Correcting for Sampling Bias in the Measurement of Welfare and Poverty in the Cote d'Ivoire Living Standards Survey

The sampling aspects of a household data set are important toanalysts. The early years of the Côte d'Ivoire LivingStandards Survey (CILSS) had a sampling bias, which seriouslyaffected estimates of population statistics such as householdsize. The bias arose from sampling procedures that overrepresentedlarger dwellings. Assuming that samples drawn in later yearswere unbiased, a correction procedure is applied that uses weightsbased on household size. Results from the weighted data arethen compared with the unweighted findings to assess the seriousnessof the bias. Estimates of household expenditure per capita inthe early years of the survey are found to be significantlyunderestimated, resulting in an overestimation of poverty. Thesampling bias also resulted in an underestimation of the upwardtrend in poverty during 1985–88. The CILSS has been apopular and fruitful data set for policy analysis. These findings,however, cast doubt on the robustness of earlier work. Thus,the effort to trace sampling information is particularly worthwhilefor policy-oriented applied research.     

Wage Differentials and Moonlighting by Civil Servants: Evidence from Cote d'Ivoire and Peru

As part of their efforts to reduce fiscal deficits, many governmentshave allowed public sector salaries to erode, often on the assumptionthat government workers are overpaid vis-à-vis thosein the private sector. We test that assumption by analyzingpublic-private pay differentials in Côte d'Ivoire andPeru. Switching regressions models are estimated using fullinformation maximum likelihood (FIML), and the results are comparedto those obtained using ordinary least squares (OLS) techniques.The OLS yields seriously biased estimates of the pay structure,suggesting that public wages are higher than private wages;the FIML estimates show the opposite. Our probit analysis alsoshows that the wage disadvantage of civil servants is a determinantof the greater prevalence of moonlighting among public thanprivate employees. The evidence suggests that reductions inemployment rather than pay, while being less palatable in theshort term, will be more effective in the long run.     

The Tragedy of the Commons in Cote d'Ivoire Agriculture: Empirical Evidence and Implications for Evaluating Trade Policies

Expansion of cultivated land diminishes the extent of forestlandsor reduces the length of fallow periods and, hence, reducesthe amount of natural vegetation. The increase in land undercultivation has a direct output-increasing effect at the costof reducing natural capital and agricultural productivity. Theevidence for western Côte d'Ivoire is consistent with,and provides an explanation for, the declining agriculturalproductivity observed in Sub-Saharan Africa during the pastfew decades. This article uses a theoretical model to determine the levelof land cultivation that maximizes village income, using datafrom Côte d'Ivoire for 1985–87. An important partof the land is under common property, usually at the villagelevel. The results show that farmers do not internalize evena small fraction of the external cost of bio-mass in their landallocation decisions. The lack of internalization of the socialcost of the biomass resource leads to large income losses atthe village level—as much as 14 percent of village income.These losses are many times larger than the usual estimatesfor conventional distortions.     

Local Financial Development and Household Welfare: Microevidence from Thai Households

The authors provide new microevidence on the relationship between financial development and welfare. Relying on the concept of local financial development, their analysis focuses on two dimensions of household welfare: investment and consumption. The results show that financial development is associated with a larger volume of productive investments and is also able to improve the financing of consumption; however, the effect of financial development on credit as an instrument to minimize consumption risk is not supported. This finding implies that consumption smoothing is only weakly improved by greater financial development.     

Disability, Poverty, and Schooling in Developing Countries: Results from 14 Household Surveys

Analysis of 14 household surveys from 13 developing countriessuggests that 1–2 percent of the population have disabilities.Adults with disabilities typically live in poorer than averagehouseholds: disability is associated with about a 10 percentagepoint increase in the probability of falling in the two poorestquintiles. Much of the association appears to reflect lowereducational attainment among adults with disabilities. Peopleof ages 6–17 with disabilities do not live in systematicallywealthier or poorer households than other people of their age,although in all countries studied they are significantly lesslikely to start school or to be enrolled at the time of thesurvey. The order of magnitude of the school participation deficitassociated with disability—which is as high as 50 percentagepoints in 3 of the 13 countries—is often larger than deficitsrelated to other characteristics, such as gender, rural residence,or economic status differentials. The results suggest a worrisomevicious cycle of low schooling attainment and subsequent povertyamong people with disabilities in developing countries.     

Bank Size and Household Financial Sentiment: Surprising Evidence from University of Michigan Surveys of Consumers

We analyze comparative advantages/disadvantages of small and large banks in improving household financial sentiment. Matching University of Michigan Surveys of Consumers household sentiment data with local banking market data from 2000 to 2014, we find surprising results—large banks have significant comparative advantages in boosting such sentiment. The findings apply across demographic groups, market types, and time periods, and are robust to different measurements and econometric methods. We contribute to the literatures on bank specialness, benefits and costs of small and large banks, household sentiment, and real effects of banking. We conjecture about the drivers of the findings, and discuss policy implications.     

International Financial Reporting Standards in an Emerging Economy: Lessons from Romania

International Financial Reporting Standards (IFRS) are a reference point for the modernisation of accounting models in emerging economies. Previous literature documents a diverse IFRS experience, especially among emerging economies. The IFRS implementation strategy and local institutional characteristics shape the way in which the standards are used in practice. We use the Romanian case to illustrate the effect of various contextual factors, some historical, on the process and outcomes of IFRS implementation. We show that IFRS implementation can follow a different pattern in emerging economies.     

Health and Mortality Delta: Assessing the Welfare Cost of Household Insurance Choice

We develop a pair of risk measures, health and mortality delta, for the universe of life and health insurance products. A life‐cycle model of insurance choice simplifies to replicating the optimal health and mortality delta through a portfolio of insurance products. We estimate the model to explain the observed variation in health and mortality delta implied by the ownership of life insurance, annuities including private pensions, and long‐term care insurance in the Health and Retirement Study. For the median household aged 51 to 57, the lifetime welfare cost of market incompleteness and suboptimal choice is 3.2% of total wealth.     

Comparability in IPSASs: Lessons to be Learned for the European Standards

Abstract

In 2013 the European Commission started addressing issues concerning public sector accounting harmonization across EU Member States, embarking on a project to develop European Public Sector Accounting Standards (EPSASs). Although acknowledging the indisputable reference of the existing International Public Sector Accounting Standards (IPSASs), it highlighted that IPSASs, as they were, could not be suitably applied in the EU context (European Commission, 2013a). IPSASs were considered as not covering specific important matters of public sector accounting, not showing enough stability due to the need of constant convergence with IFRSs, and offering several options that compromised comparability.

Comparability of public sector accounts across Member States is one of the main objectives of EPSASs (EUROSTAT, 2016, 2019), clearly established as a qualitative characteristic in the draft EPSAS Conceptual Framework (EUROSTAT, 2018). It is critical for EU economic and fiscal convergence that countries’ accounts allow for substantial comparison and standardized transition to the National Accounts (Jorge et al., 2014).

The IPSAS Conceptual Framework (IPSASB, 2014), meanwhile issued, sustains that adopting these standards would improve comparability of General Purpose Financial Reporting (GPFR), in this way strengthening transparency and accountability of public sector finance.

Given that, despite the above concerns, EPSASs are to be developed on the basis of IPSASs (European Commission, 2019), the purpose of this paper is to show that IPSASs are not an adequate reference for EPSASs in terms of allowing the desired comparability of countries’ accounts in the EU. It relies on evidence gathered from IPSAS-based financial reports prepared by some Agencies of the United Nations System and from audit reports of the UN Board of Auditors.

The research illustrates that IPSASs only allow for de jure comparability of financial reports at a very broad level. Their implementation and interpretation in practice (due to the options permitted and the judgement required) does not allow for de facto comparable GPFR. European standard-setters need to be aware that the comparability EPSASs need to address across EU Member States’ accounts must go beyond the one that is permitted by IPSASs – EPSASs need to stretch IPSASs harmonization to a higher level of standardization.     

Income Inequality and Living Standards: Changes in the 1970s and 1980s

‘This country has the highest standard of living that it has ever known … Real incomes have increased throughout all income groups.’ Margaret Thatcher (Weekly Hansard, 27 April 1989, cols 1087–8) ‘While the very rich have lost some of their riches to the less rich, over time, the poor have hardly profited proportionately.’ Neil Kinnock (The Future of Socialism, Fabian Tract no. 506, January 1986)     

Corporate Disclosure Quality: Lessons from Australian Companies on the Impact of Adopting International Financial Reporting Standards

For annual reporting periods beginning on or after 1 January 2005, Australian companies were required to comply with the Australian equivalents of International Financial Reporting Standards (AIFRS). To ensure a smooth transition, a broadly defined standard (AASB 1047) mandated pre-adoption company disclosures of the AIFRS' impact. The standard provided managers with the opportunity to exercise considerable discretion in complying with the underlying disclosure requirements. We examine how this discretion impacted on the quality of pre-adoption AIFRS disclosures provided by a sample of large Australian companies. Using a disclosure quality index, we find considerable evidence of a cross-sectional variation in disclosure quality that varies according to differences in the AIFRS financial impact, size, industry and profitability factors. Importantly, we also observe individual Big 4 audit firm influences on disclosure quality. These findings highlight consequences of mandating corporate disclosures based on broadly defined principles.     

社会企业的交叉补贴定价及福利效应分析——基于三级价格歧视的视角

社会企业是社会创业的重要载体,是致力于解决社会问题的兼具社会和经济属性的创新组织,在服务于欠缺支付能力的弱势群体方面发挥着重要作用。通过与商业企业的比较,以区别于商业企业定价目标的社会使命收益最大化为出发点,借鉴三级价格歧视理论,研究社会企业的交叉补贴定价策略及福利效应,并以印度 Aravind 眼科医院为例分析,发现社会企业采取的交叉补贴定价是可行的,且在某种程度上实现了帕累托改进。     

The Debt‐Payment‐to‐Income Ratio as an Indicator of Borrowing Constraints: Evidence from Two Household Surveys

Liquidity constraints have been proposed as an important explanation for deviations from the rational expectations/permanent income hypothesis. This paper introduces to the liquidity constraint literature the ratio of a household's debt payments to its disposable personal income, the debt service ratio (DSR). We find that a household with a high DSR is significantly more likely to be turned down for credit than other households. Also, the consumption growth of likely constrained households, identified using the DSR along with the liquid‐asset‐to‐income ratio, is significantly more sensitive to past income than that of other households, confirming the DSR's value in identifying constrained households.     

Monetary Policy and the Lost Decade: Lessons from Japan

I investigate how monetary policy can avoid a deflationary slump when policy rates are near zero by studying interest rate policy during Japan's “Lost Decade.” Estimation results suggest that the Bank of Japan's interest rate policy fits a conventional reaction function with an inflation target near 1%. The disapointing economic performance thus seems primarily due to adverse economic shocks rather than extraordinary policy errors. Also, counterfactual policy simulations suggest that simply raising the inflation target would not have substantially improved performance. However, price‐level targeting or combining a higher inflation target with an aggressive output response would have achieved superior stabilization results.     

Equity Accounting: Empirical Evidence and Lessons from the Past

This paper analyses the recently issued accounting standard prAASB 1016 and its predecessor ED 71 in the light of the historical development of equity accounting in Australia and overseas. Empirical research shows that equity accounting was not universally adopted before being banned and that, given a voluntary choice of accounting method, firms are more likely to adopt equity accounting when they hold material investments in associated companies, when the investments in associates are unlisted and when there is a greater level of interdependency between the investor and investee, as evidenced by the existence of cross-guarantees or the level of non-capital transactions which take place. There is no empirical evidence supporting the degree of influence as an important consideration in the adoption decision.     

Fiscal Forecasting: Lessons from the Literature and Challenges*

While fiscal forecasting and monitoring has its roots in the accountability of governments for the use of public funds in democracies, the Stability and Growth Pact has significantly increased interest in budgetary forecasts in Europe, where they play a key role in EU multilateral budgetary surveillance. In view of the increased prominence and sensitivity of budgetary forecasts, which may lead to them being influenced by strategic and political factors, this paper discusses the main issues and challenges in the field of fiscal forecasting from a practitioner's perspective and places them in the context of the related literature.     

Determinants and consequences of student satisfaction in Australian Universities: Evidence from QILT Surveys

We examine the determinants and consequences of student satisfaction, measured by satisfaction scores reported in the QILT surveys from 2012 to 2017. We find that university-level profitability determines overall student satisfaction, where a positive relationship exists between student satisfaction and university performance. This association is more pronounced for Group of Eight (Go8) universities and those with higher academic expenditure. These findings have important implications for higher education providers as the Australian Government is contemplating the use of QILT student satisfaction in allocating public funding for higher education.