Can ecolabels survive in the long run?: The role of initial conditions

This paper analyzes the interaction between three environmental strategies within a population of firms: brown, green, and certified green strategies. We first present a restricted version of an evolutionary game where only brown and green strategies are possible. Next, the model is extended to allow green firms to certify their environmental strategies by joining an ecolabel. Our analysis shows that when it survives, the ecolabel tends to fully replace other uncertified environmental initiatives and to increase the proportion of firms implementing voluntary abatement. Nevertheless, the long-run survival of the ecolabel is not a necessary outcome of the model, although it can be facilitated via policies that reduce abatement or certification costs, increase consumer's environmental concerns or improve the credibility of the certifier, whereas it may be reduced by green-wash news about the sector. An ecolabel's survival may also depend on how and when it is launched. In those common situations where the model has two stable equilibria, initial conditions play a key role in determining the ecolabel's survival. Specifically important determinants are the degree of adoption of voluntary abatement when the ecolabel is launched and the amount and composition of firms that participate in the creation of the ecolabel.     

Can a decline in search cost increase prices?

This paper provides a new explanation of why a decline in consumers’ price search cost may not lead to lower prices. In a duopoly with price competition, I show that when some consumers are captive to one firm, there may be a non‐monotonic relationship between search cost and market power; firms may charge high prices with higher probability and the average price charged may be higher when consumers’ price search cost falls below a critical level. Furthermore, when firms have asymmetric captive segments, expected prices charged by each firm may move in opposite directions as search cost declines.     

Can child allowances improve fertility in a gender discrimination economy?

While it is believed that child allowances can improve fertility in principle, this paper shows that the effects of child allowances with gender discrimination should be reconsidered. It points out that gender wage discrimination can inhibit the positive effects of child allowances on fertility. With high gender wage discrimination, assuming that both parental time and market childcare goods are indispensable for childrearing, child allowances significantly increase maternal childcare time. On the other hand, child allowances also reduce childcare expenditure due to the decline in female labor time and increase in the relative price of market childcare goods, which eventually decreases fertility. We show that when the gender discrimination factor is greater than a certain cutoff, the effects of child allowances on fertility become negative. Moreover, male childcare time also plays an essential role in increasing fertility rates. Therefore, gender equality is a prerequisite for increased child allowances to be effective.     

Can a brain drain be good for growth in the source economy?

"This paper analyzes the interaction between income distribution, human capital accumulation and migration. It shows that when migration is not a certainty, a brain drain may increase average productivity and equality in the source economy even though average productivity is a positive function of past average levels of human capital in an economy. It is also shown how the temporary possibility of emigration may permanently increase the average level of productivity of an economy."     

Can Poverty be Alleviated in China?

The 2000s witnessed the third poverty alleviation wave in China. Compared with its predecessors, the third wave distinguished itself by new interventions and redefined standards for the National Poor Counties. This paper evaluates the effectiveness of the new program using a data set consisting of 1,411 of China's western and central counties from 2000 to 2010. It combines the propensity score matching method with the difference‐in‐differences approach, which helps to avoid selection bias and track the policy impact on variables of interest at each time point. It is found that the non‐western local governments tended to manipulate data on income and output growth to maintain the special transfer payments disbursed exclusively to the National Poor Counties. It is also shown that the program failed to improve the infrastructure and sanitary conditions in general.