Home About us Contact
|
Home About us Contact | ||
|
|
||
Welfare Gains (welfare + gain)
Selected AbstractsChina's Penetration of the Korean Market: Stylized Facts and Welfare EffectCHINA AND WORLD ECONOMY, Issue 5 2010Kichun Kang F10; F14 Abstract China's penetration of the world market has been impressive. This paper uses highly disaggregated Korean import data (from 1992 to 2008) to examine China's penetration of the Korean market in the context of the composition of value (the extensive and intensive margins) and the product type (homogeneous and differentiated) in trade. The increase in Chinese imports has been attributed to the rapid increase in the import of new products (the extensive margin) and of existing products (the intensive margin). However, the growth rate of new products decelerated in the 2000s. The growth in the intensive margin was due to quantity, not price. Chinese imports to Korea did not improve over the period in terms of quality. Although Chinese products became cheaper, they were more differentiated over time. Welfare gains were realized through the expanded introduction of new products from China. However, much of the gains from Korea's Chinese product import boom were realized in earlier years (1992,2000) because even though imported products became more differentiated, the increase in the extensive margin was lower in more recent years (2001,2008). [source] The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry ProductivityECONOMETRICA, Issue 6 2003Marc J. Melitz This paper develops a dynamic industry model with heterogeneous firms to analyze the intra-industry effects of international trade. The model shows how the exposure to trade will induce only the more productive firms to enter the export market (while some less productive firms continue to produce only for the domestic market) and will simultaneously force the least productive firms to exit. It then shows how further increases in the industry's exposure to trade lead to additional inter-firm reallocations towards more productive firms. The paper also shows how the aggregate industry productivity growth generated by the reallocations contributes to a welfare gain, thus highlighting a benefit from trade that has not been examined theoretically before. The paper adapts Hopenhayn's (1992a) dynamic industry model to monopolistic competition in a general equilibrium setting. In so doing, the paper provides an extension of Krugman's (1980) trade model that incorporates firm level productivity differences. Firms with different productivity levels coexist in an industry because each firm faces initial uncertainty concerning its productivity before making an irreversible investment to enter the industry. Entry into the export market is also costly, but the firm's decision to export occurs after it gains knowledge of its productivity. [source] Comments on the Productivity Commission's Modelling of the Economy-Wide Effects of Future Automotive Assistance,ECONOMIC PAPERS: A JOURNAL OF APPLIED ECONOMICS AND POLICY, Issue 1 2009Peter B. Dixon C68; F13 The Productivity Commission claims on the basis of computable general equilibrium modelling that a seemingly small reduction in assistance to the Australian Automotive industry (a cut in tariffs from 10 per cent to 5 per cent and elimination of the ACIS scheme) would generate an annual welfare benefit of about $500 million. I explain that this implausible result rests on an implicit manna-from-heaven assumption. Using results published by the Commission, I rework their welfare calculations. With parameter values favoured by them, the corrected annual welfare gain is $66 million. With what I consider more realistic parameter values, the welfare effect is negative. [source] Copyright, Parallel Imports and National Welfare: The Australian Market for Sound RecordingsTHE AUSTRALIAN ECONOMIC REVIEW, Issue 4 2000Theo Papadopoulos For more than a decade now there has been considerable, often heated, debate over the issue of the parallel importation of sound recordings into Australia. Citing anti-competitive monopolistic distribution, an increasingly integrated global market and the challenges of new technologies, the Australian government recently passed the Copyright Amendment Act (No.2) 1998, which permits the parallel importation of ,non-infringing' copies of a sound recording. This paper investigates the economic rationale underpinning this regulatory change and, using a partial equilibrium model, attempts to measure the likely welfare effects on consumers, copyright owners and the nation. In addition the paper examines the likely welfare impact of piracy within the new regulatory framework. This paper demonstrates that in a global music market characterised by exclusive territorial licences and price discrimination, the removal of parallel import restrictions by a small net-importer of intellectual property may be welfare enhancing for the nation. This welfare gain is at the expense of largely foreign copyright owners. [source] International Joint Venture And Host-Country PoliciesTHE JAPANESE ECONOMIC REVIEW, Issue 4 2003Satya P. Das In the presence of international joint ventures, effects of policies like foreign equity cap, trade protection and domestic resource requirement restriction towards equity sharing and welfare are analysed. Foreign equity cap reduces host country's welfare. Trade protection lowers equity share for the local firm. It has a first-order source of welfare gain as the internal efficiency of the firm improves. Also, there is a first-order loss resulting from a leakage effect, since a part of the surplus goes to a foreign firm. A marginal domestic resource requirement restriction enhances the joint surplus of the venture and social welfare. [source] LABOUR MARKET DISTORTION, TECHNOLOGY TRANSFER AND GAINFUL EFFECTS OF FOREIGN CAPITAL,THE MANCHESTER SCHOOL, Issue 2 2005SARBAJIT CHAUDHURI This paper purports to show that even in a 2 × 2 full-employment production structure, an inflow of foreign capital may be welfare improving in the presence of labour market distortion. However, the existence of labour market distortion is a necessity to obtain this unconventional result. If an inflow of foreign capital is accompanied by labour market reform, the possibility of welfare gain due to foreign capital diminishes. Therefore, there may exist a trade-off between the policies of growth with foreign capital and labour market reform. However, if the inflow of foreign capital is accompanied by a labour-augmenting type technology transfer, it is found that investment liberalization policy and labour market reform may be undertaken concurrently in a developing economy. [source] A Quantitative Theory of Unsecured Consumer Credit with Risk of DefaultECONOMETRICA, Issue 6 2007Satyajit Chatterjee We study, theoretically and quantitatively, the general equilibrium of an economy in which households smooth consumption by means of both a riskless asset and unsecured loans with the option to default. The default option resembles a bankruptcy filing under Chapter 7 of the U.S. Bankruptcy Code. Competitive financial intermediaries offer a menu of loan sizes and interest rates wherein each loan makes zero profits. We prove the existence of a steady-state equilibrium and characterize the circumstances under which a household defaults on its loans. We show that our model accounts for the main statistics regarding bankruptcy and unsecured credit while matching key macroeconomic aggregates, and the earnings and wealth distributions. We use this model to address the implications of a recent policy change that introduces a form of "means testing" for households contemplating a Chapter 7 bankruptcy filing. We find that this policy change yields large welfare gains. [source] PRICE AND EFFICIENCY EFFECTS OF TAXES AND SUBSIDIES FOR AUSTRALIAN HOUSINGECONOMIC PAPERS: A JOURNAL OF APPLIED ECONOMICS AND POLICY, Issue 2 2007PETER ABELSON This paper quantifies the major subsidies and taxes that affect housing, the impacts on house prices and housing consumption, and the efficiency effects. Private housing receives an estimated net subsidy of $6.3 billion per annum. Most of this subsidy accrues to homeowners, who as a group receive about an 8% subsidy on imputed gross rentals. The rental sector receives a subsidy of approximately 0.4% of rents. On plausible (unitary elasticity) demand and supply assumptions, the homeowner subsidy increases all housing prices by about 2% and total housing consumption by about 2%, with the rise in consumption by home owners more than offsetting the fall in consumption by renters. The housing subsidy produces an estimated deadweight loss from expenditure on renovations of about $100 million per annum. However, contrary to previous work, the paper finds that the housing subsidy produces welfare gains from expenditure on new housing in the order of $187 million a year. This arises because the subsidy offsets the over-regulated supply of new housing. Transaction taxes on housing have a separate deadweight loss of $375 million per annum. Also, the unequal treatment of homeowners and renters creates a small annual deadweight loss. [source] Transport and environment: policy directions for europeENVIRONMENTAL POLICY AND GOVERNANCE, Issue 3 2001Robert Tinch Transport externalities are among the most important environmental problems affecting quality of life in Europe. Forecasts suggest that past environmental improvements may now be rolled back by traffic growth, and current traffic trends are not sustainable. The theory of environmental policy proposes pricing external costs at their marginal social costs as one solution. Although full marginal social cost pricing is impracticable, advances in tolling technology and environmental valuation mean that it is now a viable option to approximate such charging. There are signs that the European Commission and other bodies are starting to favour pricing over regulatory instruments. However, often overlooked is the potential for non-convexities in the transport sector or between transport and the rest of the economy. For example it may be that small increases in resources for public transport would not result in welfare gains, whereas large increases would. Non-convexities would mean that market forces under marginal social cost pricing might lead away from the optimal transport system. This is one reason why pricing instruments cannot in themselves be a panacea for transport externalities or bring about a sustainable transport system. Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment [source] ON THE DISTRIBUTIONAL CONSEQUENCES OF CHILD LABOR LEGISLATION*INTERNATIONAL ECONOMIC REVIEW, Issue 3 2005Dirk Krueger This article studies the effects of child labor legislation on human capital accumulation and the distribution of wealth and welfare. We calibrate our model to U.S. data circa 1880 and find that the consequences of restricting child labor or providing tax-financed education depend on the main source of individual household income. Households with significant financial assets unambiguously lose from government intervention, whereas high-wage workers benefit most from a child labor ban, and low-wage workers benefit most from free education. Introducing free education results in substantial welfare gains, whereas a child labor ban induces small welfare losses. [source] Agricultural and Economy-Wide Effects of European Enlargement: Modelling the Common Agricultural PolicyJOURNAL OF AGRICULTURAL ECONOMICS, Issue 2 2000C. F. Bach The economic impact of extending the Common Agricultural Policy to the Central and Eastern European countries (CEEC) has become a major issue in the European enlargement debate. This paper provides an assessment of the economy-wide effects of European enlargement using a global general equilibrium model where special attention is given to modelling the instruments of the Common Agricultural Policy, the Agenda 2000 proposal and the EU budget. The results indicate a substantial potential for increasing agricultural production in the CEEC. The EU budget will increase significantly and the transfers from EU taxpayers to farmers in the CEEC result in significant welfare gains in the new member countries. In spite of these important transfers the macroeconomic costs for the EU are found to be limited. [source] Participation and study decisions in a public system of higher educationJOURNAL OF APPLIED ECONOMETRICS, Issue 3 2010Stijn Kelchtermans We analyze the decision whether to participate and where and what to study in a public system of higher education, based on a unique dataset of all eligible high school pupils in an essentially closed region (Flanders). We find that pupils perceive the available institutions and programs as close substitutes relative to the outside option. This implies an ambiguous role for travel costs: they hardly affect the participation decision, but have a strong impact on the decision where and what to study. To illustrate how our empirical results can inform the debate on reforming public systems, we assess the effects of tuition fee increases. Uniform cost-based tuition fee increases achieve most of the welfare gains; the additional gains from fee differentiation are relatively limited. These welfare gains are quite large under conservative assumptions on the social cost of public funds, and there is a substantial redistribution from students to outsiders. Copyright © 2009 John Wiley & Sons, Ltd. [source] The pricing of innovations: An application to specialized corn traitsAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 3 2002Corinne Alexander One concern regarding the growing agricultural biotechnology industry is the potential for these firms to exercise market power when pricing their innovations, which would affect the magnitude and distribution of resulting welfare gains. We argue that competition across production systems limits the exercise of such market power by suppliers. In order to examine the demand for these innovations, we evaluate the producer's returns to planting patented seed innovations, using a calibrated optimization model of a south-central Iowa corn producer's adoption decision. Overall, our results suggest that patented seed innovations do not increase the market power of biotechnology firms in the relevant market for production systems. [EconLit subject codes: L190, O330, Q120] © 2002 Wiley Periodicals, Inc. [source] Exploring strategic priorities for regional agricultural R&D investments in East and Central AfricaAGRICULTURAL ECONOMICS, Issue 2 2010Liangzhi You O13; O32; O55; Q16 Abstract The 11 countries of East and Central Africa have diverse but overlapping agroclimatic conditions, and could potentially benefit from spillovers of agricultural technology across country borders. This article uses high-resolution spatial data on actual and potential yields for 15 major products across 12 development domains to estimate the total benefits available from the spread of new agricultural technologies around the region. Market responses and welfare gains are estimated using the,Dynamic Research Evaluation for Management,model, taking account of current and future projections of local and international demand. Results suggest which crops, countries, and agroclimatic regions offer the largest total benefits. Downloadable data and program files permit different assumptions and additional information to be considered in the ongoing process of strategic priority setting. [source] EVALUATING INTERDEPENDENT WATERSHED CONSERVATION AND GROUND WATER MANAGEMENT REFORMS1JOURNAL OF THE AMERICAN WATER RESOURCES ASSOCIATION, Issue 6 2006Basharat A. Pitafi Abstract: Conserving the watershed can help to preserve ground water recharge. Preventing overuse of available water through pricing reforms can also substantially increase the value of an aquifer. Inasmuch as users are accustomed to low prices, efficiency pricing may be politically infeasible, and watershed conservation may be considered as an alternative. We estimate and compare welfare gains from pricing reform and watershed conservation for a water management district in Oahu that obtains its water supply from the Pearl Harbor aquifer. We find that pricing reform is welfare superior to watershed conservation unless the latter is able to prevent very large recharge losses. Watershed conservation that yields net gains in combination with pricing reform may cause net losses without the pricing reform. If adoption of watershed conservation delays the implementation of pricing reform, the benefits of the latter are significantly reduced. [source] From Welfare to Work: Evaluating a Tax and Benefit Reform Targeted at Single Mothers in SwedenLABOUR, Issue 3 2007Lennart Flood We formulate and estimate simultaneously a structural static model of labor supply and welfare participation. The results suggest that labor supply among single mother households in Sweden is quite elastic, and that there is self-selection into welfare. We also find that the proposed reform would generate welfare gains for virtually everyone in the sample, benefit low-income households, and would at the same time generate a small revenue surplus. [source] | ||||||||||||||||||||||||||||