Distribution Of Welfare Research Articles

Repugnance and Perfection

Repugnance and Perfection

Discounting Beyond Death

How do people value the welfare of future generations? This question is of special importance now that future generations’ welfare is at stake because of expected climate change. This paper looks into people’s preferences regarding intergenerational distribution of welfare. It replicates research on the discounting of life saving and uses a new question that aims to measure the valuation of future generations’ standard of life. Data is obtained from an online questionnaire (N = 138) and shows values for the discount factors that indicate decreasing valuation of future welfare. Heterogeneity is observed in distributions between one’s descendants and between future generations in general. This might be explained by the superiority of either kinship-related or ethical motives that would differ for both sorts. Obtained discount factors possibly reflect decreasing connectedness to generations over time, until the point where such generations are considered strangers and no further discounting takes place. The effect of major life events such as grandparenthood also fit this explanatory framework. Changes in demographic factors could therefore translate to changes in intergenerational discounting. Exact predictions of these and other relationships should be confirmed by further research.

Price transmission after the determination of rice ceiling price in South Sumatra Province: analysis of secondary and empirical data

Price transmission becomes an important issue because it is useful in measuring the distribution of welfare between producers and consumers as well as indicators of the efficiency of a marketing system. This study aimed to analyze the vertical transmission of the rice prices from consumers to farmers after the determination of rice ceiling price by the government in September 2017. The study was conducted in South Sumatra Province as one of the centers of rice production in Indonesia. Price transmission was analyzed using price transmission elasticity, on weekly time series secondary data of rice price for 100 weeks, from September 2017 to July 2019. Besides, primary data of the price, production, and cost of production of rice also collected in an empirical study in South Sumatra province to compare before and after the situation. The results showed that the price transmission of premium and medium rice at consumer-level to the price of harvested dried grain has an elasticity value not equal to one, but rather less than one for premium quality rice and more than one for medium quality. This shows that the rice market in South Sumatra Province is still inefficient because the prices are transmitted asymmetrically both for premium and medium rice. Results from the empirical study have also supported the same phenomena which showed an average increase of rice cost production and then the decrease of farmer income in 2018, one-year implementation of the ceiling price policy, especially in lowland swamp.

Gated community typology based on growth and development in Medan City, Indonesia

Theoretically there are three arguments against the gated community. First, gated community as a physical form and a real expression of post-revolutionary social change industry (fragmentation, individualism and increasing community). Second, gated community as a symptom of urban diseases including social classification. Third, the development of fragmentation and individualism is the emergence of elite private groups that contradict the welfare distribution system. So this situation provide the assumption that the allocation of public services is inefficient. The three arguments above are the background of why gated communities thrive in Indonesia. Based on the above arguments, the purpose of this study is to find the typology of gated community settlements based on its development in the Medan City starting from the 1980s until now. In the case of Medan City, the distribution of this settlements are seen by the growing number of gated communities in the South and West regions of Medan City. Even the social groupis formed indirectly affect consumers’ perceptions when choosing the housing locations. This research is a qualitative descriptive study with data collection methods in the form of observations and interviews. The method of data analysis is spatial analysis method. The results of this study are expected to find a typology of the form of gated community settlements based on housing size, the formation of public space and the characteristics of residents.

Scenario Selection for Iterative Stochastic Transmission Expansion Planning

Reliable transmission expansion planning is critical to power systems’ development. To make reliable and sustainable transmission expansion plans, numerous sources of uncertainty including demand, generation capacity, and fuel cost must be taken into consideration in both spatial and temporal dimensions. This paper presents a new approach to selecting a small number of high-quality scenarios for transmission expansion. The Kantorovich distance of social welfare distributions was used to assess the quality of the selected scenarios. A case study was conducted on a power system model that represents the U.S. Eastern and Western Interconnections, and ten high-quality scenarios out of a total of one million were selected for two transmission plans. Results suggested that scenarios selected using the proposed algorithm were able to provide a much more accurate estimation of the value of transmission plans than other scenario selection algorithms in the literature.

GOVERNMENT POLICY IN ACHIEVING COMMUNITY WELFARE THROUGH THE EFFECTIVENESS OF MANAGEMENT OF ZAKAT IN INDONESIA

The State of Indonesia is a welfare state as stipulated in the 1945 Constitution of the Republic of Indonesia. The 1945 Constitution of the Republic of Indonesia is the highest legal basis for the implementation of state power. In its opening, it said that one of the objectives is to advance public welfare, thus the legal regulations established by the state were in the framework of the realization of the country's goals. One of the regulations formed was Law Number 23 of 2011 concerning Management of Zakat. In general provisions mentioned that zakat is an obligation for Muslims who are able to comply with Islamic law, zakat is a religious institution that aims to improve justice, community welfare and poverty reduction. Considering the majority of Indonesian citizens are Muslims, zakat is considered as a potential source in the distribution of public welfare. The purpose of zakat management as regulated in Article 3 states that the purpose of zakat management is to increase the effectiveness and efficiency of services in managing zakat, to increase the benefits of zakat to realize public welfare and poverty alleviation. The purpose of this research is to find out government policies in the field of zakat management, so that zakat management can run effectively. The study provides an overview of the various government policies in the context of effective management of zakat, so that the benefits of zakat can be realized in order to help the realization of the country's goals. The method used was a normative juridical method. Data used in this research includes primary law in the form of legal regulations, secondary legal materials such as books, journals and tertiary legal materials in the form of legal dictionaries, encyclopedias. The results showed that the government has issued various regulations so that zakat management can run effectively, both managing institutional management through BAZNAS and BASNAS Province, also Regency. The city, as well as in terms of the receipt and distribution of zakat, the government has issued a policy in the framework and distribution of zakat.

Willingness to pay for staying away from haze: Evidence from a quasi-natural experiment in Xi'an

Previous studies of the residents' willingness to pay (WTP) for air quality improvement are likely suffering various endogeneity biases. Exploiting the unique opportunity of a recent quasi-experiment operation of the world's first SFT (Smog Free Tower) in China's northwestern city Xi'an, this paper reliably calibrates local residents' WTP for less exposure to haze by analyzing the price responses of housings in the neighborhoods of SFT. The hedonic regression is applied in the DID (difference-in-difference) setting, with further assistances of the PSM (propensity score matching) method, quantile regression and placebo test. The regression results consistently suggest that housing price responded positively to the installment of the SFT, and the impact estimates are closely centered around 4%. The study also indicates high-priced housings response much more to the operation of the SFT than cheap-priced housings, suggesting uneven distribution of welfare gains of air quality improvement. A cost-benefit analysis of the SFT project indicates that the economic benefits of this project far outweigh the costs involved. The paper concludes with discussions of policy implications of this paper for environment governance.

Konsep Profit and Loss Sharing (PLS) Berbasis Surah Al-Mulk

This study aims to restore human consciousness related to the concept of Profit and Loss Sharing (PLS) on the order of justice and welfare distribution based on Surah Al-Mulk. This research is a qualitative research with a descriptive-qualitative approach. The data collected in this study are secondary data obtained from literature studies of the literature related to problems in the study. The data obtained were then analyzed using descriptive analysis methods. The result of this research is that Al-Mulk surah is able to make people aware of always presenting Allah in all their activities, so that they can avoid the actions that He forbids. Therefore, this researcher uses surah al-Mulk as the basis for the application of the PLS concept.

The welfare and price effects of sector coupling with power-to-gas

Abstract Electricity markets with high installed capacities of Variable Renewable Energy Sources (VRES) experience periods of supply and demand mismatch, resulting in near-zero and even negative prices, or energy spilling due to surplus. The participation of emerging Power-to-X solutions in a sector coupling paradigm, such as Power-to-Gas (PTG), has been envisioned to provide a source of demand flexibility to the power sector and decarbonize the gas sector. We advance a long-run equilibrium model to study the PTG investment decision from the point of view of a perfectly competitive electricity and gas system where each sector's market is cleared separately but coupled by PTG. Under scenarios combining PTG technology costs and electricity RES targets, we study whether or not there is a convergence in the optimal deployment of PTG capacity and what is the welfare distribution across both sectors. We observe that PTG can play an important price-setting role in the electricity market, but PTG revenues from arbitrage opportunities erodes as more PTG capacity is installed. We find that the electricity and gas sector have aligned incentives to cooperate around PTG, and instead find an issue of misaligned incentives related to the PTG actor. Although not the focus of our analysis, in some scenarios we find that the welfare optimal PTG capacity results in a loss for the PTG actor, which reveals some intuition that subsidizing PTG can make sense to reduce the cost of RES subsidies. Sensitivity analyses are conducted to contextualize these findings for system specificities.

An economic evaluation on welfare distribution and carbon sequestration under competitive pyrolysis technologies

Pyrolysis and gasification are considered as a means of producing renewable energy and improving energy sustainability, which has become attractive renewable technologies to many countries. Unlike other studies that are conducted in small scale, this study aims to aggregate the economic and environmental effects such as agricultural benefits, energy sale, and carbon sequestration to provide more detailed information to decision-makers before these projects are widely employed. This study first employs a lifecycle assessment to investigate the feasibility, profitability, and emission reduction of four major pyrolysis and gasification technologies using crop residuals, and then conducts a sensitive analysis to examine the most influential factors. The results indicate that the intermediate pyrolysis with rice straw and slow pyrolysis from corn stover could offset the carbon dioxide the most. However, the pyrolysis value is also sensitive to production of the feedstock used. Value adding of stover-based biochar under fast pyrolysis improves profitability but other technologies do not have such patterns. Additionally, while gasification can generate considerable amount of renewable electricity, it yields almost zero percent of biochar that can be used as a soil amendment, and thus its contribution to agricultural sector is trivial.

We forgot the middle class! Inequality underestimation in a changing Sub-Saharan Africa

The creation of national middle classes and the changes in consumption patterns in many Sub-Saharan African (SSA) countries suggest reconsidering the way welfare and consequently inequality is typically measured. Using only consumption to measure welfare can lead to an important loss of information regarding the real welfare of the top 10–20% of the welfare distribution that is generally referred as “middle class” in these countries. This paper proposes a method capable of correcting the middle-class part of the consumption distribution using information coming from the income distribution of the same surveys. Results from 6 SSA countries indicate an increase of about 20% in the Gini index.

Can Urbanization Improve Household Welfare? Evidence from Ethiopia

Despite evolving evidence that Africa is experiencing urbanization in a different way, empirical evaluations of the welfare implications of urban-development programs in Africa remain scant. We investigated the welfare implications of recent urbanization in rural areas and small towns in Ethiopia using household-level longitudinal data and satellite-based night-light intensity. Controlling for time-invariant unobserved heterogeneity (across individuals and localities) and exploiting intertemporal and interspatial variation in satellite-based night-light intensity, we found that urbanization, as measured by night-light intensity, was associated with significant welfare improvement. In particular, we found that a one-unit increase in night-light intensity was associated with an improvement in household welfare of about 2%. Much of this was driven by the increase in labor-market participation in the non-farm sector, mainly salaried employment, induced by urbanization. Other potential impact pathways, such as an increase in consumer prices or migration explained little (if any) of the change in household welfare. Finally, our quantile and inequality analyses suggested that the observed urbanization had a negligible effect on the distribution of household welfare. Our results can inform public policy debates on the consequences and implications of urban expansion in Africa.

Feeling Poor, Feeling Rich, or Feeling Middle-Class: An Empirical Investigation

Based on their objective economic situation and comparing with their peers, individuals form perceptions of their economic position in a society. Data from the three waves of the Life in Transition surveys of European countries show that these perceptions systematically deviate from the rankings obtained using consumption levels. People position themselves in the ranks in larger numbers than those who are in the ranks according to their consumption levels. Correspondingly, many people who objectively are classified in the top, richest, or bottom, poorest, ranks subjectively feel that they are in the class. This puzzling bunching in the middle is the focus of this paper. Explanations are tested and discarded that consider subjective perceptions as misperceptions or the result of other mistakes due to data limitations (such as tail bias). The paper concludes that rather than reflecting a subjective assessment of the distribution of welfare, subjective rankings reveal subjective economic well-being. The paper show that monetary consumption is a strong predictor of subjective economic well-being, but that the latter is influenced by many other factors, including economic security, proxied by employment status or other measures of human capital, such as health and education. These findings have policy relevance, since redistribution measures aiming at simply protecting consumption levels may not be sufficient to restore the economic well-being provided by having full-time secure types of employment.

Equitable Distribution of Community Welfare: Alignment of Local Government Capacity and Territorial Challenges

This paper examines the dynamics of the implementation of decentralization in the archipelago of Sumenep Regency, related to the distribution of development and equitable distribution of community welfare. The effectiveness of regional government administration leads to the realization of community welfare. However, each autonomous region faces the challenges of different territorial conditions. Geographic conditions characterized by archipelago are a big challenge for regional governments. Difficult accessibility causes limited mobility of people and goods which results in difficulties in the implementation of public services. It is found that equitable distribution of community welfare must be encouraged through accelerating development in the archipelago. Then, there must also be an increase in the capacity of the regional government so that the implementation of development in the archipelago area can be carried out well, which in turn, welfare distribution can be realized.

Subsidy Incidence in the Presence of Bertrand Suppliers of Complementary Inputs: A U.S. Agricultural Example

Past farm subsidy research has identified the occurance of subsidy incidence to only a single input factor market (land). We expand subsidy incidence literature to a partial equilibrium two-stage dynamic game between a price-taking buyer and two Bertrand complementary input suppliers. The buyer (farmer) is the target of the government subsidy. We find that a coupled subsidy results in higher input prices for both the affiliated coupled factor (land) and its nonaffiliated complementary factor (e.g. seed). Sector welfare and welfare distribution are highly influenced by input demand complementarity. Surplus for the receiver of the coupled subsidy increases as inputs become closer complements,while aggregate surplus distribution increasingly favors the input suppliers. However, increases in sector growth from coupled subsidies (mulitplier effect) increases as inputs become closer complements. Therefore, policy aimed at mitigating subsidy incidence may reduce sector growth.

The Driving Effects of Forest Industry in China: An Input-Output Analysis

This paper analyses Chinese forest industry’s significance and its driving effects with the 2007’ input-output statement and the 2008’ national economic census data; and concludes that forest industry itself created GDP 330 billion RMB, while driving the GDP increase by 270 million RMB, showing an obvious driving effect. Especially the paper making industry contributed most; The industry created 4.6 million jobs, while driving the job increase by 25 million, demonstrating forest industry’s job-creating capacity and its labour-intensive characteristics. The timber processing sector particularly created 2.4 million jobs, while driving the job increase by 10 million; Forest industry drove profit increase by 520 billion RMB, of which timber processing and paper making sectors contributed significantly; The whole industry drove the wage and welfare distribution up by 460 billion RMB, of which furniture manufacturing sector accounted for the largest share with 190 billion RMB, demonstrating forest industry’s important status among all sectors and significant driving effect on economy.

Estimating the Welfare Gains from Public Schools in Rural India

We adapt recently developed econometric techniques to estimate the distribution of welfare gains from public schools in rural India. Individuals have preferences over school quality and income spent on other goods. In a situation where both private and pubic schools are available, we define the cash-equivalent value of the public school as the hypothetical income sacrifice that would equate an individual’s utility to his/her utility when only the private school was available. We apply this procedure to data on income, enrollment and school quality from the Indian Human Development Survey of 2012 and estimate the distribution of implicit transfers across states and income deciles. We find these transfers are progressive. Poor households receive more on average because they have higher fertility and because their children are more likely to attend state schools. We also find however that transfers are particularly small for some of the poorest states in central and eastern India because of their low public school quality. Our methods can be generalized to measure the distribution of benefits from other types of public goods and government services.

Capacity sharing with different oligopolistic competition and government regulation in a supply chain

This paper constructs a capacity sharing model in a supply chain to reveal the factors affecting equilibrium outcomes. The results show that improving the technical level lowers capacity charge and increases seller profits in any case. Product differentiation has uncertain impacts on equilibrium outcomes, which depend on government regulations and oligopolistic competition models. The improvement of supplier's fixed component of marginal costs improves capacity sharing charge and reduces profits and consumer surplus. The government regulations and oligopolistic competition model directly affect equilibrium outcomes and welfare distribution. Government capacity control helps improve social welfare, but the effect of government subsidies is uncertain.

A Multi-Perspective Model for Evaluation of Residential Thermal Demand Response

Demand response (DR) is envisaged to be of significance for enhancing the flexibility of power systems. The distributed nature of residential demand-side resources necessitates the introduction of an aggregator/retailer to represent the flexible demand in the electricity market. However, the objectives of the residential consumers, the retailer, and the system operator might not be aligned. This paper presents a multi-perspective model which integrates the optimization problems of these strategic decision makers within a single framework for evaluation of residential thermal DR. The multi-perspective model is formulated as a bilevel optimization problem and incorporates detailed building state-space models of residential thermal demand. Comparison of the multi-perspective model with existing market-based models shows that it is able to provide a holistic view of residential DR by capturing the interactions in both the retail and wholesale markets. The results also show that centralized optimization models would over-estimate the system value of DR in the presence of strategic market participants. Detailed sensitivity analyses using the multi-perspective model reveal interesting insights on the welfare distribution aspects of DR. The results show that in addition to consumers’ flexibility, retail contract design will also play a major role in determining the welfare distribution among the involved entities.

Has farmer welfare improved after rural residential land circulation?

The uneven distribution of welfare not only hinders social fairness but also affects the optimal allocation of resources for rural residential land. Recourse to traditional welfare theory or Amartya Sen's function and ability welfare theory is inappropriate in this situation as neither is focused on the influence of welfare differences. Therefore, this study aims to provide a new focus for welfare economics in integrating the concept of the internal group welfare gap into overall welfare evaluation. Fuzzy mathematics is applied to calculate welfare and the concept of the Gini coefficient is used to evaluate the welfare gap. The resulting model is applied to the cities of Guangzhou, Chongqing, and Wuxi before and after rural residential land circulation (RRLC) to determine their resulting changes in welfare and welfare gap. From this, it is found that, after RRLC, the farmers' overall welfare increased by 17.5%, 15.1%, and 23.5% respectively, while the welfare gap of Guangzhou and Wuxi was improved, and Chongqing was decreased. This means the welfare gap widened in Guangzhou and Wuxi, while narrowed in Chongqing. Concluding remarks call for increased government attention to the fair distribution of welfare between different groups of farmers by increased social security and a more detailed consideration of the groups involved.