group lending repayment incentives and social collateral abstract in this paper we investigate the impact on repayment rates of lending to groups which are made jointly liable for repayment this type of scheme especially in the guise of the grameen bank in bangladesh has received increasing attention we set up and analyze the repayment game which group lending gives rise to our analysis suggests that such schemes have both positive and negative effects on repayment rates the positive effect is that successful group members may have an incentive to repay the loans of group members whose projects have yielded insufficient return to make repayment worthwhile the negative effect arises when the whole group defaults even when some members would have repaid under individual lending we also show how group lending may harness social collateral which serves to mitigate its negative effect

women s schooling home teaching and economic growth the hypothesis that increases in the schooling of women enhance the human capital of the next generation and thus make a unique contribution to economic growth is assessed on the basis of data describing green revolution india estimates are obtained that indicate that a component of the significant and positive relationship between maternal literacy and child schooling in the indian setting reflects the productivity effect of home teaching and that the existence of this effect combined with the increase in returns to schooling for men importantly underlies the expansion of female literary following the onset of the green revolution

emigration and wages in source countries evidence from mexico abstract this paper examines empirically the effect of mexican emigration to the united states on wages in mexico using data from the mexican and us censuses from 1970 to 2000 the main result in the paper is that emigration has a strong and positive effect on mexican wages there is also evidence for increasing wage inequality in mexico due to emigration simple welfare calculations based on a labor demand supply framework suggest that the aggregate welfare loss to mexico due to emigration is small however there is a significant distributional impact between labor and other factors

do potential migrants internalize migrant rights in oecd host societies this paper analyzes how countries provision of migrant rights affects potential migrants destination choice combining data on bilateral migration desires from over 140 origin countries and data on migrant rights in 38 mainly oecd destination countries over the period 2007 2014 we find that potential migrants tend to favour destinations that are more open to the inclusion of immigrants into their society in particular better access to and conditions on the labour market as well as access to nationality and to permanent residency significantly increase the perceived attractiveness of a destination country these results are robust across different specifications and hold for subsamples of origin countries as well as of destinations moreover some results vary across types of respondents educational opportunities for migrants for instance affect the migration desires of individuals aged 15 to 24 years but less so of individuals in other age groups

the transfer efficiency and trade effects of direct payments all the different ways governments use to provide financialsupport to farmers can potentially distort trade and reduce net economic welfare however there are some types of support that are less trade distorting and more efficient than others this article reports the results of an analysis that examined different policy measures providing support to crop producers to rank them in terms of their effects on a selection of indicators with a particular focus on trade distortion and income transfer efficiency 1 we begin with an analysis of the differences in policy impacts among the three main categories of support provided to crop producers in oecd countries market price support payments based on land use and payments based on use of purchased inputs oecd 2001c that analysis is based on a two region model of equilibrium in the world market for a representative crop analytical solutions to this modelare devel oped to compare the production trade and income effects of the different support measures following procedures used in cahill and in moro and sckokai comparisons are of impact ratios using market price support as the reference category these ratios measure the effect on production trade or farm income of a given joe dewbre jesus anton and wyatt thompson are economists in the agricultural directorate of the organization for economic cooperation and development where the underlying analysis was undertaken the views expressed are our own and not necessarily those of the oecd secretariat or its member countries we thank our secretariat colleagues ken ash carmel cahill wilfrid legg and michele patterson for helpful comments on an earlier draft and stephane guillot for computer programming assistance this article was presented in a principal paper session at the aaea annualmeeting chicago il august 2001 the articl es in these sessions are not subjected to the journal s standard refereeing process 1

estimation of farmers risk attitude an econometric approach abstract an econometric procedure for estimating arrow pratt coefficients of risk aversion is derived the model of farmers allocating land among different crops and time between leisure and labor allows for testing arrow s hypotheses of decreasing absolute risk aversion and increasing relative risk aversion the empirical results support these hypotheses

replacement of agricultural price supports by area payments in the european union and the effects on pesticide use this article determines the contribution of recent european union agricultural policy reforms on the use of pesticides our theoretical model extends the multioutput generalization of the lichtenberg zilberman damage control technology model developed by chambers and lichtenberg our empirical analysis uses farm level data for a sample of french farms results suggest that price effects on the use of pesticides are always more elastic than area payment effects this indicates that policy reforms consisting of a reduction in price supports in favor of area payments may reduce application of crop protection inputs such policy changes which represent a certain degree of decoupling took place under the 1992 common agricultural policy reforms

acreage decisions under risk the case of corn and soybeans an acreage supply response model is developed under expected utility maximization the resulting framework is used to specify and estimate a system of risk responsive acreage equations for corn and soybeans in the united states particular attention is given to the truncation effects of government price supports on the distribution of corn and soybean prices also a wealth variable is included in the acreage equations the empirical results indicate that risk and wealth variables play an important role in cornsoybean acreage decisions the analysis also shows that cross commodity risk reduction is important in acreage allocation decisions

the influence of commodity programs on acreage response to market price with an illustration concerning rice policy in the united states farm programs influence the parameters of typically estimated supply functions we develop and apply an approach that uses detailed information about farm program incentives and constraints to identify underlying structural acreage response parameters when the data reflect behavior under complex government commodity programs we illustrate the approach with data on rice acreage response to market price in the united states for u s rice estimates that fail to appropriately incorporate the program rules under which market data were generated are three to four times smaller than the structural parameters that are useful for most policy analysis or projections under alternative policies

the impact of the 1999 cap reforms on the efficiency of the cop sector in spain the cereal oilseeds and protein crop sector cop occupies a prominent position within the european union s agricultural sector within spain the cop sector accounts for almost a third of total agricultural guidance and guarantee fund expenses and half of the utilized agricultural area uaa the cop sector is not only relevant because of its physical and economic magnitude but also because of the political attention it receives the common agricultural policy cap reforms that occurred during the 1990s paid special attention to this sector this article aims to determine the impacts of agenda 2000 on a sample of spanish cop farmers production decisions by using an output oriented stochastic distance function the distance function allows for an assessment of the reform motivated changes on total output input used input composition and crop mix it also permits an assessment of the impacts of the reform on farms technical efficiency results show that the reform has shifted the production frontier inward and changed output composition in favor of voluntary set aside land with respect to input composition agenda 2000 induced a decrease in land fertilizers pesticides and other inputs in favor of labor in addition agenda 2000 has had a negative impact on technical efficiency

trade policy options for chile this article uses a multisector multicountry computable general equilibrium model to examine chile s strategy of additive regionalism negotiating bilateral free trade agreements with all of its significant trading partners taking chile s regional arrangements bilaterally only its agreements with northern partners provide sufficient market access to overcome trade diversion costs due to preferential market access however additive regionalism is likely to provide chile with gains that are many multiples of the static welfare gains from unilateral free trade at least one partner country loses from each of the regional agreements considered and excluded countries as a group always lose gains to the world from global free trade are estimated to be vastly larger than gains from any of the regional arrangements

least cost subsidization alternatives this paper addresses the problem of designing least cost subsidy schemes for agriculture thus it departs somewhat from the mainstream of the literature on agricultural policy analysis which following wallace s pioneering work focuses on evaluating alternative policies in a welfare theoretic context the approach taken here is more closely related to that taken in the optimal taxation literature e g mirrlees it involves the specification of a goal of farm policy and an examination of appropriate policy instruments to achieve that goal the only policy instruments considered are linear subsidies i e subsidies all individuals receive while the criterion for choosing among alternative subsidy schemes is the minimization of government expenditure hence we are interested in isolating the cheapest way of attaining a stated policy objective and we do not consider the welfare consequences of such policy action no use is made of traditional welfare measures like deadweight loss and consumer surplus the approach is purely positive and therefore ignores issues like those raised in gardner s recent paper on efficient redistribution of eco

the econometrics of damage control why specification matters the contribution of damage control agents to production differs fundamentally from that of standard inputs lands labor capital this paper develops an econometric model based on the key characteristics of damage control agents and examines its properties it demonstrates that standard production function specifications overestimate damage control agent productivity and have erroneous implications for the evolution of damage control agent productivity and use in response to changing environments e g the spread of pest resistance it also proposes several alternative specifications and discusses methods for estimating them

efficiency of decoupled farm programs under distortionary taxation when lump sum taxation is not feasible decoupled transfers to farmers which require raising government revenue will entail welfare loss somewhere in the economy assuming the government s objective is to assure a given welfare level for farmers we show that when decoupling is possible free trade is always superior to some tariff protection for a small country even under distortionary taxation as expected for a large country there is scope for an optimal tariff policy that improves the terms of trade however we show a separation between the exercise of market power through an optimal tariff and the interaction of distortionary taxation with transfers to farmers we conclude that decoupling is usually desirable even in a distorted economy in which lump sum taxation is not feasible

macroeconomic consequences of farm support policies agricultural protectionism is a basic factor underlying the u s trade deficit third world debt and global underemployment yet despite the seriousness of the problem and attention given to it by many researchers little progress has been made in formulating and implementing policies to deal with it the scholars and experts here assembled present for the first time a quantification and analysis of the impact upon the world economy of reduction or elimination of agricultural protectionism they question why give the magnitude of the problem inferior policies endure despite the weight of evidence that they have failed the answer they derive is that there is no general understanding of the true cost of the failure and therefore it is necessary to initiate reform from outside agricultural circles

the economic cost of the cap revisited this paper reports estimates of the domestic economic cost of the common agricultural policy cap from computable general equilibrium simulations which incorporate imperfect competition in the non primary sectors as well as explicit modelling of agricultural protection imperfect competition is characterised to include hierarchical preferences addressing the notion of varietal diversity as an important decision variable in consumer behaviour results indicate that repeal of the cap would reduce varietal diversity in food processing in the eu causing utility losses however these would be countered by positive varietal effects in other sectors and by strong allocative effects the net cost of the cap to the eu is estimated at 0 2 of gross domestic product gdp for an individual member state the cost can be considerably larger as with the uk where the estimate is above 0 5 of gdp

a global assessment of human capital mobility the role of non oecd destinations discussions of high skilled mobility typically evoke migration patterns from poorer to wealthier countries which ignore movements to and between developing countries this paper presents for the first time a global overview of human capital mobility through bilateral migration stocks by gender and education in 1990 and 2000 and calculation of nuanced brain drain indicators building on newly collated data the paper uses a novel estimation procedure based on a pseudo gravity model then identifies key determinants of international migration and subsequently uses estimated parameters to impute missing data non oecd destinations account for one third of skilled migration while oecd destinations are declining in relative importance

the effect of social capital on group loan repayment evidence from field experiments an important question to microfinance is the relevance of existing social capital in target communities to the performance of group lending this research presents evidence from field experiments in south africa and armenia in which subjects participate in trust and microfinance games we present evidence that personal trust between group members and social homogeneity are more important to group loan repayment than general societal trust or acquaintanceship between members we also find some evidence of reciprocity those who have been helped by other group members in the past are more likely to contribute in the future during the past decade exploring the role that social capital plays in economic behaviour has emerged as one of the most fascinating and fertile areas of economic research although precise definitions of social capital are notoriously difficult to pin down one of the early pioneers of the concept coleman 1988 defines social capital as social structure that facilitates certain actions of actors within the structure in his definition coleman specifically highlights the roles of mutual obligation expectations and trustworthiness social norms social sanctions and the transmission of information important studies in both developed and developing countries have analysed the impact of social capital in economic relationships putnam s celebrated work making democracy work civic traditions in modern italy 1993 and bowling alone america s declining social capital 1995 brought attention to the role that social capital plays in the development of the modern state udry s ground breaking 1994 work in nigeria illustrated how the social capital existing in traditional societies may allow for more efficient credit contracts than in developed economies with weaker social

profit maximizing land use revisited the testable implications of non joint crop production under land constraint this article derives new implications for the land allocation and production decisions of profit maximizing farm firms where production of different crops is non joint but subject to a constraint on the total land area these implications are observable and thus subject to empirical scrutiny an estimable model of crop production land allocation and input use decisions is derived that permits joint production and enables the implications of non joint but land constrained production to be tested this may improve econometric estimates of cross price elasticities of supply by linking models of land use and production decisions and allowing non jointness to be imposed where appropriate copyright 2013 oxford university press

women empowerment and economic development women empowerment and economic development are closely related in one direction development alone can play a major role in driving down inequality between men and women in the other direction empowering women may benefit development does this imply that pushing just one of these two levers would set a virtuous circle in motion this paper reviews the literature on both sides of the empowerment development nexus and argues that the interrelationships are probably too weak to be self sustaining and that continuous policy commitment to equality for its own sake may be needed to bring about equality between men and women

reform of the european union s common agricultural policy how to reach gatt compatibility abstract this paper studies the reform of the european union s common agricultural policy cap it examines three questions 1 1 do current reforms meet the targets specified in the uruguay round agreement 2 2 what additional reforms are needed to make cap gatt compatible and 3 3 does cap reform alleviate the eu s budgetary problem to investigate these issues we use a six region 13 sector computable general equilibrium model with explicitly modeled policies we find that cap reform worsens the eu s budgetary situation and does not meet the gatt targets we quantify support price reductions and quota increases needed to reach the targets

endogenous regressor binary choice models without instruments with an application to migration abstract this paper shows identification of a semiparametric binary choice model containing an endogenous regressor when no outside instrumental variable is available a simple estimator an easy test for endogeneity and an empirical application to us migration data are provided

comparing features of convenient estimators for binary choice models with endogenous regressors abstract we discuss the relative advantages and disadvantages of four types of convenient estimators of binary choice models when regressors may be endogenous or mismeasured or when errors are likely to be heteroscedastic for example such models arise when treatment is not randomly assigned and outcomes are binary the estimators we compare are the two stage least squares linear probability model maximum likelihood estimation control function estimators and special regressor methods we specifically focus on models and associated estimators that are easy to implement also for calculating choice probabilities and regressor marginal effects we propose the average index function aif which unlike the average structural function asf is always easy to estimate

moral hazard and peer monitoring in a laboratory microfinance experiment abstract this paper reports the results from a laboratory microfinance experiment of group lending in the presence of moral hazard and costly peer monitoring we compare peer monitoring treatments in which credit is provided to members of the group to individual lending treatments with lender monitoring we find that if the cost of peer monitoring is lower than the cost of lender monitoring peer monitoring results in higher loan frequencies higher monitoring and higher repayment rates compared to lender monitoring in the absence of monitoring cost differences however lending monitoring and repayment behavior is mostly similar across group and individual lending schemes within group lending contrary to theoretical predictions simultaneous and sequential lending rules provide equivalent empirical performance

brain drain and economic growth theory and evidence we focus on the impact of migration prospects on human capital formation and growth in a small open developing economy we assume that agents are heterogeneous in skills and take their educational decisions in a context of uncertainty regarding future migrations we distinguish two growth effects an ex ante brain effect migration prospects foster investments in education because of higher returns abroad and an ex post drain effect because of actual migration flows the case for a beneficial brain drain bbd emerges when the first effect dominates i e when the average level of human capital is higher in the economy opened to migrations than in the closed economy we derive the theoretical conditions required for such a possibility to be observed using cross section data for 37 developing countries we find that the possibility of a bbd could be more than a theoretical curiosity

trade wars trade negotiations and applied game theory what is the value of trade negotiations quantitative measures of the value of trade liberalisation generally ignore the strategic aspects of protection policy the traditional approach is to compare welfare levels under the existing structure of protection with welfare levels under some alternative structure of protection such as unilateral or multilateral free trade we add two additional questions first in a non cooperative context are either of these points of comparison consistent with countries adopting best response policies given the policies of other countries second in the context of a cooperative negotiation are either of these points of comparison consistent with the outcome that meets certain plausible criteria for a bargaining process if the answer to either of these questions is no then the traditional approach provides at best an incomplete answer to the original question and could provide a misleading answer a simple example illustrates our basic point consider the game in table i this is a non cooperative game between the united states and ec in which each agent has just two pure strategies to do nothing and keep k the existing structure of protection in place or to abolish a trade barriers on imports from the other agent only the payoffs shown are the annual welfare impact relative to the status quo as measured by the equivalent variation ev in income in billions of i973 u s dollars the values shown are taken from the simulation results of brown and whalley i980 table i 4 p 864 what is the best response of the united states in this context if the ec decides to keep its protection structure the united states does better by also keeping its protection structure intact in other words given that the ec plays k it is a best response for the united states to also play k thus the traditional approach would imply that the united states gains from protection in this case however what is the best response of the united states if the ec decides to abolish its protection structure in this instance the united states does best by also abolishing its protection structure the point here is simply that the welfare cost of protection to the united states depends on what the ec does without saying something about what the ec will do one cannot answer our question vis a vis the united states as it happens in this particular game we

food insecurity gender and international migration in low and middle income countries abstract the determinants of migration have been widely studied but research has rarely addressed the roles of food insecurity and gender in the migration decision process to address these gaps we examine these relationships for 135 078 individuals across 94 low and middle income countries we use a series of binary choice models with sample selection and data from the 2014 2015 waves of the gallup world poll survey which includes the first global measure of individual level food insecurity results which are robust indicate that food insecurity is an important determinant of both migration intentions and preparations and the probability of migration intentions increase monotonically with the severity of food insecurity and the probability of migration preparations decrease these relationships also differ significantly by gender and level of gross national income evidence suggests a need for increased coordination between the international food security and migration policy agendas

market equilibrium with hidden knowledge and self selection the problem of the existence of a competitive equilibrium in models with hidden knowledge and self knowledge has been discussed previously by m rothschild and j e stiglitz 1976 c a wilson 1977 and j g riley 1979 recent analyses of such models by i cho and d kreps 1986 and riley argue for a particular outcome the pareto dominant separating zero profit one the authors prove the existence of such an outcome under very general conditions and generalizing the reactive equilibrium concept introduced by riley they prove this outcome is the unique reactive equilibrium copyright 1987 by the econometric society

tariff protection elimination and common agricultural policy reform implications of changes in methods of import demand modelling the study proposes a way for accommodating the traditional armington assumption to capture the possibility for a country to import imperfect substitutes as well as perfect substitutes for domestically produced goods when this possibility is incorporated into a modelling framework then a common agricultural policy elimination scenario including the setting to zero of import tariffs would have starker implications than many studies suggest to illustrate this point a computable general equilibrium cge model of the french economy is used highlighting agricultural and food sectors the study analyses the consequences for the french economy of a complete liberalization scenario in the european sector of cereals

compensating variation consumer s surplus and welfare the compensating variation was defined by j r hicks 1942 as the amount one would have to deduct from a person s income to make him just as well off after a change in prices and income as he had been in the initial situation if the compensating variation is positive the individual is better off under the new situation since the compensating variation furnishes a uniquely defined numerical cardinal indicator of welfare improvement it provides an implicit ranking of alternative prospective situations not only relative to the initial situation but also relative to each other in practice this appears to be how this and other tools of cost benefit analysis are actually used one is interested in knowing not only whether a particular bridge or a particular excise tax will lead to an improvement in welfare but which out of a set of alternative bridges or alternative tax systems will improve welfare the most 1 in this paper we analyze conditions under which the compensating variation can be validly used in this generalized sense these turn out to be precisely the same as conditions previously derived see our 1976 paper for the valid use of consumer s surplus as a welfare measure in our final section we analyze the problem of deriving the generalized equivalent and compensating variations either exactly or approximately from observable demand functions by means of generalizations of or alternatives to consumer s surplus

repayment performance in group lending evidence from jordan abstract using data from a survey of 160 urban borrowing groups of the microfund for women in jordan we investigate the effect of screening peer monitoring group pressure and social ties on borrowing groups repayment behavior as an indirect test of different theoretical models the dependent variable used captures the intensity of default measured by the total number of days of late repayment after each due date allowing us to use count data models with cluster standard errors as theory predicts our empirical analysis suggests that peer monitoring group pressure and social ties reduce delinquency the paper uncovers interesting evidence about the role of social ties and religion most notably in an area where religion contributes to attitudes and beliefs of individuals we find that religiosity improves repayment performance

simple econometrics of pesticide productivity this paper develops a multioutput generalization of the lichtenberg zilberman damage control technology the dual representation of the technology is shown to be conditionally additive in the price of abatement activities and other prices an econometric procedure for estimating the dual technology is developed and applied to an aggregate u s agricultural data set the conditionally additive nature of the model allows estimation of pest damage from the dual technology our estimates of aggregate u s pest damage are much lower than previous estimates

do decoupled payments affect u s crop area preliminary evidence from 1997 2000 the federal agriculture improvement and reform fair act of 1996 changed the manner in which the u s government provides direct payments to u s farmers under the fair act producers are eligible for fixed production flexibility contract pfc payments independent of the production of specific crops 1 with a few exceptions 2 supplemental market loss assistance mla payments authorized in subsequent legislation have been made to producers under similar terms i e a producer cannot increase or decrease mla payments by increasing or decreasing production the united states has declared that pfc

the role of group size in group lending abstract this paper explores group size in joint liability lending primarily in the adverse selection framework with local borrower information a single standardized contract that imposes full joint liability subject to a limited liability cap is optimal further if gross returns to borrowing are moderately high this contract results in perfectly efficient lending if groups are large enough however raising group size accomplishes nothing if there is no local borrower information these results show that more is required for efficient lending than full within group insurance and highlight a complementarity between group size and social capital very similar results are shown in two different settings ex ante and ex post moral hazard though the type of social capital that complements group size varies across the settings taking a step toward modeling drawbacks of larger groups it is shown that if information deteriorates sufficiently with group size an intermediate group size does better than either extreme simulations suggest that most of the efficiency gains from larger groups are realized in group sizes below ten and that outreach and efficiency can increase dramatically when a moderate group size threshold is crossed

do risky microfinance borrowers really invest in risky projects experimental evidence from bolivia abstractthis paper reports the results of an experiment testing a fundamental assumption in stiglitz and weiss 1981 model of credit rationing that defaulting borrowers are associated with investment in risky projects through an artefactual field experiment with 200 bolivian microfinance borrowers we observe that subjects from real world delinquent borrowing groups do not prefer risky projects to safer ones significantly more than subjects from repaying groups instead our results support more recent behavioural theories of credit market failure implications are that defaulting microfinance borrowers may be those who take too little investment risk rather than those who take too much

challenges in quantitative economic analysis in support of multilateral trade negotiations abstract a wide range of economic analysis of agricultural trade liberalization was performed prior to and during the uruguay round of trade negotiations views differ as to the effectiveness of this research although most would agree that it became less relevant as the negotiations progressed this paper reviews the contributions of economists to the trade liberalization debate with an emphasis on the quantitative assessment of multilateral agricultural trade liberalization with a new round of agricultural trade negotiations scheduled to begin in 1999 it is crucial that the quantitative work required to support these negotiations begin in the near future the authors conclude that the uruguay round outcome provides numerous challenges and opportunities in analyzing the traditional agenda of agricultural trade liberalization in addition new issues will be added to the agenda of the next round of negotiations these include trade and the environment competition policy and intellectual property rights it is important that economists begin to develop a research agenda that can address these issues and become activists in addressing these topics in public forums

group lending with sequential financing contingent renewal and social capital this paper focuses on the dynamic aspects of group lending in particular sequential financing and contingent renewal we examine the efficacy of these two schemes in harnessing social capital we find that for the appropriate parameter configurations there is homogenous group formation so that the lender can ascertain the identity of a group without lending to all its members thus screening out bad borrowers partially moreover under certain parameter configurations negative assortative matching occurs as a robust phenomenon

in search of rational government what political preference function studies measure and assume political preference function ppf studies assume that policy making can be described by a mathematical problem in which a rational government maximizes a function of interest groups welfares the purpose of my paper is to explain in depth ramifications of ppf study assumptions and methodology ppf studies that attempt to measure interest group political power do so by measuring marginal rates of transformation along a pareto frontier one can estimate political power with a ppf only if observed policies are pareto efficient which may depend on the assumed number of interest groups and policy instruments marginal rates of transformation need not reveal anything meaningful about interest group political power and may incorrectly measure the direction of transfers

women s liberation what s in it for men the nineteenth century witnessed dramatic improvements in the legal rights of married women given that these changes took place long before women gained the right to vote they amounted to a voluntary renouncement of power by men in this paper we investigate men s incentives for sharing power with women in our model women s legal rights set the marital bargaining power of husbands and wives we show that men face a tradeoff between the rights they want for their own wives namely none and the rights of other women in the economy men prefer other men s wives to have rights because men care about their own daughters and because an expansion of women s rights increases educational investments in children we show that men may agree to relinquish some of their power once technological change increases the importance of human capital we corroborate our argument with historical evidence on the expansion of women s rights in england and the united states

joint liability lending and the rise and fall of china s township and village enterprises abstract we present a new explanation for the rise and fall of collectively owned enterprises based on the changing lending preferences of banks until the mid 1990s bank loans to collective firms exhibited the key features of joint liability lending supported by the sanctioning ability of local government leaders however subsequent changes in collateral firm performance interest rates and financial competition led banks to prefer individual lending to private firms this explanation is supported by empirical analysis of the determinants of bank lending preferences the involvement of township leaders in lending and the ability of firms to obtain loans

south south migration and discrimination against women in social institutions a two way relationship summary using the social institutions and gender index sigi from the oecd development centre this paper provides evidence on the two way relationship between discrimination against women in social institutions and south south migration on the one hand discriminatory social institutions in both origin and destination countries are an additional determinant of female migration on the other hand migration implies changes in discrimination against women according to the level of gender inequalities at destination specifically migration toward countries with low levels of discrimination promotes gender equality in social institutions at home while migration toward destinations with high levels of discrimination has the reverse effect

judging agricultural policies a survey this survey provides a structured picture of 40 years of literature which uses welfare economic tools to judge agricultural policy challenges and developments of normative agricultural policy analysis are discussed in an easily accessible graphical framework it is shown how the literature has gone from examining a very small discrete set of simple policies to a much broader often continuous set of policies that combine policy instruments simultaneously the importance of the pareto criterion used to explore the limits of how government can affect welfare is revealed moreover given the importance of the objective of income redistribution in agricultural policy agricultural economists have often departed from the purely efficiency oriented tradition in economics it is shown that they have tried to incorporate equity considerations by either adding these criteria as constraints to the social welfare function or directly incorporating these criteria in the functional form of the social welfare function

does the law of supply hold under uncertainty a widely held conjecture of economists is that the quantity supplied by pricetaking producers increases with an increase in output price law of supply this cornerstone of economics has been proven repeatedly with many techniques under many different sets of assumptions and is found in all textbooks on principles of economics most of these proofs assume full certainty of production relationships single product technology and or risk neutrality in a world of uncertainty one of the most crucial aspects of economic behaviour is risk aversion with risk aversion diversification is a basic response to economic uncertainty thus models of producer behaviour under uncertainty need to consider multioutput technology where diversification is a possibility this paper points out that the widely held law of supply may fail when these generalities risky multioutput production with risk aversion are introduced simultaneously where diversification is also affected by a capacity constraint in production conditions are developed under which the law fails holds the peculiar result occurs because increasing price can increase profit risk more than proportionally while expected profit increases proportionally this relative increase in risk causes a tendency to shift production capacity into an alternative activity the first section introduces a model of production under uncertainty the second section analyses the behaviour of supply in the special case of additive production risk without price risk the third section shows that similar problems can be encountered with other cases as well empirical examples which demonstrate relevance of the results are also given

how different are the british in their willingness to move evidence from international social survey data drinkwater s and ingram p how different are the british in their willingness to move evidence from international social survey data regional studies this paper analyses people s willingness to move using data from the 1995 british social attitudes survey and international social survey programme the personal characteristics and sub regional indicators that are important in explaining the willingness to move within britain are identified it is also found that the willingness to move is only higher in a few other countries including the usa the equivalent desire to move is found to be much lower in eastern european countries and in several other european union member states compositional effects such as age and education are generally important in explaining differences in attitudes towards migration in comparison with other western economies however structural effects such as institutions history and culture tend to play a more dominant role in explaining differences compared with countries

damage control productivity why econometrics matters cet article consiste d une part en une critique de l approche de lichtenberg et zilberman 1986 pour l explication de la surestimation habituelle de la productivite marginale des pesticides les auteurs montrent que l argument selon lequel les fonctions de production standard cobb douglas translog ne seraient pas adequates pour la modelisation de l action des pesticides sur les rendements agricoles n est vraisemblablement valide que dans des cas tres particuliers d autre part on propose une autre explication potentielle de cette surestimation de la productivite marginale des pesticides l existence de biais d heterogeneite tels qu ils ont ete mis en evidence par mundlak 1961 ces discussions theoriques sont illustrees a l aide d estimations et de tests realises dans le cadre de la methode des moments generalisee a partir d un panel issu du rica de 496 agriculteurs suivis de 1987 a 1990

group lending sequential financing lender monitoring and joint liability abstract we develop a simple model of group lending based on peer monitoring and moral hazard we find that in the absence of sequential financing or lender monitoring group lending schemes may involve under monitoring with the borrowers investing in undesirable projects moreover under certain parameter configurations group lending schemes involving either sequential financing or a combination of lender monitoring and joint liability are feasible in fact group lending schemes with sequential financing may succeed even in the absence of joint liability though the repayment rate will be lower in the absence of joint liability however group lending with lender monitoring is unlikely to be feasible

joint liability lending and the peer selection effect we show that the joint liability lending contracts derived in ghatak 2000 violate an ex post incentive compatibility constraint which says that the amount of joint liability cannot exceed the amount of individual liability we derive and characterise optimal separating joint liability contracts incorporating this constraint

immigrant selectivity and wages the evidence for women in an effort to extend the analysis of selectivity to female immigrants this paper examines the impact of economic conditions at the time of migration on the subsequent wages of foreign born women in the united states in addition the variables chosen to describe the migration decision have been expanded to include the effects of household status and immigration policy these results are compared to previous results for men and provide additional evidence about how the context of the migration decision affects the subsequent success of immigrants in the united states the sample for this project comes from the april 1983 current population survey and consists of married native and foreign born women between the ages of 16 and 64 excerpt

micro credit in chiapas mexico poverty reduction through group lending micro credit mc programs lend money to poor borrowers using innovative mechanisms such as group lending under joint liability while successfully accounting for the presence of asymmetric information in underdeveloped financial markets mc programs have achieved what the conventional financial institutions and the government have not been able to lend to the poor impressive loan recuperation and a positive impact in poverty reduction this article analyzes the performance of alsol an mc program in chiapas mexico for 2151 participants in urban and rural areas for the time period between july 2000 and july 2001 while loan recuperation is high 95 administrative costs also remain high socially responsible lenders and donors play a key role in providing continuous funding to mc programs and assisting in reducing the level of poverty

optimal collective contract without peer information or peer monitoring if entrepreneurs have private information about factors influencing the outcome of an investment individual lending is inefficient the literature typically offers solutions based on the assumption of full peer information to solve adverse selection problems and peer monitoring to solve moral hazard problems in contrast i show that it is possible to construct a simple budget balanced mechanism that implements the efficient outcome even if each borrower knows only own type and effort and has neither privileged knowledge about others nor monitoring ability the mechanism satisfies participation incentives for all types and is immune to the rothschild stiglitz cream skimming problem despite using transfers from better types to worse types the presence of some local information implies that the mechanism cannot be successfully used by formal lenders thus a local credit institution can emerge as an optimal response to the informational environment even without peer information or monitoring finally i investigate the role of monitoring in this setting and show how costly monitoring can increase the scope of the mechanism

peer monitoring and credit markets a major problem for institutional lenders is ensuring that borrowers exercise prudence in the use of the funds so that the likelihood of repayment is enhanced one partial solution is peer monitoring having neighbors who are in a good position to monitor the borrower be required to pay a penalty if the borrower goes bankrupt peer monitoring is largely responsible for the successful financial performance of the grameen bank of bangladesh and of similar group lending programs elsewhere but peer monitoring has a cost it transfers risk from the bank which is in a better position to bear risk to the cosigner in a simple model of peer monitoring in a competitive credit market this article demonstrates that the transfer of risk leads to an improvement in borrowers welfare

dynamic microlending under adverse selection can it rival group lending we derive an optimal lending contract in a two period adverse selection model with limited commitment on the borrower side the contract involves penalty interest rates after default and favorable rates after success under some conditions it also charges first time borrowers higher rates than repeat borrowers as in relationship lending because the lender is constrained to keep borrowing attractive while using revealed information to price for risk we compare the efficiency of a group lending contract of the kind popularized by the microcredit movement to the dynamic individual contract both types of contracts reveal the same information but the contracts face different constraints on using the information to improve risk pricing as a result either type of contract can lead to greater efficiency depending on specifics of the environment opening the possibility that dynamic lending has played a role comparable to that of group lending in the success of microcredit we also characterize the optimal dynamic group contract when both lending techniques are feasible and find that it combines both approaches but with varying emphases a recurrent theme is that in more marginal environments dynamic lending performs relatively better than and is prioritized over group lending we also discuss a number of extensions including spatially and serially correlated risk and the effect of competition

the production effects of agricultural income support policies under uncertainty this analysis decomposes the production impacts of income support programs into wealth insurance and coupling effects under the usual assumptions about preferences the wealth and insurance effects of many support programs increase optimal input levels even for supposedly decoupled programs if the program is coupled in the usual sense then all three effects often act in the same direction it is concluded that studies of trade and domestic policy reform in stochastic environments should consider insurance and wealth effects the derivative conditions required to obtain results are also subjected to scrutiny simulations for an iowa corn producer confirm the comparative statics

group lending under asymmetric information abstract this paper examines joint liability loan contracts as part of a screening mechanism adopted by lenders using group lending schemes a model and one period game are introduced in order to analyze the type of optimal loan contracts that emerge when lenders have less information than borrowers it is shown that under imperfect information lenders may be able to utilize joint liability contracts as a means of screening agent types by inducing endogenous group formation and self selection among the borrowers

the effect of common sources of regression error on benefit estimates discussions of the sources of error in recreation demand analysis are common in the existing literature the most traditional line of thought e g gum and martin considers the error component in predicting the individual s recreation behavior to arise from unmeasured socioeconomic factors others e g hanemann attribute at least some of this error to fundamental randomness in human behavior applied statisticians e g hiett and worrall on the other hand suggest that recall of annual number of recreational trips i e the quantity demanded is subject to substantial error still others e g brown et al have argued that recall of explanatory variables such as travel expenses contains error despite the discussion of potential error sources there is no work which relates the sources of error in the demand relationship with benefit measurement 1 of practical importance in recreational demand estimation is whether error assumptions have an influence on welfare measures since it is for public policy decision purposes that recreational demand estimation is usually undertaken will the estimated consumer surplus derived from demand analysis be independent of the assumed source of the error in the regression the purpose of this paper is to explore how the assumptions about sources of error influence estimates of recreation benefits a discussion of the various sources of error in de

risk matching behavior in microcredit group formation evidence from northern ethiopia theoretical models on group lending assume the formation of groups of homogenous risk types recent theoretical and empirical findings challenge this view arguing that when markets for insurance are missing risk homogeneity may not hold any more and risk heterogeneity can be the optimal outcome using data from an mfi in tigray ethiopia this article examines the homogeneity hypothesis and reflects on implications for repayment no evidence is found that supports risk homogeneity even accounting for matching frictions however we also do not find an explicit link between the presence of risk heterogeneity and side payments due to missing insurance as suggested in the literature instead other trust based social networks seem to underlie heterogeneity such social networks are often synchronized with credit groups and influence the probability of repayment under heterogeneity the implication is that successful repayment rates in group lending need not arise only under risk homogeneity but can also arise under risk heterogeneity heterogeneity may also serve to bridge missing insurance markets in poor rural environments mfis therefore need to consider such local conditions when designing their lending schemes

long term financial contracts can mitigate the adverse selection problem in project financing this paper shows that long term contracts can be used in competitive financial markets to separate entrepreneurs of different abilities in equilibrium poor entrepreneurs are financed with a sequence of standard debt contracts good entrepreneurs are financed with a modified contract in which the terms of the second part of the contract are contingent upon whether default is observed at the first date sorting is achieved through the contingent term in the contract in equilibrium good entrepreneurs will typically pay high interest rates to start with followed by relatively lower rates later if they are successful the solution in the paper is contrasted with the use of collateral incomplete information plays an important role in explaining the existence and form of enduring relationships when agents have private information and cannot precommit to future actions and announcements there may be a role for multiperiod contracts see townsend 1982 and hart and holmstrom 1986 such contracts tie future contractual terms to current behaviour moreover these contracts can be self enforcing simply relying upon the self interest of agents to see them through this paper shows that long term relationships may help overcome adverse selection problems the basic idea is very simple entrepreneurs have different probabilities of completing successive projects successfully observation of the returns cannot reveal the type of project however repeated observation of returns does give information about the type of project by the law of large numbers even if there are only two observations at successive dates it may be possible to separate types by making the terms of the contract at the second date conditional upon whether default is observed at the first we consider an entrepreneur who is risk neutral and who has a project at each of two successive dates the projects may require outside finance from banks risk neutral banks offer two period credit contracts to the entrepreneur we assume that there are two types of entrepreneur one with a high probability of completing projects successfully and a second with a low probability the probability of success is private information to the entrepreneur it is not known by the bank the problem of generalising the analysis to more entrepreneur types is discussed in the conclusion in section 2 of the paper it is shown that in this setting an adverse selection problem may arise we consider a sequence of standard debt contracts which specify a fixed payment at each date the important point to note here is that with

group lending local information and peer selection this paper analyzes how group lending programs use joint liability to utilize local information that borrowers have about each other s projects through self selection of group members in the group formation stage these schemes are shown to lead to positive assortative matching in group formation faced with the same contract this makes the effective cost of borrowing lower to safer borrowers because they have safer partners conditional on success their expected dues to the lender are lower than that of riskier borrowers the resulting improvement in the pool of borrowers is shown to increase repayment rates and welfare q 1999 elsevier science b v all rights reserved

panel data estimation techniques and farm level data models econometric models wishing to estimate relevant parameters for agricultural policy analysis are increasingly relying on unbalanced panels of farm level data since in the agricultural economics literature such models have often been estimated through simplified approaches in this paper we try to verify whether the adoption of more sophisticated panel data techniques may impact the estimation results for this reason the policy model by moro and sckokai 1999 has been re estimated using techniques recently developed in the econometric literature the preliminary results show a strong impact on the estimations this seems to suggest that the adoption of proper panel data techniques is likely to be very important in order to obtain reliable estimates of some key policy parameters

assortative matching adverse selection and group lending abstract this note reconsiders a theoretical result asserted to explain the success of group lending programs in ldcs it has been claimed that if groups are allowed to form themselves risky and safe borrowers will sort themselves into relatively homogenous groups this positive assortative matching can be exploited by lenders to solve an adverse selection problem that would otherwise undermine the effectiveness of such lending programs i show that the positive assortative matching result does not necessarily hold if earlier models are extended to incorporate dynamic incentives

damage control econometrics functional specification and pesticide productivity empirical studies of pesticide productivity have often concluded that the value of marginal product of pesticide exceeds marginal factor cost despite anecdotal and other evidence to the contrary this article presents estimates of pesticide productivity derived from alternative functional specifications of pesticide involvement in production results suggest that explanation of the magnitude of pesticide productivity estimates obtained in empirical studies may lie somewhere other than with functional specification

screening by the company you keep joint liability lending and the peer selection effect we look at an economic environment where borrowers have some information about the nature of each other s projects that lenders do not we show that joint liability lending contracts similar to those used by credit cooperatives and group lending schemes will induce endogenous peer selection in the formation of groups in a way that the instrument of joint liability can be used as a screening device to exploit this local information this can improve welfare and repayment rates if standard screening instruments such as collateral are unavailable

information and enforcement in informal credit markets we study loan enforcement in informal credit markets with multiple lenders but no sharing of credit histories and derive the dynamics of loan size and interest rates for relational lending in the presence of a sufficient fraction of natural defaulters the rest of the market can be incentivized against default by micro rationing sharper credit limits and possibly higher interest rates that serve as gateways into new borrowing relationships when there are too few natural defaulters in the market this can be supplemented by macro rationing random exclusion of some borrowers when information collection is endogenized multiple equilibria may arise

the impact of decoupled payments on farm choices conceptual and methodological challenges abstract in this paper we review the methodological framework for analysing decoupled payments in models of agricultural production market and technological uncertainty farm efficiency credit constraints farm household choices involving extra agricultural decisions policy uncertainty and long run impact of decoupling on investment and land values are the relevant issues that should be pursued by methodological and empirical analysis future research should refine the analysis of decoupled payments mainly trying to provide results that can be useful for policy simulation to bridge the gap between analysis at the individual level and sector policy models

help or hindrance religion s impact on gender inequality in attitudes and outcomes summary this paper investigates the effect of religiosity on attitudes toward gender equality using world values survey data results indicate that religiosity is strongly correlated with gender inequitable attitudes across countries further ols tsls and 3sls regression estimates reveal that gender inequitable attitudes are associated with negative effects on seven measures of gender equality of well being and public policy no single religion stands out as more gender inequitable than others the impact of religiosity is likely transmitted via stealth effects on everyday behavior in economic transactions in labor markets household resource allocation and government spending

out migration wealth constraints and the quality of local amenities the relation between income and migration intentions can be monotonically decreasing increasing or inverse u shaped dependent on the level of migration cost relative to wealth and if individuals are credit constrained using unique individual level data covering countries in three geographic regions sub saharan africa asia and latin america we show that migration intentions respond to individual wealth and that the pattern differs across the country groups studied in a manner compatible with the predictions of our simple model we also show that contentment with various dimensions of local amenities such as public services and security are key determinants of migration intentions

female migration a way out of discrimination abstract in light of the recent feminization of migration we empirically explore to what extent worldwide female migration can be explained by perceived gender discrimination making use of unique individual level data we track women s intention and preparation to migrate from 148 countries between 2009 2013 and disentangle how individual perceptions of gender discrimination can foster or impede female migration across countries we perform extensive robustness checks to mitigate concerns about potential threats to identification posed by measurement error and unobservables our evidence indicates that women who do not feel treated with respect and dignity have a higher incentive to migrate abroad the likelihood that these migration intentions are turned into actual preparations however depends on more traditional determinants such as household income network effects and family obligations furthermore we also show that more intense gender imbalances in economic and political opportunities prevent women from actually moving abroad