nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2011‒08‒22
sixteen papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. The return of vulgar economics: A Rejoinder to Colander, Holt and Rosser By Matías Vernengo
  2. Continuous Training, Job Satisfaction and Gender: An Empirical Analysis Using German Panel Data By Claudia Burgard; Katja Görlitz
  3. The Impact of Trade Liberalization on Micro Enterprises: Do Banks Matter? Evidence from Indian Manufacturing By Asha Sundaram
  4. Antitrust market definition using statistical learning techniques and consumer characteristics By Willem H. Boshoff
  5. Extreme Divorce: the Managerial Revolution in UK Companies before 1914 By Foreman-Peck, James; Hannah, Leslie
  6. Housewives in a dual-earner society Who is a housewife in contemporary Norway? By Ragni Hege Kitterød and Marit Rønsen
  7. Towards a Transnational Analysis of the Political Economy of Care By Williams, Fiona
  8. Tastes, castes, and culture : the influence of society on preferences By Fehr, Ernst; Hoff, Karla
  9. Conference summary: federal regulation of the prepaid card industry: costs, benefits, and changing industry dynamics By Philip Keitel
  10. Do supermarkets reduce the number of traditional bookshops? An empirical application to the textbook market in Spain By Aday Hernandez; Juan Luis Jimenez
  11. Resequencing of mixed-model assembly lines: Survey and research agenda By Nils Boysen; Armin Scholl; N. Wopperer
  12. Virtual Incubation in Industrial Clusters: A Case Study in Pakistan By Babur Wasim Arif; Tetsushi Sonobe
  13. Measuring (socio-)economic systems using the SNA. A SAM approach. By Santos, Susana
  14. Productivity and technical change in Indian economy By Pohit, Sanjib; Pal, Barun
  15. Testable implications of economic revolutions: An application to historic data on European wages By Fry, J. M.; Masood, Omar
  16. The Experience of Unemployment in Ireland: A Thematic Analysis By Liam Delaney; Michael Egan; Nicola O'Connell

  1. By: Matías Vernengo
    Abstract: This paper provides a rejoinder to Colander, Holt and Rosser (2010) strategy to win friends and influence mainstream economics. It is suggested that their strategy is counter-productive, and while it might gain them friends, it will not lead to increased influence of heterodox ideas within what they term the cutting edge of the profession. It is argued that their failure to understand the nature of heterodoxy, and the reason for the eclecticism of the mainstream, associated to the rise of vulgar economics, undermines their arguments.
    Keywords: Methodology, Heterodox Economics JEL Codes: B49, B59
    Date: 2011
  2. By: Claudia Burgard; Katja Görlitz
    Abstract: Using data from the German Socio-Economic Panel (SOEP), this paper analyzes the relationship between training and job satisfaction focusing in particular on gender differences. Controlling for a variety of socio-demographic, job and firm characteristics, we find a difference between males and females in the correlation of training with job satisfaction which is positive for males but insignificant for females. This difference becomes even more pronounced when applying individual fixed effects. To gain insights into the reasons for this difference, we further investigate training characteristics by gender. We find that financial support and career-orientation of courses only seems to matter for the job satisfaction of men but not of women.
    Keywords: Training, job satisfaction, gender differences, fixed effects
    JEL: I29 J24 J28 M53
    Date: 2011
  3. By: Asha Sundaram
    Abstract: This paper looks at the impact of trade liberalization on output, factor intensity and labor productivity of micro enterprises with differential access to banks. It uses Indian data on micro enterprises employing fewer than ten workers in the manufacturing sector and finds that trade liberalization, measured by a fall in the tariff, is associated with higher enterprise output, capital-labor ratios and labor productivity in districts with a larger number of bank branches per capita. Evidence is consistent with strong complementarities between trade liberalization effects and better access to credit and greater economic dynamism due to greater bank presence in the enterprise’s location. In addition, the research points to greater likelihood of outsourcing of production activity to micro enterprises in more open industries. The study highlights the role of credit market institutions, labor regulation and linkages between micro enterprises and large firms in determining the effects of trade liberalization on developing country manufacturing.
    Keywords: Trade Reform, Banks, Manufacturing, Informal Firms, Productivity, Outsourcing
    JEL: F16 J32 L24 O14 O17
    Date: 2011
  4. By: Willem H. Boshoff
    Abstract: Market definition is the first step in an antitrust case and relies on empirical evidence of substitution patterns. Cross-price elasticity estimates are preferred evidence for studying substitution patterns, due to advances in IO econometric modelling. However, the data and time requirements of these models weigh against their universal adoption for market definition purposes. These practical constraints — and the need for a greater variety of evidence — lead practitioners to rely on a larger set of less sophisticated tools for market definition. The paper proposes an addition to the existing toolkit, namely an analysis of consumer characteristics for market definition purposes. The paper shows how cluster analysis can be used to identify meaningful groups of substitutes on the basis of homogeneity of their consumer profiles. Cluster analysis enforces consistency, while recent bootstrap techniques ensure robust conclusions. To illustrate the tool, the paper relies on data from a recently concluded radio merger in South Africa.
    Keywords: market definition substitutes media demography clusters bootstrap
    JEL: L4 L1 C1 D1
    Date: 2011
  5. By: Foreman-Peck, James (Cardiff Business School); Hannah, Leslie
    Abstract: We present the first broadly representative study for any early twentieth century economy of the extent to which quoted company ownership was already divorced from managerial control. In the 337 largest, independent, UK companies in the Investor's Year Book (those with \pounds 1m or more share capital in 1911) the two million outside shareholders were fewer than today's shareholding population, but they held 97.5% of the shares in the median company and their directors only 2.5%. This indicates a lower level of personal ownership by boards, and of director voting control, in the largest securities market of the early twentieth century than in any of the world.s major securities markets toward the end of that century. Berle, Means, Gordon and others later quantified the USA's delayed (and on this dimension less advanced) managerial "revolution." Their evidence has been widely misinterpreted: some erroneously concluded that America pioneered this aspect of "modernity" and that the "divorce" of ownership from control, globally, was a new and continuing trend.
    Date: 2011–08
  6. By: Ragni Hege Kitterød and Marit Rønsen (Statistics Norway)
    Abstract: The number of housewives has declined significantly in most Western countries, but there is now a renewed interest in the homemaker role in the media and public discourse. Utilising representative survey data from 2007 we examine the prevalence and characteristics of the housewife role in present Norway, a social-democratic country with high gender-equality ambitions. Irrespective of the definition used, being a housewife is clearly a minority practice in Norway. About one out of ten partnered women of prime working age either look upon themselves as housewives or work for pay less than 20 hours per week. Housewives are overrepresented among the less educated, those with health restrictions, women with many children and young children, non-Western immigrants and those with a partner with fairly high income. The partners’ aggregate income is lower in housewife couples than in other couples, though. Housewives are usually in charge of most domestic chores and report high levels of satisfaction with their division of labour and domestic economy. The analysis does not support the popular notion that today’s housewife is primarily a highly educated woman who puts her career on halt, or a rich man’s wife who spends her time on leisure activities.
    Keywords: Housewife; gender; equality; labour market; unpaid work.
    JEL: J13 J21 J22 J23
    Date: 2011–08
  7. By: Williams, Fiona (Stockholm University Linnaeus Center for Integration Studies - SULCIS)
    Abstract: The resurgence of the employment of domestic and care workers in private homes in many industrialised countries over the last two decades has been shaped by important social changes, most notable among this are the increased responsibilities and rights of women across the globe to be both earners and carers. This reflects graduated shifts from the ‘male breadwinner’ to ‘adult worker’ model taking place in many industrialised societies and unemployment and poverty in developing countries. As many of those who carry out this work are migrant women, this reveals the movement of women seeking opportunities created by the changing patterns of post-colonial migration to financially support their families. Such migrations are also structured by the policies developed by states in richer countries. The nature of care regimes in host countries clearly influence take up: where care provision is commodified and where care cultures favour home-based/ surrogate care, then reliance on the low paid end of the private market is more common (Ungerson and Yeandle, 2007; Williams and Gavanas, 2008). At the same time, migration rules construct the legal, social and civil rights of migrants in different ways, in tandem with employment policies that may serve to deregulate the economy and to increase the casualisation of labour. Superimposed on this universe of change is the ongoing reconstitution of social relations of gender, care and domestic service, of hierarchies of ethnicity and nationality, and of differentiated meanings of, and rights to, citizenship. This paper draws on earlier research into migration and home-based care in Europe as a basis for developing a transnational analysis of the political economy of care (Lister et al, 2007, chapter 5; Williams and Gavanas, 2008; Williams, 2007; 2008; Williams, Tobio and Gavanas, 2009; Williams, 2010).
    Keywords: Care; Gender; Domestic Service; Ethnicity; Nationality
    JEL: J29 J61
    Date: 2011–08–09
  8. By: Fehr, Ernst; Hoff, Karla
    Abstract: Economists have traditionally treated preferences as exogenously given. Preferences are assumed to be influenced by neither beliefs nor the constraints people face. As a consequence, changes in behaviour are explained exclusively in terms of changes in the set of feasible alternatives. Here the authors argue that the opposition to explaining behavioural changes in terms of preference changes is ill-founded, that the psychological properties of preferences render them susceptible to direct social influences, and that the impact of"society"on preferences is likely to have important economic and social consequences.
    Keywords: Biodiversity,Labor Policies,Economic Theory&Research,Cultural Policy,Gender and Social Development
    Date: 2011–08–01
  9. By: Philip Keitel
    Abstract: On April 8-9, 2010, the Payment Cards Center of the Federal Reserve Bank of Philadelphia hosted a conference that brought together leaders in the prepaid card industry, regulators, consumer groups, law enforcement agents, and industry researchers to discuss the economics of prepaid cards and the benefits and costs of their regulation from the standpoint of several different product categories. In particular, the conference examined ways in which prepaid card products can differ, how the industry has developed over time, ongoing industry dynamics, ways in which the usefulness of prepaid products to criminals might be limited, whether consumers who use prepaid cards are adequately protected, and the challenges facing regulators. This paper summarizes the highlights from the presentations given at the conference and the discussions that ensued.
    Keywords: Point-of-sale-systems ; Consumer credit
    Date: 2011
  10. By: Aday Hernandez; Juan Luis Jimenez (University of Las Palmas de Gran Canaria. Facultad de Economía, Empresa y Turismo)
    Abstract: Some countries, especially in Europe, regulate the textbook market due to its special characteristics. In 2000, the Spanish Government passed a law that relaxes resale price maintenance and lets retailers give discounts of up to 25% off the gross price. Traditional bookshops do not favour this policy. We construct a database for the Canary Islands (a Spanish Autonomous Community) on schools, bookshops, population and other control factors. Our empirical objectives are twofold: first, we explore whether malls force the exit (or encourage entry) of bookshops; second, we test whether these larger retailers decrease consumer welfare by increasing distance from schools to points of sale. The results show that malls are not as bad as bookshops claim
    Keywords: Textbooks, Competition, Regional economic activity
    JEL: Z11 R11
    Date: 2011–07
  11. By: Nils Boysen (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Armin Scholl (School of Economics and Business Administration, Friedrich-Schiller-University Jena); N. Wopperer
    Abstract: Nowadays, mixed-model assembly lines are applied in a wide range of industries to mass-produce customized products to order, e.g., in automobile industry. An important decision problem in this context receiving a lot of attention from researchers and practitioners is the sequencing problem, which decides on the succession of workpieces launched down the line. However, if multiple departments with diverging sequencing objectives are to be passed or unforeseen disturbances like machine breakdowns or material shortages occur, a resequencing of a given production sequence often becomes equally essential. This paper reviews existing research on resequencing in a mixedmodel assembly line context. Important problem settings, alternative buffer configurations, and resulting decision problems are described. Finally, future research needs are identified as some relevant real-world resequencing settings have not been dealt with in literature up to now.
    Keywords: Mixed-model assembly line, Resequencing, Survey
    Date: 2011–08–09
  12. By: Babur Wasim Arif (Federal Bureau of Statistics, Pakistan); Tetsushi Sonobe (National Graduate Institute for Policy Studies)
    Abstract: In industrial clusters, transaction costs are kept low and free riding is discouraged by a community mechanism developed through dense and repeated interactions among entrepreneurs. In such environments, new entrants without established reputations and connections are put at a distinct disadvantage. This negative effect on new entry must be neutralized for an industrial cluster to expand. Using enterprise level data from Pakistan, this study finds that personal networks are indeed important for successful enterprise operation, which works to the advantage of incumbents, but that subcontracting plays the role of virtual incubation in nurturing new enterprises, reinforcing the cluster’s dynamism.
    Keywords: South Asia, Pakistan, industrial cluster, social capital, subcontracting
    Date: 2011–08
  13. By: Santos, Susana
    Abstract: A SAM (Social Accounting Matrix) can be an important tool for measuring a society’s activity, underlying which there are systems that can be worked upon in different ways. This tool will be presented as an alternative support for those who intervene in the policymaking process, which can be directed towards different parts of those systems. Both numerical and algebraic versions of the SAM will be referred to, while the method to be used in constructing the former from the System of National Accounts (SNA), implemented by the United Nations, will be examined. The SAM’s basic structure and consistency within the whole system will be studied, as well as any possible disaggregations, extensions, aggregates, indicators and balances that can be calculated. Other aspects beyond that basic structure will also be examined.
    Keywords: Social Accounting Matrix; National Accounts
    JEL: C82 E01 E61
    Date: 2011–08–12
  14. By: Pohit, Sanjib; Pal, Barun
    Abstract: This paper makes a modest attempt to apply input-output methodology to understand the structural changes in Indian economy in recent years. Our observations cover the period 1998-99 to 2006-07, the latest year for which India’s input-output table is published. Our analysis indicates that most of the manufacturing as well as services sectors exhibit large intermediate input factor productivity growth during the years under observations. Notable among them are electrical machinery, coke, refined petroleum etc, radio, television and communication equipments, machinery and equipments, construction, and hotels and restaurants. Furthermore barring few sectors, most of these sectors registered capital productivity gain during this period.Surprisingly, India has not been able to register significant capital productivity gains in the labour intensive sectors like food products, textile products etc, even though India has comparative advantage in these sectors being a labour rich economy. We find that there is falling labour productivity in many of the labour intensive sectors like agriculture and allied, mining and quarrying, food products, wood products, pulp and paper. On the other hand, our analysis of technical coefficient of India’s input-output table suggests that input cost on agriculture allied activities in food products, beverages sector has progressively fallen over the years. Moreover, we find that input costs on machinery related items in many of our sector are increasing which suggest that economy is on a path of modernisation. This has also helped in reducing energy cost on production.
    Keywords: Input-putput; India; total factor productivity growth; technical change
    JEL: D2 C82 D24
    Date: 2011–07–08
  15. By: Fry, J. M.; Masood, Omar
    Abstract: Motivated by an on-going debate in economic history we develop a simple method to quantify the impact of economic revolutions upon a novel historical data set listing the wages of building craftsmen and labourers in Southeast Europe. Structural breaks are found in the data and signify the effects of economic revolutions. With a small number of localised exceptions economic revolutions, caused by technological and administrative progress, lead to a decrease in the long-term level of wage volatility and overall results suggest close analogies between biological and economic evolution. The Commercial Revolution (mid 16th-early 18th centuries) acts as an important pre-requisite for the later Industrial Revolution (mid 18th-19th centuries). The Price Revolution (15th-16th centuries) results in some short-term increases in wage volatility.
    Keywords: Historical Economics; Economic Revolutions; Economic Evolution; European Wages
    JEL: N01 N00 G00
    Date: 2011–08–15
  16. By: Liam Delaney (Stirling University, UCD Geary Institute, University College Dublin); Michael Egan (UCD Geary Institute); Nicola O'Connell (UCD Geary Institute)
    Abstract: This paper reports on the results of 13 semi-structured focus groups carried out with unemployed respondents across Ireland in 2010. The purpose of the research is to examine the subjective experience of unemployment across a wide range of dimensions. 15 overarching themes emerged from a detailed thematic analysis of the texts of the interviews. The themes highlight a wide range of aversive psychological states associated with unemployment. The themes examine: perceptions of the economic boom; reactions to the recession; attitudes toward media coverage; gender differences in experiences of unemployment; financial worries relating to unemployment; perceptions of the position of young people; uncertainty about the future; lack of structure and routine associated with unemployment; health issues associated with unemployment; identity challenges; the social context of unemployment; issues surrounding reentering employment; attitudes toward social protection payments; social comparison effect and perceptions of training services. This paper concludes with a brief discussion of the psychological impact of unemployment.
    Date: 2011–08–18

This nep-hme issue is ©2011 by Frederic S. Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.