to claim which approach to estimation is more flexible more precisely i show that structural and iv approaches differ mainly at the level of i the compatibility of the underlying models with truly dynamic behavior ii the role of heterogeneity in ability and tastes iii the consideration of post schooling opportunities and iv the specification and interpretation of the mincer wage equation

toward a model of risk in declining organizations an empirical examination of risk performance and decline scholars who study organizational decline have argued that declining organizations reduce or eliminate their riskier activities such as innovation further they cite reduced risk taking as a primary contributor to further decline scholars with an interest in risk per se come to the opposite conclusion low performing firms often take more risks than other firms and such risks reduce subsequent performance this study attempts to resolve these conflicting views by examining the risk of firms in decline our model based on cyert march s cyert r m j g march 1963 a behavioral theory of the firm prentice hall englewood cliffs nj behavioral theory of the firm includes six basic variables 1 performance 2 slack 3 aspirations 4 expectations 5 risk income stream uncertainty and 6 organization size as a measure of decline the estimated model includes prior levels of risk and performance in the risk and performance equations respectively as controls this study uses data on 34

estimating intertemporal preferences for natural resource allocation in this article we show how the degree of risk aversion discounting and preference for intertemporal substitution for a natural resource manager can be structurally estimated within a recursive utility framework we focus on the management of a reservoir in california and test the data for consistency with a recursive utility model specification versus standard time additive separability the results show that the data are consistent with a risk averse manager with recursive preferences the data also reject time additive separability with or without risk aversion such as the standard constant relative risk aversion utility model the improvement in model fit when recursive preferences are used is notable natural resource management problems are typically stochastic and dynamic in nature by virtue of the characteristics of the underlying physical or biological processes that govern the evolution of the resource this has been the reason for a number of empirical applications of dynamic programming within the natural resource literature as chronicled by williams however the tendency of researchers to use risk neutral expected net present value epv objective functions when modeling natural resource problems has caused policy makers to be somewhat skeptical of the real world relevance of resource economics analysis 1 given the uncertainty facing the decision maker in each period of the planning horizon due to the realization of stochastic shocks we would expect risk aversion and intertemporal substitution to feature prominently in the characterization of intertemporal preferences

the effect of tax transfer policies on fertility in canada 1921 88 this paper estimates the effect on fertility of the personal tax exemption for children child tax credit family allowances and maternity leave benefits in canada using time series data from 1921 to 1988 it is found that the exemption child tax credit and family allowances all have significant and positive effects on fertility the results are robust to a variety of specifications including first differencing while the three tax transfer programs seem to be very distinct the null hypothesis that they have no differential effects on fertility can hardly be rejected all the results also hold for the cumulative effect of the three tax transfer programs the estimates predict that a large increase in the value of the tax transfer programs would be needed to increase fertility to the replacement level

the determinants of black white differences in early employment careers search layoffs quits and endogenous wage growth this paper studies the transition from school to full time employment and subsequent labor mobility during the first five postschooling years for several recent cohorts of black and white male terminal high school graduates using unique data from the 1979 youth cohort of the national longitudinal surveys of labor market experience a constrained optimization model of labor force dynamics is implemented empirically integrating features of models previously described in the literature the estimates of the model provide quantitative evidence on underlying structural differences in labor market constraints faced by blacks and whites for example while blacks have overall a substantially smaller wage return to work experience and face a less disperse wage offer distribution blacks face a higher probability of receiving job offers

knowledge transfer in international acquisitions this paper reports on a multimethod study of knowledge transfer in international acquisitions using questionnaire data we show that the transfer of technological know how is facilitated by communication visits meetings and by time elapsed since acquisition while the transfer of patents is associated with the articulability of the knowledge the size of the acquired unit and the recency of the acquisition using case study data we show that the immediate post acquisition period is characterized by imposed one way transfers of knowledge from the acquirer to the acquired but over time this gives way to high quality reciprocal knowledge transfer

conditional choice probability estimation of dynamic discrete choice models with unobserved heterogeneity we adapt the expectation maximization algorithm to incorporate unobserved heterogeneity into conditional choice probability ccp estimators of dynamic discrete choice problems the unobserved heterogeneity can be time invariant or follow a markov chain by developing a class of problems where the difference in future value terms depends on a few conditional choice probabilities we extend the class of dynamic optimization problems where ccp estimators provide a computationally cheap alternative to full solution methods monte carlo results confirm that our algorithms perform quite well both in terms of computational time and in the precision of the parameter estimates

does 401 k eligibility increase saving evidence from propensity score subclassification abstract by comparing 401 k eligible and ineligible households wealth this paper estimates that on average about one half of 401 k balances represent new private savings and about one quarter of 401 k balances represent new national savings responses to eligibility vary considerably however with households who normally save the most largely contributing funds they would have saved anyway this paper improves on previous research by 1 employing propensity score subclassification to control more completely for observed household characteristics 2 controlling for more household characteristics including several correlated with unobserved savings preferences and 3 adjusting the observed measure of households wealth to reduce measurement error

an estimable dynamic stochastic model of fertility and child mortality this paper develops a finite horizon dynamic stochastic model of discrete choice with respect to life cycle fertility within an environment where infant survival is uncertain the model yields implications for the number timing and spacing of children a tractable estimation method is developed for the linear constraint quadratic utility case that is intimately tied to the dynamic optimization problem and the method is applied to malaysian household data estimation is based on integrating the numerical solution of the dynamic programming model of behavior with a maximum likelihood procedure

women s education and fertility an analysis of the relationship between education and birth spacing in indonesia abstract the negative relationship between women s education and fertility is one of the strongest empirical regularities in social science yet there are few empirical studies that identify the mechanisms through which education affects fertility this article goes beyond the usual interpretation of education as a proxy for wage by testing whether education affects fertility through demand for children or through availability of contraceptives using the indonesian case it examines one aspect of fertility namely birth spacing over the period 1970 93 i find that higher levels of female education are associated with a shorter birth interval among earlier cohorts but with a longer birth interval among later cohorts the key finding is that changes in the effects of education on birth hazard over time are primarily driven by changes in the availability of contraceptives rather than by changes in the demand for children in the context of contraceptive technology the result can be interpreted as evidenc

the economics of organization the transaction cost approach the transaction cost approach to the study of economic organization regards the transaction as the basic unit of analysis and holds that an understanding of transaction cost economizing is central to the study of organizations applications of this approach require that transactions be dimensionalized and that alternative governance structures be described economizing is accomplished by assigning transactions to governance structures in a discriminating way the approach applies both to the determination of efficient boundaries as between firms and markets and to the organization of internal transactions including the design of employment relations the approach is compared and contrasted with selected parts of the organization theory literature

why do firms do basic research with their own money abstractthe question to be addressed is why do private firms perform basic research with their own money interest in this question derives from both analytical and utilitarian considerations there is empirical evidence in the united states which provides the main context for this paper supporting the view that basic research makes a significant contribution to the productivity growth of the economy 4 7 it is widely held that social returns from basic research are significant and higher than private returns and it is for this reason that most such activities continue to be financed by the taxpayer this also implies that measures aimed at increasing basic research by the private sector will be welfare improving in the united states the federal government in the years since the second world war has provided the vast majority of all funds devoted to basic research although the federal share has been declining in recent years and although that share is at its lowest level in about 20 years it still constitutes about two thirds of the total 10 this abstract was borrowed from another version of this item

dynamic female labor supply the increase in female employment and participation rates is one of the most dramatic changes to have taken place in the economy during the last century however while the employment rate of married women more than doubled during the last 50 years that of unmarried women remained almost constant to empirically analyze these trends we estimate a female dynamic labor supply model using an extended version of eckstein and wolpin 1989 to compare the various explanations in the literature for the observed trends this dynamic model provides a much better fit to the life cycle employment pattern than a static version of the model and a standard static reduced form model heckman 1979 the main finding using the dynamic model is that the rise in education levels accounts for about 33 percent of the increase in female employment and the rise in wages and narrowing of the gender wage gap account for another 20 percent while about 40 percent remains unexplained by observed household characteristics we show that this unexplained portion can be empirically attributed to cohort specific changes in preferences or the costs of child rearing and household maintenance finally the decline in fertility and the increase in divorce rates account for only a small share of the increase in female employment rates

what is behind the recent surge in patenting abstract we investigate the cause of an unprecedented surge of us patenting over the past decade conventional wisdom points to the establishment of the court of appeals of the federal circuit by congress in 1982 we examine whether this institutional change which has benefited patent holders explains the burst in us patenting using both international and domestic data on patent applications and awards we conclude that the evidence is not favorable to the conventional view instead it appears that the jump in patenting reflects an increase in us innovation spurred by changes in the management of research

an investigation of the harvest decision of timber firms in the south east united states in the forestry literature stochastic extensions of the classic faustmann model have become the predominant models of optimal harvesting on even aged timber stands a recent attempt to estimate a stochastic version of the faustmann model left several puzzling results unexplained provencher 1995 this paper reports on new estimation and analyses undertaken to resolve these puzzles of particular note is the result that the value of using correct price forecasts in the harvest decision is much lower than indicated by recent simulation studies perhaps because variability in convenience yield dampens the expected gain from exploiting stochastic variation in timber prices

birth spacing and sibling inequality asymmetric information within the family this paper formulates a dynamic model of birth spacing incorporating uncertainty about and heterogeneity in birth outcomes and joint production to assess how the spacing of children responds to exogenous shocks in birth outcomes estimation technics are developed that use assumptions about the constraints on the information available to parental decision makers associated with the sequential nature of childbearing ignored in static models of intra household behavior section 1 examines the technology of birth spacing and its consequences for the level and distribution of child outcomes and resources in section 2 the model compares alternative estimation technics in section 3 data from a probability sample of us white married couples are used to describe intrafamily variation in birth outcomes and spacing and to test for heterogeneity bias the results in section 4 suggest that across family heterogeneity bias may be less important than within family heterogeneity bias in estimates of the effects of birth order and timing patterns of births on health results from family fixed effect of sibling models of child quality determination that ignore intrafamily substitution may be misleading section 5 estimates how birth outcome endowments and information on gender are used to estimate how differences in them affect subsequent birth timing decisions and sibling inequality results suggest that 1 the birth of 1st born children tends to be delayed among families with high income husbands highly educated parents superior health endowment or high tastes for health investments 2 the proximity of the birth of the 2nd child to that of the 1st child is a positive function of the quality of the 1st born and 3 the spacing and existence of a 3rd child is significantly related to the birth outcomes sex composition and sex ordering of the 1st and 2nd children

endogeneity in count data models an application to demand for health care the generalized method of moments gmm estimation technique is discussed for count data models with endogenous regressors count data models can be specified with additive or multiplicative errors and it is shown that in general a set of instruments is not orthogonal to both error types simultaneous equations with a dependent count variable often do not have a reduced form which is a simple function of the instruments however a simultaneous model with a count and a binary variable can only be logically consistent when the system is triangular utilizing data from the british health and lifestyle survey 1991 1992 the gmm estimator is used in the estimation of a model explaining the number of visits to doctors with a self reported binary health index as a possible endogenous regressor if this regressor is truly endogenous one expects the pseudo likelihood estimate of its coefficient to be biased upwards indeed for the additive model the estimated coefficient of the binary health index decreases in value when the possible endogeneity of this regressor is taken into account further indication of endogeneity is given by the fact that the overidentifying restrictions are rejected in the multiplicative model but not in the additive model finally a model that includes predicted latent health instead of the binary health index is estimated in stages

the choice between mergers acquisitions and joint ventures the case of japanese investors in the united states this paper investigates the determinants of the choice between two alternative methods of pooling similar and complementary assets the merger acquisition and the greenfield equity joint venture two theories of the determinants of that choice are tested on a sample of japanese investments in the united states the results show that equity joint ventures are preferred over acquisitions when the desired assets are linked to nondesired assets because the u s firm owning them is large and not divisionalized when the japanese investor has little previous experience of the american market and hence seeks to avoid postmerger integration problems when the japanese investor and the u s partner manufacture the same product and when the industry entered is growing neither very rapidly nor very slowly

dynamic labour force participation of married women and endogenous work experience this paper presents and estimates a dynamic model of married women s labour force participation and fertility in which the effect of work experience on wages is explicitly taken into account because current participation alters future potential earnings the investment return to work will be an important factor in the current work decision in any forward looking behavioural model the model is estimated using the national longitudinal surveys mature women s cohort we use the estimates of our model to predict changes in the lifecycle patterns of employment due to changes in schooling fertility husband s income and the magnitude of the experience effect on wages we find that although work experience increases the disutility of further work the effect is overwhelmed by the positive effect of experience on wages leading to persistence in the employment patterns of these women in addition we find that an increase in young children and in husband s income substantially reduces participation while increased schooling has a powerful positive impact on participation this paper presents an estimable structural dynamic model of married women s labour force participation and fertility in which wages are stochastic and work experience or cumulative participation is endogeneous the model is structural in the sense that the parameters which are estimated are contained in the fundamental relationships governing behaviour namely the utility function and the constraints the model is contained in the class of models which describe the life cycle capital accumulation process with endogeneous labour supply such as weiss 1972 and heckman 1976 it is closest in spirit to that of weiss and gronau 1981 1 the basic feature of their model and ours is that labour market participation affects future wages which then affects future participation the investment return to current work will necessarily be taken into account in any forward looking optimizing model as weiss and gronau note estimates of labour supply models have ignored the inherent behavioural dynamics associated with a positive wageexperience profile there is no adequate empirical treatment of the human capital investment dimension of the labour force participation decision in the literature heckman and willis 1977 have studied a sequential discrete choice model of the labour force participation of married women in a reduced form framework their work

optimal pricing with costly adjustment evidence from retail grocery prices in many theoretical models it is assumed that there are costs associated with adjusting prices in this paper the existence type and magnitude of such costs are investigated empirically a discrete choice dynamic programming model that nests fixed and variable costs is developed and econometric estimates of the adjustment cost function are obtained the data used to implement the model consist of weekly retail prices and sales of three brands of saltine crackers sold by four chains of grocery stores in a small u s town the study has several distinguishing characteristics first the data are highly disaggregate at the level of brand and store second variables are sampled at weekly intervals third the model nests fixed and variable adjustment costs and can therefore determine their relative importance finally the discrete choice model is both structural and dynamic

child labor urban proximity and household composition using detailed survey data from nepal this paper examines the determinants of child labor with a special emphasis on urban proximity we find that children residing in or near urban centers attend school more and work less in total but are more likely to be involved in wage work or in a small business the larger the urban center the stronger the effect is urban proximity is found to reduce the workload of children and improve school attendance up to 3 h of travel time from the city in areas of commercialized agriculture located 3 to 7 h from the city children do more farm work urban proximity effects are accounted for by a combination of local labor supply and demand conditions most notably the local importance of agriculture the education level of the parents and the local wage rate child servants which represent a small proportion of all children work much harder than other children and appear particularly at risk

are children really inferior goods evidence from displacement driven income shocks abstract this paper explores the causal link between income and fertility by analyzing women s fertility response to the large and permanent income shock generated by a husband s job displacement i find that the shock reduces total fertility suggesting that the causal effect of income on fertility is positive a model that incorporates the time cost of children and assortative matching of spouses can simultaneously explain this result and the negative cross sectional relationship i also find that a husband s displacement accelerates childbearing which is consistent with lifecycle models of fertility in which the incentive to delay is driven by expected earnings growth

a dynamic model of contraceptive choice of spanish couples in this paper we propose a simple dynamic stochastic model of sterilization and contraceptive use and we estimate its structural parameters using a sample of married couples from the 1995 spanish family and fertility survey the estimated structural model improves on previous studies in terms of its ability to rationalize observed behavior the large proportion of women contracepting at parity 0 is interpreted as evidence of precautionary contraceptive behavior allowing for simple forms of permanent unobserved heterogeneity across couples in their ability to conceive has important implications for estimates of utility and cost parameters our estimates of child valuation parameters imply that most spanish couples would have two children but significant deviations from this goal are brought about by imperfect and costly fertility control our simulations suggest that the introduction of sterilization has reduced fertility by an average of 0 2 children per couple and that the availability of more effective reversible contraceptive methods would reduce expected fertility by up to 0 4 children per couple

precautionary saving credit constraints and irreversible investment theory and evidence from serniarid india this article investigates the extent to which poor households are discouraged from making a non divisible but profitable investment using data on irrigation wells in india we estimate the parameters of a structural model of irreversible investment results show that poor farmers fail to undertake a profitable investment that they could in principle self finance because the nondivisibility of the investment puts it out of their reach irreversibility constitutes an additional disincentive to invest simulations show that the availability of credit can dramatically increase investment in irrigation and that interest rate subsidization has little impact

assessing the impact of a school subsidy program in mexico using a social experiment to validate a dynamic behavioral model of child schooling and fertility this paper uses data from a randomized social experiment in mexico to estimate and validate a dynamic behavioral model of parental decisions about fertility and child schooling to evaluate the effects of the progresa school subsidy program and to perform a variety of counterfactual experiments of policy alternatives our method of validation estimates the model without using post program data and then compares the model s predictions about program impacts to the experimental impact estimates the results show that the model s predicted program impacts track the experimental results our analysis of counterfactual policies reveals an alternative subsidy schedule that would induce a greater impact on average school attainment at similar cost to the existing program

a penny for your quotes patent citations and the value of innovations the use ofpatents in economic research has been seriously hindered by the fact that patents vary enormously in their importance or value and hence simple patent counts cannot be informative about innovative output the purpose of this article is to put forward patent counts weighted by citations as indicators of the value of innovations thereby overcoming the limitations of simple counts the empirical analysis of a particular innovation computed tomography scanners indeed shows a close association between citation based patent indices and independent measures of the social value of innovations in that field moreover the weighting scheme appears to be nonlinear increasing in the number of citations implying that the informational content of citations rises at the margin as in previous studies simple patent counts are found to be highly correlated with contemporaneous rd however here the association is within afield over time rather than cross sectional

population and the environment a parable of firewood and other tales the author analyzes the relationship between population and the environment with a focus on the role which environmental degradation and natural resources depletion may play in producing the population pressure which lies behind such degradation and depletion especially in developing countries the principal conclusion of this analysis is that the possibilities for a stable equilibrium between human population and its environment are quite limited i show that parental altruism toward their children can only make matters worse if socially unchecked by leading to an increase of the birthrate in every environmental state in comparison with that which would occur in its absence excerpt

a stochastic dynamic analysis of parental sex preferences and fertility the author has developed a stochastic dynamic model of fertility to examine assumptions which form the basis of often used econometric tests for parental sex preferences these assumptions included the use of fertility data to test for sex preferences and to test for son preference based on the effect of the number of males on fertility the heckman and willis stochastic model of reproduction was used to formulate this model this new model allowed some tractable and testable predictions it was able to predict income and wage effects without sex preferences further it can accurately describe life cycle dynamic fertility behavior the model demonstrated the existence of a quantity quality interaction which influence parents decisions on fertility for example higher quality measured by the effective number of children substituted for a higher quantity number of children the model proved that sex preferences can indeed be tested but it could not differentiate empirically between son preference and daughter preference from fertility data perhaps data on intrafamily allocation of resources as used by rosenzweig and schultz behrman pollak and taubman and behrman would better be able to test for son versus daughter preference since allocation is based on existing children the results of this newly formulated stochastic dynamic model of fertility challenge the validity of traditional econometric tests for son preference

patents as options some estimates of the value of holding european patent stocks in many countries holders of patents must pay an annual renewal fee in order to keep their patents in force this paper uses data on the proportion of patents renewed and the renewal fees faced by post world war ii cohorts of patents in france the united kingdom and germany in conjunction with a model of patent holders renewal decisions to estimate the returns earned from holding patents in these countries since patents are often applied for at a nearly stage in the innovation process the model allows agents to be uncertain about the sequence of returns that will be earned if the patent is kept inforce formally then the paper presents and solves a discrete choice optimal stochastic control model derives the implications of the model on aggregate behaviour and then estimates the parameters of the model from aggregate data the estimates enable a detailed description of the evolution of the distribution of returns earned from holding patents over their life spans and calculations of both the annual returns earned from holding the patents still in force or the patent stocks in the alternative countries and the distribution of the discounted value of returns earned from holding the patents in a cohort this abstract was borrowed from another version of this item

firm organization industrial structure and technological innovation abstract the formal and informal structures of firms and their external linkages have an important bearing on the rate and direction of innovation this paper explores the properties of different types of firms with respect to the generation of new technology various archetypes are recognized and an effort is made to match organization structure to the type of innovation the framework is relevant to technology and competition policy as it broadens the framework economists use to identify environments that assist innovation

the impact of m a on the r d process an empirical analysis of the role of technological and market relatedness abstract using information on 31 in depth cases of individual m a deals we show that technological and market relatedness between m a partners distinctly affects the inputs outputs performance and organisational structure of the r d process while the findings in the literature on the effect of m a on r d are quite mixed we can sharpen results by analysing data at the level of the r d process this comes at the price of a smaller sample and more qualitative data for which caution in the interpretation is necessary m a between partners with ex ante complementary technologies result in more active r d performers after the m a in sharp contrast when merged entities are technologically substitutive they significantly decrease their r d level after the m a moreover r d efficiency increases more prominently when merged entities are technologically complementary than when they are substitutive these two findings on the r d level and the performance support the scope economy effect of m a on the one hand and reject the scale economy effect of m a on the other next for cases in which partners were active in the same technological fields before the m a the reduction of r d is more prominent while the r d efficiency gain is smaller if merged entities were rivals in the product market prior to their merger than if they were non rival this suggests that rival firms reap little technology gains from mergers

internal r d expenditures and external technology sourcing abstract the paper examines the two way relationship between external r d activities and internal r d expenditures on a cross section of flemish r d active companies the analysis extends the classical explanatory variables like size diversification ownership structure and technological opportunities to include the impact of various external sourcing strategies r d cooperation and to a lesser extent r d contracted out are found to have a significant positive effect on internal r d but only if the companies have absorptive capacity in the form of a full time staffed r d department at the same time firms are found to be more frequently engaged in r d cooperation the more they spend on internal r d

income risk the tax benefit system and the demand for children because children represent an irreversible commitment parents might hedge against higher income risk by having fewer children we show that under plausible assumptions recent increases in income risk might have reduced prudent parents desired fertility responses to this via the tax benefit system are considered introducing an expected revenue neutral transfer cum child benefit system under proportional taxation which lets the government share the household s income risk increases desired fertility for parents who would choose to have small families in this system s absence pound for pound the targeted child benefit enhances fertility more than the lump sum transfer

semiparametric information bound of dynamic discrete choice models abstract we develop a simulation based approach that can determine whether the semiparametric efficiency bound of a dynamic discrete choice model with fixed effects is zero or not we illustrate the usefulness of our approach by considering a simplified version of keane and wolpin s 1997 model where we show that the semiparametric information is zero

compensation policies and teacher decisions a dynamic discrete choice framework with a flexible structure for unobserved heterogeneity is used to model the occupational decisions of individuals who are certified to teach in elementary and secondary schools the model is estimated using data from the national longitudinal study of the high school class of 1972 and is used to examine the effects of possible changes in the compensation policy for teachers

optimal mailing of catalogs a new methodology using estimable structural dynamic programming models we investigate the key determinants of the optimal direct mail policy in a dynamic environment where customers maximize utility and the direct mailer maximizes profits we measure the sensitivity of the customers to receiving a catalog in the mail while controlling for customer characteristics such as elapsed time in responses and number of purchases we apply our model to a database from a national cataloger that markets nonseasonal products we summarize the results of our model that are valid for these types of products we find that the dynamic model significantly outperforms its single period counterpart we find that it is not optimal to mail to individuals at low recency levels because they are likely to buy anyway it is better to save the mailing dollars for customers at higher recency levels we find that it is optimal to mail to customers who have purchased only a small or a medium number of times to induce them to continue to buy from this catalog and not switch to others it is not necessary to mail often to customers who have purchased many times before from the company unless they have high recency values we find that under the optimal mailing policy the cataloguer enjoys higher profits than under the current mailing policy

population growth and human capital investments theory and evidence this paper presents evidence from empirical studies that test hypotheses derived from models of household behavior pertaining to the interrelationships among population growth human capital and economic development these studies have exploited quasi natural experiments embodied in the cross area variability in the wage rates of children in a number of low income countries the intercouple variation in the biological propensity to conceive and the geographically selective introduction of new high yielding seed varieties in india in the period 1961 71 the different varieties of evidence support the hypotheses that alterations in the returns to human capital associated with exogenous technical change lead simultaneously to increases in human capital investments and to reductions in fertility and that the costliness of fertility control is a significant but modest factor in inhibiting human capital investments

systems competition and network effects this paper discusses firm behavior market performance and the public and private institutions that arise in systems markets i e markets where consumers use compatible components together to generate benefits in such markets which include communications networks and hardware software networks popular products are inherently more valuable these network effects can drive corporate strategies and are critical in understanding innovation in many high technology markets the discussion here emphasizes the dynamics of consumer adoption decisions in the presence of network effects competition between incompatible systems and how suppliers choose which components are compatible and which are not

the role of economic incentives in teenage nonmarital childbearing choices abstract in this paper we explore whether behaviors of youths that are likely to result in a teen nonmarital birth event are influenced by their expectations of the net economic benefits or costs associated with the occurrence of such a birth we posit and find that an increase in the perceived costs associated with the occurrence of a nonmarital birth would lead to a reduction in these risky behaviors and to a lower probability of a nonmarital birth event we represent these economic incentives by the income expectations of young women conditional on either giving birth as an unmarried teen or forgoing childbearing while unmarried and an adolescent we also measure the effects of an extensive list of other factors including the characteristics of the girl s family and its choices the social and economic environment in which she lives including policy related factors such as expenditures by states on family planning programs and the generosity of aid to families with dependent children and her own prior choices

testing a causal model of corporate risk taking and performance the determinants of organizational risk taking and its impact on economic performance are critical issues in strategic management using a model that included risk performance performance expecta