THE RELATIONSHIP BETWEEN CONSUMPTION, INCOME AND WEALTH IN HONG KONG

Abstract. This paper estimates a consumption function for Hong Kong along the lines of the standard life‐cycle model. I find a stable relationship between consumption, labour income and wealth with plausible long‐run estimates of the implied marginal propensity to consume out of income and wealth. The marginal propensity to consume out of housing wealth is estimated to be lower than in other industrialized economies, which is consistent with a relatively uneven distribution of wealth in Hong Kong. Arithmetically, the decline in housing wealth in Hong Kong since 1997 can more than account for the weakness of consumption since then.     

Disclosure and the outcome of securities litigation

Review of Accounting Studies - We examine the impact of disclosure by defendant firms on the outcome of securities fraud class actions. We hypothesize that firms issuing a higher quantity of...     

Hutton's flawed blueprint for the reform of public sector pensions— a critical analysis of the Independent Public Service Pensions Commission

This article critically analyses the two reports of the Independent Public Services Pensions Commission. It argues that the Commission has failed to establish a coherent case for major structural changes in UK public sector pensions.     

The Economics of Health System Payment

Summary Health care takes up 10 to 15 percent of GDP in most countries. In this lecture, I consider the efficiency of the medical system, focusing on the potential for payment reform to increase efficiency. Traditionally, medical care reimbursement has been based on the quantity and intensity of the services provided. While this system encouraged valuable innovation, it failed when high quality is not achieved by increased quantity. In theory, a more efficient system could be achieved by paying for medical care on the basis of quality of care provided, not just quantity. I discuss the design of such a payment system and review the literature on how pay-for-performance systems have worked in practice. Cautious optimism about the potential for efficiency gains from payment reform is warranted. This essay was presented as the 19th Tinbergen Lecture on October 21, 2005, in Amsterdam. I am grateful to session participants for comments.     

The measurement of poverty: A review of attempts to quantify the poor, with special reference to India

Poverty can be measured relatively, but a measure of absolute poverty is more useful for making cross-cultural comparisons. Unfortunately, the measurement of absolute poverty is difficult, because of inter-individual and intra-individual variations in minimum needs over time. As a result, simplistic assessment methods and confusion have marked many of the estimates of absolute poverty in less-developed countries. Using Indian material as an example, this paper attempts to trace the progress of the methodology; to explain how widely varying poverty estimates have come about; and to draw some tentative conclusions about the extent and pattern of absolute poverty in India today.     

Comparing the economic views of American and South Korean teenagers

Drawing directly upon responses to an economics questionnaire, this study offers a comparative perspective on how 125 American and 106 South Korean teenagers understand, view, and interact with their national economies. The study primarily focuses on responses to three questions. Should teenagers work for their parents without pay? What possessions do teenagers consider of most value? What do the terms "rich" and "poor" mean to teenagers? Analysis of the responses revealed that teenagers in both countries have a complex understanding of economic issues and hold a wide range of opinions on the concept of economic wealth and personal economic responsibility. Significantly, the study suggests that popular perceptions depicting teenagers as singularly materialistic may be misguided. The study also explores the extent to which cultural traits impact how teenagers view and interact with their economies.