Biased valuations, damage assessments, and policy choices: The choice of measure matters

Damages from, for example, an oil spill can be measured by how much people are willing to pay to avoid them, or by the minimum compensation they demand to accept them; and decisions to clean up can be justified by the willingness to pay to do it or by the compensation necessary to forgo it. Contrary to the usual official and unofficial conventions that the choice of measure is of no matter, the empirical evidence and intuitions of most people strongly suggest otherwise. The appropriate choice of measure appears to turn, not on legal entitlements, but on the reference state people use to judge negative and positive changes — a criteria that is likely to call into question most estimates of the damages of increased health risks and the value of environmental mitigation efforts.     

Consumer Resistance Against Regulation: The Case of Health Care

Regulation fostering Managed Care alternatives in health insurance is spreading. This work reports on an experiment designed to measure the amounts of compensation asked by the Swiss population (in terms of reduced premiums) for Managed-Care type restrictions in the provision of health care. It finds that restrictions on the freedom of physician choice would require an average compensation of more than one-third of the premium, while generic substitution even meets with a small willingness to pay. Marked preference heterogeneity is an argument against regulation imposing uniformity of contract in Swiss social health insurance.     

公共产品缺乏是造成住房价格偏高的重要原因

近年来，我国住房价格不断上涨，但房价仍在消费者承受范围内；房地产开发企业并未出现普遍的暴利行为；居民人均购房与建房支出占家庭收入的比重也没有明显的增加。由于公共产品不足，居民家庭教育和医疗支出所占的比重迅速提高，消费者对未来收入和支出的不确定性预期增强，购房能力相对下降。消费者越来越不敢花钱，也就越来越觉得住房价格高，因此，公共产品缺乏是造成住房价格偏高的重要原因。     

国有企业中的薪酬管制与在职消费

本文从我国国有企业中存在薪酬管制这一特殊制度背景出发,对上市公司高管人员在职消费行为进行理论分析,并对在职消费的主要影响因素与薪酬管制的经济后果进行了实证检验。经验证据表明,我国上市公司在职消费主要受企业租金、绝对薪酬和企业规模等因素的影响;由于薪酬管制的存在,在职消费成为国有企业管理人员的替代性选择,说明在职消费内生于国有企业面临的薪酬管制约束;与民营企业中内生于公司的薪酬契约相比,国有企业中受到管制的外生薪酬安排缺乏应有的激励效率。     

Combat,casualties, and compensation: Evidence from Iraq and Afghanistan

Our research examines the effect of combat deployments to Iraq and Afghanistan on casualties and combat exposure compensation policy. We use restricted data from the Defense Manpower Data Center (DMDC) and Social Security Administration (SSA) to construct a panel of all US Active Duty service members having served at some point during the years 2001–2012. Casualties disproportionately occur at higher rates among (i) young, white, males, (ii) enlisted personnel, (iii) less educated personnel, and (iv) those in combat job types. Our estimates indicate that overall US military personnel who deployed in an individual year to Iraq or Afghanistan had a 45 per 100,000 higher probability of death than non-deployed military personnel who remained stateside. The increased fatal injury risk of deployed US military personnel is 15 times higher than the national average civilian workplace fatality rate, but roughly equal to the fatal injury risk faced in some of the most dangerous civilian occupations. Our estimates suggest a compensating wage differential equal to $861 per month would be appropriate in comparison to the current average of $1238 per month in danger pay provided to US military personnel deployed into combat zones. We recommend a revenue-neutral approach in adjusting the pay structure for military members. For example, the military should consider increasing bonuses or base pay while simultaneously decreasing danger pay by an equivalent amount. Furthermore, it may be beneficial to adjust danger pay by service or job type to reflect fatality risk more accurately.     

景区拓荒群体的旅游特征——以福建邵武天成岩为例

邵武市天成岩是一处原始旅游地,已有一些旅游者自发而来。这些拓荒群体以中青年为主,他们多数经人介绍获得信息,以猎奇心态对景区观光漂流体验活动感兴趣,他们希望景区保持原样,不要太多人为干扰。这些拓荒群体的旅游特征对原始旅游地开发具有一定的指导意义。     

Influence of firm performance and gender on CEO compensation

In this article we continue the examination of top executive pay by comparing performance, total pay and the influence of CEO gender. We analyse compensation differences between male and female CEOs using nonparametric analysis. We calculate the potential compensation for each executive using two benchmarks. First, each executive's performance and compensation are evaluated relative to members of the same gender to produce a same-gender measure of under-compensation. Each executive's compensation is also benchmarked against the other gender's potential compensation, producing an other-gender measure of under-compensation. Together, both measures allow an analysis of the gender-specific potential salaries of each executive while controlling for performance. The approach is applied to a sample of male and female executives. The results indicate that women are under-compensated.     

薪酬满意的前因研究:基于多维度本质下的效应相对性

从薪酬体系的全面价值感知出发,遴选了薪酬的4种意义(即绝对意义、相对意义、控制意义、匹配意义)范畴下的前因,并提出基于"外向-内向"、"内容-过程"与"个体-体系"的分析框架,探究了薪酬满意的各前因变量影响薪酬满意各维度的效应相对性。实证研究结果支持了薪酬满意在本质上是多维度的,证实了并非所有前因在影响薪酬满意各维度时是"等同"有用的,揭示了薪酬的不同意义(价值)对薪酬满意不同维度具有不同程度的影响效应,所遴选的前因变量解释了薪酬满意各维度的绝大部分变异。     

Stock vesting conditions,control benefits and managerial replacement

This article considers the effect of vesting conditions of stock‐based compensation on firms’ decisions to replace managers. I indicate that firms may excessively replace managers with both long‐ and short‐term vested stock‐based compensation, while excessive retention can be caused only by short‐term vested options. If the discount factor is sufficiently small, I also show that short‐term vested stock‐based compensation is the equilibrium contract. The study also has implications for regulations concerning mandatory deferral and clawback of executive pay.     

Trust in the image of God: Links between religiosity and reciprocity in Haiti

Are religious believers more prosocial than other people? In a trust game field experiment with 774 subjects in Haiti, we elicit willingness to pay to play in the presence of religious images, and argue that this can be interpreted as a measure of the strength of religiosity. More religious individuals trust others more and reciprocate more than others, with effect sizes between 14% and 21% of mean behaviour depending on the measure. They do not reciprocate more in the presence of religious images than without them, nor towards members of the same denomination as themselves. The results support the view that religious affiliation is correlated with intrinsic trustworthiness. We show that lab behaviour correlates with intuitive measures of religiosity outside the lab and with participation in borrowing and lending networks.     

The Future of Personnel Economics

Personnel economics has grown over the past 20 years to become a major branch of labour economics. Although much has been learned, many important questions remain. For example, are worker wage profiles dependent on individual attributes or is the firm more important in determining wage growth? Why are executives so highly paid and why does pay take the form that it does? How can cross-country differences in pay patterns be explained? Does variable pay provide better incentives than fixed hourly wages? Under which circumstances is one form of compensation used over another? These questions and others are investigated and some conjectures offered.     

Nudging Merit Goods: Conceptual,Normative, and Practical Connections

Abstract

Mainstream economics has traditionally maintained a respect for preferences and the choices that individuals make based on them. But recent advances in psychology and behavioral economics have led scholars and policy-maker to doubt if people make wise choices in their own interests. Based on this, libertarian paternalists endorse choice interventions—nudges—designed to steer people to decisions that will better promote their interests. However, the complex, multifaceted, and subjective nature of interests implies that policy-makers are imposing externally chosen interests for people’s own when designing nudges. In this sense, policy-makers are treating the interests they choose to advance like merit goods as described by Richard Musgrave, goals or ends that are explicitly judged by policy-makers to be worth advancing even if they are not ranked highly or chosen consistently by individuals themselves. This paper will make explicit the conceptual and normative connections between nudges and merit goods, arguing that nudges can be considered delivery mechanisms for merit goods, and recommending that libertarian paternalists abandon their claim to be advancing people’s true interests and instead adopt the objective theories of good used to justify merit goods.     

Cost credibility and the stated preference analysis of public goods

Two recent stated preference studies include questions that explore participants’ beliefs regarding the cost amount stated in the valuation question in relation to the cost to them if the project were implemented. Results from these studies suggest that a significant proportion of people do not believe these stated cost amounts. This paper explores the implications of participants answering valuation questions that are not consistent with their beliefs regarding stated costs. As an example, the paper develops a response model for dichotomous choice stated preference questions. Participants gather project information through the stated preference experiment, form a prior distribution of costs, update the distribution of costs based on a survey's stated cost and then respond to the dichotomous choice stated preference question. The model suggests that participants will not generally respond truthfully in the sense that they may say no to a stated cost that is less than their willingness to pay for a project or yes to a stated cost that is more than their willingness to pay. While the model findings suggest potentially serious problems with stated preference estimation, the observed patterns of disbelief from the empirical studies result in downwardly biased estimates of mean willingness to pay.     

城市饮用水水源地生态补偿标准测算与资金分配研究——以广东省东江流域为例

生态补偿作为解决城市饮用水源地生态环境保护问题,协调保护方和受益方利益冲突的重要手段,已成为国内外学者研究的热点,其中补偿标准是决定生态补偿能否顺利实施的关键环节。选取珠江三角洲城市群重要饮用水水源地——广东省东江流域作为研究对象,在总结分析现有补偿标准的基础上,运用生态保护成本法和条件价值评估法,分别从流域水源地保护方和下游受益方的角度对东江流域生态补偿标准进行测算,并依据下游用水量对补偿金进行分摊。通过测算,广东省东江流域上游六县生态保护总成本为105.38亿元,其中直接成本5.40亿元,间接成本99.98亿元,引入水质修正系数和水量分摊系数后,下游四市应补偿上游六县的生态补偿额度为24.69亿元。下游四市生态补偿支付意愿总额为5.91亿元,应支付总补偿额度超出支付意愿总额18.79亿元。因此,在充分考虑流域上游生态保护成本和下游支付意愿、支付能力的前提下,利益相关双方通过谈判、协商在生态补偿标准问题上达成一致,对东江流域生态环境保护和生态补偿机制的建立有着重要的现实意义。     

Executive shareholding,compensation, and analyst forecast of Chinese firms

We examine the impact of executive and leadership shareholding and cash compensation on analyst forecast error and dispersion as proxies for information asymmetry. We find that firms pay higher compensation (or excess compensation) to executives and directors are associated with higher information asymmetry. The positive association is stronger where executives’ and directors’ shareholdings are higher. Shareholding appears to facilitate managerial entrenchment and gives highly paid executives/leadership stronger structural power which adversely affects information disclosure leading to larger forecast error and dispersion. These results are robust to different measures of compensation and alternative models controlling for the predictability of firm-level earnings. Our findings indicate that executive/director shareholding and compensation do not provide sufficient incentives for information disclosure by Chinese firms.     

Willingness to pay for other species' well-being

Benefit-cost analysis of environmental policies typically focuses on benefits to human health and well-being. For other species, economists have attempted to measure human WTP for changes in the numbers of individuals for different types of wildlife, and to preserve biodiversity. When it comes to humans' WTP for improvements in the quality-of-life for other species, however, the evidence is limited. Morbidity and quality-of-life considerations may be particularly important to the task of valuing non-fatal harm to wildlife in the wake of an environmental disaster. We argue that the other species morbidity-reduction component of WTP should be calculated net of any “outrage” component associated with the cause of the harm. This net WTP is likely to be correlated with the premium that people are willing to pay for chicken products from birds for which the quality-of-life has been enhanced by improved animal welfare measures. This paper uses a conjoint choice stated preference survey to reveal the nature of systematic heterogeneity in preferences for “humanely raised” versus “conventionally raised” chicken. We also use latent class analysis to distinguish between two classes of people—those who are willing to pay a premium for humanely raised chicken, and those who are not.     

Choices, situations, and happiness

This article explores some conceptual issues in the study of well-being using the traditional economic approach of inferring preferences solely from choice behavior. We argue that choice behavior alone can never reveal which situations make people better off, even with unlimited data and under the maintained hypothesis of 100% rational choice. Ancillary assumptions or additional forms of data such as happiness measures are always needed. With such ancillary assumptions and additional data, however, the use of revealed preference to study well-being can be significantly improved, so that the choices people make can jointly identify preferences, mistakes, and well-being.     

Marine Debris, Beach Quality, and Non-Market Values

This paper reports the first attempt to measure the importance of controlling marine debris as an aesthetic characteristic of beaches and coastal area. The results are based on a contingent valuation survey designed to estimate the economic value people would place on controlling marine debris on recreational beaches in New Jersey and North Carolina. A Weibull survival model was estimated treating for and against votes as defining censoring points for an unknown willingness to pay distribution. The findings suggest: (1) people do distinguish situations with differing amounts of debris when they are described using color photographs; (2) the pilot survey implies measures of people's willingness to pay (WTP) for debris control are consistent with a scope test in that larger WTP is associated with programs intended to address situations for more serious background levels of debris; and (3) local beach conditions seem to influence how people interpreted the plans describing beach conditions without the proposed control programs.     

WHY HAS TOP EXECUTIVE COMPENSATION INCREASED SO MUCH IN CHINA: A EXPLANATION OF PEER‐EFFECTS

Top executive compensation can be affected significantly by peer group pay. This paper investigates the impact of peer effects on the change in top executive compensation based on evidence from China. Empirical results show that if the top three executives' compensation was lower than the peer group median level in year t ? 1, the percentage change in the top three executives compensation in year t would be higher by 0.225%, and that the absolute level of pay would increase by 51 000 yuan. Furthermore, better performance, faster growth and state ownership increase the likelihood of peer effects, while corporate governance variables do not.     

“Big Man” politics in the social economy: a case study of microfinance in Kingston,Jamaica

Microfinance and its “reinvention as bankers-for-the-poor” to create financial inclusion has not been effective everywhere. The literature seems to suggest that the social economy and microfinance help marginalized business people; yet no one considers that political bias interferes with the social economy, making it hard for it to be just. The promise of micro-credit was to achieve a double bottom line: first, the financial sustainability of the lending institution itself, and second, the social benefit of providing loans to low-income business people. Yet, alternative pitches of a social economy to “help people” fail to analyze the embedded power dynamics within the social economy. In this case study in downtown Kingston, Jamaica, 233 small-business people who depend on development finance because of social exclusion now find that these targeted programs are intertwined in partisan, sometimes dangerous, politics. As a result, oppressed people opt out of micro-banking programs to resist “Big Man” politics – the politicians or gangsters attempting to control them. In this study of 307 interviews, I analyze the informal politics of Dons and politicians who misuse micro-credit for their own ends. I find that the coupling of class biases and clientelist practices in the social economy discourages eligible business people from taking micro-loans, and argue that the microfinance industry needs to pay close attention to this issue if it is to continue to help marginalized business people.