Remembering Joseph M. Becker,S.J.

“Critique” of the Neoclassical paradigm in economics is a vital intellectual contribution in its own right. The prevailing wisdom and last word in economics, enforced by the socializing experiences of young would-be economists, is that if you can’t build a better theory immediately, without resources or access to debate and discussion, you have no right to criticize the existing paradigm, This requirement cuts off challenge and debate in economics, strongly deters the development of alternative theories, and leads to a weaker, less interesting economic science.     

Trade and technological explanations for changes in sectoral labour demand in OECD economies

This paper sets out to establish the main determinants of variations in the demand for aggregate labour in manufacturing and service sectors (22) for a cross-section of OECD countries (14). A relatively new panel data set is employed in the analysis, the OECD's International Sectoral Data Base. Preliminary analysis revealed that the ‘within’ sector variation in the wage share dominated overall variation for most countries and time periods. A separate dynamic model was thus generated to explain the ‘within’ sector variation in the wage share. This model contained real wages, output, the capital stock, technological change (total factor productivity) and trade (the imports to value-added ratio) as independent variables. In addition the wage level was also interacted with these explanatory variables on the presumption that skill is positively correlated with the level of wages. Because of the potential for simultaneity bias, estimation was conducted by IV and OLS. The main findings were that the capital stock and technological change were the main determinants of shifts in labour demand. While some countries reported the trade variable as significant its influence was only of slight importance in most cases. The interaction terms proved to be significant in a large number of countries. Some evidence was found that capital and technological were complementary with skill. Overall it was found that broad agreement existed across countries in the factors which influence labour demand despite considerable differences in the cross-country nature of labour market institutions.     

Valuing a multistate river: the case of the River Murray*

The River Murray and the Coorong in Australia have been in a state of decline. With the prospect of extended droughts and shifts in inflows due to climate change, difficult choices loom. The options include halting the decline, triage of some assets along the River or staying with the declining river system. To support decision‐making, a survey was designed to elicit willingness to pay for improvements in environmental quality. Over 3000 Australians responded to this survey. The study focuses on key River Murray environmental quality indicators: the frequency of bird breeding along the River Murray, increasing native fish populations in the River Murray, increasing the area of healthy vegetation along the River Murray, and restoring water bird habitat in the Coorong. State/Territory models were jointly estimated using a panel multinomial logit error‐components model. Willingness to pay estimates for improvements in environmental quality were calculated for the River Murray and the Coorong. Respondents were found to be willing to pay most for the Coorong and to improve waterbird breeding frequency. Respondents from the Australian Capital Territory were found to have significantly higher willingness to pay whereas those in Victoria had a significantly lower willingness to pay than respondents in other states.     

Compatibility of expected utility and <Emphasis Type="Italic">μ/σ</Emphasis> approaches to risk for a class of non location–scale distributions

Proofs of compatibility of the expected utility and μ/σ approaches to incorporating uncertainty in decision making exist for at least some utility functions and location–scale distributions. But there are severe constraints and it is desirable to investigate compatibility more widely. We do so for the class of distributions that are transformable to location–scale form by concave transformation and where the utility functions remain concave under transformation. The class is important, containing distributions such as the lognormal and Pareto, usually considered more appropriate for modelling income or wealth than those in the location–scale family. We are grateful to Jack Meyer for very helpful comments and discussions and also to an anonymous referee for useful remarks.     

The consequences of transfer of training for service quality and job satisfaction: an empirical study in the Malaysian public sector

The significance of transfer of training to organizations has been acknowledged by many studies. However, the consequences of transfer of training, particularly for employees, have still not been adequately explored. The present study was conducted to address this gap. Specifically, it explores the relationship among transfer of training, service quality and job satisfaction. Data for this study were collected through surveys of employees, their supervisors and their colleagues. Data were analysed using structural equation modeling. The findings reveal that transfer of training is positively and significantly associated with both service quality and job satisfaction.     

The duty of the firm in selling to the poor: A question of the person, justice, and subsidiarity

Mainstream economists do not address the question of the duty of the firm in selling to the poor. To them the issue is normative, and they have taken pains to delimit economics as a positive discipline. They separate value and fact, and engage themselves in questions relating to what is and not what should be. Forensic economists hold a different view. Firms are liable for damages due not just to deception and fraud but to negligence as well, and governments have consumer protection agencies to examine cases involving the duty of the firm well beyond deception and fraud. Social economists reject the argument based on libertarianism and individualism that the firm has only one purpose: increasing shareholder value. Social economists view the firm as having several constituencies — shareholders, managers, workers, customers, suppliers, neighbors, partners — and duties associated with each one. Those duties are grounded in the virtue of justice: to render to another that which is owed. The firm has a duty to its customers, its suppliers, and its employees deriving from the principle of equivalence; to its shareholders and employees from the principle of distributive justice; to its competitors and neighbors from the principle of contributive justice. This article argues that the firm has a special duty in selling to the poor which is grounded in the person of the one who is poor, the three principles of economic justice, and the principle of subsidiarity. Mainstream economists address poverty apart from consumer behavior as if the two were unrelated. This article brings the two together and in so doing helps throw light on the question of the duty of the firm in selling to the poor. An earlier version was presented as a paper at the midwest Economics Association annual meetings in Kansas City in March 1997.