Vulnerability,shocks and persistence of poverty: estimates for semi‐arid rural South India

This paper focuses on the vulnerability of rural households to poverty when a negative crop shock occurs. The analysis is based on the ICRISAT panel survey of households in a semi‐arid region in south India during 1975–84. Using a dynamic panel data model that takes into account effects of crop shocks, an assessment of vulnerability of different groups of households is carried out. What is somewhat surprising is that even sections of relatively affluent households are highly vulnerable to long spells of poverty when severe crop shocks occur. As such crop shocks are frequent in a harsh production environment, there must be a shift of emphasis in anti‐poverty measures from meeting income shortfalls among the poor to enabling the vulnerable to protect themselves better against these shocks.     

Poverty Dynamics of Households in Rural China

The objective of our study is to identify patterns and causes of households' transitions into and out of poverty using the long household panel data on rural China in 1989–2009. We propose a discrete‐time multi‐spell duration model that not only corrects for unobserved heterogeneity, but also addresses the endogeneity due to dynamic selection associated with household's livelihood strategies. The household choosing farming or out‐migration as a main livelihood strategy was more likely to escape from persistent poverty than those taking local non‐agricultural employment. The present study emphasizes the central role of agriculture in helping the chronically poor escape from poverty.     

Voting, bargaining, and factor income distribution

The effect of possible price control on factor income distribution under a democratic system is examined in the context of a collective bargaining model. A solution concept of the cooperative game theory called the Harsanyi-Shapley value is chosen to predict a likely outcome. The explicit solution for a non-atomic production economy, with two production factors and a fixed coefficient technology, is obtained. We find that this solution can be realized through prices. It is observed that in this solution, factor income shares respond to the ratio of the total endowments of two factors.     

From engineer to taxi driver? Language proficiency and the occupational skills of immigrants

We examine the ability of immigrants to transfer the occupational human capital they acquired prior to immigration. We first augment a model of occupational choice to study the implications of language proficiency on the cross‐border transferability of occupational human capital. We then explore the empirical predictions using information about the skill requirements from O^*NET and a unique dataset that includes both the last source country occupation and the first four years of occupations in Canada. We supplement the analysis using Census estimates for the same cohort with source country occupational skill requirements predicted using detailed human capital related information such as field of study. We find that male immigrants to Canada were employed in source country occupations that typically require high levels of cognitive skills, but rely less intently on manual skills. Following immigration, they find initial employment in occupations that require the opposite. Consistent with the hypothesized asymmetric role of language in the transferability of previously acquired cognitive and manual skills, these discrepancies are larger among immigrants with limited language fluency.     

A supply chain-transport supernetwork equilibrium model with the behaviour of freight carriers

This paper presents a supernetwork equilibrium model integrating supply chain networks with a transport network, namely, a supply chain-transport supernetwork equilibrium model. The model takes into account the behaviour of freight carriers and transport network users to endogenously determine the transport costs generated in the supply chain networks. The interaction between transport network and supply chain networks can also be examined. Results of the numerical tests reveal that the improvement of transport network could enhance the efficiency of supply chain networks. The paper makes contributions to modelling of supply chain networks as well as to that of transport networks.     

Japan’s return to gold: Turning points in the value of the yen during the 1920s

We identify turning points in the value of the yen during the 1920s to determine which factors were perceived by market participants as affecting Japan’s probability of returning to the gold standard. The 1920s were marked by military expansionism, political turmoil, and other dramatic political and institutional events. We conclude that changes of power between the Kenseikai and Seiyukai parties and worsening diplomatic relations with China were primarily responsible for turning points in the value of the yen. The democracy movement and the associated expansion of suffrage seem not to have been viewed as important by contemporaries.     

Poverty,undernutrition and vulnerability in rural India: role of rural public works and food for work programmes

This paper analyses the effects of access to Rural Public Works (RPW) or Food for Work programme (FFW) on consumption poverty, vulnerability and undernutrition in India using the large household data sets constructed by the National Sample Survey for 1993 and 2004. The treatment-effects model is used to take account of sample selection bias in evaluating the effects of RPW in 1993 or FFW in 2004 on poverty. We have found significant and negative effects of participation in RPW and the Food for Work Programme on poverty, undernutrition (e.g. protein) and vulnerability in 1993 and 2004.     

Dynamic Fund Protection

Abstract

Dynamic fund protection provides an investor with a floor level of protection during the investment period. This feature generalizes the concept of a put option, which provides only a floor value at a particular time. The dynamic protection feature ensures that the fund value is upgraded if it ever falls below a certain threshold level. Gerber and Pafumi (2000) have recently derived a closed-form expression for the price of this protection when the basic portfolio follows geometric Brownian motion. In this paper we examine the pricing of this feature under the constant elasticity of variance process. Two approaches are used to obtain numerical results. First, we show how to extend the basic Monte Carlo approach to handle the particular features of dynamic protection. When a discrete-time simulation approach is used to value a derivative that is subject to continuous monitoring, there is a bias. We show how to remove this bias. Second, a partial differential equation approach is used to price dynamic protection. We demonstrate that the price of the dynamic protection is sensitive to the investment assumptions. We also discuss a discrete time modification of the dynamic protection feature that is suitable for practical implementation. The paper deals just with pricing and does not consider the important question of reserving for these contracts.