Firm Responses to Income Inequality and the Cost of Time

The full cost of shopping includes the cost of the shopper's time.When that cost increases, stores have incentives to respond in waysthat economize on shopper time. One response is to substitute in-storelabor for shopper time. Pooled cross-sectional tests using data fromsuburban and city food stores show that various labor intensitymeasures are higher where the opportunity cost of shopper time ishigher. We distinguish between income and cost of time effects byshowing that store labor intensity depends on the composition ofincome between male and female members of the family, and notonly on the level of family income. We obtain similar results for twoother ways that food stores can economize on shopper time – locatingcloser to the customer and offering more check out stations withina store. We also use a unique shopping time survey to showthat shoppers from higher income households make fewer visitsto food stores, spend less time per visit in the check out line andare more likely to shop at stores with longer hours.     

Implications of rural settlement patterns for development: A historical case study in Qaukeni,Eastern Cape,South Africa

Successive administrative policies, overlaid on the traditional communal land tenure system in the Qaukeni area of the Eastern Cape, have had the effect of tying people to the land and creating an environment that severely constrains opportunities for development. This article traces the influence of administrative changes on land allocation over the last century. It assesses the impact of the settlement pattern in the early 1980s on accessibility to basic facilities, services and development opportunities. In view of the severe conditions in the study area (internal push factors), coupled with reduced restrictions on movement to South African cities and a general urbanisation trend (external pull factors), population movements could have been expected both out of the region and to more accessible places within it. Primary research, using districts and administrative areas as the units of analysis, revealed that few of the expected changes had occurred in the period between 1982 and 1993. However, recent evidence shows that several of the anticipated changes are taking place. The article concludes that, notwithstanding recent trends, a combination of the land tenure system (in both rural and urban areas), a variety of place-related factors in rural areas, together with risk-spreading strategies on the part of households, continue to exert a strong influence in keeping people on the land, even though their existence is not subsistence based, but linked to the urban economy.     

Are regulations the answer for emerging stock markets? Evidence from the Czech Republic and Poland

Does the emergence of a stock market require a well-developed legal and/or regulatory system? Although historical work by Neal and Davis [Neal, L., & Davis, L. (2005). The evolution of the rules and regulations of the first emerging markets: The London, New York, and Paris stock exchanges, 1792–1914. Quarterly Review of Economics and Finance, 45, 296–311] and Stringham [Stringham, E. (2003). The extralegal development of securities trading in seventeenth century Amsterdam. Quarterly Review of Economics and Finance, 43, 321–344] suggests that securities markets have successfully developed with little government oversight, numerous authors [including Black, B. (2001). The legal and institutional preconditions for strong securities markets. University of California Law Angeles Law Review, 48, 781–855; Coffee, J. (1999). Privatization and corporate governance: The lessons from securities market failure. Journal of Corporation Law, 25, 1–39; Frye, T. (2000). Brokers and bureaucrats: Building market institutions in Russia. Ann Arbor: University of Michigan Press; Glaeser, E., Johnson, S., & Shleifer, A. (2001). Coase versus the Coasians. Quarterly Journal of Economics, 116, 853–899; Mlčoch, L. (2000). Restructuring of property rights: An institutional view. In L. Mlčoch et al. (Eds.), Economic and Social Changes in Czech Society After 1989. Prague: The Karolinum Press; Pistor, K. (2001). Law as a determinant for equity market development – the experience of transition economies. In Peter Murrell (Ed.), The Value of Law in Transition Economies (pp. 249–287). Ann Arbor: Michigan University Press; Stiglitz, J. (1999). Whither reform. Ten years of the transition. Keynote Address, Annual Bank Conference on Development Economics, Washington, DC, April 28–30, 1999; Zhang, X. (2006). Financial market governance in developing countries: Getting the political underpinnings right. Journal of Developing Societies, 2, 169–196] argue that the Czech Republic and other Eastern European governments need more regulation for their newly created stock markets. They maintain that the Warsaw Stock Exchange, which is seen as more regulated, has outperformed the Prague Stock Exchange which is seen as largely unregulated. Thus increased regulations are a key to increased performance. This article, however, maintains that the evidence from the Czech experience has been misinterpreted. This article provides an in depth case study of the Czech stock market and finds that (a) Czech capital markets have been hindered by government intervention from their beginning, (b) that the evidence on Poland's superior performance is not as strong as suggested, and (c) that Czech regulators seem to be unqualified, lack the proper incentives, and are unlikely to benefit the market. Under these circumstances it appears that Neal and Davis (2005:311) are correct that increased government involvement is unlikely to improve the situation.     

Life-cycle effects of social security in an open economy: A theoretical and empirical survey

Conventional wisdom views demographic change as a set of exogenous shocks impinging on social security, with the economy treated as a closed system. This contribution argues that demographics is nothing but the aggregate of individual decisions, which are influenced by social security. This claim is supported by both theoretical argument and empirical evidence with regard to decisions over the life cycle, ranging from educational effort, marriage, number of children, divorce, retirement, and effort to extend one's life. Distinguishing the effects of contributions and benefits of social security, these feedback relationships are shown to in the main hamper employment and growth, thus undermining the financial viability of today's social security schemes, with increasing openness of the economy (`globalization') exacerbating problems.     

Do regional economies converge?

Current interest in the new economic growth theory, linked with the development of new, innovative methods of measurement, has resurrected interest in spatial economic convergence. The primary objective of this paper is to examine the extent that regional economies seem to be converging or diverging. It explores the expanding theoretical literature in the field and examines the growing body of empirical evidence that has emerged in recent years not only in the U.S. but also internationally. The paper is retrospective but also embraces new findings relating to the United Kingdom and the U.S., putting particular emphasis on long- and short-term indicators of economic convergence.     

THE SHORT-TERM EFFECT OF DOMESTIC OIL PRICE INCREASES ON THE AUSTRALIAN ECONOMY WITH SPECIAL REFERENCE TO THE AGRICULTURAL SECTOR

The rise in the domestic price of oil products implied by the new import parity pricing policy for domestic crude oil is likely to pose some problems for macroeconomic management. In this paper an attempt has been made to quantify the short-run adjustment problems involved, using the ORANI 78 model of the Australian economy. Results are presented for a range of variables of interest, including macroeconomic variables, industrial and workforce composition and farm incomes. With fixed real wages, farm incomes are projected to decline by between 6 and 8 per cent.