Effects of residential relocation on household and commuting expenditures in Shanghai, China

Over the past three decades, China's cities have undergone massive spatial restructuring in the wake of market reforms and economic growth. One consequence has been a rapid migration of urban residents to the periphery. Some movers have been forced out either by rising urban rents or government reclamation of their residences. Others have relocated willingly to modernized housing or for other lifestyle reasons. This article examines the effects of relocation to the urban edge on household well-being. It explores the factors underlying changes in housing and transportation costs as households move to the periphery. The research also examines whether those who moved involuntarily are affected differently from those who moved by choice. Results show that, relative to those who moved by choice, involuntary movers are disproportionately and adversely affected in terms of job accessibility, commute time, housing consumption and disposable income. The findings also show that, compared with higher-income households, lower-income groups are disproportionately affected in relation to housing costs, accessibility losses, disposable income and household worker composition. These results indicate that relocation compensation for involuntarily relocated households should be expanded to include more than just housing value: it should encompass urban location changes, household needs and relocation costs.     

Subsidies as sorting devices

The divergence between tax payments and the cost of providing public services that arise from financing local public services provides an incentive for higher-income communities to deter the entry of lower-income households into their community. Here we demonstrate that higher-income households, to insure that low-income households do not enter their community or reduce the number that do enter, subsidize goods consumed by higher-income households more than by lower-income households. This strategy will make the rich community less attractive to the poor, deterring their entry to the community.     

IMPACTS OF ECONOMIC REFORM ON RURAL-URBAN WELFARE: A GENERAL EQUILIBRIUM FRAMEWORK

This paper demonstrates how economic reform undertaken in a developing country will impact not only macroeconomic variables but also income distribution between different household groups, particularly between rural and urban households. Unlike the well-known link to macroeconomic variables, the path connecting economic reform with income of rural-urban households is more equivocal and thus demands an inquisition. The CGE model constructed in this study is designed to serve such a purpose. When applied to the Indonesian case, both the static and dynamic simulations indicate that the post-reform progress in the country's macroeconomic condition is likely accompanied by worsening—albeit slightly—household income distribution between income groups. The non agricultural sector appears to be the major beneficiary of the reform. From the dynamic simulation, a worsening distribution is also found between rural and urban areas. However, results of both simulations also show that improved poverty conditions are likely achieved following the reform.     

RURAL-URBAN LINKAGES: Farming and Farm Households in Regional and Town Economies*

While it is known that agricultural expansion is critical to growth in nonfarm sectors of rural regions, the extent and mechanisms of economic interdependency between agriculture and other sectors remains an inadequately understood aspect of the rural-urban economic growth dynamic. Least well understood are the linkages between household farm income and development of town economies. This paper presents findings from rural-urban exchange research in rural regions of Kenya and Somalia that provide insights into relationships between agriculture and the nonfarm economy, and offers conclusions for rural regional development strategies.     

Collective Household Models: Principles and Main Results

In the traditional approach to consumer behaviour it is assumed that households behave as if they were single decision‐making units. This approach has methodological, empirical and welfare economic deficiencies. A valuable alternative to the traditional model is the collective approach to household behaviour. The collective approach explicitly takes account of the fact that multi‐person households consist of several members which may have different preferences. Among these household members, an intrahousehold bargaining process is assumed to take place. In addition to providing an introduction to the collective approach, this survey intends to show how different collective household models, each with their own aims and assumptions, are connected.     

Urban Households’ Cooking Oil and Fat Consumption Patterns in Turkey: Quality Vs. Quantity

This article investigates households’ cooking oil and fat consumption patterns in Turkey using data from household budget surveys. The almost ideal demand system was employed to analyze demand parameters and elasticities for major five types of oil. Prices were adjusted for quality and the demographic translation method was used to incorporate to demographic variables. Finally, the two stage generalized demand model was used to take into account censory of the dependent variable. Results showed that higher-income and higher-educated consumers consume more quality and healthy oil such as olive oil than lower-income and less educated consumers. According to income elasticities, lower-income consumers are more sensitive to income changes compare to higher-income consumers. Moreover, lower-income consumers are more prices sensitive to olive oil and corn oil than are higher-income consumers.     

Wealth Accumulation and Factors Accounting for Success

We use detailed income, balance sheet, and cash flow statements constructed for households in a long monthly panel in an emerging market economy, and some recent contributions in economic theory, to document and better understand the factors underlying success in achieving upward mobility in the distribution of net worth. Wealth inequality is decreasing over time, and many households work their way out of poverty and lower wealth over the seven year period. The accounts establish that, mechanically, this is largely due to savings rather than incoming gifts and remittances. In turn, the growth of net worth can be decomposed household by household into the savings rate and how productively that savings is used, the return on assets (ROA). The latter plays the larger role. ROA is, in turn, positively correlated with higher education of household members, younger age of the head, and with a higher debt/asset ratio and lower initial wealth, so it seems from cross-sections that the financial system is imperfectly channeling resources to productive and poor households. Household fixed effects account for the larger part of ROA, and this success is largely persistent, undercutting the story that successful entrepreneurs are those that simply get lucky. Persistence does vary across households, and in at least one province with much change and increasing opportunities, ROA changes as households move over time to higher-return occupations. But for those households with high and persistent ROA, the savings rate is higher, consistent with some micro founded macro models with imperfect credit markets. Indeed, high ROA households save by investing in their own enterprises and adopt consistent financial strategies for smoothing fluctuations. More generally growth of wealth, savings levels and/or rates are correlated with TFP and the household fixed effects that are the larger part of ROA.     

Club theory and household formation

The relationship between our general equilibrium model with multi-member households and club models with multiple private goods is investigated. The main distinction in the definitions consists in the equilibrium concepts. As a rule, competitive equilibria among households where no group of consumers can benefit from forming a new household and valuation equilibria prove equivalent in the absence of consumption externalities, but not in their presence.     

What happens to household formation in a recession?

While many studies have investigated the determinants of housing demand, very few studies have focused on how economic conditions affect the formation of potential households directly. Potential households may choose to delay entry into the housing market by remaining with one’s parents during times of economic hardship or by combining with other persons to share housing costs. Using a variety of modeling approaches, we find that both the increase in the unemployment rate and the presence of recessions reduce the rate of household formation. Simulations suggest that these declines are substantively important. For example, in a recession, the likelihood that a young adult will form an independent household falls by 1–9% points depending on the age of the person. By way of comparison, if an individual is unemployed, the likelihood of leaving the parental home is up to 11% points lower.     

FOOD SECURITY AND LOW‐INCOME HOUSEHOLDS IN THE MALAYSIAN EAST COAST ECONOMIC REGION: AN EMPIRICAL ANALYSIS

This research, conducted to analyze the level of food security among poor and low‐income households in the east coast economic region of Malaysia, uses primary data of 460 families from the E‐Kasih poor households database, based on a cluster random sampling technique. Food security levels were measured using the United States Agency for International Development Household Food Insecurity Access model. Findings indicate that 52.8% of households are food secure, 23.3% mildly food insecure, 14.3% moderately food insecure, and 9.6% are severely food insecure. These findings are very important to assist policymakers to achieve Vision 2020 and the targets of Malaysian National Plans regarding food security, socioeconomic development, and the alleviation of poverty. The involvement of private sector and community‐based organizations are important to combat short run, seasonal, and event‐related risks, as well as for the development of appropriate mitigation and adaptation options to ensure sustainable food security at household level in Malaysia.     

Direct Estimation of Equivalence Scales and More Evidence on Independence of Base

We explore a direct approach to estimating household equivalence scales from income satisfaction data. Our method differs from previous approaches to using satisfaction data for this purpose in that it can be used to directly fit and evaluate closed‐form and non‐parametric equivalence scales of any desired form. Its flexibility makes it easy to consider specific aspects such as income dependence or more specific information on household composition (such as whether household members live in a partner relationship). We estimate and evaluate a number of scales used in the literature. If the equivalence scale is assumed to be independent of income and to depend only on household size, we do not reject the validity of the widely used square‐root scale at conventional significance levels. We also test GESE and GAESE restrictions (Donaldson and Pendakur, 2003, 2006) and investigate in detail to what extent household economies of scale depend on income. Our results suggest that the income dependence differs fundamentally across household types (rising economies of scale for ‘family’ households, falling economies of scale for multi‐adult households without children and no income dependence for other households).     

Challenges of green consumption in China: a household energy use perspective

To encourage economic progress, China's government has been pushing domestic consumption as a substitute for its waning growth in investment and exports. It has also been promoting greener policies for growth, of which green consumerism is a prime component. By examining the economy through the lens of household energy consumption, this paper lays out the challenges the nation must overcome through green consumption. We explore the trends in household energy use and decompose energy used indirectly by households into six factors: changes in total population, urbanization rate, energy efficiency, interindustry input mix, household consumption preferences, and per capita household consumption level. Doing so yields insights into how progress in industrial technology, household income, urbanization, and lifestyles has affected energy use in the production of goods and services used by households. It also offers policy suggestions on how China might guide lifestyle changes to effect green consumption.     

A characterization of Ramsey equilibrium in a model with limited borrowing

This paper considers a one-sector economic growth model with several infinitely-lived heterogeneous households, who differ both in the discount factors as well as preferences over consumption. Unlike the extreme form of borrowing constraint observed in the classical Ramsey model, recently surveyed in Becker (2006), we allow limited borrowing by the households and prove the existence of a perfect foresight equilibrium. We also show that irrespective of production technology employed by the firms, the capital stock sequence converges to the steady state stock and from some time onward all impatient households are in the maximum borrowing state, whereas the most patient household owns entire capital stock and the debts of all other households.     

Coexistence of surplus labor and the Lewis turning point in China: a unitary household decision-making model study

This paper discusses the underlying relationship between surplus labor and the Lewis turning point in the duration of rapid economic growth in China. An agent-based model was proposed for studying the Lewis turning point and labor resource allocation, in which the decision-making interactions were made among the members of a household. This model differs from traditional development economics theory in which only an individual’s behavior is considered. How peasant households allocate their human capital to maximize the utility of a household unit was investigated on the basis of the unitary principle under the assumption of risk aversion. The roles of living expenses, subsidies and income adjustment factors were also considered. Our results revealed the paradoxical phenomenon that rural surplus labor and the Lewis turning point coexist.     

湘粤桂边瑶区农户的贫困脆弱性:测度与治理

湘粤桂边瑶区是我国典型的集中连片特困民族地区,当前该区域农户贫困状态正由经济性渐趋脆弱性。本文借鉴Chaudhuri的贫困脆弱性测度模型,通过对样本点590户农户的一手数据实施测算,发现该瑶区的农户脆弱性系数明显高于全国平均数,区域内也存在较大的差异。最后,结合该区域实情,提出了变更贫困识别、突出地理区域整体联动、实施资源资本化等脆弱性治理的发展思路。     

REGIONAL ECONOMIC INTEGRATION AND ITS IMPACTS ON GROWTH, POVERTY, AND INCOME DISTRIBUTION: THE CASE OF INDONESIA

Indonesia continually tries to open its economy through free trade areas (FTAs) on bilateral, regional, and multilateral bases. This paper discusses the impacts of FTAs on the Indonesian economy, particularly for economic growth, poverty, and income distribution. By using a Global Computable General Equilibrium (GCGE) model, we conducted the simulation analysis by setting eighteen scenarios for the ongoing and potential FTAs of different frameworks. Indonesia is found to benefit from joining in FTAs, except for the FTA with India. It is also implied that FTAs increase rural household income at higher rates than they increase urban household income. Moreover, FTAs' impacts are more favorable for unskilled workers than for skilled ones, and also for relatively poor households more than for rich households, both in urban and rural areas. In brief, FTAs provide Indonesia with income redistribution effects.     

WEALTH EFFECTS AND MACROECONOMIC DYNAMICS

The effect of wealth on consumption is an issue of long‐standing interest to economists. Conventional wisdom suggests that fluctuations in household wealth have driven major swings in economic activity both in the United States and abroad. This paper considers the so‐called consumption wealth effects. There is an extensive existing literature on wealth effects that has yielded some insights. For example, research has documented the relationship between aggregate household wealth and aggregate consumption over time, and a large number of household‐level studies suggest that wealth effects are larger for households facing credit constraints. However, there are also many unresolved issues regarding the influence of household wealth on consumption. We review the most important of these issues and argue that there is a need for much more research in these areas as well as better data sources for conducting such analysis.     

The Effect of using Household as a Sampling Unit

The effect of sampling people through households is considered. Results on design effects for two stage surveys are reviewed and applied to give design effects of household samples. The main factors that determine the design effect are identified for the designs in which one person, or all people, are selected from each selected household. Within household correlation is one factor. We show that the relationships between household size and the mean and variance within households are also important factors. Census and survey data are used to empirically compare the design effects for a range estimators, variables and designs.     

The measurement and structure of household wealth

This paper deals with methodological issues that arise in measuring household wealth. Two prominent American household surveys—the PSID and SCF—rely on different methodological approaches to the measurement of household wealth. In particular, SCF oversamples high-income households and has a far more extensive set of questions. In the top one percent of the wealth distribution, better measures of wealth are related to over-sampling of very wealthy households and the number of questions that are asked. However, one can characterize total household wealth holdings for the overwhelming majority of households with a relatively moderate number of questions. When successive waves of wealth modules are used to compute savings, the verdict on quality is more cautious, in part due to the inherently larger role measurement error plays in any first difference formulation.