Poverty in Slovenia: A Conseqence of Economic Transition

Slovenia is considered to be one of the most successful Central and Eastern European countries undergoing the process of transition. It has a high GDP per capita (the highest in the Visegrad group) amounting to about 7200 US dollars (at the exchange rates pertaining during Ms. Stropnik's research). In 1994, a low rate of inflation, a low level of public debt and almost balanced public finances, were all positive elements. However, there is a darker side, for instance the dramatic increase in unemployment and (somewhat less dramatic) fall in production during the transition period. This analysis aimed to provide insights into what is actually happening at the household level, since households are the ultimate bearers of macroeconomic and social change. The final output totalled 166 pages in English and Slovenian, available also on disc. The income concept used by Ms. Stropnik is that of the disposable (monetary) household income, i.e. the cash income of all household members - including social security transfers and family benefits, and the net sum of taxes and social security contributions - plus the equivalent of domestic production, used in the household. Non-monetary income sources, such as household own production, benefits in kind, subsidies for goods and services, and fringe benefits, were not taken into account. The concept of relative and objective poverty was followed. Poverty means having less than others in society, it is a state of relative deprivation. Objective aspects of the situation, e.g. command over resources (i.e. the household income) and the relative position of the household in the income distribution, determine who is poor and who is not. Changes in household composition - an increase in the number of pensioners, unemployed and self-employed, concomitant with a large decrease in the number of employees - obviously played a part in the changing structure of household income sources during this period. The overall decrease in the share of wages and salaries from primary employment in 1993 is to be observed in all income deciles. On the other hand, the importance of salaries gained from secondary employment has increased in all deciles. The lower seven deciles experienced a sharp rise in the share of social benefits in the period 1988-1993, mostly because of the increase in the number of persons entitled to claim unemployment benefits. In Slovenia, income inequality has increased considerably during the 1988-1993 period. To make matters worse, the large increase in income inequality occurred in a period of falling real incomes. In 1983 the bottom decile disposed of 3.8 percent and the top decile disposed of 23.4 percent of total monetary income in Slovenia, whereas by 1993 the same statistics revealed 3.1 percent and 18.9 percent respectively. Unemployment greatly increases the risk of living in poverty. In 1993, 35 per cent of all unemployed persons in Slovenia were living in the lowest income quintile. Ms. Stropnik found certain features that were specific to Slovenia and not shared by most countries in transition. For example, the relative income position of pensioners has improved. Retirement did not increase the risk of poverty in 1993 as much as it did in 1983 and 1988. Also, it appears that children have not been particularly hard-hit by the transition upheavals. The incidence of poverty amongst children has not increased in the period 1983-1993. Children were also fairly evenly distributed across income quintiles. In 1983, 11.8 percent of households with children aged 18 or less were poor. In 1993, this figure was 8.4 per cent. On the other hand, poor households with children were, in comparison with other households of the same type, poorer in 1993 than in 1983. Ms. Stropnik also analysed the impact of social transfers. Her conclusion was that the level of social transfers prevented them from being successful in alleviating poverty. Family policy transfers (child allowances, child tax allowances, subsidised child care) did, however, contribute to the lowering of income inequality between families with and without children, and amongst families with different numbers of children. Ms. Stropnik is determined that the results of her research be used in the creation of social policy aimed at helping the poor. She quotes Piachaud approvingly: "If the term 'poverty' carries with it the implication and moral imperative that something should be done about it, then the study of poverty is only ultimately justifiable if it influences individual and social attitudes and actions."

Livelihoods in Transition: Changing Land Use Strategies and Ecological Implications in a Post Soviet Setting (Kyrgyzstan)

The sudden independence of Kyrgyzstan from the Soviet Union in 1991 led to a total rupture of industrial and agricultural production. Based on empirical data, this study seeks to identify key land use transformation processes since the late 1980s, their impact on people's livelihoods and the implication for natural resources in the communes of Tosh Bulak and Saz, located in the Sokuluk River Basin on the northern slope of the Kyrgyz Range. Using the concept of the sustainable livelihood approach as an analytical framework, three different livelihood strategies were identified: (1) An accumulation strategy applied by wealthy households where renting and/or buying of land is a key element; they are the only household category capable of venturing into rain fed agriculture. (2) A preserving strategy involving mainly intermediate households who are not able to buy or rent additional agricultural land; very often they are forced to return their land to the commune or sell it to wealthier households. (3) A coping strategy including mainly poor households consisting of elderly pensioners or headed by single mothers; due to their limited labour and economic power, agricultural production is very low and hardly covers subsistence needs; pensions and social allowances form the backbone of these livelihoods. Ecological assessments have shown that the forage productivity of remote high mountain pastures has increased from 5 to 22 per cent since 1978. At the same time forage productivity on pre-mountain and mountain pastures close to villages has generally decreased from 1 to 34 per cent. It seems that the main avenues for livelihoods to increase their wealth are to be found in the agricultural sector by controlling more and mainly irrigated land as well as by increasing livestock. The losers in this process are thus those households unable to keep or exploit their arable land or to benefit from new agricultural land. Ensuring access to land for the poor is therefore imperative in order to combat rural poverty and socio-economic disparities in rural Kyrgyzstan.

Who has really paid for the Reconstruction of East Germany? Expected and Realized Returns on Real Estate Investments in East and West Germany in the 1990s

We evaluate the profitability of investments in residential property in Germany after unification with a focus on the comparison of East and West Germany. Calculations are carried out for (1) the after-tax return an investor might have expected at the beginning of the 1990s, and (2) the after-tax return that has been realized ten years after. We compare a set of statistical data for investments in fifty major cities by using complete financial budgeting. The results show that tax subsidies could not always protect investors from losing money, but they have boosted realized returns after tax considerably. Therefore, it was indeed the taxpayers, not the investors, who have borne the cost of reconstructing East Germany.

Critical Control Points for Profitability in the Cow-Calf Enterprise

Financial, economic, and biological data collected from cow-calf producers who participated in the Illinois and Iowa Standardized Performance Analysis (SPA) programs were used in this study. Data used were collected for the 1996 through 1999 calendar years, with each herd within year representing one observation. This resulted in a final database of 225 observations (117 from Iowa and 108 from Illinois) from commercial herds with a range in size from 20 to 373 cows. Two analyses were conducted, one utilizing financial cost of production data, the other economic cost of production data. Each observation was analyzed as the difference from the mean for that given year. The independent variable utilized in both the financial and economic models as an indicator of profit was return to unpaid labor and management per cow (RLM). Used as dependent variables were the five factors that make up total annual cow cost: feed cost, operating cost, depreciation cost, capital charge, and hired labor, all on an annual cost per cow basis. In the economic analysis, family labor was also included. Production factors evaluated as dependent variables in both models were calf weight, calf price, cull weight, cull price, weaning percentage, and calving distribution. Herd size and investment were also analyzed. All financial factors analyzed were significantly correlated to RLM (P < .10) except cull weight, and cull price. All economic factors analyzed were significantly correlated to RLM (P < .10) except calf weight, cull weight and cull price. Results of the financial prediction equation indicate that there are eight measurements capable of explaining over 82 percent of the farm-to-farm variation in RLM. Feed cost is the overriding factor driving RLM in both the financial and economic stepwise regression analyses. In both analyses over 50 percent of the herd-to-herd variation in RLM could be explained by feed cost. Financial feed cost is correlated (P < .001) to operating cost, depreciation cost, and investment. Economic feed cost is correlated (P < .001) with investment and operating cost, as well as capital charge. Operating cost, depreciation, and capital charge were all negatively correlated (P < .10) to herd size, and positively correlated (P < .01) to feed cost in both analyses. Operating costs were positively correlated with capital charge and investment (P < .01) in both analyses. In the financial regression model, depreciation cost was the second critical factor explaining almost 9 percent of the herd-to-herd variation in RLM followed by operating cost (5 percent). Calf weight had a greater impact than calf price on RLM in both the financial and economic regression models. Calf weight was the fourth indicator of RLM in the financial model and was similar in magnitude to operating cost. Investment was not a significant variable in either regression model; however, it was highly correlated to a number of the significant cost variables including feed cost, depreciation cost, and operating cost (P < .001, financial; P < .10, economic). Cost factors were far more influential in driving RLM than production, reproduction, or producer controlled marketing factors. Of these cost factors, feed cost had by far the largest impact. As producers focus attention on factors that affect the profitability of the operation, feed cost is the most critical control point because it was responsible for over 50 percent of the herd-to-herd variation in profit.

A 13-Year Summary of the ISU Beef Cow Business Record

A 13-year summary of the Iowa State University Extension Service’s Beef Cow Business Record (BCBR) was compiled to show the trends in cost, profit, and production for beef-cow enterprises in Iowa. During these 13 years, 966 yearly records were summarized on herds with an average size of 74.6 cows. Each year-end summary sorts the producers with profits in the top and the bottom thirds of the group so that differences can be analyzed. The average cost to maintain a beef cow from 1982 to 1994 was $370.80. Cost components included in this average total were: feed and pasture, $177.10; operating, $45.40; depreciation, taxes, and insurance, $19.70; labor, $44.90; and capital, $83.70. Producers sorted into the top one-third profit group had 13-year average total cow costs of $309.80, but the bottom onethird profit group averaged $437.10. Economic returns per cow for these same 13 years were: return to capital, labor, and management, $139.50; return to labor and management, $56.20; and net profit, $20.20. Top-profit producers had an average net profit of $126.20 per cow, whereas the least profitable group had an average loss of $107.40. Of this $233.60 difference, $127.30 was due to production cost, and the remaining $106.30 was caused by gross return differences. The average number of pounds of beef produced per cow from 1984 through 1994 was 567. This production was achieved with 2.5 acres of pasture, 3.9 acres of cornstalk grazing, and 4,675 pounds of stored feed per cow unit. Top-profit producers used 673 pounds of stored feed per hundredweight of production, but the least profitable producers used 1,015 pounds. Top-profit producers produced 74 pounds more per cow while using 1,313 pounds less stored feed.

MRI-guided and CT-guided cervical nerve root infiltration therapy: a cost comparison

PURPOSE To evaluate and compare the costs of MRI-guided and CT-guided cervical nerve root infiltration for the minimally invasive treatment of radicular neck pain. MATERIALS AND METHODS Between September 2009 and April 2012, 22 patients (9 men, 13 women; mean age: 48.2 years) underwent MRI-guided (1.0 Tesla, Panorama HFO, Philips) single-site periradicular cervical nerve root infiltration with 40 mg triamcinolone acetonide. A further 64 patients (34 men, 30 women; mean age: 50.3 years) were treated under CT fluoroscopic guidance (Somatom Definition 64, Siemens). The mean overall costs were calculated as the sum of the prorated costs of equipment use (purchase, depreciation, maintenance, and energy costs), personnel costs and expenditure for disposables that were identified for MRI- and CT-guided procedures. Additionally, the cost of ultrasound guidance was calculated. RESULTS The mean intervention time was 24.9 min. (range: 12 - 36 min.) for MRI-guided infiltration and 19.7 min. (range: 5 - 54 min.) for CT-guided infiltration. The average total costs per patient were EUR 240 for MRI-guided interventions and EUR 124 for CT-guided interventions. These were (MRI/CT guidance) EUR 150/60 for equipment use, EUR 46/40 for personnel, and EUR 44/25 for disposables. The mean overall cost of ultrasound guidance was EUR 76. CONCLUSION Cervical nerve root infiltration using MRI guidance is still about twice as expensive as infiltration using CT guidance. However, since it does not involve radiation exposure for patients and personnel, MRI-guided nerve root infiltration may become a promising alternative to the CT-guided procedure, especially since a further price decrease is expected for MRI devices and MR-compatible disposables. In contrast, ultrasound remains the less expensive method for nerve root infiltration guidance.

The Long-Run Relationship between Money, Nominal GDP, and the Price Level in Venezuela: 1950 to 1996

This paper explores whether a significant long-run relationship exists between money and nominal GDP and between money and the price level in the Venezuelan economy. We apply time-series econometric techniques to annual data for the Venezuelan economy for 1950 to 1996. An important feature of our analysis is the use of tests for unit roots and cointegration with structural breaks. Certain characteristics of the Venezuelan experience suggest that structural breaks may be important. Since the economy depends heavily on oil revenue, oil price shocks have had important influences on most macroeconomic variables. Also since the economy possesses large foreign debt, the world debt crisis that exploded in 1982 had pervasive effects on the Venezuelan economy. Radical changes in economic policy and political instability may have also significantly affected the movement of the macroeconomy. We find that a long-run relationship exists between narrow money (M1) and nominal GDP, the GDP deflator, and the CPI when one makes allowances for one or two structural breaks. We do not find such long-run relationships when broad money (M2) is used.

Does Exchange Rate Risk Affect Exports Asymmetrically? Asian Evidence

The effects of exchange rate risk have interested researchers, since the collapse of fixed exchange rates. Little consensus exists, however, regarding its effect on exports. Previous studies implicitly assume symmetry. This paper tests the hypothesis of asymmetric effects of exchange rate risk with a dynamic conditional correlation bivariate GARCH(1,1)-M model. The asymmetry means that exchange rate risk (volatility) affects exports differently during appreciations and depreciations of the exchange rate. The data include bilateral exports from eight Asian countries to the US. The empirical results show that real exchange rate risk significantly affects exports for all countries, negative or positive, in periods of depreciation or appreciation. For five of the eight countries, the effects of exchange risk are asymmetric. Thus, policy makers can consider the stability of the exchange rate in addition to its depreciation as a method of stimulating export growth.

Point-of-sale machines in school cafeterias and parental influence on child food choices

The prevalence of obesity has reached epidemic proportions in the United States. Twenty-five percent of school aged students are overweight. Schools have the opportunity to help slow this epidemic. School cafeterias in the United States feed millions of students every day through the National School Lunch Program.^ Point-of-sale machines are used in most school cafeterias to help streamline the process of purchasing school lunches. The point-of-sale software allows school personnel to place special notes on student's accounts to provide alerts about parental requests. This study investigated what the alerts are used for, who uses the alerts, and if there are any patterns by demographic characteristics. ^ Counts and percentages were used to determine what the alerts were used for and who used them. This study found that students who were white non-Hispanic, paid status, or in elementary school were most likely to have alerts placed on their accounts. Also, the majority of point-of-sale alerts were used as allowances (i.e., allowed to purchase snacks from the balance on the school lunch account), rather than restrictions (i.e., restricted from purchasing high calorie foods or specific food items). Using chi-square analysis, a total of 688 alerts were analyzed. There were significant differences in alert frequencies for intent category by grade level (p=0.000), snack access (p=0.000), and gender (p=0.002). Therefore, the results are significant, and one can conclude there is a significant relationship between gender, grade level, and snack access, and the presence of an alert on the school lunch account.^ Also, school administrators may want to take into consideration possible changes to their program, such as requiring more time to run the software. The results of this study can assist school administrators to better understand that a point-of-sale alert program may help their school lunch programs run more efficiently, while also providing parental influence on students’ food choices at the point-of-sale.^ School food service authorities should consider implementing a structured point-of-sale alert policy to encourage parental input on their children's food choices. When implementing the point-of-sale policy, schools should publicize this policy online, through school lunch menus, and parent communications increase participation throughout the school district.^

AN ANALYSIS OF THE RELATIVE INFLUENCE OF RACE, INCOME, EDUCATION, AND FOOD STAMP PROGRAM PARTICIPATION/NONPARTICIPATION ON THE FOOD AND NUTRIENT CONSUMPTION OF A NORTH FLORIDA URBAN CLINIC POPULATION IN CONJUNCTION WITH A SURVEY OF NUTRITION RELATED HABITS AND ATTITUDES

The relative influence of race, income, education, and Food Stamp Program participation/nonparticipation on the food and nutrient intake of 102 fecund women ages 18-45 years in a Florida urban clinic population was assessed using the technique of multiple regression analysis. Study subgroups were defined by race and Food Stamp Program participation status. Education was found to have the greatest influence on food and nutrient intake. Race was the next most influential factor followed in order by Food Stamp Program participation and income. The combined effect of the four independent variables explained no more than 19 percent of the variance for any of the food and nutrient intake variables. This would indicate that a more complex model of influences is needed if variations in food and nutrient intake are to be fully explained.^ A socioeconomic questionnaire was administered to investigate other factors of influence. The influence of the mother, frequency and type of restaurant dining, and perceptions of food intake and weight were found to be factors deserving further study.^ Dietary data were collected using the 24-hour recall and food frequency checklist. Descriptive dietary findings indicated that iron and calcium were nutrients where adequacy was of concern for all study subgroups. White Food Stamp Program participants had the greatest number of mean nutrient intake values falling below the 1980 Recommended Dietary Allowances (RDAs). When Food Stamp Program participants were contrasted to nonparticipants, mean intakes of six nutrients (kilocalories, calcium, iron, vitamin A, thiamin, and riboflavin) were below the 1980 RDA compared to five mean nutrient intakes (kilocalories, calcium, iron, thiamin and riboflavin) for the nonparticipants. Use of the Index of Nutritional Quality (INQ), however, revealed that the quality of the diet of Food Stamp Program participants per 1000 kilocalories was adequate with exception of calcium and iron. Intakes of these nutrients were also not adequate on a 1000 kilocalorie basis for the nonparticipant group. When mean nutrient intakes of the groups were compared using Student's t-test oleicacid intake was the only significant difference found. Being a nonparticipant in the Food Stamp Program was found to be associated with more frequent consumption of cookies, sweet rolls, doughnuts, and honey. The findings of this study contradict the negative image of the Food Stamp Program participant and emphasize the importance of education. ^

Exchange Rate Stabilization and IMF High Interest Rate Policy: A Critical Reconsideration Using a Dynamic Model

This paper examines whether the IMF high interest rate policy was suitable for crisis-ridden East Asian economies. Using an "overshoot" model similar to that of Dornbusch's (1976), it shows that this sort of policy might cause an unnecessary deflationary adjusting process and have no effect on containing the real depreciation of exchange rates in the long run. The study also demonstrates that Thai economic data coincides quite well with the model presented here. Finally, it points out that the high interest policy itself might provoke high risk-premium, the existence of which, in turn, justifies the policy. This means that the policy has a self-fulfilling property. In conclusion, a "one-size-fits-all" adaptation of high interest rate policy in a currency crisis is very dangerous in general, and was inappropriate for East Asia. The desirable policy would have been to let currencies depreciate and keep interest rates stable.

Financial Policies and Dynamic Game Simulation in Poland and Hungary

Recently, steady economic growth rates have been kept in Poland and Hungary. Money supplies are growing rather rapidly in these economies. In large, exchange rates have trends of depreciation. Then, exports and prices show the steady growth rates. It can be thought that per capita GDPs are in the same level and development stages are similar in these two countries. It is assumed that these two economies have the same export market and export goods are competing in it. If one country has an expansion of monetary policy, price increase and interest rate decrease. Then, exchange rate decrease. Exports and GDP will increase through this phenomenon. At the same time, this expanded monetary policy affects another country through the trade. This mutual relationship between two countries can be expressed by the Nash-equilibrium in the Game theory. In this paper, macro-econometric models of Polish and Hungarian economies are built and the Nash- equilibrium is introduced into them.

Liability dollarization and fear of floating

This paper explores the idea that fear of floating can be justified as an optimal discretionary monetary policy in a dollarized emerging economy. Specifically, I consider a small open economy in which intermediate goods importers borrow in foreign currency and face a credit constraint. In this economy, exchange rate depreciation not only worsens importers' net-worth but also increases the financing amount in domestic currency, therefore exaggerating their borrowing finance premium. Besides, because of high exchange rate pass-through into import prices, fluctuations in the exchange rate also have strong impacts on domestic prices and production. These effects, together, magnify the macroeconomic consequences of the floating exchange rate policy in response to external shocks. The paper shows that the floating exchange rate regime is dominated by the fixed exchange rate regime in the role of cushioning shocks and in welfare terms.

FTA in international finance : impacts of exchange rates on FTA utilization

This paper investigates how exchange rates affect the utilization of a free trade agreement (FTA) scheme in trading. Changes in exchange rates affect FTA utilization by two ways. The first way is by changing the excess profits gained by utilizing the FTA scheme, and the second way is by promoting the compliance of rules of origin. Our theoretical models predict that the depreciation of exporters' currency against that of importers enhances the likelihood of FTA utilization through those two channels. Furthermore, our empirical analysis, which is based on rich tariff-line-level data on the utilization of FTA schemes in Korea's imports from ASEAN countries, supports the theoretical prediction. We also show that the effects are smaller for more differentiated products.

The Economic Value of Residential Land in Historical Areas: An Application of the Residual Method to the Secondary Market

Land value bears significant weight in house prices in historical town centers. An essential aim for regulating the mortgage market, particularly in the financial and property crisis that countries such as Spain are undergoing, is to have at hand objective procedures for its valuation, whatever the conditions (location, construction, planning). Of all the factors contributing to house price make-up, the land is the only one whose value does not depend on acquisition cost, but rather on the location-time binomial. That is to say, the specific circumstances at that point and at the exact moment of valuation. For this reason, the most commonly applied procedure for land valuation in town centers is the use of the residual method: once the selling price of new housing in a district is known, the other necessary costs and expenses of development are deducted, including those of building and the developer’s profit. The value left is that of the land. To apply these procedures it is vital to have figures such as building costs, technical fees, tax costs, etc. But, above all, it is essential to obtain the selling price of the new housing. This is not always feasible, on account of the lack of newbuild development in this location. This shortage of information occurs in historical town cities, where urban renewal is slight due to the heritage-protection policies, and where, nevertheless there is substantial activity in the secondary market. In these circumstances, as an alternative for land valuation in consolidated urban areas, we have the adaptation of the residual method to the particular characteristics of the secondary market. To these ends, there is the proposal for the appreciation of the dwelling which follows, in a backwards direction, the application of traditional depreciation methods proposed by the various valuation manuals and guidelines. The reliability of the results obtained is analyzed by contrasting it with published figures for newly-built properties, according to different rules applied in administrative appraisals in Spain and the incidence of an eventual correction due to conservation state.