Sales location among semi‐subsistence cassava farmers in Benin: a heteroskedastic double selection model

In much of rural Africa, high transaction costs limit farmers’ market participation and thus their potential for income growth. Transaction costs can affect not only whether a farmer sells product but also whether sales occur at the farm gate or at a market. If production behavior is related to a chosen sales location, then analysis of interventions can be improved by explicit consideration of the decision of where to sell. This article develops a double‐selection model that explains consumption and production decisions by semi‐subsistence farmers who first decide whether to be a seller and then whether to sell at the farm gate or at an off‐farm location before deciding on production and consumption. The study tests the validity of this dual‐criteria model against a single‐criterion model in which a grower first decides to be a seller and then decides production, consumption, and sales location simultaneously. The results suggest that the dual‐criteria model provides more information than the single‐criterion model using a sample of cassava producer in Benin.     

On public opinion polls and voters' turnout

This paper studies the effects that the revelation of information on the electorate's preferences has on voters' turnout. The experimental data show that closeness in the division of preferences induces a significant increase in turnout. Moreover, for closely divided electorates (and only for these electorates), the provision of information significantly raises the participation of subjects supporting the slightly larger team relative to the smaller team. We show that the heterogeneous effect of information on the participation of subjects in different teams is driven by the subjects' (incorrect) beliefs of casting a pivotal vote. Simply put, subjects overestimate the probability of casting a pivotal vote when they belong to the team with a slight majority, and choose the strategy that maximizes their utility based on their inflated probability assessment. Empirical evidence on gubernatorial elections in the United States between 1990 and 2005 is consistent with our main experimental result. Namely, we observe that the difference in the actual vote tally between the party leading according to the polls and the other party is larger than the one predicted by the polls only in closely divided electorates. We provide a behavioral model that explains the main findings of our experimental and empirical analyses.     

Local food,food miles and carbon emissions: A comparison of farm shop and mass distribution approaches

This paper provides a critical commentary on the conception of food miles followed by an empirical application of food miles to two contrasting food distribution systems based on carbon emissions accounting within these systems. The comparison is between the carbon emissions resultant from operating a large-scale vegetable box system and those from a supply system where the customer travels to a local farm shop. The study is based on fuel and energy use data collected from one of the UK’s largest suppliers of organic produce. The findings suggest that if a customer drives a round-trip distance of more than 6.7 km in order to purchase their organic vegetables, their carbon emissions are likely to be greater than the emissions from the system of cold storage, packing, transport to a regional hub and final transport to customer’s doorstep used by large-scale vegetable box suppliers. Consequently some of the ideas behind localism in the food sector may need to be revisited.     

Accounting for the Changing Role of Family Income in Determining College Entry

In this paper, I analyze the determinants of college enrolment and the changes in these determinants over time. I propose a quantitative life‐cycle model with college enrolment. Altruistic parents provide financial support to their children. Using counterfactual experiments, I find that 24 percent of all households are financially constrained in their college decision. Constraints become more severe over time. I show that my model is consistent with a narrow college enrolment gap between students from rich and poor families, as previously reported in the empirical literature. The estimation of enrolment gaps is a popular reduced‐form approach for measuring the fraction of constrained households. My results suggest that these reduced‐form estimates are misleading, and that a structural model of parental transfers is needed to correctly identify constrained households. Further, I show that parental transfers are an important driver behind the changing role of family income as a determinant of college entry, a fact that is well documented for the US economy.     

On vertical control in monopolistic competition

This paper demonstrates that vertical restraints are profitably imposed by a manufacturer or wholesaler who has some market power and whose product is sold in a monopolistically competitive downstream market. Simple conditions are developed under which a price floor (resale price maintenance) or a price ceiling is profitable, and under which private incentive for a restraint is sufficient for its social desirability. Where demand elasticities are constant, observed vertical price floors are always welfare-improving but profitable price ceilings may decrease welfare. In the special case of the CES-aggregate-surplus specification with competitive conjectures, price ceilings are profitable and welfare-decreasing.     

The Costs of Implementing the Majority Principle: The Golden Voting Rule

In a context of constitutional choice of a voting rule, this paper presents an economic analysis of scoring rules that identifies the golden voting rule under the impartial culture assumption. This golden rule depends on the weights β and (1−β) assigned to two types of costs: the cost of majority decisiveness (‘tyranny’) and the cost of the ‘erosion’ in the majority principle. Our first main result establishes that in voting contexts where the number of voters n is typically considerably larger than the number of candidates k, the golden voting rule is the inverse plurality rule for almost any positive β. Irrespective of n and k, the golden voting rule is the inverse plurality rule if β ≥ 1/2 .. This hitherto almost unnoticed rule outperforms any other scoring rule in eliminating majority decisiveness. The golden voting rule is, however, the plurality rule, the most widely used voting rule that does not allow even the slightest ‘erosion’ in the majority principle, when β=0. Our second main result establishes that for sufficiently “small size” voting bodies, the set of potential golden rules consists at most of just three rules: the plurality rule, the Borda rule and the inverse plurality rule. On the one hand, this finding provides a new rationalization to the central role the former two rules play in practice and in the voting theory literature. On the other hand, it provides further support to the inverse plurality rule; not only that it is the golden rule in voting contexts, it also belongs, together with the plurality rule and the Borda method of counts, to the “exclusive” set of potential golden voting rules in small committees. We are indebted to Jim Buchanan, Amichai Glazer, Noa Nitzan, Ken Shepsle, and an anonymous referee for their useful comments.     

RULE RATIONALITY

We study the strategic advantages of following rules of thumb that bundle different games together (called rule rationality) when this may be observed by one's opponent. We present a model in which the strategic environment determines which kind of rule rationality is adopted by the players. We apply the model to characterize the induced rules and outcomes in various interesting environments. Finally, we show the close relations between act rationality and “Stackelberg stability” (no player can earn from playing first).