Do Danes and Italians Rate Life Satisfaction in the Same Way? Using Vignettes to Correct for Individual‐Specific Scale Biases

Self‐reported life satisfaction is highly heterogeneous across similar countries, a phenomenon that may be explained by the different scales and benchmarks that people use to evaluate themselves. This study uses cross‐sectional data gathered from older populations in ten European countries to compare estimates from a model that assumes reporting styles are constant across respondents against estimates from a model in which anchoring vignettes help correct for individual‐specific scale biases. Variations in response scales explain much of the difference in the raw data. Moreover, the cross‐country ranking in life satisfaction depends significantly on scale biases.     

Does microcredit increase borrowers’ savings? A fuzzy regression discontinuity design approach

Microcredit has expanded rapidly in recent years but its effect at the household level is still controversial. This paper uses a unique data-set collected from 69 villages in Bangladesh to estimate the effect of participation in microcredit programs on household savings. A regression discontinuity design (RDD) is used to identify the credit effect. To justify the validity of RDD, we test the discontinuities in the conditional density of the forcing variable (in our case, household land), as suggested by McCrary. We do not find any substantial evidence of manipulation of forcing variable at the threshold to invalidate the RDD. Our results show that access to credit increases savings of the borrowers.     

Capital structure and value of reported earnings: evidence from an emerging market

This article documents a nonlinear impact of capital structure on the value of reported earnings in India during the period between 2009 and 2015. Our results show that earnings reported by firms with moderate level of debt are more valuable than earnings reported by firms with low or high level of debt. Our results are robust across various proxies of capital structure and across various sub-samples. This article argues that moderate level of debt is associated with low-agency problems, while low and high level of debt is synonymous to high-agency problems. Differences in agency problems result in reported earnings that have very different levels of relevance.     

Does corruption affect health outcomes in the Philippines?

We examine the effect of corruption on health outcomes in the Philippines. We find that corruption reduces the immunization rates, delays the vaccination of newborns, discourages the use of public health clinics, reduces satisfaction of households with public health services, and increases waiting time at health clinics. We also find that corruption affects public services in rural areas in different ways than urban areas, and that corruption harms the poor more than the wealthy. The research underlying this paper was supported by a grant from the World Bank, financed by the Netherlands Trust Fund.     

Government Expenditures and Revenues: Evidence from Asymmetric Modeling

In this article, we examine the relationship between U.S. federal revenues and expenditures while relaxing the assumption of a symmetric adjustment process underlying the conventional cointegration and error correction model. Threshold autoregression and momentum threshold autoregression models are used to ascertain the empirical link between the two variables of the budgetary process. Our results suggest that revenues and expenditures are cointegrated and that the adjustment process of the budgetary disequilibrium is asymmetric. The application of the asymmetric error correction model indicates that revenues and expenditures respond to the long-run requirements of the budgetary balance only when the budget is worsening.     

Globalization as a Development Strategy in Latin America?

The swinging of the pendulum toward policies that enhance Latin America’s insertion into the world economy diverted attention from domestic policies that continue to be essential for growth and development broadly defined. Six domestic policy areas are identified here: increasing domestic savings, implementing countercyclical fiscal policies, mobilizing public resources, investing in education, promoting employment, and reducing income inequality. The opportunity cost of not having devoted due attention to these issues throughout the 1990s is surely enormous, and for those countries still underplaying domestic variables, the longer the delay the greater the costs. The imperative of devoting more political capital to domestic strategies of development cannot be overstated––whether international financial institutions choose to emphasize them or not.     

Sustainability indicators,alternative strategies and trade-offs in peasant agroecosystems: analysing 15 case studies from Latin America

In view of the urgent need to improve agroecosystem sustainability, several efforts have been made to evaluate the effect of alternative strategies on key environmental and socioeconomic variables at the farm, community and regional levels. Most peasant farmers manage complex and diverse agroecosystems, and constantly adapt management strategies with multiple aims. A sustainability evaluation framework for peasant systems has been applied in over 40 case studies in Latin America, from which 15 were analysed, focusing on the choice of indicators, the effect of alternative strategies on agroecosystem sustainability and the trade-offs involved. Common indicators include yields, income, agrodiversity and external input dependence. Alternative strategies include crop/product diversification and soil conservation practices. Yields, income and agrodiversity improved in most cases, but in some cases the establishment costs increased external input use. Trade-offs observed include improved performance of a subsystem (i.e. crops) vs. decreased one in others (livestock, forestry) and increases in productivity vs. decreases in stability, resilience and reliability. The difficulty of assessing systems in transition towards alternative management was acknowledged by some evaluation teams. Applying the framework to such a variety of cases allowed making the sustainability concept operational, promoted alternative strategies and generated knowledge on agroecosystem processes among stakeholders.     

A CONFLICT OF INTEREST: ISLAMIC HOME FINANCING IN AMERICA

The rising Muslim population in the USA has fuelled an increase in the domestic demand for '     ' finance. One of the prominent restrictions that     imposes on financial practices is a prohibition on the payment and collection of riba , interest on loans. This paper examines the home financing models of three prominent Islamic financial institutions. It identifies the transaction models that these institutions use, explains the differences among these models and illustrates how each institution 'sells' its chosen approach to the public.