How strong is the macroeconomic case for downward real wage rigidity?

We explore the existence of downward real wage rigidity (DRWR) at the industry level, based on data from 19 OECD countries for the period 1973-1999. The results show that DRWR compresses the distributions of industry wage changes overall, as well as for specific geographical regions and time periods, but there are not many real wage cuts that are prevented. More important, however, DRWR attenuates larger real wage cuts, thus leading to higher real wages. There is stronger evidence for downward nominal wage rigidity than for DRWR. Real wage cuts are less prevalent in countries with strict employment protection legislation and high union density.     

Keeping up with the Vaishyas? Caste and relative standing in India

People care about relative, and not only absolute, income. Thispaper investigates the importance of relative income withinand between castes in the Indian caste system, using a choiceexperimental approach. The results indicate that slightly morethan half of the marginal utility of income comes from somekind of relative income effects, on average. This is comparableto the results from previous studies in other countries. Belongingto a low caste and having a low family income are associatedwith higher concern for relative income. Moreover, an increasein the mean income of the caste to which the individual belongs,everything else held constant, reduces utility for the individual.Thus, the negative welfare effect of having a reduced relativeincome compared to the own caste average income dominates thepositive welfare effect due to increased relative income ofthe own caste compared to the income of other castes.     

FOREIGN NETWORKS AND EXPORTS: RESULTS FROM INDONESIAN PANEL DATA

Most firms and plants in developing countries produce only for the domestic market and few are able to export. One plausible hypothesis is that foreign networks decrease export costs and that plants with large amounts of such networks will be relatively likely to start exporting. We focus on two types of foreign networks: foreign ownership and imports of intermediate products. Our results suggest that plants in Indonesian manufacturing with any foreign ownership are substantially more likely to start exporting than wholly domestically owned plants. The results remain robust to alternative model specifications and after controlling for other plant characteristics. There is no effect on exports of imports of intermediate products.     

A survey-based choice experiment on coca cultivation

From 1997 to 2005, an astonishing 5200 million USD was invested to reduce cocaine production in Colombia, the world's main cocaine producer. However, little is known about the effectiveness of policies targeting coca cultivation. This paper uses a survey-based experiment to evaluate the effects of the two main policies: eradication and alternative development programs. Our results support Becker's (1968) model of crime participation and in addition shed light on other non-monetary factors that affect the coca cultivation decision: religion, legitimacy, remoteness, and poverty are found to be important. We find that coca cultivation is inelastic to increases in perceived risk and relative profit so eradication and alternative development would have a rather small effect on coca cultivation. A simple simulation exercise predicts that investing additional hundred thousand dollars in eradication decreases coca cultivation in only 1.5%.     

Dealing with Ignored Attributes in Choice Experiments on Valuation of Sweden’s Environmental Quality Objectives

Using a choice experiment, this paper investigates how Swedish citizens value three environmental quality objectives. In addition, a follow-up question is used to investigate whether respondents ignored any attributes when responding. The resulting information is used in model estimation by restricting the individual parameters for the ignored attributes to zero. When taking the shares of respondents who took both the environmental and the cost attributes (52–69% of the respondents) into account, then the WTP for each attribute changes if the respondents who ignored the attributes have a zero WTP. At the same time, we find evidence that not all respondents who claimed to have ignored an attribute really did. However, the most commonly ignored non-monetary attributes always have the lowest rankings in terms of WTP across all three environmental objectives. Thus, our results show that instead of ignoring attributes completely, respondents seem to put less weight on the attributes they claimed to have ignored.     

Democratic revolutions as institutional innovation diffusion: Rapid adoption and survival of democracy

Recent ‘democratic revolutions’ in Islamic countries call for a re-consideration of transitions to and from democracy. Transitions to democracy have often been considered the outcome of socio-economic modernization and therefore slow and incremental processes. But as a recent study has made clear, in the last century, transitions to democracy have mainly occurred through rapid leaps rather than slow and incremental steps. Here, we therefore apply an innovation and systems perspective and consider transitions to democracy as processes of institutional, and therefore systemic, innovation adoption. We show that transitions to democracy starting before 1900 lasted for an average of 50 years and a median of 56 years, while transitions originating later took an average of 4.6 years and a median of 1.7 years. However, our results indicate that the survival time of democratic regimes is longer in cases where the transition periods have also been longer, suggesting that patience paid in previous democratizations. We identify a critical ‘consolidation-preparing’ transition period of 12 years. Our results also show that in cases where the transitions have not been made directly from autocracy to democracy, there are no main institutional paths towards democracy. Instead, democracy seems reachable from a variety of directions. This is in line with the analogy of diffusion of innovations at the nation systems level, for which assumptions are that potential adopter systems may vary in susceptibility over time. The adoption of the institutions of democracy therefore corresponds to the adoption of a new political communications standard for a nation, in this case the innovation of involving in principle all adult citizens on an equal basis.     

Coevolutionary cycles of convergence: An extrapolation from the ICT industry

Convergence between technologies can be regarded as an increasingly emerging trend, and has received particular attention in the coming-together of previously distinct products and solutions within the information and communication technologies (ICT) industry. In previous research, the overall impact of the convergence phenomenon remains ambiguous. Whereas some scholars suggest convergence to be associated with disintegration, entry and growth, others relate the phenomenon to opposite effects, such as consolidation and shakeouts. This inconsistency in managerial conceptions on convergence formulates a need for an integrated understanding. Within a multi-case study approach, the convergence within ICT has been observed through examining the coevolution of actors in a converging environment, and patterns in innovation dynamics and managerial responses have been identified. In reflection with existing models of innovation cycles, a model for convergence innovation processes is elaborated and discussed. In particular, the reasoning within the ICT case set is transferred onto the currently emerging entrepreneurial activities in the intersection between nano- and bio-technologies (NBT), resulting in a comparison between ICT and NBT convergences, and deriving recommendations from a retrospective to a predictive context.     

Adverse selection and bilateral asymmetric information

A simple principal-agent model with bilateral asymmetric information and common values is developed. The agent(s) has private information about his characteristics but does not knowhow these affect outcomes. The principal knows how the characteristics translate into outcomes, but does not observe the characteristics. It is shown that equilibrium contracts aresimple in being designednot to reveal the agent's characteristics. When the agent knows howsome of his characteristics affect the outcome, contracts will be differentiated with respect to precisely those characteristics. An application to the use of genetic information is considered.     

On the screening power of incentive schemes

We demonstrate the screening power of incentive schemes. The model is a synthesis of a signaling model and the principal-agent problem. A non-cooperative stage where the agent may send a signal precedes a contractual stage where the agent serves a principal under an incentive scheme. After establishing the existence of a revealing equilibrium in an environment with long-lived principals and overlapping contracts, the paper discusses the implications for efficiency of the distribution of surplus. Finally, it is shown that under commitment the agency relationship may serve self-selection purposes and hence reduce the need of costly signaling.     

Assessing the impact of nocturia on health-related quality-of-life and utility: results of an observational survey in adults

Background and aim: The impact of nocturia (getting up at night to void) on health-related quality-of-life (HRQoL) is often under-estimated. This study investigated the relative burden in terms of HRQoL and utilities of nocturia in a real-world setting.

Methods: Patient data were collected from two surveys: a nocturia-specific, cross-sectional survey of physicians and their patients (DSP), and a general UK population health survey (HSFE). Utilities (EQ-5D-5L), productivity (Work Productivity and Activity Index), and the impact of nocturia symptoms (Nocturia Impact Diary and Overactive Bladder Questionnaires) were assessed against the number of voids. A robust linear regression model with propensity score weights was used to control for confounding factors in estimating utilities.

Results: Physician-recorded data were available from 8,738 patients across the US, Germany, Spain, France, and the UK; of these, 5,335 (61%) included patient-reported outcomes. In total, 6,302 controls were drawn from the two surveys and compared to 1,104 nocturia patients. Deterioration of HRQoL was associated with increasing number of night-time voids (p?p?p?Limitations: The cause of nocturia is multifactorial and the mostly elderly patients may have several concomitant diseases. The authors tried to adjust for the most common ones, but there may be diseases or unknown relationships not included.

Conclusions: Nocturia negatively affected HRQoL and patient utility. A clear effect is seen already at two voids per night. Every effort should, therefore, be made to reduce nocturia below the bother threshold of two voids per night.