Relative Performance Evaluations in a Model of Financial Intermediation

This paper focuses on the delegation by bank managers of lending decisions to their agents, typically subordinate employees of the bank. We assume that agents may base their decisions about lending to borrowers on decisions other banks have made about these same borrowers. Then we show that there exist some lazy or negligent agents who neither directly monitor the borrower nor imitate the other banks if managers use relative performance evaluations as incentive schemes. In addition, it is shown that the learning or adjustment process of agents exhibits cyclical dynamics. Journal of Economic Literature Classification Numbers: D82, D83.     

The effectiveness of bank recapitalization policies in Japan

This study examines the effectiveness of bank recapitalization policies in Japan. Based on a reading of the “business revitalization plan” submitted by banks requesting government funds, we identify four primary goals for the capital injection plan in Japan: (1) to increase the bank capital ratios; (2) to increase write-offs of non-performing loans; (3) to increase lending, in particular to small and medium enterprises, in order to avoid a “credit crunch”; (4) to encourage restructuring. Using a panel of individual bank data, we empirically estimate the effectiveness of the Japanese government policy of public fund injection in achieving the first three of these stated goals. Our empirical analysis reveals that, in general, the capital injections into the large internationally active banks were more effective than those into the smaller domestic banks in Japan. In addition, the second round capital injection, administered in 1998, was more effective than the first round, administered in 1997. The first capital injection in 1997 mostly served as a stop-gap measure to help the large international banks clear the 8% capital adequacy ratio (BIS ratio) required under the Basel Accord and did not make much contribution to the other policy objectives. The second round of capital injections in 1998 were more effective, boosting capital adequacy ratios for the domestic as well as international banks and supporting other policy objectives as well by stimulating banks to write off bad loans and increase domestic lending, in particular to small and medium enterprises.     

Valuing recreational fishing in Tasmania and assessment of response bias in contingent valuation*

We report results from contingent valuation studies in each of two Tasmanian fisheries that estimate the value of a day’s recreational fishing. Published studies estimating the economic value of recreational fishing in Australia and New Zealand are limited, although the economic and social benefits associated with this activity are sizable and the importance of understanding the behaviour of recreational fishers for the sustainable management of aquatic resources is well recognised. In our contingent valuation surveys, we use a double‐bounded version of the dichotomous choice question, which improves the statistical efficiency of the estimates relative to those based on a single dichotomous choice question. We test and control for response bias, in the form of anchoring and a shift effect, that may occur in data collected using a double‐bounded dichotomous choice (DBDC) elicitation format. We highlight the importance of identifying and correcting for response bias in DBDC models on a case‐by‐case basis. Our estimation results show that there is no significant difference in the willingness to pay for a day of recreational fishing across individuals who caught different number of fish in either fishery. This suggests that high and low catch fishers placed the same value on a day’s fishing.     

Calculations of the shares of financial resources paid by actual payers for transportation improvements

In this paper we identify and quantitatively describe the actual providers of financial resources, termed “actual payers”, for transportation improvements in some advanced countries, using various statistical data. The theoretical framework on which the concept of actual payers is based was presented in our earlier paper (Transport Policy, April 1998). The current study presents the results of calculations performed according to that concept. Because of the complexity and variety of the financial resources drawn on by transportation systems, the means of financial support for transportation have not been made clear when superficial classifications such as “National expenditures”, “Local expenditures”, “Owners/operators' funds” and “Debt” are used. In the present study, the financial support for transportation is calculated on the basis of what is spent by actual payers, such as users, payers of national taxes and payers of local taxes. This approach allows us to show that the shares of actual payers are quite different in each country. In addition, we indicate the characteristics of the shares of the actual payers in each country by calculating the ratio of the users' burden or the dependence of debt, etc.     

ON ASYMPTOTIC PROPERTIES OF THE PARAMETERS OF DIFFERENTIATED PRODUCT DEMAND AND SUPPLY SYSTEMS WHEN DEMOGRAPHICALLY CATEGORIZED PURCHASING PATTERN DATA ARE AVAILABLE*

We derive asymptotic properties of an estimator for supply and demand models extended with additional moments relating consumer demographics to the characteristics of purchased products. We clarify the structure of a practical sampling scheme in which the extended estimator is consistent, asymptotically normal, and more efficient than the original estimator. We provide conditions guaranteeing the asymptotic theorems hold for the random coefficient logit model of demand with oligopolistic suppliers. Extensive simulation studies demonstrate significant benefits of the additional moments in estimating the random coefficient logit model.     

Self‐rated Health Status of Japanese and Europeans in Later Life: Evidence from JSTAR and SHARE

Using panel data from two surveys in Japan and Europe, we examine the comparability of the self‐rated health of the middle‐aged and elderly across Japan and European countries and across the survey periods. We find that a person's own health is evaluated using different standards (thresholds) across the different countries and survey waves. When evaluated using common thresholds, the Japanese elderly are found to be healthier than their counterparts in the European countries. Reporting biases causing discrepancies between the changes in individuals' self‐rated health and their actual health over the survey waves are associated with education and country of residence.     

Charitable behavior in China under the Charity Law: Evaluation of charity advertisements involving in-groups and out-groups

This paper examines Chinese charitable behavior in 2016—the year the Charity Law was enforced—with a focus on the evaluation of charity advertisements. The 2016 Charity Law is the first law in China to regulate charitable organizations and their activities. It also provides various tax incentives for charitable organizations and donors. A study was conducted to understand Chinese charitable behavior in terms of in-groups and out-groups. Results indicate that the Chinese more positively evaluate charity advertisements targeting in-groups than those targeting out-groups. This relationship between advertisement type and advertisement attitude is mediated by ethnocentrism. Furthermore, we found that familiarity with the Charity Law moderates the effect of ethnocentrism on advertisement attitude.     

DOES SENDING FARMERS BACK TO SCHOOL HAVE AN IMPACT? REVISITING THE ISSUE

The Farmer Field School (FFS) is an intensive training program providing farmers with science‐based knowledge and practices, including integrated pest management. Recently there has been intensive debate as to whether or not this kind of training has any significant impact. Most case studies argue that the impact, in terms of a farmer's ability to reduce the use of pesticides while increasing yields, is significant. However, panel data studies using household panel data sets for Indonesia have not been able to confirm that this is the case. The present paper uses panel data available from previous panel data studies and applies a new model specification to reevaluate whether or not the FFS induces better performances among farmers enrolled in the program and also among their neighbors, who are expected to receive some spillover knowledge from the FFS alumna.     

POST‐PRIVATIZATION OWNERSHIP AND FIRM PERFORMANCE: A LARGE META‐ANALYSIS OF THE TRANSITION LITERATURE

This paper aims to perform a large‐scale meta‐analysis of the relationship between post‐privatization ownership and firm performance in Central and Eastern Europe and the former Soviet Union. Baseline estimation of a meta‐regression model that employs a total of 2,894 estimates drawn from 121 previous studies indicated the superior impact of foreign ownership on firm performance in comparison with state and domestic private entities. Furthermore, the estimation of an extended meta‐regression model that explicitly controls for the idiosyncrasies of transition economies and privatization policies strongly suggested that differences between countries in location, privatization method, and speed of policy implementation strongly influence the link between post‐privatization ownership structure and firm performance. We also found that these factors not only cause a remarkable gap between countries in terms of ex post improvement in firm performance but also significantly affect the interrelationship between foreign investors, domestic outsider owners, and firm managers, and the relative superiority of various domestic outsiders. Conclusive evidence of the harm caused to ex post firm performance by voucher privatization is one of the most noteworthy empirical findings in this paper.     

New Evidence on Intra‐Household Allocation of Resources in Japanese Households

This paper examines intra‐household allocation of resources to gain insight into family relationships and gender bias in Japanese households. We take the Engel curve approach to examine how adult consumption is affected by the presence of a child, either a boy or a girl, in the family. Empowered by diary‐based high quality spending data from the Family Income and Expenditure Survey, our empirical results show that adult consumption is significantly reduced in households with children; furthermore, gender bias is not observed in total adult expenditures, while responses of adult clothing expenses to the presence of a child are significantly different between a boy and a girl: spending on a father's clothing is reduced when the child is a school‐aged daughter, while spending on a mother's clothing decreases when a school‐aged son is in the home. Our analysis also shows that after the early 2000s girls receive a larger share of spending for children's clothing as well as for high school education than boys.