Insights on Development from the Economics of Happiness

The literature on the economics of happiness in developed economiesfinds discrepancies between reported measures of well-beingand income measures. One is the so-called Easterlin paradox:that average happiness levels do not increase as countries growwealthier. This article explores how that paradox—andsurvey research on reported well-being in general—canprovide insights into the gaps between standard measures ofeconomic development and individual assessments of welfare.Analysis of research on reported well-being in Latin Americaand Russia finds notable discrepancies between respondents’assessments of their own well-being and income- or expenditure-basedmeasures. Accepting a wide margin for error in both types ofmeasures, the article posits that taking such discrepanciesinto account may improve the understanding of development outcomesby providing a broader view on well-being than do income- orexpenditure-based measures alone. It suggests particular areaswhere research on reported well-being has the most potentialto contribute. Yet the article also notes that some interpretationsof happiness research—psychologists’ set point theory,in particular—may be quite limited in their applicationto development questions and cautions against the direct translationof results of happiness surveys into policy recommendations.      

The Neglect of Monotone Comparative Statics Methods

Monotone methods enable comparative static analysis without the restrictive assumptions of the implicit-function theorem. Ease of use and flexibility in solving comparative static and game-theory problems have made monotone methods popular in the economics literature and in graduate courses, but they are still absent from undergraduate mathematical economics courses and textbooks. In this article, the authors illustrate the generality of monotone comparative statics relative to the implicit function approach. For example, to sign the effect of a discrete policy shift on a choice variable, the marginal returns will increase with the policy parameter. They also apply monotone methods in game theory settings. As mathematical economics courses and majors gain popularity, incorporating monotone methods into curriculum and textbooks would provide a modern treatment of comparative static analysis.     

Carbon Footprint Taxes

Environmental and Resource Economics - We analyze whether a carbon consumption tax is logistically feasible. We consider a carbon footprint tax (CFT), which would be modeled after a credit-method...     

Regional Challenges to Globalisation: Perspectives from Southern Africa

This article examines the effectiveness of private transnational regulation of labour standards/rights in the clothing industry. It adopts three objectives. First, the study focuses on national states in developing countries, explaining their lack of enforcement of labour law and the suppression of labour rights. Second, the article examines the effectiveness of transnational regulatory networks (TRNs) in raising labour standards/rights in producer countries. We conclude that, in a fragmented and highly competitive global industry, existing TRNs cannot ensure labour decent standards/rights. Third, we investigate the reasons for their limited effectiveness. We empirically investigate the conditions and rights of labour in the clothing industries of China and Turkey. In the case of Turkey, we are able to explain the lack of effectiveness of TRNs by drawing on interviews with a variety of actors in firms and networks.     

Numerosity: Forward and Reverse Stock Splits

Abstract

Individuals have a tendency to fixate on large numbers and ignore other relevant information in their decision making process. The numerosity heuristic, a cognitive bias, is the first behavioral hypothesis to explain why investors prefer to receive more shares (rather than less shares) in a stock split even though the aggregate economic value is the same. For forward splits, after controlling for the positive signaling of improved earnings growth and liquidity from the split announcement, the stock price reacts positively to the larger number of shares issued. More importantly, the use of a dual class numerosity model can explain why most conventional hypotheses fail to explain the negative stock price reaction to reverse splits. Given a typical bearish outlook associated with a reverse stock split, investors’ cognitive resources have already been conditioned to derive a systematic conclusion to sell the stock at the higher price. Focusing only on large stock price numerosity, investors are incorrectly inferring a higher investment value. As the high numerosity encourages bearish investors to sell at the higher perceived investment value, the stock returns react more negatively to the higher post-reverse split price level. In both forward and reverse split cases, investors react to high numerosity.     

Complex home care: Part I--Utilization and costs to families for health care services each year

As many as 120 persons per million people in the United States are dependent on the lifelong, complex, technology-based care of home parenteral nutrition (HPN) infusions. However, data for costs paid by families for HPN-related health care services and for non-reimbursed expenditures are rarely tabulated and most often underestimated. The goals of this study were to describe health care services used by families to manage HPN, report the frequency of each service used annually, and estimate the average annual non-reimbursed costs to families for these health services. The numerous and varied types of services reported and the time required to coordinate and access HPN services illustrates the challenges faced by patients and their family caregivers. The lack of a coordinated and efficient system for delivering complex chronic care results in poorer outcomes for HPN patients and their families on-reimbursed costs and the extensive amount of time required to coordinate multi-professional services negatively impacts the clinical outcomes and quality of life of complex chronic home care.     

Model risk adjusted hedge ratios

Most option pricing models assume all parameters except volatility are fixed; yet they almost invariably change on re‐calibration. This article explains how to capture the model risk that arises when parameters that are assumed constant have calibrated values that change over time and how to use this model risk to adjust the price hedge ratios of the model. Empirical results demonstrate an improvement in hedging performance after the model risk adjustment. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 29:1021–1049, 2009     

THE HISTORY OF THE UNITED STATES NATIONAL INCOME AND PRODUCT ACCOUNTS: THE DEVELOPMENT OF AN ANALYTICAL TOOL*

The purpose of this article is to record the history of the national income and product accounts of the United States, concentrating on the period 1932–47. During that period the single national income aggregate evolved into a set of accounts and the estimates emerged as an important analytical tool. Interviews with participants in these developments were extensively utilized to trace the events, people, ideas, and other factors which shaped the history of the accounts. The generally recognized need for economic information during the Great Depression stimulated the request that the Department of Commerce undertake what became the first official continuing series on national income in the United States. These estimates were prepared with the cooperation of the National Bureau of Economic Research and were published in 1934. By the late 1930's, estimates were extended to include income by state and a monthly series. World War II was the impetus for the development of product, or expenditure, estimates. By the mid-1940's, the estimates had evolved into a set of income and product accounts–a consolidated production account, sector income and outlay accounts, and a consolidated saving-investment account–designed to provide a bird's-eye-view of the economy. During this period uses of the accounts widened; analysis of wartime production goals and anti-inflation policy are noteworthy examples. The National Income, 1947 Edition was the culmination of a period of intensive conceptual discussion, extension of data sources, and improvement of estimating techniques. Thereafter the mainlines of development are more familiar, encompassing refinement and elaboration of the estimates and proliferation of uses.     

Controlling offshore knowledge workers: Power and agency in India's software outsourcing industry

The paper describes the modes of organisational control employed in the Indian software services outsourcing industry, highlighting the combination of subjective and panoptical managerial techniques. Drawing on ethnographic work in several software services companies in Bangalore, India, it explores the structures of power that operate in these organisations as well as the agency and subjectivity of software workers.     

The Effect of Earnings Management on the Value Relevance of Accounting Information

This study investigates whether opportunistic earnings management affects the value relevance of net income and book value in determining stock price. We document a decrease in the value relevance of earnings in the year of an equity offering for a group of firms with ex post evidence of earnings management. This decrease is greater for the discretionary component of earnings than for the non‐discretionary component. These results are robust to model specification and the type of offering. However, the results are sensitive to firms' disclosure activity prior to the offering.