Beyond the grumpy rich man and the happy peasant: mixed methods and the impact of food security on subjective dimensions of wellbeing in India

This paper responds to the recent advocacy of subjective wellbeing in policy evaluation with an investigation of food security in rural Chhattisgarh, India, in 2010–2013. Conceptually, it suggests the need to move beyond a primary focus on happiness to consider a broader-based investigation into people’s subjective perceptions. In particular, it introduces a multi-domain model with some affinities to the capability approach, which asks what people think and feel themselves able to be and do. Methodologically, it suggests that the primary reliance on quantitative measures should be complemented by more qualitative approaches to give a more rounded appreciation of how people view their lives. Three approaches are presented: qualitative analysis of interview text; statistical analysis comparing a single measure of happiness with a broader, domain-based approach; and mixed qualitative and quantitative data generated from an individual case.     

Randomized Stopping Times and American Option Pricing with Transaction Costs

In a general discrete-time market model with proportional transaction costs, we derive new expectation representations of the range of arbitrage-free prices of an arbitrary American option. The upper bound of this range is called the upper hedging price, and is the smallest initial wealth needed to construct a self-financing portfolio whose value dominates the option payoff at all times. A surprising feature of our upper hedging price representation is that it requires the use of randomized stopping times (Baxter and Chacon 1977), just as ordinary stopping times are needed in the absence of transaction costs. We also represent the upper hedging price as the optimum value of a variety of optimization problems. Additionally, we show a two-player game where at Nash equilibrium the value to both players is the upper hedging price, and one of the players must in general choose a mixture of stopping times. We derive similar representations for the lower hedging price as well. Our results make use of strong duality in linear programming.     

Structural model for analysis of key performance indicators for sustainable manufacturer–supplier collaboration: A grey-decision-making trial and evaluation laboratory-based approach

With growing competition in the market and dire need for sustainability, it has become imperative for companies to build long-term relationship with their supply chain partners through sustainable collaboration. Among these, the supplier–manufacturer relationship is crucial for improved organizational, business and sustainable performance. Sustainable collaboration with suppliers involves crucial decision-making processes such as continuous supplier monitoring and supplier development. Hence, a critical challenge that a company faces is to identify the key performance indicators (KPIs) for assessing the performance of a supplier for sustainable collaboration. In this regard, this study focuses on identification of KPIs for an Indian home appliance company through exhaustive discussions involving multiple decision-makers. Further, a grey-based decision-making trial and evaluation laboratory (DEMATEL) model is proposed in the study for analysing the importance levels among the fifteen KPIs based on multiple stakeholder perspectives. The results of the grey structural model indicate seven KPIs as influencing KPIs and eight KPIs as influenced KPIs. The KPI ‘Information disclosure’ has been identified as the most influential KPI for the evaluation of suppliers for sustainable collaboration. The implications drawn from the result analysis model can provide meaningful insights to managers for identifying strategies towards strengthening the supplier–manufacturer relationship and achieving organizational and market competence.     

A Refined Binomial Lattice for Pricing American Asian Options

We present simple and fast algorithms for computing very tight upper and lower bounds on the prices of American Asian options in the binomial model. We introduce a new refined version of the Cox-Ross-Rubinstein (1979) binomial lattice of stock prices. Each node in the lattice is partitioned into nodelets, each of which represents all paths arriving at the node with a specific geometric stock price average. The upper bound uses an interpolation idea similar to the Hull-White (1993) method. From the backward-recursive upper-bound computation, we estimate a good exercise rule that is consistent with the refined lattice. This exercise rule is used to obtain a lower bound on the option price using a modification of a conditional-expectation based idea from Rogers-Shi (1995) and Chalasani-Jha-Varikooty (1998). Our algorithms run in time proportional to the number of nodelets in the refined lattice, which is smaller than n^4/20 for n > 14 periods.     

Modelling variety in consumption expenditure on food in India

In this paper we compute nutrient‐income elasticities for two macronutrients (calories and protein) and five micronutrients (calcium, thiamine, riboflavin, carotene and iron) using an all‐India sample of rural households for 1994. We show that in each case the respective elasticities are positive and significant. This lends support to our hypothesis that an increase in income would increase nutrient intake by varying amounts, contrary to some assertions. We then compute differences in the elasticity of substitution for non‐poor and poor across commodity groups and show that these differences, while significant, are small. This further corroborates our conclusion that increases in income of the poor would lead to greater increases in their nutrient intake as compared to the non‐poor, although the magnitudes will be small.     

Scaling behaviour of Treasury rates in India

This study finds that the scaling properties of India’s nominal and real Treasury rates are time varying, as is their multiscaling behaviour. We observe an association between the scaling behaviour of interest rates and the stages of development of the bill market. Interest rate behaviour is influenced by structural reforms, microstructure changes, and improvement in the operational efficiency of the Treasury market. Our findings suggest that monetary policy shocks have a persistent effect, but rates eventually revert to the mean. We show that the adaptive market hypothesis helps to delineate the dynamics of an emerging market undergoing a series of institutional and structural changes.     

Financial Reforms and Corruption: Which Dimensions Matter?

This paper investigates the effects of reforms in different dimensions of the financial sector on corruption in a panel of 82 countries. It finds that several, but not all, of the policies targeted toward liberalizing financial sector reduce corruption. Specifically, entry barriers, directed credit, securities market development, and the extent of banking supervision are significantly negatively associated with corruption. The effects of reforms in different dimensions of the financial sector also depend on the quality of the governance (bad versus good governance) and whether the country is an advanced or a non‐advanced economy. Finally, a stronger democracy and better law and order are found to be associated with lower corruption.     

Temporal variation of capture of anti‐poverty programs: rural public works and food for work programs in rural India

Using National Sample Survey data for rural India we examine the incidence of capture in two workfare programs in rural India: the Rural Public Works and the Food for Work Programs for 1993–1994 and 2004–2005 respectively. We discover a high degree of program capture among the general population. Among the traditionally backward groups in Indian rural society – but with considerable variation in their living standards – there appears to be a higher degree of capture among SC (Scheduled Castes), than among ST (Scheduled Tribes). Targeting among SC worsened over time. There was an increase in capture by the fourth quintile (of household per capita expenditure) of SC, ST and landowners. This may be reflective of a varying degree of collusion between the elite and the program implementing agencies (e.g. village councils) over time. Thus, potential benefits of workfare get undermined. We also provide evidence to suggest that income‐based targeting could outperform social group based targeting.     

“Capture” of anti-poverty programs: An analysis of the National Rural Employment Guarantee Program in India

Using pooled household level data for the Indian states of Rajasthan and Andhra Pradesh we find that the size of landholdings is a negative predictor of participation in the National Rural Employment Guarantee Program (NREGP). In state level analysis this pattern survives in Rajasthan but reverses in Andhra Pradesh where we notice a positive relationship. This paper examines whether this sign reversal in Andhra Pradesh is indicative of program capture in Andhra Pradesh and better targeting in Rajasthan. We compare land inequality, ratio of NREG and slack season agricultural wage rates, political interference, and geographical remoteness across the two states and conclude that program capture may be an issue in Andhra Pradesh, largely because of these reasons. We also find evidence of complementarity between NREGP and the Public Distribution System (PDS), implying that the real income transfer through food subsidy needs supplementation.