The impact of housing reform on durables consumption in China

The privatization of public housing in the 1990s in China had a considerable impact on the wealth of urban households. This paper analyzes the effects of the wealth change on household consumption of nine durable goods in urban China, including air conditioner, computer, color TV, washing machine, refrigerator, camera, microwave, telephone, and VCD/DVD. Our results show that households affected by the housing reform had a significantly higher level of durables consumption than those unaffected by the program. In the short term, their probabilities of purchasing air conditioners and computers increase by 2%–10% and 2%–7% respectively. In the long term, the effect on air conditioner consumption increases over time during our study period but effect on computer does not increase monotonically. Further, the effects of the housing reform on the consumptions of more commonly owned durables, such as color TV, washing machine, refrigerator, and telephone have diminished over time.     

Discrimination in hire‐purchase lending by retailers of consumer durables in apartheid South Africa

A double‐hurdle partial observability model of hire‐purchase lending is specified and estimated to test for racial discrimination by retailers of consumer durables during apartheid. ‘Discrimination’ is defined as supplying no loans or less desirable loans to certain borrowers, who do not differ from more successful borrowers with respect to creditworthiness but who do differ with respect to race. There is strong evidence of discrimination. In particular, black households are 13 percentage points more likely to desire a hire‐purchase loan but not to have one supplied to them than are other households equivalent in all ways except race. Although the statistical test cannot determine whether race affected lending because lenders were bigoted or because race is correlated with unobserved characteristics correlated in turn with creditworthiness, increased access to formal loans for all South Africans could be promoted by relaxing the Usury Act and by removing from loan applications information that could reveal an applicant's race.     

Man in the public sector

Summary This paper addresses the question of how to model government behavior. The central thought is that in principle the same behavioral model should apply to the behavior of individuals in the private sector as well as the public sector. The paper starts, therefore, with an outline of the contours of a general model of individual behavior. Use is thereby made of the so-called interest function approach that I developed inOn the Interaction Between State and Private Sector (Amsterdam, North-Holland, 1983) and which is somewhat further elaborated in this paper. The model is subsequently applied to the behavior of the individuals that make up the government organization, bureaucrats and politicians. The potential importance of the approach is indicated by a short survey of the theoretical and empirical results obtained with it so far.     

The government sector,the export sector and growth

Summary A three-sector, two-input growth model is developed which potentially allows for the separate identification of government and export sector productivity differentials and externality effects. Using data from a limited sample of OECD countries (which are the only countries for which reliable capital stock data are readily available), we find that the export sector is more productive than the rest of the economy, but that neither an externality effect nor a productivity differential can be detected in the case of the government sector.The author wishes to acknowledge financial assistance from a Research Grant from the Division of Commerce of the University of Otago which funded the participation of William M. Jones as research asistant in this work. Thanks are due to Annette Godman for secretarial assistance. The referees of this journal made extensive comments on an earlier version of this paper, and the present version is substantially better thanks to them. Remaining errors are, of course, my responsibility.     

Fostering the capital-goods sector in LDCs

The conventional arguments in favour of the production of capital goods by LDCs are based on comparative advantage, the possibility of designs appropriate to indigenous factor proportions, and the externalities conferred on other sectors. These and other arguments are inducing the governments of many middle-income countries to more intensively foster the development of the machinery sector. This paper examines the analytic and empirical bases of the conventional arguments and finds a considerably more complex picture than that contained in earlier studies.     

Investment appraisal in the public sector

Recent developments, such as privatization and the private financeinitiative, have raised the issue of which assets should beowned by the public sector and whether assets have differentvalues in the public and private sectors. In order to answerthe questions, we first note that the allocative considerationsthat usually motivate government intervention need not requirethe direct provision of services by the government using government-ownedassets. We then argue that the government should own the assetsused to provide the services where the private sector fearsexpropriation by the government, or where ownership conferson the private sector such power as to preclude efficient allocations.Finally, we argue that the discount rate for governments' projectsequals the expected return on comparable investments in thecapital markets. The government should, however, discount pre-taxcash flows at the pre-tax discount rate, for it receives alltax revenues.     

Investigating early modern Ottoman consumer culture in the light of Bursa probate inventories

This study investigates the development of early modern Ottoman consumer culture. In particular, the democratization of consumption, which is a significant indicator of the development of western consumer cultures, is examined in relation to Ottoman society. Sixteenth- and seventeenth-century probate inventories of the town of Bursa combined with literary and official sources are used in order to identify democratization of consumption and the macro conditions shaping this development. Findings demonstrate that commercialization, international trade, urbanization which created a fluid social structure, and the ability of the state to negotiate with guilds were possible contextual specificities which encouraged the democratization of consumption in the Bursa context.     

Economics of the public sector

Likierman, A. 1988: Public Expenditure: Who Really Controls it and How? London: Penguin, £4.99.

Helm, D. (ed) 1989: The Economic Borders of the State. Oxford: Oxford University Press, £35.00 cloth, £15.00 paper.

Collard, D. (ed) 1989: Fiscal Policy: Essays in Honour of Cedric Sandford. Aldershot: Avebury, £35.00 cloth.

Hare, P. (ed) 1988: Surveys in Public Sector Economics. Oxford: Blackwell, £37.50 cloth.     

Smart grids in the European energy sector

The Smart Grid is crucial for a successful transition to a new energy era in which a high percentage of energy will be provided by renewable energy sources. Many of the necessary ICT technologies are already available and the advances of in-memory computing will enable all actors to process and leverage the massive amount of data delivered by the Smart Grid. The development of the Smart Grid is however slowed down by uncertainties in the regulatory framework and missing standards as well as security and privacy issues. To overcome these challenges, incentives for Smart Grid investment, demonstrations of the benefits and a framework for a truly functioning market are needed.     

Pricing in the hotel and catering sector

Summary A model explaining gross margins in the hotel and catering sector is developed. A cost-mark-up model for the retail sector is used as a starting point. Although we have to reject the hypothesis of mark-up pricing in the hotel and catering sector, the model proves a useful instrument to discriminate between such influences as sales composition, costs and their various components, scale and demand conditions on price setting. Our empirical evidence stems from the Dutch hotel and catering sector (1977 through 1981).We are extremely grateful to the Central Bureau of Statistics (particularly the Department of Interior Trade and Commercial Services) in Voorburg, The Netherlands for permitting the use of their data under certain secrecy conditions.     

The rise of the service sector in China

This paper analyzes the underlying mechanisms that explain the rise of the service sector in China. Along with China’s unprecedented growth, the rapid expansion of its service sector is one of the fastest among emerging countries. However, the literature has yet to offer a clear understanding of such expansion. We show that distribution services first grow with the manufacturing sector, followed by personal services as per capita income rises. Motivated by this growth pattern, this paper provides a theory that describes 1) the complementarity between distribution services and the manufacturing sector, and 2) the substitution between personal services and home production. Empirics show that the personal service sector is the key to account for the early and rapid rise of the service sector in China. Quantitatively, high productivity growth and high capital intensity in the personal service sector, and labor market frictions are the most important channels. By revealing the growth pattern of the service sector in the early stages of development, the paper thereby contributes to the growing literature on the rising importance of the service economy.     

On modelling the informal sector

A recent plea by Robert Hackenberg to develop new conceptual models in order ‘to take full account of the new realities of the urban informal sector’ and ‘rid the field from divergent connotations’ is questioned. It seems that existing models easily lend themselves to analysis of the formal-/informal-sector interactions and that divergent conditions necessarily lead to ‘contradictions’. Thus, the existing arsenal of models cannot be held responsible for ‘analysis paralysis’. New research on the informal sector, rather than aiming at ultra-generalizations, should concentrate on issues such as identification of the determining factors of the urban production technologies and the nature of linkages and elasticity of substitution between formal and informal production.     

Privatization and the private sector

From the perspective of someone who has observed the private and public sectors in emerging economies for many years, it is interesting to recall that in the past it was the World Bank that supported the development of state-owned utilities and industrial enterprises in developing countries, especially Latin America. It is also in Latin America that the World Bank became a convert to and promoter of privatization. A key lesson of privatization in emerging markets is the importance of competition, not only in the sale process but in the subsequent operation of privatized enterprises. Protective devices, such as core shareholders and areas off-limits to foreign investors, are counterproductive. Privatization has spawned a new generation of entrepreneurs and been especially beneficial to the development of domestic capital markets.     

加快第三产业发展实现经济结构优化——安徽省第三产业发展中存在的问题及对策

本文对安徽省第三产业发展中存在的问题进行了剖析 ,结合安徽省情 ,为加快安徽第三产业发展 ,实现经济结构优化提出了对策     

Determinants of energy use in the informal food sector

Although enterprises in the informal food sector require energy to transform, cook and process food, energy-use patterns in this sector are not well understood by policymakers and the local-level authorities who regulate their trading activities. This paper reviews relevant literature and presents empirical data collected in Rwanda, Senegal and South Africa on the use of traditional and modern energy sources by informal food sector operators. Our sample includes male- and female-operated enterprises in the urban centres of three African countries where the informal food sector is important, not only for providing the convenience of affordable and readily prepared meals, but also as a source of income for women and men in developing countries. Multiple fuel-use and energy-stacking strategies are common among informal food enterprises and policy needs to acknowledge this if it is to intervene in ways that will benefit both enterprises and regulators.     

Economies of scale in sector evaluation

Zusammenfassung Steigende Skalenertr?ge (economies of scale) bei der Sektorenbewertung. Der lineare Fall. —In der vorliegenden Abhandlung wird ein wichtiger Aspekt der Komplikationen geprüft, die sich aus steigenden Skalenertr?gen ergeben, n?mlich die Engpa\kapazit?t, bei der die Produktion ?konomisch m?glich wird. Dieses Problem wird unter Verwendung der Terminologie einer einfachen Kosten-Nutzen-Analyse (Benefit-Cost-Analysis) dargestellt und diskutiert, wenn sich das hier vorgeschlagene L?sungsverfahren im besonderen auch auf die Durchführung einer linearen Programmierung bezieht. Dieses Verfahren erm?glicht eine Prüfung der charakteristischen Eigenschaften und Wirkungen des Ph?nomens steigender Skalenertr?ge und besonders der Verbindung mit Exportbeschr?nkungen unter ?konomischen Bedingungen. Die Engpa\kapazit?ten (minimum capacities) werden zun?chst in der Form von groben ?Entweder-oder-Bedingungen? (entweder keine Produktion oder Produktion bei oder über dem Minimalumfang) behandelt. Diese Bedingungen werden jedoch in einem sp?teren Stadium modifiziert. Die Analyse führt im Endergebnis zu einem einfachen Rechenplan, um Engpa\kapazit?ten unter Vermeidung der ganzzahligen Programmierung berechnen zu k?nnen. Eine strengere algebraische Darstellung der überlegungen, die diesem Verfahren zugrunde liegen, wird im Anhang gegeben.

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Résumé Economies d’échelle (economies of scale) dans l’évaluation des secteurs. Le cas linéaire. —Cet article examine un aspect important des complications qui surgissent des économies d’échelle dans la production, c’est-à-dire la capacité minimum à laquelle la production devient économiquement possible. Ce problème est présenté et discuté en utilisant la terminologie d’une simple analyse de profits et co?ts, bien que le procédé ici proposé se rapporte spécifiquement à une formule de programmation linéaire. Ce procédé permet d’examiner les caractéristiques et les effets du phénomène ?economies of scale? et particulièrement ses relations, en termes économiques, avec une limitation des exportations. Les capacités minima sont d’abord introduites sous forme de conditions alternatives assez crues (ou pas de production, ou production au, ou en dessus du volume minimum), conditions qui sont modifiées plus tard. L’analyse donne un simple tableau, à l’aide duquel on peut calculer les capacités minima en évitant la programmation à nombres entiers. Un traitement algébrique plus rigoureux des considérations sur lesquelles repose ce tableau est donné dans l’annexe.

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Resumen Economias de escala crecientes (economies of scale) en la evaluaci?n sectorial. El caso lineal. —En el presente trabajo se analiza un importante aspecto de las complicaciones que resultan de economías de escala crecientes; se trata de la capacidad minima que permite todavía producir. Este problema se describe en términos del ?cost-benefit-analysis?, si bien la solutión aqui propuesta está relacionada también con el método de programación lineal. Este método permite analizar bajo condiciones econ?micas las características y los efectos del fenómeno de economfas de escala, especialmente en relation con limitaciones a la exportatión. Con el fin de calcular las capacidades minimas, el autor plantea primero condiciones sencillas alternativas (o bien no se produce o bien se produce la cantidad minima o bien se produce a un nivel superior). Más adelante se modifican estas condiciones. El resultado final del análisis es un esquema sencillo que permite el cálculo de las capacidades minimas sin necesidad de recurrir a la programación lineal. En elapéndice el autor présenta el cálculo algebraico en que se basan sus reflexiones.

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Riassunto Crescenti proventi di scala (economies of scale) nella valutazione dei settori. Il caso lineare. —Nella presente trattazione è esaminato un aspetto fondamentale delie complicazioni che risultano dai crescenti proventi di scala, cioè la capacità di strozzatura nella quale è possibile economicamente la produzione. Questo problema è esposto e discusso applicando la terminologia di una semplice analisi di costi e di utili (Benefit-Cost-Analysis) quando il procedimento di soluzione qui proposto si riferisce soprattutto alla realizzazione di una programmazione lineare. Questo procedimento rende possibile un esame délie qualità caratteristiche e degli effetti del fenomeno di crescenti proventi di scala ed in special modo del collegamento con limitazioni di esportazioni in base a condizioni economiche. Le capacità di strozzatura (minimum capacities) sono trattate dapprima nella forma di rozze ?o -oppure-condizioni? (o nessuna produzione o produzione dal o sul volume minimo. Queste condizioni sono però modificate in uno stadio posteriore. L’analisi ha corne risultato finale un semplice piano di calcolo per poter calcolare capacità di strozzature evitando la programmazione di tutti i numeri. Una più rigorosa rappresentazione algebrica délie riflessioni che sono alla base di questo procedimento è data nell’appendice.

     

Recession and the informal sector in South Africa

Despite the recent avalanche of writings investigating the informal sector, scant consideration has been accorded to the impact of an economic recession upon the growth and complexion of the informal sector.The object of this paper is to reflect upon the likely consequences of economic recession upon the South African informal sector in light of the extant international literature. Two different sets of processes are identified as impacting upon the growth and composition of the informal sector. The first suggests that the growth of the informal sector is the consequence of the lack of expansion of the formal sector. The second argues that much of the expansion in the informal sector is directly linked to its integration with formal sector enterprises. Under recessionary conditions, it is suggested that the growth of the informal sector may occur as a refuge from destitution but that the complexion of the informal economy will shift and be dominated by activities of a more ‘socially unacceptable’ nature.