nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒12‒11
twelve papers chosen by
Maximo Rossi
University of the Republic

  1. Recursive linear estimation for discrete time systems in the presence of different multiplicative observation noises By Carlos Sánchez-González; Tere M. García-Muñoz
  2. Third-party Punishment is more effective on Women: Experimental Evidence By Pablo Brañas-Garza; Stefania Ottone
  3. Incentives in Religious Performance: a Stochastic Dominance Approach By Tere M. García-Muñoz
  4. Well-being across America By Oswald, Andrew J.; Wu, Stephen
  5. Schooling, Cognitive Skills, and the Latin American Growth Puzzle By Hanushek, Eric A.; Woessmann, Ludger
  6. Do Better Schools Lead to More Growth? Cognitive Skills, Economic Outcomes, and Causation By Hanushek, Eric A.; Woessmann, Ludger
  7. Markets for Reputation: Evidence on Quality and Quantity in Academe By Hamermesh, Daniel S.; Pfann, Gerard A.
  8. Individual and Corporate Social Responsibility By Benabou, Roland; Tirole, Jean
  9. Estimating income poverty and inequality from the Gallup World Poll. The case of Latin America and the Caribbean By Leonardo Gasparini; Pablo Gluzmann
  10. Population and Health Policies By Schultz, Paul
  11. Economics, Area Studies and Human Development By Ranis, Gustav
  12. Happiness, Ideology and Crime in Argentine Cities By Rafael di Tella; Ernesto Schargrodsky

  1. By: Carlos Sánchez-González (Department of Economic Theory and Economic History, University of Granada.); Tere M. García-Muñoz (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: This paper describes a design for a least mean square error estimator in discrete time systems where the components of the state vector, in measurement equation, are corrupted by different multiplicative noises in addition to observation noise. We show how known results can be considered a particular case of the algorithm stated in this paper
    Keywords: State estimation, multiplicative noise, uncertain observations
    Date: 2009–11–27
  2. By: Pablo Brañas-Garza (Department of Economic Theory and Economic History, University of Granada.); Stefania Ottone (Department of Economics, University of Milano-Bicocca)
    Abstract: Existing experimental studies mainly focus on motivations and choices of thirdparty punishers, but only few of them detect sanction efficacy contradictory results. Our paper wants to shed light on this point. In particular, we want to detect whether the threat of being punished for unfair actions is credible and affects subjects’ choices thus, making it rational to behave fairly. To disentangle the effect of expected punishment on behaviour, we implement in the lab two experimental games - the standard Dictator Game, that is used as baseline, and the Third-Party Punishment Game that incorporates a third player who observes and may punish the Dictator. The idea is that, if the Dictator in treatment TPP believes punishment is a credible threat, s/he may decide to change her/his behaviour, that is, to behave generously in order to avoid sanctions. We find a clear gender bias: women reacted to the punishment threat by increasing their transfer to the Recipient, while men did exactly the opposite.
    Date: 2009–11–20
  3. By: Tere M. García-Muñoz (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: Using a stochastic dominance approach in an international dataset of about 10,000 Catholic subjects, we show that incentives (based on absolute belief) play a crucial role in religious practice (church attendance and prayer). Furthermore, we find that when both positive (heaven) and negative (hell) incentives are available, the former have a much stronger effect than the latter. The results are confirmed using Kolmogorov-Smirnov tests.
    Keywords: Incentives, rewards, punishment, Economics of Religion
    Date: 2009–11–27
  4. By: Oswald, Andrew J. (University of Warwick); Wu, Stephen (Hamilton College)
    Abstract: This paper uses new Behavioral Risk Factor Surveillance System data to provide the first estimates of well-being across the states of America. From this sample of 1.3 million US citizens, we analyze measures of life satisfaction and mental health. Adjusting for people's characteristics, states such as Louisiana and DC have high psychological well-being levels while California and West Virginia have low well-being; there is no correlation between states' well-being and their GDP per capita. Correcting for people's incomes, satisfaction with life is lowest in the rich states. We discuss implications for the arbitrage theory that regions provide equal utility and compensating differentials.
    Keywords: compensating differentials, BRFSS, happiness, geography, GHQ, Easterlin Paradox, mental health, depression, life course
    JEL: D1 I3
    Date: 2009–11
  5. By: Hanushek, Eric A. (Stanford University); Woessmann, Ludger (Ifo Institute for Economic Research)
    Abstract: Economic development in Latin America has trailed most other world regions over the past four decades despite its relatively high initial development and school attainment levels. This puzzle can be resolved by considering the actual learning as expressed in tests of cognitive skills, on which Latin American countries consistently perform at the bottom. In growth models estimated across world regions, these low levels of cognitive skills can account for the poor growth performance of Latin America. Given the limitations of worldwide tests in discriminating performance at low levels, we also introduce measures from two regional tests designed to measure performance for all Latin American countries with internationally comparable income data. Our growth analysis using these data confirms the significant effects of cognitive skills on intra-regional variations. Splicing the new regional tests into the worldwide tests, we also confirm this effect in extended worldwide regressions, although it appears somewhat smaller in the regional Latin American data than in the worldwide data.
    Keywords: human capital, economic growth, cognitive skills, Latin America
    JEL: H4 I2 O4 N16
    Date: 2009–11
  6. By: Hanushek, Eric A. (Stanford University); Woessmann, Ludger (Ifo Institute for Economic Research)
    Abstract: We investigate whether a causal interpretation of the robust association between cognitive skills and economic growth is appropriate and whether cross-country evidence supports a case for the economic benefits of effective school policy. We develop a new common metric that allows tracking student achievement across countries, over time, and along the within-country distribution. Extensive sensitivity analyses of cross-country growth regressions generate remarkably stable results across specifications, time periods, and country samples. In addressing causality, we find, first, significant growth effects of cognitive skills when instrumented by institutional features of school systems. Second, home-country cognitive-skill levels strongly affect the earnings of immigrants on the U.S. labor market in a difference-in-differences model that compares home-educated to U.S.-educated immigrants from the same country of origin. Third, countries that improved their cognitive skills over time experienced relative increases in their growth paths. From a policy perspective, the shares of basic literates and high performers have independent significant effects on growth, and the estimates suggest that the high-performer effect is larger in poorer countries.
    Keywords: human capital, economic growth, cognitive skills
    JEL: H4 I2 J3 J61 O1 O4
    Date: 2009–11
  7. By: Hamermesh, Daniel S. (University of Texas at Austin); Pfann, Gerard A. (Maastricht University)
    Abstract: We develop a theory of the market for individual reputation, an indicator of regard by one’s peers and others. The central questions are: 1) Does the quantity of exposures raise reputation independent of their quality? and 2) Assuming that overall quality matters for reputation, does the quality of an individual’s most important exposure have an extra effect on reputation? Using evidence for academic economists, we find that, conditional on its impact, the quantity of output has no or even a negative effect on each of a number of proxies for reputation, and very little evidence that a scholar's most influential work provides any extra enhancement of reputation. Quality ranking matters more than absolute quality. Data on mobility and salaries show, on the contrary, substantial positive effects of quantity, independent of quality. We test various explanations for the differences between the determinants of reputation and salary.
    Keywords: mobility, quality/quantity trade-off, salary determination
    JEL: L14 J31
    Date: 2009–12
  8. By: Benabou, Roland (Princeton University); Tirole, Jean (IDEI)
    Abstract: Society's demands for individual and corporate social responsibility as an alternative response to market and distributive failures are becoming increasingly prominent. We first draw on recent developments in the "psychology and economics" of prosocial behavior to shed light on this trend, which reflects a complex interplay of genuine altruism, social or self image concerns, and material incentives. We then link individual concerns to corporate social responsibility, contrasting three possible understandings of the term: the adoption of a more long-term perspective by firms, the delegated exercise of prosocial behavior on behalf of stakeholders, and insider-initiated corporate philanthropy. For both individuals and firms we discuss the benefits, costs and limits of socially responsible behavior as a means to further societal goals.
    Keywords: corporate social responsibility, socially responsible investment, image concerns, shareholder value
    JEL: D64 D78 H41 L31
    Date: 2009–11
  9. By: Leonardo Gasparini (CEDLAS, Universidad de la Plata); Pablo Gluzmann (CEDLAS, Universidad de la Plata)
    Abstract: This paper takes advantage of a new source of information – the Gallup World Poll 2006 – to estimate and characterize income poverty and inequality in Latin America and the Caribbean (LAC) at the country level, and to compare LAC estimates to those in other regions of the world. The Gallup survey has the advantage of being conducted in over 130 nations with almost the same questionnaire in all countries, and then it stands as a complement to national household surveys for international comparison purposes.
    Keywords: Multidimensional poverty measurement, deprivation, counting approach, dimension adjusted headcount ratio, ordinal data
    JEL: D3 I3
    Date: 2009
  10. By: Schultz, Paul (Yale University)
    Abstract: The program evaluation literature for population and health policies is in flux, with many disciplines documenting biological and behavioral linkages from fetal development to late life mortality, chronic disease, and disability, though their implications for policy remain uncertain. Both macro and micro economics seek to understand and incorporate connections between economic development and the demographic transition. The focus here is on research methods, findings, and questions that economists can clarify regarding the causal relationships between economic development, health outcomes, and reproductive behavior, which operate in many directions, posing problems for identifying causal pathways. The connection between conditions under which people live and their expected lifespan and health status refers to "health production functions". The relationships between an individual's stock of health and productivity, well being, and duration of life encompasses the "returns to health human capital". The control of reproduction improves directly the well being of women, and the economic opportunities of her offspring. The choice of population policies may be country specific and conditional on institutional setting, even though many advances in biomedical and public health knowledge, including modern methods of birth control, are now widely available. Evaluation of a policy intervention in terms of cost-effectiveness is typically more than a question of technological efficiency, but also the motivation for adoption, and the behavioral responsiveness to the intervention of individuals, families, networks, and communities. Well-specified research strategies are required to address (1) the economic production of health capacities from conception to old age, (2) the wage returns to increasing health status attributable to policy interventions, (3) the conditions affecting fertility, family time allocation, and human capital investments, and (4) the consequences for women and their families of policies which change the timing as well as number of births.
    JEL: D13 I18 J13 O12
    Date: 2009–07
  11. By: Ranis, Gustav (Yale University)
    Abstract: This paper suggests that area studies and economics have a better chance to be married successfully if we shift our attention from the exclusive emphasis on economic growth towards improvements in human development, especially the much broadened version of that concept. Different areas are shown to differ substantially in terms of the choices they make among the various independent dimensions of well-being and the various indicators within each dimension. The particular characteristics of each area play an important role in determining the choices societies make and the extent to which they are constrained by their initial conditions.
    JEL: O10 O20 O50
    Date: 2009–07
  12. By: Rafael di Tella; Ernesto Schargrodsky
    Abstract: This paper uses self-reported data on victimization, subjective well being and ideology for a panel of individuals living in six Argentine cities. While no relationship is found between happiness and victimization experiences, a correlation is documented, however, between victimization experience and changes in ideological positions. Specifically, individuals who are the victims of crime are subsequently more likely than non-victims to state that inequality is high in Argentina and that the appropriate measure to reduce crime is to become less punitive (demanding lower penalties for the same crime).
    Keywords: Happiness, crime, beliefs
    JEL: I31 K42 R29
    Date: 2009–11

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