Resource-Monotonicity for House Allocation Problems

We study a simple model of assigning indivisible objects (e.g., houses, jobs, offices, etc.) to agents. Each agent receives at most one object and monetary compensations are not possible. We completely describe all rules satisfying efficiency and resource-monotonicity. The characterized rules assign the objects in a sequence of steps such that at each step there is either a dictator or two agents who “trade” objects from their hierarchically specified “endowments.”

On the Scope of Egalitarian Justice.

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The Quest for Hegemony Among Countries and Global Pollution

This paper builds on the assumption that countries behave in such a way as to improve, via their economic strength, the probability that they will attain the hegemonic position on the world stage. The quest for hegemony is modeled as a game, with countries being differentiated initially only by some endowment which yields a pollution free flow of income. A country's level of pollution is assumed directly related to its economic strength, as measured by its level of production. Two types of countries are distinguished: richly-endowed countries, for whom the return on their endowment is greater than the return they can expect from winning the hegemony race, and poorly-endowed countries, who can expect a greater return from winning the race than from their endowment. We show that in a symmetric world of poorly-endowed countries the equilibrium level of emissions is larger than in a symmetric world of richly-endowed countries: the former, being less well endowed to begin with, try harder to win the race. In the asymmetric world composed of both types of countries, the poorly-endowed countries will be polluting more than the richly endowed countries. Numerical simulations show that if the number of richly-endowed countries is increased keeping the total number of countries constant, the equilibrium level of global emissions will decrease; if the lot of the poorly-endowed countries is increased by increasing their initial endowment keeping that of the richly-endowed countries constant, global pollution will decrease; increasing the endowments of each type of countries in the same proportion, and hence increasing the average endowment in that proportion, will decrease global pollution; redistributing from the richly-endowed in favor of the poorly-endowed while keeping the average endowment constant will in general result in an increase in the equilibrium level of global pollution.

Essais sur des questions internationales en économie des ressources naturelles

Cette thèse s'articule autour de trois essais portant sur des questions internationales en économie des ressources naturelles. Le premier essai examine la production et l'échange des ressources non-renouvelables dans un modèle spatial et souligne le rôle de la superficie des pays et du coût des transports dans la détermination du sens de l'échange. Le deuxième essai considère le tarif d'extraction de la rente de rareté liée aux ressources naturelles non-renouvelables avec le modèle spatial développé dans premier essai. Le cadre spatial (plus général) permet de représenter des pays qui sont à la fois importateurs et producteurs de la ressource, ce qui n'est pas possible dans les modèles traditionnels de commerce international où les pays sont traités comme des points (sans dimension). Le troisième essai aborde la question des droits de propriétés sur les zones maritimes et examine l'allocation d'une population de pêcheurs entre les activités productives et non-productives dans une communauté côtière. Le premier chapitre propose un modèle spatial de commerce international des ressources non-renouvelables. Le cadre spatial considère explicitement la différence de taille géographique (superficie) entre les pays et permet ainsi de tenir compte du fait que les gisements naturels et leurs utilisateurs soient dispersés dans l'espace, même à l'intérieur d'un pays. En utilisant un modèle spatial à la Hotelling, nous examinons l'évolution dans le temps du sens de l'échange entre deux pays (ou régions) qui diffèrent du point de vue de leur technologie de production, de leur superficie et de leur dotation en gisement d'une ressource naturelle non-renouvelable. Le chapitre met en évidence le rôle de la taille géographique dans la détermination du sens de l'échange, à côté des explications traditionnelles que sont l'avantage comparatif et les dotations des facteurs. Notre analyse est fondamentalement différente des autres contributions dans la littérature sur le commerce international des ressources naturelles parce qu'elle souligne l'importance de la taille géographique et du coût de transport par rapport à d'autres facteurs dans la détermination des flux de ressource à l'équilibre. Le coût unitaire de transport joue un rôle capital pour déterminer si la différence de superficie entre les pays influence le sens de l'échange à l'équilibre plus que les autres facteurs. Le chapitre discute aussi du caractère régional des échanges qui a été observé pour certaines ressources telles que le minerai de fer et la bauxite. Le chapitre deux aborde la question de la répartition de la rente de rareté liée aux ressources naturelles non-renouvelables entre les pays producteurs et les pays consommateurs. Cette question a été abordée dans la littérature sous une hypothèse quelque peu restrictive. En effet, dans la plupart des travaux portant sur ce sujet le pays importateur est automatiquement considéré comme dépourvu de gisement et donc non producteur de la ressource. Pourtant la réalité est qu'il existe des ressources pour lesquelles un pays est à la fois producteur et importateur. Le cadre d'analyse de ce second essai est le modèle spatial développé dans le premier essai, qui permet justement qu'un pays puisse être à la fois importateur et producteur de la ressource. Le pays importateur détermine alors simultanément le tarif optimal et le taux d'extraction de son propre stock. Nous montrons que le tarif optimal croît au taux d'intérêt et de ce fait, ne crée aucune distorsion sur le sentier d'extraction de la ressource. Le tarif optimal permet de récupérer toute la rente lorsque le pays exportateur ne consomme pas la ressource. Néanmoins, la possibilité pour le pays exportateur de consommer une partie de son stock limite la capacité du pays importateur à récupérer la rente chez le pays exportateur. La présence de gisements de la ressource dans le pays importateur réduit la rente du pays exportateur et de ce fait renforce la capacité du pays importateur à récupérer la rente chez le pays exportateur. Le tarif initial est une fonction décroissante du stock de ressource dans le pays importateur. Cet essai aborde également la question de la cohérence dynamique du tarif obtenu avec la stratégie en boucle ouverte. Le troisième chapitre examine un problème d'allocation de l'effort entre les activités productives (par exemple la pêche) et les activités non productives (par exemple la piraterie maritime) dans une population de pêcheurs. La répartition de la population entre les activités de pêche et la piraterie est déterminée de façon endogène comme une conséquence du choix d'occupation. Nous établissons l'existence d'une multiplicité d'équilibres et mettons en évidence la possibilité d'une trappe de piraterie, c'est-à-dire un équilibre stable où une partie de la population est engagée dans les actes de piraterie. Le modèle permet d'expliquer l'augmentation significative des attaques de piraterie dans le Golfe d'Aden au cours des dernières années. Le chapitre discute aussi des différents mécanismes pour combattre la piraterie et souligne le rôle crucial des droits de propriété.

Rural households’ social capital and welfare: A case study of Msinga, KwaZulu-Natal, South Africa

In a household or nations production system, social capital has been recognized as an input having major implications for project design as well as policy development. Using a structured questionnaire, household level data was obtained from a representative sample of 300 rural households in Msinga, KwaZulu-Natal. This study employed the conventional household economic behaviour model under constrained utility maximisation to examine the effect of social capital on the welfare of household, testing the hypothesis that the possession of social capital improves household welfare. The result shows that social capital endowments have a statistically significant positive effect on household welfare, in addition to the some household’s demographic and socio-economic characteristics. The study concluded that, access to social capital among other factors, is very crucial for improved rural household welfare and poverty reduction. It is therefore important for government to have knowledge of existing social groups and networks as this will improve the effectiveness of the present strategies aimed at reducing poverty.

Desigualdad, educación y crecimiento económico

Este documento plantea un modelo teórico de generales traslapadas en el que se resalta la importancia de la educación pública como instrumento para reducir las brechas salariales, asimismo, considera la relación inversa entre la desigualdad en la distribución del ingreso y el crecimiento económico de un país. Por último, resalta la importancia del capital humano como fuente del desarrollo de un país, en la medida que éste es un insumo para la producción y estimula la acumulación de capital físico.

Allocation rules on networks

When allocating a resource, geographical and infrastructural constraints have to be taken into account. We study the problem of distributing a resource through a network from sources endowed with the resource to citizens with claims. A link between a source and an agent depicts the possibility of a transfer from the source to the agent. Given the supplies at each source, the claims of citizens, and the network, the question is how to allocate the available resources among the citizens. We consider a simple allocation problem that is free of network constraints, where the total amount can be freely distributed. The simple allocation problem is a claims problem where the total amount of claims is greater than what is available. We focus on consistent and resource monotonic rules in claims problems that satisfy equal treatment of equals. We call these rules fairness principles and we extend fairness principles to allocation rules on networks. We require that for each pair of citizens in the network, the extension is robust with respect to the fairness principle. We call this condition pairwise robustness with respect to the fairness principle. We provide an algorithm and show that each fairness principle has a unique extension which is pairwise robust with respect to the fairness principle. We give applications of the algorithm for three fairness principles: egalitarianism, proportionality and equal sacrifice.

Does uncertainty cause inertia in decision making? An experimental study of the role of regret aversion and indecisiveness

Previous research has shown that often there is clear inertia in individual decision making---that is, a tendency for decision makers to choose a status quo option. I conduct a laboratory experiment to investigate two potential determinants of inertia in uncertain environments: (i) regret aversion and (ii) ambiguity-driven indecisiveness. I use a between-subjects design with varying conditions to identify the effects of these two mechanisms on choice behavior. In each condition, participants choose between two simple real gambles, one of which is the status quo option. I find that inertia is quite large and that both mechanisms are equally important.

Comparative advantage in demand: Experimental evidence of preferences for genetically modified food in the United States and European Union

The United States (US) exports more than US$6 billion in agricultural commodities to the European Union (EU) each year, but one issue carries the potential to diminish this trade: use of biotechnology in food production. The EU has adopted more stringent policies towards biotechnology than the US. Understanding differences in European and American policies towards genetically modified (GM) foods requires a greater understanding of consumers' attitudes and preferences. This paper reports results from the first large-scale, cross-Atlantic study to analyse consumer demand for genetically modified food in a non-hypothetical market environment. We strongly reject the frequent if convenient assumption in trade theory that consumer preferences are identical across countries: the median level of compensation demanded by English and French consumers to consume a GM food is found to be more than twice that in any of the US locations. Results have important implications for trade theory, which typically focusses on differences in specialization, comparative advantage and factor endowments across countries, and for on-going trade disputes at the World Trade Organization.

Logit models for identifying the factors that influence the uptake of new 'no-tillage' technologies by farmers in the rice-wheat and the cotton-wheat farming systems of Pakistan's Punjab

In the 'rice-wheat' and the 'cotton-wheat' farming systems of Pakistan's Punjab, late planting of wheat is a perennial problem due to often delayed harvesting of the previously planted and late maturing rice and cotton crops. This leaves very limited time for land preparation for 'on-time' planting of wheat. 'No-tillage' technologies that reduce the turn-round time for wheat cultivation after rice and cotton have been developed, but their uptake has not been as expected.-This paper attempts to determine the farm and farmer characteristics and other socio-economic factors that influence the adoption of 'no-tillage' technologies'. Logit models were developed for the analysis undertaken. In the 'cotton-wheat' system personal characteristics like education, tenancy status, attitude towards risk implied in the use of new technologies and contact with extension agents are the main factors that affect adoption. As regards the 'rice-wheat' system, resource endowments such as farm size, access to a 'no-tillage' drill, clayey soils and the area sown to the rice-wheat sequence along with tenancy and contact with extension agents were dominant in explaining adoption. (C) 2002 Elsevier Science Ltd. All rights reserved.

Rural-urban disparities in child nutrition in Bangladesh and Nepal

Background The persistence of rural-urban disparities in child nutrition outcomes in developing countries alongside rapid urbanisation and increasing incidence of child malnutrition in urban areas raises an important health policy question - whether fundamentally different nutrition policies and interventions are required in rural and urban areas. Addressing this question requires an enhanced understanding of the main drivers of rural-urban disparities in child nutrition outcomes especially for the vulnerable segments of the population. This study applies recently developed statistical methods to quantify the contribution of different socio-economic determinants to rural-urban differences in child nutrition outcomes in two South Asian countries – Bangladesh and Nepal. Methods Using DHS data sets for Bangladesh and Nepal, we apply quantile regression-based counterfactual decomposition methods to quantify the contribution of (1) the differences in levels of socio-economic determinants (covariate effects) and (2) the differences in the strength of association between socio-economic determinants and child nutrition outcomes (co-efficient effects) to the observed rural-urban disparities in child HAZ scores. The methodology employed in the study allows the covariate and coefficient effects to vary across entire distribution of child nutrition outcomes. This is particularly useful in providing specific insights into factors influencing rural-urban disparities at the lower tails of child HAZ score distributions. It also helps assess the importance of individual determinants and how they vary across the distribution of HAZ scores. Results There are no fundamental differences in the characteristics that determine child nutrition outcomes in urban and rural areas. Differences in the levels of a limited number of socio-economic characteristics – maternal education, spouse’s education and the wealth index (incorporating household asset ownership and access to drinking water and sanitation) contribute a major share of rural-urban disparities in the lowest quantiles of child nutrition outcomes. Differences in the strength of association between socio-economic characteristics and child nutrition outcomes account for less than a quarter of rural-urban disparities at the lower end of the HAZ score distribution. Conclusions Public health interventions aimed at overcoming rural-urban disparities in child nutrition outcomes need to focus principally on bridging gaps in socio-economic endowments of rural and urban households and improving the quality of rural infrastructure. Improving child nutrition outcomes in developing countries does not call for fundamentally different approaches to public health interventions in rural and urban areas.

Kazakhstan: long-term economic growth and the role of the oil sector

This study combines a narrative and modelling framework to analyse the development of Kazakhstan’s oil sector since its takeoff following separation from the USSR. As in the case of other emerging or transitional countries with large natural resource endowments, a key question is whether the exploitation of the natural resource is a benefit to longer term economic development: is it a curse, a blessing – or neither? Narrative evidence suggests that the establishment of good governance, in terms of institutions and policies, provides a background to sound long-term development, especially if combined with the development of sectors outside the natural resource sector, for example diversification into manufacturing and services, often through attracting FDI. The narrative is supported by econometric modelling of the relationship between domestic output, overseas output and exports of oil, which finds in favour of a sustained positive effect of oil exports on GDP. The model then provides a basis for projection of the growth in GDP given a consensus view of likely developments in the oil price.

Trade and infrastructure: evidences from the Andean Community

This paper presents evidence on the key role of infrastructure in the Andean Community trade patterns. Three distinct but related gravity models of bilateral trade are used. The first model aims at identifying the importance of the Preferential Trade Agreement and adjacency on intra-regional trade, while also checking the traditional roles of economic size and distance. The second and third models also assess the evolution of the Trade Agreement and the importance of sharing a common border, but their main goal is to analyze the relevance of including infrastructure in the augmented gravity equation, testing the theoretical assumption that infrastructure endowments, by reducing trade and transport costs, reduce “distance” between bilateral partners. Indeed, if one accepts distance as a proxy for transportation costs, infrastructure development and improvement drastically modify it. Trade liberalization eliminates most of the distortions that a protectionist tariff system imposes on international business; hence transportation costs represent nowadays a considerably larger barrier to trade than in past decades. As new trade pacts are being negotiated in the Americas, borders and old agreements will lose significance; trade among countries will be nearly without restrictions, and bilateral flows will be defined in terms of costs and competitiveness. Competitiveness, however, will only be achieved by an improvement in infrastructure services at all points in the production-distribution chain.

Bubbles, collateral and monetary equilibrium

Consider an economy where infinite-lived agents trade assets collateralized by durable goods. We obtain results that rule out bubbles when the additional endowments of durable goods are uniformly bounded away from zero, regardless of whether the asset’s net supply is positive or zero. However, bubbles may occur, even for state-price processes that generate finite present value of aggregate wealth. First, under complete markets, if the net supply is being endogenously reduced to zero as a result of collateral repossession. Secondly, under incomplete markets, for a persistent positive net supply, under the general conditions guaranteeing existence of equilibrium. Examples of monetary equilibria are provided.