Older or Wealthier? The Impact of Age Adjustment on Wealth Inequality*

Differences in individual wealth holdings are widely viewed as a driving force of economic inequality. However, as this finding relies on cross‐sectional data, a concern is that older is confused with wealthier. We propose a new method to adjust for age effects in cross‐sections, which eliminates wealth inequality due to age, yet preserves inequality arising from other factors. Using a new cross‐country comparable database, we examine the impact of age adjustments on wealth inequality across countries and over time. We find that the most widely used method yields a substantially different picture of age‐adjusted wealth inequality than our method.     

A Behavior‐Based Approach to the Estimation of Poverty in India

Estimates of poverty in India are crucial inputs for the understanding of world poverty, yet there is much disagreement about the numbers and the legitimacy of methods used to derive them. In this paper, we propose and justify an alternative approach to identify the poor, which uses the proportion of income spent on food. Our estimates have weaker data requirements than official methods, and they compare favorably with several validation tests. Most notably, households around our state poverty lines obtain their calories from similar sources, whereas this is not true of official poverty lines. We also find that rates of self‐reported hunger are higher in states that we classify as poor.     

MERGERS AND PROFITABILITY: A MANAGERIAL SUCCESS STORY?*

Since 1983 expenditure on acquisitions in the UK has more than doubled in real terms, despite the fact that the consensus of opinion in the academic literature is that acquisitions are not, on average, performance enhancing for the acquiring firm. Such literature, however, relates mainly to the acquisition of large, public companies. Drawing on survey evidence from 146 of the UK's top 500 companies, this article reports the results from a survey which encompasses all takeovers. The study revealed that is the expected reward of increased profitabililty which is used in ex-post evaluation. The major finding of the study is, however, that managers firmly perceive that their takeover activity has been performance enhancing for their company. The evidence presented does suggest that the integration of small acquisitions into an existing organizational structure may be achieved without severe problems of loss of control, and the subsequent decline in performance which beset large acquisitions