Aggregation effects on price and expenditure elasticities in a quadratic almost ideal demand system

Abstract.  While it is well known that demand elasticities calculated at the macro level will in general differ from those calculated at the micro level because of aggregation effects, there remain the questions of how large the effects are and how they vary with the degree of inequality in the income distribution. We explore these questions with models based on a quadratic version of the Almost Ideal Demand System. We investigate the elasticity differences theoretically and then calibrate the models and generate numerical results, using income data for seven countries with widely different distributions. The aggregation effects are found generally to be rather small, even with highly unequal income distributions.     

Current issues in European migration

The authors examine recent migration patterns into and within the European Union. Issues involving asylum and migration policy are discussed, and problems caused by differing naturalization practices in different countries are considered. Skill patterns of migrants and problems in labor markets are also investigated.     

Indonesian population growth 1971-1980

The author reviews the accuracy of the preliminary results of the 1980 Indonesian population census. Methodological weaknesses and errors made in implications for evaluating the effectiveness of family planning programs are considered     

Money creation and economic activity

Summary In the Netherlands not much attention is paid to money supply figures as an indicator of actual monetary conditions. This can be partly explained by the publication lag and the continuous revisions of seasonally adjusted data. However, the information that can be derived from money supply figures is limited because of temporary disturbances originating from the foreign exchange market. In this paper a correction method for these temporary disturbances is proposed. Money supply figures show a much closer link to real economic activity when corrected in this way.A different version of this essay with less emphasis on Holland but more information about other West-European countries has been published as chapter II Watching the money supply in: Eduard J. Bomhoff,Monetary Uncertainty, Amsterdam and New York, 1983. We gratefully acknowledge the able research assistance of Isolde B. Woittiez and Geert Rouwenhorst; Kempen and Co. kindly provided the two figures.     

The economics of dying: A misapplication of tools

Conclusions Unlike McKenzie and Tullock, we do not know how personsshould treat their bodily organs or what is an ideal exit. That depends upon their utility goals, which are defined in output terms specific to the decision maker. We contend that the body is an input into the utility production process, and therefore, as with any input, it must be maintained and repaired at a level consistent with the output goals for maximization of utility. Thus, from this framework, it is quite consistent for a person to die with healthy organs without any thought of belief in reincarnation or the desire to bequeath one's bodily organs to others, or religious values. Self interest is all that must prevail.Also, the fact that there are interrelationships between the organs in the system, and at points these relationships take on fixed factor characteristics such that reduced levels of operation in one organ can create disorientation or coma or damage to other organs, means that the body cannot die as M-T suggest. Zero capacity for all organs at death is a technical impossibility as well as being inconsistent with the output goals of utility maximizers.     

The Indonesian national family planning program

With a change in the Indonesian government in 1965 there came a change in government policy from pronatalist to limiting the birthrate. In January 1970 the government National Family Planning Cordinating Body was established. During the initial phase of the program family planning efforts have been limited to the islands of Java and Bali where family planning services are integrated into health service clinics. By the beginning of 1975 there were some 2400 clinics on Java and Bali. Family planning acceptors increased from 53,100 in 1969 to 1.5 million in 1974. The 1st phase of the program aimed at consolidating government support, winning local formal and informal leader support, introducing services into public clinic health systems, and building a viable administrative organization. The 2nd phase of the program has quantified the goal of the program, shifted from an emphasis on new acceptors to continuing users, broadened the participation of various government and nongovernmental groups, expanded the program into the private sector, and initiated a research and development program to stimulate local problem identification and resolution. By mid-1975 over 4.7 million women, or 34% of the married women between the ages of 15 and 44, had been recruited into the program. The East Java program has consistently been the most cost effective in terms of recruiting new acceptors. In terms of cost per couple year of protection, the trend has been steadily downward over the 3 years of study in the provinces of Jakarta, West Java, Central Java, Yogyakarta, East Java, and Bali where there are programs. The program needs to develop new approaches for those individuals who are not yet acceptors. Additionally, the program must concentrate on user continuation.     

Jackknifing Bond Option Prices

Prices of interest rate derivative securities depend cruciallyon the mean reversion parameters of the underlying diffusions.These parameters are subject to estimation bias when standardmethods are used. The estimation bias can be substantial evenin very large samples and much more serious than the discretizationbias, and it translates into a bias in pricing bond optionsand other derivative securities that is important in practicalwork. This article proposes a very general and computationallyinexpensive method of bias reduction that is based on Quenouille's(1956; Biometrika, 43, 353–360) jackknife. We show howthe method can be applied directly to the options price itselfas well as the coefficients in the models. We investigate itsperformance in a Monte Carlo study. Empirical applications toU.S. dollar swap rates highlight the differences between bondand option prices implied by the jackknife procedure and thoseimplied by the standard approach. These differences are largeand suggest that bias reduction in pricing options is importantin practical applications.