Can We—and Should We—Measure Well-Being?

In this article, I argue that recent criticisms of happiness research in economics can be extended to any conception of well-being used for scientific or policymaking purposes. These criticisms are both practical and ethical: well-being is not only impossible to define, measure, or implement, but its use also offends human dignity through unjust distribution of harm and value substitution. On this basis, I recommend the abandonment of welfare economics and urge social economists to propose new approaches to addressing social problems that are more focused and respect the dignity of persons.     

Are Unrealistic Assumptions/Simplifications Acceptable? Some Methodological Issues in Economics

Are unrealistic assumptions acceptable? If results are not changed in a misleading way, they are acceptable. The same assumption may be acceptable in one context and not in another. Assuming identical pairs of individuals in the parity and limit theorems in general equilibrium theory is acceptable as results are not changed substantially. The alleged equivalence of the first‐price and second‐price auctions is based on misleading assumptions; Coase's case against taxing pollution is based on a misleading all‐or‐nothing comparison. The contrasting results (neutrality versus non‐neutrality of money) of perfect versus imperfect competition in macroeconomics with important real‐world policy relevance are also used to illustrate the point.     

Populism,Fairness and Competition: Should We Care and What Could We Do?

The rise of populism in a number of countries is one of the most visible signs of the weakening of enthusiasm for trade liberalization and market competition. Market competition is increasingly denounced as leading to unfair results by those who lose jobs, and in some cases risk losing their employment prospects because of the pressure of competition, or those who see their wages stagnate or be reduced. Their perception is that pro‐competitive policies benefit capitalists and a small coterie of highly skilled workers to the detriment of the low‐skilled majority. In a number of countries there have been calls by politicians to reconsider the trade liberalization policy which was actively pursued in recent decades and to change the standard applied by competition law enforcers from a strict consumer welfare standard to a consideration of the trade‐off between efficiency and fairness. The competition community has, to a large extent, strongly resisted such possibilities, arguing that protectionist policies had failed in the past and that the concept of fairness is at best vague, lack economic foundation, and could lead to a weakening of incentives to achieve efficient static and dynamic performances. The article examines three issues related to this debate. First, we examine the theoretical and practical reasons for which some categories of workers lose in the competitive process. Second, we discuss the relationship between inequality and fairness and the contribution of behavioural economics to the exploration of what people consider to be fair or unfair in vertical relationships (i.e. between employees and employers or between consumers and suppliers). Third, we discuss alternative ways in which competition authorities could reconcile fairness and efficiency in their advocacy or enforcement activities.     

How much could be saved in Chinese hospitals in procurement of anti-hypertensives and anti-diabetics?

Background: Efficient use of government funding has been increasingly relevant for the success and sustainability of ongoing health-system reform in China; however, as there is no generic substitution policy, patients and basic health-insurance programs pay more for public-preferred brand originators. Such phenomenon is especially typical in public hospitals. The objective of this study is to estimate the potential cost savings in procurement by Chinese public hospitals when switching from brand originators of anti-hypertensive and anti-diabetic medications to their generic equivalents between 2012–2014.

Method: IMS Health volume and value consumption data (IMS China Hospitals Audit system 2012–2014) were used, which covered all Chinese hospitals with 100 beds and above. The top 60% IMS volume consumption of respective anti-hypertensive and anti-diabetic medication with unique dosage form and strength were included. The potential cost savings were calculated from a switch of brand originators with their generic equivalents on the Chinese and international market. An independent sample t-test was conducted to compare the difference of proportion of cost savings in value between the Chinese and international market.

Results: An average of 44% (US$44 million) and 87% (US$90 million) and a total of US$1.4 and 2.8 billion (2014?US$) could be saved from a switch from originator brand anti-hypertensives and anti-diabetics to domestically and internationally available generic equivalents, respectively. The differences of cost savings (in proportion) between domestic and international market were statistically significant (α?=?0.005, p?=?0.003, p?=?0.002, p?=?0.000).

Conclusion: Expensive brand originators dominated the anti-hypertensive and anti-diabetic market in Chinese hospitals between 2012–2014. Preference of brand originators wastes a huge amount of health resources in China and these limited resources could have been used more efficiently. As one of the world’s key generic suppliers, if China wants to use its health resource more efficiently on medicines, comprehensive measures are needed to address both demand-side (consumers’ low trust in the quality of local generics) and supply-side barriers (health professionals’ preference of brand originators).     

(When) Should We Use Foreign Direct Investment Data to Measure the Activities of Multinational Corporations? Theory and Evidence

This paper reviews the different concepts of measuring activities of multinational corporations. It aims at working out the economic relationships that theoretically exist between these measures under general economic assumptions and then empirically investigates to which extent such relationships exist in the data. As a main conclusion, foreign direct investment (FDI) stock data is indeed a good proxy for measuring most real economic activities of multinational firms. Discrepancies between FDI stock and other data can to a large extent be given a reasonable economic meaning, but observed asset‐to‐employment patterns in multinational production also call for more thorough future research.     

Accounting Framework to Measure the Environmental Costs and Disclosed in Industrials Companies Case Study of Societe Cement Hamma Bouziane （SCHB） in Constantine

Accounting, being an integrated information system, is not merely influenced by its environment, but also affects environment as well, due to its crucial role in generating the necessary information to decision-makers. It has two main pillars： measuring and declaring the costs that result from the activities of companies, especially industrial companies because they affect the environment. Therefore, the objective of this research is to investigate how well industrial companies are committed to measuring their environmental duties and declaring them in their balance sheets. This topic will be developed over two parts： scientific basis of environmental costs and accounting; environmental measuring and disclosure.     

More is Less? Regulation in a Rent Seeking World

Competition between two interest groups that engage in strategic lobbying to influence regulatory decisions is examined. It is shown that increases in gross surplus can be detrimental to all parties. The circumstances under which this might occur, along with several applications, including the decision to deregulate, are considered. It is also shown that a simultaneous increase in both groups marginal lobbying costs benefits the low cost group and harms the high cost group.     

Poverty changes in Manaus: Legacy of a Brazilian free trade zone?

This study contributes to the literature on the social impacts of Special Economic Zones by analyzing poverty changes in the Brazilian state of Amazonas, where the Free Trade Zone of Manaus (FTZM) is located. Using census data, statistical micro‐decompositions and counterfactual simulations, we show that labor income was the major driver of poverty declines during the 2000 to 2010 decade in the municipality of Manaus (and all the more so for households with members working in the FTZM, who were less poor to start with). Comparison with ex‐ante “similar” municipalities, in regard to socioeconomic and demographic criteria, corroborates the relative success of Manaus in terms of poverty reduction as well as the essential role played by labor income. Wage regressions also show a significant FTZM premium effect for workers, though diminishing over time. In the rest of the state of Amazonas, nonlabor income remains the main factor for poverty reduction and the FTZM appears to have limited spillover effects, even at short distances. Our contrasting results illustrate both the benefits and limitations that trade and industrial policies face in underprivileged areas and suggest that a better targeting of social policies is needed to improve distributional outcomes and spillovers for the whole state.     

Indexing Out of Poverty? Fiscal Drag and Benefit Erosion in Cross-National Perspective

We assess how tax-benefit policy developments in 2001–11 affected the household income distribution in seven EU countries. We use the standard microsimulation-based decomposition method, separating further the effect of structural policy changes and the uprating of monetary parameters, which allows us to measure the extent of fiscal drag and benefit erosion in practice. The results show that despite different fiscal effects, policies overall mostly reduced poverty and inequality and both types of policy developments had sizeable effects on the income distribution. We also find that the uprating of monetary parameters not only had a positive effect on household incomes, meaning fiscal drag and benefit erosion were avoided, but generally also contributed more to poverty and inequality reduction than structural policy reforms.     

International Service Transactions: Is Time a Trade Barrier in a Connected World?

Firms’ international fragmentation of production has recently widened its focus from outsourcing of intermediates to off-shoring of business services such as software program development and international call center networks. Although many services are intangible and non-storable, gravity model estimates show that geographical distance between business partners matters less for commercial service transactions. Rather, time zones can be a driving force of international service trade by allowing for continuous operation over a 24 hours business day (continuity effect) when a proper division of labor is feasible and countries are connected to electronic communications infrastructure (ICT). But even when ICT provides alternatives for face-to-face interaction, time zones can act as a barrier when coordination problems with sleeping business partners occur (synchronization effect). In this paper, we find empirical evidence for the continuity effect in trade of business services, which is robust to measurement and sample size. Even more important is that the effect of time zones on service trade depends on access to ICT. An improvement of ICT infrastructure will affect business service trade at long time zone distances significantly more than trade at short time zone distances.     

Always Poor or Never Poor and Nothing in Between? Duration of Child Poverty in Germany

Abstract. This paper analyses the duration of child poverty in Germany. Observing the entire income history from the individuals' birth to their coming of age at age 18, we are able to analyse dynamics in and out of poverty for the entire population of children, whether they become poor at least once or not. Using duration models, we find that household composition, most importantly single parenthood, and the labour market status as well as level of education of the household head are the main driving forces behind exit from and re‐entry into poverty and thus determine the (long‐term) experience of poverty.     

Is Australia Really a World Leader in Closing the Gender Gap?

Abstract

In the World Economic Forum (WEF) 2006 Global Gender Gap report, Australia was highlighted as a world leader in closing the gender gap. With reference to the Economic Participation and Opportunity Index (one of four components in the WEF Gender Gap Index (GGI)), this article assesses whether or not Australia is deserving of this recognition. Closer analysis shows that convergence in the participation gap flowed from increased participation in part-time, low-paid, and precarious jobs. Research also shows that women's entry into professional jobs has led to the feminization of some positions and that vertical segregation remains an ongoing problem. In highlighting these disparities, this article questions the capacity of the GGI to provide an adequate understanding of women's labor market participation and economic attainment.     

How and Why Has Teacher Quality Changed in Australia?

International research suggests that differences in teacher performance can explain a large portion of student achievement. Yet little is known about how the quality of the Australian teaching profession has changed over time. Using consistent data on the academic aptitude of new teachers, we compare those who have entered the teaching profession in Australia over the past two decades. We find that the aptitude of new teachers has fallen considerably. Between 1983 and 2003, the average percentile rank of those entering teacher education fell from 74 to 61, while the average rank of new teachers fell from 70 to 62. We find that two factors account for much of the decline: a fall in average teacher pay (relative to other occupations) and a rise in pay differentials in non‐teaching occupations.     

Usury,Market Power and Poverty Traps: A Study of Rural Credit in 1930s’ China

This paper studies the cross-regional variation of interest rates in China in the 1930s. Based on county-level data from the Buck (1941) rural surveys, we examine factors that may have influenced rural interest rates in pre-1949 China. Since the quality of institutions that define property rights and facilitate contract enforcement is important for such transactions as land tenancy arrangements, we treat land tenancy rate (or percentage of owner-farmers) as a proxy for institutional quality. Contrary to the popular belief among historians and economists that usury or high interest rates caused persistent poverty, we find that while the monopoly-exploitation hypothesis has little explanatory power, a region’s institutional quality and income level are persistent and significant determinants of interest rates. Thus, poverty is a key driver of high rates of interest. Economic growth and the development of market institutions are crucial for lowering high interest rates and combating usury.     

Solidified Branding Function: How the Urban Brand Affects a Small Town’s Development? Case Study of Wangqingtuo,Tianjin, China

Chinese small towns are usually developed with single core industry,and the urban brand is the identity of a town that formed with the development of its indust...     

ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case?: A Comparative Study of Nine OECD Countries

This paper compares the impact of information and communication technology (ICT) capital accumulation on output growth in Australia, Canada, Finland, France, Germany, Italy, Japan, the United Kingdom, and the United States. Over the past two decades, ICT contributed between 0.2 and 0.5 percentage point per year to economic growth, depending on the country. During the second half of the 1990s, this contribution rose to 0.3 to 0.9 percentage point per year. Despite differences between countries, the United States has not been alone in benefiting from the positive effects of ICT capital investment on economic growth nor was the United States the sole country to experience an acceleration of these effects. ICT diffusion and ICT usage play a key role and depend on the right framework conditions, not necessarily on the existence of a large ICT-producing sector.