Total factor productivity, the east Asian miracle, and the world production frontier

Total Factor Productivity, the East Asian Miracle, and the World Production Frontier. — The post WWII growth of the East Asian Tiger states has stimulated the discussion about its determinants. Young and Krugman hold that high capital accumulation rather than gains in efficiency or technological progress has spurred growth. Nelson and Pack, however, have recently criticized the methods of measuring technological progress. Applying the nonparametric approach to frontier production function determination and the Malmquist index of total factor productivity change, the authors take up this criticism. They calculate productivity indicators for a sample of 18 American, Asian, and European countries. For the Tiger states, their results confirm that capital accumulation was the main source of growth in 1960-1973, whereas they find evidence for an increasing importance of efficiency improvements for the growth in 1973-1990.     

On the optimality of a minimum wage: New insights from optimal tax theory

We build a theoretical model to study whether a minimum wage can be welfare-improving if it is implemented in conjunction with an optimized nonlinear income tax. We consider this issue in a framework where search frictions on the labor market generate unemployment. Workers differ in productivity. The government does not observe workers' productivity but only their wages. Hence, the redistributive policy solves an adverse selection problem. We show that a minimum wage is optimal if the bargaining power of the workers is relatively low. However, if the government controls the bargaining power, then it is preferable to set a sufficiently high bargaining power.     

60. Geburtstag von Heinz-Werner Stuiber

Ohne Zusammenfassung     

Lab and framed lab versus natural experiments: Evidence from a risky choice experiment

Some recent papers have studied data from TV game shows to examine the behaviour of individuals towards risk. It is generally agreed that data from these shows are useful in detecting individual risk aversion in the field, with both “real life” subjects and incentives. Field experiments also include some interesting reality features that could affect individuals’ behaviour and possibly lead to different findings. This paper aims at investigating lab versus field evidence in risk taking attitudes, especially controlling for framing effects. To assess whether the behaviour of subjects in the field is consistent with that of experimental subjects, we designed an experiment to mimic (with experimental rewards and subjects) the rules of a well-known Italian TV game show, Affari Tuoi, in two different settings: a traditional lab setting, where the game was played individually (109 subjects) (Treatment 1); and a framed lab, in which the experiment was replicated in the Italian public television (RAI) studio where the show was actually recorded, with a smaller sample of undergraduate students (33) and in the presence of an audience (Treatment 2). Our comparison between the two different settings aims at establishing whether the presence of an audience, or of a situation that reproduces the stress that contestants must experience in the TV studio, can affect experimental subjects’ choices. We did not find any significant evidence of framing effects: students behave in a similar way in the two lab settings, responding essentially to incentives. Comparing the risk attitudes shown by experimental subjects in the two lab treatments with those exhibited by the contestants in the field, we found that contestants in the TV show are generally more risk averse than students in the lab.