REMOVING THE “VEIL OF IGNORANCE”: NONLINEARITIES IN EDUCATION EFFECTS ON GENDER WAGE INEQUALITIES

A large literature studies the mean gender wage gap in developing countries and finds mixed evidence about the role of education policies in closing gender earnings inequalities. We contribute to this literature by exploring two types of nonlinearities in wage earning regressions: (1) nonlinearities on the effects of education on expected earnings along the distribution of education endowments; and (2) heterogeneities on the contributions of education to the gender wage gap at different quantiles of the wage distribution. Our analyses provide new insights on how these nonlinear effects can be used to set up better targeted gender and development policies. (JEL I26, C14)     

The effects of social heterogeneity on travel patterns: A replication study

This paper examines differences between the U.S. and Australian urban landscape in terms of the relationship between urban structure and the effectiveness of public transportation. A replication study is undertaken that tests the validated hypothesis from a U.S. study that urban travel corridor social heterogeneity reduces patronage of public transportation because of resident concerns with social composition of passengers and effects on the travel privacy dimension. A causal model is identified for the city of Sydney that specifies enogenous and endogenous variables, as per the U.S. study, which affect bus and rail use. Results do not lead to the acceptance of the hypothesized relationship. The presence of social heterogeneity in Sydney travel corridors does not deter residents within the study corridors from using the bus or train for the journey to work, nor do they appear to affect longer term decisions on car ownership. Bus patronage was shown to be dependent on social heterogeneity factors while rail use was associated with car owning households. These results highlight differences in urban spatial structure and travel patterns between Sydney and cities in the U.S. study, and suggest differential effects of changes in urban spatial structure and policy responses.     

Morality and Rationality in Environmental Policy

The "Moralist" camp takes environmental morale to be essential in order to save nature. The "Rationalist" camp, mainly represented by economists, takes market-based instruments solely relying on extrinsic motivation to be both necessary and sufficient for a successful environmental policy. Recently, the moralists have learned to appreciate economists' incentive instruments, and rationalists have learned that environmental morale is required to find political support for the introduction of their preferred instruments.Intrinsic motivation in the form of environmental morale is moreover closely connected to the extrinsic motivation via crowding effects. Economic incentives – in particular tradeable emission rights and emission taxes – tend to undermine environmental morale while policy instruments tend to raise it.An environmental policy based on complementarity is able to exploit the advantages, and to weaken the disadvantages, of the policies proposed by the two camps. Market-based instruments should be accompanied by policies informing and inviting the consumers to engage. In addition, possibilities to participate in the decision-making about environmental policy should be offered (preferably via direct democracy), and the policy should be decided and undertaken at the lowest possible level, normally the local community level.     

Equilibrium returns with transaction costs

We study how trading costs are reflected in equilibrium returns. To this end, we develop a tractable continuous-time risk-sharing model, where heterogeneous mean–variance investors trade subject to a quadratic transaction cost. The corresponding equilibrium is characterized as the unique solution of a system of coupled but linear forward–backward stochastic differential equations. Explicit solutions are obtained in a number of concrete settings. The sluggishness of the frictional portfolios makes the corresponding equilibrium returns mean-reverting. Compared to the frictionless case, expected returns are higher if the more risk-averse agents are net sellers or if the asset supply expands over time.     

Modelling insurgent-incumbent dynamics: Vector autoregressions,multivariate Markov chains,and the nature of technological competition

The struggle between sail and steam is a long-standing theme in economic history. But this technological competition story has only partly tackled, since most studies have appreciated the rivalry between the two alternative modes of commercial sea carriage in the late 19th century while the early period has remained relatively under-analysed. This paper models the early dynamics between the two capital goods using a vector autoregression approach (VAR) and a Multivariate Markov Chain approach (MMC). We find evidence that the relationship was non-linear, with a strong indication of complementarities and cross-technology learning effects.     

Consumer confidence and consumption forecast: a non-parametric approach

The consumer confidence index is a highly observed indicator among short-term analysts and news reporters and it is generally considered to convey some useful information about the short-term evolution of consumer expenditure. However, its usefulness in forecasting households consumption is sometimes questioned in empirical studies. A possible weakness can be due to the use of a linear functional form to model the relation between these two variables. Here, in order to overcome this issue, a non-parametric model is used, so that overly restrictive assumptions about the functional form can be avoided.     

The role of villages in households’ poverty exit: evidence from a multilevel model for rural Vietnam

Vietnam experienced a dramatic drop in overall poverty during the 90s. However, the poverty reduction showed substantial variation across households, villages and regions. Using a multilevel model on panel data from the rural sample of the Vietnam Living Standard Measurement Survey we demonstrate the important role of villages in household poverty exit dynamics. We also show how an analysis of village-level random effects predictions can help targeting of policies to reduce poverty.     

The Malmquist Productivity Index and Plant Capacity Utilization

A new decomposition of the Malmquist productivity index is proposed to account for changes in plant capacity utilization. Using a primal, non-parametric specification of technology, the Malmquist index is decomposed into technical efficiency change, variations in plant capacity utilization and frontier shifts. It provides an alternative to the available methods of incorporating capacity utilization changes into measures of productivity change. Such measures are based on parametric (and, in many cases, dual) technology specifications; moreover, they typically do not allow for technical inefficiency.
JEL Classification C 61; D 24