Gender and Job Search in Developing Country Labor Markets

Gender discrimination in developing country labor markets raises the concern that women may be unable to find alternative employment following public-sector job loss. Theoretical and empirical results in this article suggest that, in segmented labor markets, observed unemployment spells may actually be shorter for women than for men. This is a result of the relatively strong incentive wage-sector discrimination creates for women to accept more readily available, but less-remunerative, nonwage-sector positions.     

Accounting and Valuation: How Helpful Are Recent Accounting Rule Changes?

The longstanding debate over the proper definition of “earnings”—whether investors when setting stock prices focus primarily on GAAP earnings or other measures like operating cash flow—is both misguided and theoretically unresolvable. The biggest problem faced by investors in evaluating earnings reports is not their inability to understand the effects of the different accounting methods companies use when aggregating accounting line items into reported net income. More challenging, and more critical to the investment process, is getting complete and reliable information about the line items themselves. The authors' underlying premise is that investors, when provided sufficient information about these “components” of earnings, can combine or reconfigure them in whatever way they find most useful. But without sufficient and reliable information about the individual line items, investors will find it difficult to understand how earnings are generated and thus to produce the forecast of future earnings necessary to value a company. In the past few years, there have been significant rule changes in accounting for employee options, derivatives, and special purposes entities. The authors evaluate the extent to which the new rules encourage disclosures that are helpful from a valuation perspective. Although there has been some progress, financial reporting in each of the three areas continues to fall well short of providing the complete, disaggregated data required to value a firm with confidence.     

Ex Ante Evaluation of Drought‐Tolerant Varieties in Eastern and Central Africa

This study presents a model to estimate potential benefits of drought‐tolerant varieties of maize, sorghum and millet in Kenya, Uganda and the Amhara region of Ethiopia. In addition to the benefits from mean yield increases, the model takes into account risk benefits associated with yield‐stabilising varieties. Ex ante estimates provided for different drought zones and for different household types within drought zones of each country suggest that drought resistance generates substantial benefits from both mean yield improvements and yield variance reductions for both consumers and small, medium and large producers.     

Measuring soil quality dynamics A role for economists, and implications for economic analysis

Measuring soil quality is extremely difficult, yet it has clear economic importance. In particular, there is a great deal of empirical interest in the dynamics of soil quality evolution when land managers respond to policies and other incentives. Yet current methodologies for measuring changes in agricultural land quality are largely static and rely heavily either on incomplete measures such as proxy variables, or ad hoc indexes of selected soil characteristics. Moreover, much empirical work relies on static econometric techniques or simulation models. In this paper, we develop a means to infer soil quality changes from input and output data using a dynamic production function model. Using data from field experiments, we estimate the model in a way that allows the recovery of a dynamic measure of soil quality whose evolution depends on variations in management practices. Our methodology and findings will help provide firmer empirical foundations for analyses of the economic implications of land degradation and the soil quality implications of agricultural policies.     

The Payoff to America from Globalisation

This article summarizes the economic payoff to the United States from its postwar trade opening and estimates the potential future gains from more opening going forward. To quantify these gains, we survey different methodologies and estimates. We find that trade opening since World War II has added between $800 billion to $1.4 trillion to the US economy, or about $7,000 to $13,000 per household. More speculative estimates of the potential additional gains from removing the rest of US trade barriers range from $400 billion to $1.3 trillion, or about $4,000 to $12,000 per household. Since trade opening permanently raises national income, these gains are enjoyed annually. Trade opening inevitably entails adjustment costs. We estimate that the lifetime cost of all worker dislocations that have been triggered by expanded trade in the United States could be as high as $54 billion, although probably less. The permanent gains from past and potential liberalization easily swamp the modest sums necessary to alleviate the temporary pains of adjustment. In the future as in the past, free trade can significantly raise income – and quality of life – in America.     

Estimating the Effect of Individual Time Preferences on the Use of Disease Screening

Economists have long been interested in evaluating the role that time preferences play in a wide range of economic decisions. In the health care arena, time preferences may be an especially important determinant of many decisions—particularly the use of preventative health care. One potential barrier to patient adoption of preventative screening regimens is that they impose current costs on consumers with the hope of lower costs in the future. Using data from a national survey, we jointly estimate latent discount rate and preventative service demand models using a limited information maximum likelihood estimator (iterated M‐estimator). The results suggest that discount rates are generally inversely related to the likelihood of most screening tests.     

Why don’t households see the light?: Explaining the diffusion of compact fluorescent lamps

Starting in 2009 the EU ban on the sale of incandescent bulbs will force households to purchase energy-saving compact fluorescent lamps (CFLs). The impact of the ban on consumers will depend on the nature of current barriers to the use of CFLs. This paper employs a Double-Hurdle model to identify distinct barriers to household consideration of CFLs and to the subsequent intensity of adoption using a large survey of German households. Barriers to CFL consideration are found to be low for all households, except those with very low incomes. Barriers to CFL consideration are, however, strongly linked to the residential characteristics of low-income households like small size and to the lack of household knowledge of energy consumption. CFLs use will increase after the ban mainly through a rise in the intensity of adoption. But the ban will be costly to consumers because the range of applications where households chose to employ CFLs is limited, particularly for high income households.     

Returns to Initial Shareholders in Savings Institution Conversions: Evidence and Regulatory Implications

In this paper, stock prices for savings institutions that have converted to the stock form of organization are examined. Event-study methodology is used to focus on the returns to initial shareholders in the period immediately following initial trading. The results of the study indicate significant positive returns in savings institution conversions in the first several trading days, suggesting a one-time wealth transfer from depositors not exercising their rights to initial shareholders. The results also provide support for the efficiency of the market as the market price adjusts quickly in the first two days of trading after the public offering. Given the FHLBB's objectives, there appears to be little cause for regulatory concern although initial returns are significant.