The economics of food aid under subsistence farming with an application to Malawi

We investigate how food-aid affects price and production of staple food, with a partial equilibrium model with non-separable production and consumption. The model captures the key characteristics of sub-Saharan Africa subsistence economies. Simulations generate negative but also positive food-aid elasticities of production. Conditions are identified which mitigate the negative impact and support a positive impact. The share of domestic food production in total staple food demand (+) and the share of income from staple food production in total household income (−) are key determinants. Price and production equations, estimated with a panel of district data of the Malawi maize market for the period 1999–2010, show a small positive impact of food-aid. Large negative impacts of food-aid are not likely given production and income shares and behavioural responses.     

Aggregation of economic relations: A note

Summary This note considers aggregation of economic relations over individuals, where individual behavior differs according to individual characteristics, such as income, wealth and tastes. Assuming a multivariate distribution of these characteristics among individuals, aggregate per capita behavior is approximated in terms of the behavior of the average individual, plus a term depending on the nonlinearity of the relation and the covariance matrix of the distribution of the characteristics.Netherlands Central Bureau of Statistics. This note was written while the author was at the Erasmus University Rotterdam. Comments by B. M. Balk, T. Kloek, D. Sikkel and the referee are gratefully acknowledged.     

Is the EU ETS a Just Climate Policy?

The European Union Emissions Trading System (EU ETS) is in dire straits. Prone to design problems and suffering from the effects of the economic crises the scheme is criticised for its poor achievements. In this paper we will analyse some of the features of this situation from an ethical perspective. The major part is dedicated to the complications within each phase of the EU ETS and to the recent developments it has undergone. We will briefly discuss the remedies suggested by prominent commentators. Furthermore, any policy tool to tackle climate change should be evaluated in view of the profound equity issues that are inherent to the climate problem. We will evaluate the EU ETS according to two justice-based criteria, related to effectiveness and the distribution of the duties involved in climate change, respectively. We will conclude that the EU ETS, in its current form, clearly lacks fairness on both criteria. However, the biggest problem is the unwillingness of EU leaders to mend, what could be, a commendable climate policy tool. To that extent, we argue, those leaders are acting unjustly.     

The Risk Effects of Acquiring Distressed Firms

Existing research shows that bidder default risk increases following acquisitions due to a rise in post‐acquisition leverage and managerial risk‐taking actions offsetting the potential for asset diversification. This study examines whether the risk effects of acquiring distressed targets are fundamentally different and investigates possible explanations for any dissimilarities. Bidders often acquire relatively smaller distressed targets in domestic and related industries and have a higher initial target stake and more financial flexibility, thereby minimizing risk exposure. Controlling for several characteristics of bidder investment behaviour in both types of deals, however, we find that the increase in bidder default risk is substantially larger when acquiring distressed firms.     

Genetic and neurological foundations of customer orientation: field and experimental evidence

We explore genetic and neurological bases for customer orientation (CO) and contrast them with sales orientation (SO). Study 1 is a field study that establishes that CO, but not SO, leads to greater opportunity recognition. Study 2 examines genetic bases for CO and finds that salespeople with CO are more likely to have the 7R variant of the DRD4 gene. This is consistent with basic research on dopamine receptor activity in the brain that underlies novelty seeking, the reward function, and risk taking. Study 3 examines the neural basis of CO and finds that salespeople with CO, but not SO, experience greater activation of their mirror neuron systems and neural processes associated with empathy. Managerial and research implications are discussed.     

Bank loan portfolios and the Canadian monetary transmission mechanism

Abstract .  Following a monetary tightening, bank loans to consumers decrease. This is true for both mortgage and non-mortgage loans, and it is true for a tightening by the Bank of Canada that is, and is not, a response to a tightening by the Federal Reserve System. In contrast, business loans increase following a monetary tightening. The 'perverse' response of business loans cannot be explained by an increase in the demand for funds due to a reduction in real activity. These results are consistent with a change in bank portfolio behaviour in favour of business loans in response to a monetary tightening.     

Purchasing internationalisation on both sides of the Atlantic

This article focuses on similarities and differences in the perception of companies in the United States (7 cases in New York State) and Europe (5 cases from Belgium) on global purchasing opportunities and on how they react to these. It addresses two questions. First, what forces drive companies to engage in international purchasing? Seemingly basic issues such as price, quality and availability appear to be the three most important elements in this respect. Second, how do organisations organise for international purchasing in terms of configuration of actors and activities and their use of intermediaries such as brokers or agents? Findings indicate that the ways companies are organised run parallel on both sides of the Atlantic. However, we find that the New York State cases rely much more on intermediaries for their international purchasing activities than Belgian companies do.     

Trade policy in the face of price and non-price strategies

When selling their products domestically or internationally, firms rely on more than just price as a strategic variable. They also rely on non-price instruments such as advertising and/or R&D investments. Any trade policy that affects or limits the use of one variable will likely have strategic consequences for the use of all the others. Using a Hotelling model with vertical differentiation we focus on how trade policy barriers alter price and non-price competition on the goods market. The main results are as follows: first, no matter whether the trade restriction (tariff) is placed on the non-price instrument or on the good itself, the foreign (domestic) firm prefers to increase (decrease) its use of its pricing tool and give up some of (increase) its use of the non-price instrument. Second, in the presence of a non-price instrument, tariffs do not always lead both firms to increase their price: it can lead the foreign firm to decrease its (final) price.     

Smallness and Status Debates in Overseas Territories: Evidence from the Dutch Caribbean

While non-sovereignty is often presented as a rational and pragmatic political status option, this paper asserts that the smallness of overseas territories in various ways obstructs and distorts the formation of an informed local public debate about this political status. Due to personalistic politics, patron-client relations, excessive executive dominance, and the lack of professional media, which all are consequences of a small population size, the extent to which citizens of overseas territories are involved and represented in status debates is limited. The paper uses the 2010 political reforms of the Dutch Caribbean islands as an illustrative case study, to show how the smallness of these islands has obstructed a balanced consideration of status options among the population.     

REAL INCOME CHANGES O F HOUSEHOLDS IN THE NETHERLANDS, 1977–1983

This paper deals with the construction of statistics on real income changes of households in the Netherlands. Two different figures are computed, called the dynamic and the static figure. The dynamic figure reflects the change in real income as experienced by individuals. It is based on longitudinal data: two panels resulting from an exact match between three files from the Netherlands' IRS. The static figure reflects the change in real income of positions (e.g. of a 60-year old civil servant) instead of individuals. It is based on micro-simulation: changes in wages, taxes, etc. are simulated on a sample of individuals for whom socio-economic and demographic positions are assumed constant.
In the paper we discuss both figures and some other problems, e.g. the concept of real income and the price index. Furthermore we give results for the years 1977–1983 and discuss some differences between the dynamic and the static figure. The most notable result is the large variation in the dynamic figure, exhibiting a very substantial income mobility.