nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2014‒07‒05
six papers chosen by
Matthew Baker
City University of New York

  1. Mutual Biological Social Evolution, Genetic Diversity And Social Change: The Case Of Alcohol And European Colonization By Andrey Shcherbak
  2. Culture, Spatial Diffusion of Ideas and their Long-Lasting Imprints: Evidence from Froebel's Kindergarten Movement By Stefan Bauernschuster; Oliver Falck
  3. On the Stability of Preferences: Repercussions of Entrepreneurship on Risk Attitudes By Mattias Brachert; Walter Hyll
  4. Equilibrium and Optimal Fertility with Increasing Returns to Population and Endogenous Fertility By Cuberes, David; Tamura, Robert
  5. The Culture of Entrepreneurship By Chakraborty, Shankha; Thompson, Jon; Yehoue, Etienne
  6. Behavioral Economics and Macroeconomic Models By Driscoll, John C.; Holden, Steinar

  1. By: Andrey Shcherbak (National Research University Higher School of Economics)
    Abstract: The research project aims to find link between genetic diversity and social change. Although some studies associate certain genes with prosocial behavior, it is hardly to say that any genetic polymorphisms are responsible for social change. We assume that some existing differences in particular genotypes could be explained by extent of ancient urbanization, change in population density and historic pathogen prevalence. The pathogen load might have led to some genetic mutations that in their turn might have caused difference in some allele frequency among regions and populations. Our case study is the use of strong alcohol as factor of European colonization in America, Africa and Eurasia. Historically, alcohol was one of the major trade items between Europeans and indigenous populations. I argue that there is a positive correlation between probability of being colonized by Europeans and particular allele frequency responsible for metabolism of alcohol. The risk of colonization by European powers is higher for indigenous populations which had genotype with lower allele frequencies which could ’protect’ them against alcohol abuse. I test this hypothesis using binary logistic regression. The dependent variable is the binomial variable which is coded colonization1900 of a given native population by Europeans from the 1500s to 1900. The unit of analysis is not a state, but a population. Independent variable is allele frequencies of Arg48His polymorphism among 56 populations from Africa, Asia and America. The suggested causal mechanism is uneven trade: the exchange of alcohol for local goods was unfavorable for indigenous populations. Economic dependence was followed by colonization.
    Keywords: genetic diversity, colonization, alcohol, urbanization
    JEL: I15
    Date: 2014
  2. By: Stefan Bauernschuster; Oliver Falck
    Abstract: We document the spatial diffusion of Friedrich Froebel's radical invention of kindergartens in 19th-century Germany. The first kindergarten was founded at Froebel's birthplace. Early spatial diffusion can be explained by cultural proximity, measured by historical dialect similarity, to Froebel's birthplace. This result is robust to the inclusion of higher order polynomials in geographic distance and similarity measures with respect to industry, geography or religion. Our findings suggest that a common cultural basis facilitates the spill-over of ideas. We further show that the contemporaneous spatial pattern of child care coverage is still correlated with cultural similarity to Froebel's place of birth.
    Keywords: Culture, spatial diffusion, public child care
    JEL: N33 J13 Z13
    Date: 2014
  3. By: Mattias Brachert; Walter Hyll
    Abstract: The majority of empirical studies make use of the assumption of stable preferences in searching for a relationship between risk attitude and the decision to become and stay an entrepreneur. Yet empirical evidence on this relationship is limited. In this paper, we show that entry into entrepreneurship itself plays a decisive role in shaping risk preferences. We find that becoming self-employed is indeed associated with a relative increase in risk attitudes, an increase that is quantitatively large and significant even after controlling for individual characteristics, different employment status, and duration of entrepreneurship. The findings suggest that studies assuming that risk attitudes are stable over time suffer from reverse causality; risk attitudes do not remain stable over time, and individual preferences change endogenously.
    Keywords: Endogenous preferences, Risk attitudes, Entrepreneurship, German Socio-Economic Panel
    JEL: D03 D81 M13
    Date: 2014
  4. By: Cuberes, David; Tamura, Robert
    Abstract: We present a general equilibrium dynamic model that characterizes the gap between optimal and equilibrium fertility and investment in human capital. In the model, the aggregate production function exhibits increasing returns to population arising from specialization but households face the standard quantity-quality trade-off when deciding how many children they have and how much education these children receive. In the benchmark model, we solve for the equilibrium and optimal levels of fertility and investment per child and show that competitive fertility is too low and investment per child too high. We next introduce mortality of young adults in the model and assume that households have a precautionary demand for children. Human capital investment raises the likelihood that a child survives to the next generation. In this setup, the model endogenously generates a demographic transition but, since households do not internalize the positive effects of a larger population on productivity and the negative effects of human capital on mortality, both the industrial revolution and the demographic transition take place much later than it would have been optimal. Our model can be interpreted as a bridge between the literature on endogenous demographic transitions and papers that study welfare issues associated with fertility and human capital decisions.
    Keywords: increasing returns to population, endogenous fertility, endogenous mortality
    JEL: J1 J24 O1
    Date: 2014–07–02
  5. By: Chakraborty, Shankha; Thompson, Jon; Yehoue, Etienne
    Abstract: We study the cultural process through which a society inculcates an entrepreneurial spirit. People work for a guaranteed wage or operate a firm whose return depends on business expertise. The latter is culturally acquired, within the family or outside, and people may choose an occupation different from the one they were socialized into. We show that a cultural bias towards safer occupations from colonial and post-colonial policies leads to stagnation where entrepreneurs do not upgrade technology because of their proficiency with existing methods. An aggregate productivity shock can tip this economy towards growth where cultural inertia gives way to technological progress led by established businesses. A human capital shock where existing business expertise is less useful, in contrast, causes growth through the emergence of a new class of entrepreneurs. In either case culture ceases to be destiny. We relate the theory to historical and recent episodes.
    Keywords: entrepreneurship, culture, human capital, colonization, growth
    JEL: D10 F54 L26 O30 Z10
    Date: 2014–06–26
  6. By: Driscoll, John C. (Board of Governors of the Federal Reserve System (U.S.)); Holden, Steinar (University of Oslo)
    Abstract: Over the past 20 years, macroeconomists have incorporated more and more results from behavioral economics into their models. We argue that doing so has helped fixed deficiencies with standard approaches to modeling the economy--for example, the counterfactual absence of inertia in the standard New Keynesian model of economic fluctuations. We survey efforts to use behavioral economics to improve some of the underpinnings of the New Keynesian model--specifically, consumption, the formation of expectations and determination of wages and employment that underlie aggregate supply, and the possibility of multiple equilibria and asset price bubbles. We also discuss more broadly the advantages and disadvantages of using behavioral economics features in macroeconomic models.
    Keywords: Behavioral macroeconomics; New Keynesian model
    Date: 2014–06–04

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