Microcredit Programme Participation and Household Food Security in Rural Bangladesh

Lack of access to credit prevents poor households in developing countries from diversifying into income‐generating activities that could safeguard them against unforeseen shocks and seasonality, leaving them susceptible to food deprivation, even when aggregate food supplies are adequate. Microcredit programmes help these households to access financial capital that could help improve their food security situation. We examine how microcredit affects different measures of food security; namely, household calorie availability, dietary diversity indicators and anthropometric status of women of reproductive age (15–49 years) and children under the age of 5 years. We find that microcredit programme participation increases calorie availability both at the intensive and extensive margins, but does not improve dietary diversity and only has mixed effects on the anthropometric measures. We also find that the effect of microcredit participation on food security may be non‐linear in which participation initially has either no effect on food security or may actually worsen it, before improving it in the longer run. Our results help to explain why existing short‐term evaluations of microcredit sometimes do not show any positive effects.     

Urban Legends: The Word-of-Mouth Communication of Morality Through Negative Story Content

This study investigates factors influencing the diffusion of negative information via word-of-mouth communication of urban legends in the consumer environment. An experiment was conducted in which three aspects of a recent urban legend were manipulated: the intent of the central character (altruistic vs negative), the outcome of the story (positive vs negative), and the presence or absence of a brand name. Results indicate that intent to communicate an urban legend is lowest when the central character is altruistic and the outcome of the story is positive. These results are consistent with previous suggestions that consumers circulate urban legends in order to communicate negative information involving moralistic stories possessing an ironic twist.     

Estimation of Minimum Market Threshold for Retail Commercial Sectors

Understanding the ability of a local market to support a particular type of establishment is a prerequisite to designing effective development strategies. While several factors contribute to the vitality of the local retail market, the most fundamental factor is the relative size of the market in terms of potential customers. A commonly applied technique to assess the ability of a community to support various business activities is the estimation of demand threshold using simple count data models. However, due to the presence of excessive zeros in the dependent variable, this study uses Hurdle Poisson and Zero Inflated Poisson (ZIP) count data models and estimates demand threshold for twelve retail commercial sectors for 2,201 counties in the U.S. The results show that the demographic characteristics of the county population and its remoteness are significant factors determining the number of establishments in a county. The results from this study may be used by local economic development practitioners and entrepreneurs to retain, promote, and attract retail commercial businesses in the local communities.     

Competitive procurement with ex post moral hazard

Unlike standard auctions, we show that competitive procurement may optimally limit competition or use inefficient allocation rules that award the project to a less efficient firm with positive probability. Procurement projects often involve ex post moral hazard after the competitive process is over. A procurement mechanism must combine an incentive scheme with the auction to guard against firms bidding low to win the contract and then cutting back on effort. While competition helps reduce the rent of efficient firms, it exacerbates the problem due to moral hazard. If allocative efficiency is a requirement, limiting the number of participants may be optimal. Alternatively, the same incentives can be optimally provided using inefficient allocation rules.     

The relationship between incentive compensation and performance related CEO turnover

We study the relationship between incentive compensation and performance related CEO turnover. Our theoretical model predicts that the slope of the compensation contract and forced turnover may be complements. Our results support this prediction. We find that incentives and turnover are positively related. This relationship however, varies with the equity ownership of CEOs and does not hold for CEOs who own more than 5% equity. Moreover, this relationship is stronger if the firm under performs its industry. Our results suggest that high-powered incentives may increase the signaling power of performance measures and lead to higher likelihood of turnover.     

CAPITAL INFLOW UNDER VOLUNTARY EXPORT RESTRAINT

This paper investigates the welfare consequence of exogenous capital inflow for the host country when the source country implements ‘voluntary export restraint’. In an imperfectly competitive market with an increasing returns to scale (IRS) sector, we show the possibility of welfare immiserization. Two channels are identified leading to immiserization. First, and this is direct, resource reallocation following capital inflow can squeeze the underproduced sector and reduce welfare. Second, contraction of the IRS sector can raise the return to capital, even when the price of the capital‐intensive importable falls unambiguously. Thus, even with an improvement in commodity terms of trade, the factor terms of trade can worsen and reduce welfare.     

Can International Productivity Differences Alone Account for the US Current Account Deficits?

An influential explanation for the recent rise in the US current account deficit is the boom in US productivity. As US productivity surged in the mid-1990s, capital was attracted to the US to take advantage of the higher real returns. Using a two-country general-equilibrium model, this paper quantitatively shows that the gap in productivity growth between the US and the "rest of the world" cannot explain the US current account deficits, especially in the 1980s and the 2000s. This is because on a GDP-weighted basis, the "rest of the world" actually had higher productivity growth during these periods, and standard macroeconomic models would predict an outflow of funds from the US to the rest of the world, and a consequent US current account surplus . We show that changes in global financial integration can help explain this anomaly in US current account behavior.     

Tourists' Motivations to Travel during Financial Crisis

This study aims to describe the motivations of tourists to travel during financial crises and to identify the impact of those travel motivations on the likelihood that tourists would travel during financial crises. The findings suggest short-distance destinations, novelty, and culture would motivate tourists during financial crises; but tourist recreation would deter them from traveling domestically. This study enriches the literature on the travel motivations of domestic tourists, particularly Thai tourists, to travel during financial crises.     

Sequential clinical scheduling with patient no-show: The impact of pre-defined slot structures

This paper develops a sequential scheduling algorithm for consultation periods not divided into slots. Patients call a scheduler and request appointments with a specified provider. The scheduler provides the patient with an appointment time before the call terminates. In making the appointment, the scheduler cannot alter the appointments of previously scheduled patients. Service times are random and each scheduled patient has a probability of “no-showing” for the appointment. Each arriving patient generates a given amount of revenue, and costs are incurred from patient waiting and provider overtime. The scheduling method selects the calling patient's appointment time by minimizing the total expected cost. We prove that total expected cost is a convex function of appointment times and that the expected profit of the schedule is unimodal, which provides a unique stopping criterion for the scheduling algorithm. Computational studies compare this approach with no-show based sequential scheduling methods for out-patient clinics where a predefined slot structure is assumed. The new method yields higher expected profit and less overtime than when service periods are pre-divided into slots. Because slot scheduling is ingrained in healthcare, we use the model to design slot structures that account for no-show and service time variation.     

What do information frictions do?

Summary. We present an overlapping generations model in which a labor market friction (moral hazard) coexists and interacts with a credit market friction (costly state verification). Our main results are: (i) while credit market frictions have long- and short-run real effects, labor market frictions typically have only short-run effects unless they also affect the volume of investment per worker, (ii) the frictions amplify each other to produce higher long-run unemployment than would result from only labor market frictions, (iii) these distortions may prolong the effect of temporary shocks, and (iv) the dynamics of economies with both frictions are qualitatively similar to their frictionless counterparts.Received: 25 February 2003, Revised: 1 April 2004, JEL Classification Numbers: E13, E24, O41, O17. Correspondence to: Joydeep BhattacharyaWork on this paper began while Bhattacharya was visiting the University of Texas at Austin and was completed when Chakraborty was visiting the IMF Institute in Washington, DC. We are grateful to both institutions for their hospitality. For helpful comments and suggestions we thank Valerie Bencivenga, Dean Corbae, Scott Freeman, Rajesh Singh, participants at the Macro Tea in Austin, and especially, an anonymous referee of this journal. The usual caveat applies.