Measuring the Impact of Various Income Sources on the Link between Inequality and Development: Implications for the Kuznets Curve

To understand the link between inequality and development, a decomposition of the Gini index by income sources is used that emphasizes the role of three components measuring the impact of the shares of the sources, the degree to which they are unequally distributed, and their correlation with total income. Such a breakdown explains why the rising section of the Kuznets curve is mainly the consequence of the increasing share of wages while its declining section reflects the decreasing share of entrepreneurial income and the negative correlation between transfers and total income. The data sources were provided by the International Labour Office.     

MEASURING MULTIDIMENSIONAL POVERTY: AN EMPIRICAL COMPARISON OF VARIOUS APPROACHES

This paper makes a systematic comparison of four approaches to multidimensional poverty analysis based respectively on the theory of fuzzy sets, information theory, efficiency analysis and axiomatic derivations of poverty indices. The database was the 1995 Israeli Census that provided information on the ownership of various durable goods. There appears to be a fair degree of agreement between the various multidimensional poverty indices concerning the identification of the poor households. The four approaches have also shown that poverty decreases with the schooling level of the head of the household, first decreases and then increases with his/her age and with the size of the household. Poverty is higher when the head of the household is single and lower when he/she is married, lowest when the head of the household is Jewish and highest when he/she is Muslim. Poverty is also higher among households whose head immigrated in recent years, does not work or lives in Jerusalem. These observations were made on the basis of logit regressions. This impact on poverty of many of the variables is not very different from the one that is observed when poverty measurement is based only on the income or the total expenditures of the households.     

A note on the output effect of price discrimination on a sales maximizer

This note analyses the behaviour of a profit-constrained sales-maximizing firm under price discrimination. It is shown that tightening the price discriminatory constraint will cause a decrease in output regardless of the shape of the relevant demand curves.     

Mind the Gap: Crowdfunding and the Role of Seed Money

We analyze voluntary private contributions to public goods and the role seed money plays in signaling the public good's quality to potential subsequent contributors. We present a theoretical model and analyze two sets of naturally occurring data from crowdfunding platforms. After developing the theoretical background, we find statistically significant switch points that distinguish between seed contributions and subsequent contributions. A positive change in contribution behavior after the switch suggests an increase in the perceived value of the public good. We find that the signal comprises the number of contributors and the average contribution (as a proportion of the targeted goal). Copyright © 2015 John Wiley & Sons, Ltd.     

The Effects of Criminal Experience on the Incidence of Crime

A bstract . A hypothesis has been analyzed that criminals learn by doing, that with experience criminals increase their activity so that with level outlays on police the incidence of crime may be increasing. This hypothesis is tested by statistical analysis of time series cross sectional data on crime levels, police outlays and various socioeconomic variables. The results confirm that "learning by doing"—accumulating criminal experience—increases criminal activity, that police outlays have a negative and significant effect on crime and that certain socioeconomic characteristics have a significant effect on crime.     

Crime and income inequality: An economic approach

Conclusion When a given pie is redivided in a less equalitarian manner, it is uncertain whether those already undertaking illegal activity will increase or decrease their activities, since the return to illegal activities is countered by the loss due to punishment (which is more painful to a criminal who failed) on one hand, and from the cost of the sacrifice of utility from legitimate activities on the other hand.If the absolute level of wealth remains constant but relative position declines, an incentive is generated to re-establish a person's standing by joining the crime industry. This is certainly the case at the margin for those close to the boundary of joining, i.e., those who are almost indifferent between joining or remaining within the legal framework.Assuming an individual is already participating in illegal activities, the effect of either an absolute or relative change in his level of wealth on his level of illegal activities is indeterminate. This applies both to the case where the total wealth of the society is fixed and the share of the pie going to the rich rises and the case where the total pie rose but the entire gain went only to the rich.In summary, it has been shown that an increase in wealth inequality has an indeterminate outcome both with respect to the decision of the poor on whether or not to enter the crime industry and with respect to the decision of those already participating in illegal pursuits to increase or decrease their level of activity. This conclusion is somewhat contrary to the general consensus of the literature, which appears to hold that increases in wealth inequality will tend to increase both the level of participation in the crime industry and the level of output within the industry.     

A dual agency view of board compensation: the joint effects of outside director and CEO stock options on firm risk

This paper contributes to multiple agency theory by examining how the compensation schemes awarded to outside directors and the CEO jointly affect firm‐level risk taking. Using data of the S&P 1500 firms from 1997 to 2006, we find support for earlier arguments that providing the CEO, the outside directors, or both with stock options increases risk taking. More importantly, we find that compensating outside directors with stock options has significantly stronger effects than CEO stock options. Finally, contrary to what one would expect, we find that these effects are mutually substituting; that is, if both the outside directors and the CEO are provided with stock option compensation, outside directors' incentives weaken the effect of the CEO's incentives on firms' risk taking. Copyright © 2010 John Wiley & Sons, Ltd.