Gender gap in self‐employment: The role of risk attitudes

This paper examines the link between the willingness to take risk and the gender gap in self‐employment in the transition economy, where for decades entrepreneurship was considered a crime. Using rich data on risk preferences and entrepreneurial activities, we show that male–female risk tolerance differential is the main determinant of the gender gap in self‐employment in Ukraine. The decomposition results indicate that up to 38% of the gap can be attributed to this factor. Robustness tests support the validity of the baseline findings by suggesting that the results are not confounded by such factors as being unemployed before starting a current job, having a self‐employed household member, or living in a relatively wealthy household before transitioning to self‐employment.     

Purchasing Power Parity and aggregation bias for a developing country: The case of Mexico

This paper investigates long-run Purchasing Power Parity (PPP) between the US and Mexico. We use a panel of disaggregated price data between the US and Mexico with a long time series to look at two types of aggregation bias. The first is examined in Imbs et al. — which we refer to as estimator aggregation bias — and the second is put forth by Broda and Weinstein — hereafter, data aggregation bias. The findings indicate substantial estimator aggregation bias and data aggregation bias. Although estimates using aggregate data and imposing homogeneous coefficients provide little evidence of PPP, findings with disaggregated data and heterogeneous coefficient estimators offer strong support. The results also suggest the presence of small-sample bias as examined in Chen and Engel, but with little effect on the qualitative results. Tradable goods and non-tradable goods show little distinction in convergence rates. Estimated half-lives are lower under flexible than fixed exchange rates and indicate rapid convergence during the Mexican peso crisis.     

House price dynamics: Evidence from Beijing

To study the house price dynamics in China, this paper extends the traditional life-cycle model by incorporating land supply, regime shifts and government regulation factors. The models are estimated with an error correction framework using quarterly data from 2000 to 2007 in Beijing. The conclusions are as follows. (1) There exits a stable co-integration relationship between house price and fundamentals; land supply and financial regimes are also important determinants of long-run equilibrium house prices. (2) Short-run dynamics depend on changes of fundamentals and the adjustment process of housing market. Land supply has a significant impact on house price fluctuations while demand factors such as user costs, income and residential mortgage loan have greater influences. The adjustment speed of real house prices to the long-run equilibrium has been reduced significantly since 2005 which means exogenous shocks can cause prolonged deviation of real house prices from the equilibrium level.     

Increasing returns and the share economy

Under imperfect competition, profit maximization by firms results in the market price exceeding the marginal cost of production; Weitzman terms this “excess supply” Weitzman wishes to replicate in the cost function (in terms of labor) the properties of the revenue function (in terms of output), thus generating “excess demand” for labor. A revenue-sharing scheme will achieve this if and only if there are decreasing returns to scale. Hence increasing returns apparently play no role in Weitzman's analysis.     

The Impacts of Technology, Trade and Outsourcing on Employment and Labor Composition

Empirical studies of skill-biased technological change are typically based on a simple production or cost function framework and limited information on technology and labor composition. In contrast, we simultaneously assess the impacts of trade, technology, and outsourcing on shifts in labor demand using a dynamic cost function framework and comprehensive measures of workforce composition and investment in technology. Our findings indicate that technological change has had the largest impact on changes in labor composition. However, the indirect impact of trade on shifts in employment augments its direct impact because trade stimulates computerization, which further exacerbates skill-biased technological change.     

Energy and CO2 emission relationships in the NAFTA trading bloc: a multi-regional multi-factor energy input–output approach

The North-America Free Trade Agreement (NAFTA) has brought together the economies of Canada, Mexico, and the US into forming one of the largest trading blocs worldwide (within the top CO₂ emitters). However, the current global protectionist discourse threatens the agreement. This paper analyzes the energy and energy-related CO₂ emission relationships between NAFTA countries in 2014 to gain insights into the climate change implications of current integration and the possible cancelation of the agreement. The analysis is performed with a multi-regional version of the multi-factor energy input–output model. The results show that NAFTA has not built a single integrated energy system, though it has helped reduce energy-related CO₂ emissions. Moreover, if NAFTA is not revoked, further integration would depend on the capacity of the Mexican energy sector to converge to the performance of its trade partners’ energy sectors. Conversely, a broken deal would induce negative environmental externalities.     

Are serial Condorcet rules strategy-proof?

Abstract. This paper explores the extent to which majority rule is invulnerable to manipulation by individuals and coalitions, even when majority rule is used to select more than one alternative. The resulting rule may or may not be strategy-proof, depending on the size of the coalitions that can form, and on the nature of the individual preferences over sets of alternatives. No individual can manipulate with respect to a wide family of preferences over sets. The only restriction on the domain of true and revealed individual preferences is that the selection rule is always well defined. Received: 1 November 1999 / Accepted: 7 May 2001 We thank two anonymous referees for suggestions that have significantly improved the paper. We are also grateful to l'Université de Caen for sponsoring a Workshop on Social Choice Theory, where a first draft of this paper was presented in May, 1999, and to the workshop participants for helpful observations. Work on the final version of the paper was done while one of the authors was a guest of the Project on Intergenerational Equity supported by the Ministry of Education, Science, and Technology of Japan. We are grateful to the Ministry and to the project leader, Professor Kotaro Suzumura, for their support.     

Lebesgue measure and social choice trade-offs

Summary An Arrovian social choice rule is a social welfare function satisfying independence of irrelevant alternatives and transitivity of social preference. Assume a measurable outcome spaceX with its (Lebesgue) measure normalized to unity. For any Arrovian rule and any fractiont, either some individual dictates over a subset ofX of measuret or more, or at least a fraction 1–t of the pairs of distinct alternatives have their social ordering fixed independently of individual preferences. Also, for any positive integer (less than the total number of individuals), there is some subsetH of society consisting of all but persons such that the fraction of outcome pairs (x, y) that are social ranked without consulting the preferences of anyone inH, whenever no individual is indifferent betweenx andy, is at least 1–1/4.We are grateful to Roy Mathias and Daniel Waterman for help with some technical matters, and to chairman Jim Follain and the Syracuse University Economics Department for financing the exchange that launched this project. Campbell's research was funded by National Science Foundation grants, SES 9007953 and SES 9209039.     

The effect of physician advice on alcohol consumption: count regression with an endogenous treatment effect

Although there are encouraging trends, alcohol abuse continues to be a significant public health problem. Econometric studies of alcohol demand have yielded a great deal of information for alcohol abuse prevention policy. These studies suggest that higher alcohol taxes and stricter drunk‐driving policies can reduce heavy drinking and drunk driving. In this paper we explore the role physician advice plays in the campaign to prevent alcohol‐related problems. Compared to alcohol taxation, physician advice is a more precisely targeted intervention that does not impose extra costs on responsible drinkers. Compared to the resource costs of arresting, processing, and punishing drunk drivers, physician advice may be a lower‐cost intervention. To provide a basis for alcohol policy analysis, we use an alcohol demand framework to test whether physician‐provided information about the adverse consequences of alcohol abuse shifts demand to more moderate levels. There are three aspects of our alcohol demand model that complicate the estimation: (1) the dependent variable is non‐negative (it is a count variable—number of drinks consumed); (2) a non‐trivial number of sample observations have zero values for the dependent variable; and (3) because the data we use is non‐experimental, the treatment variable indicating receipt of advice from a physician may be endogenous. We implement an estimation method that is specifically designed to deal with these three complicating factors. Our results show that advice has a substantial and significant impact on alcohol consumption by males with hypertension, and that failing to account for the endogeneity of advice masks this result. Copyright © 2001 John Wiley & Sons, Ltd.