Distribution Of Endowments Research Articles

Advantageous redistribution with three smooth CES utility functions

We present a parametric example of three-country advantageous redistribution with two Cobb–Douglas utility functions and one CES utility function for which the elasticity of substitution is 1/2. This paper indicates that the possibility of advantageous redistribution strongly depends on the three countries’ taste patterns, endowment distributions, and the elasticity of substitution. In particular, we will show with specific examples that greater difference between the donor and recipient’s taste patterns and a lower elasticity of substitution can increase the chance of advantageous redistribution.

The Waqf of Money as a Community Economic Empowerment Efforts

Waqaf is basically seen as one of the religious institutions in Islam which is relevant and functionally efforts to solve socio-economic problems and humanity, such as poverty alleviation, human resource development, and economic empowerment. The endowments are absolutely an important role in achieving a just social order. From the perspective of shapes, endowment money is seen as one of the solutions that can make endowments to be more productive. Because the money here will no longer to be used as a means of exchange, but more than it, we can explore it as a commodity to produce in the terms of economic development. Therefore, the cash money in the form of waqaf of money can result any benefit for the community. Appearances distribution of endowments can be used to productive activity in the era of economic downturn of the Islamic community in Indonesia. Now it should become the primary choice. In another sense, it is a productive waqaf endowment that must be a priority and dedicated its efforts to more fruitful. Thus, the sizes of different paradigms are done by the consumptive waqaf, because it gives a new hope for the majority of the Muslim community. Endowments are not willing to lead in worship of mahdhah which is directed to the consumptive waqaf. Using the findings of waqaf has been prioritized to give benefit in a very broad, including for economic empowerment, such as public facilities and worship activities, social facilities and educational activities as well as health, aid to poor people, displaced children, orphans, scholarship, progress and economic improvement for the people who needs the advancement of public welfare other non-contrary to the sharia business law.

A top dog tale with preference complementarities

The emergence of a winner-take-all (top dog) outcome is generally due to political or institutional constraints or to specific technological features which favour the performance of just one individual. In this paper we provide a different explanation for the occurrence of a top-dog equilibrium in exchange economies. We show that once heterogeneous complementarities (i.e. Scarf’s preferences) are analysed with general endowment distributions, a variety of equilibria different from the well-known symmetric outcome with full utilisation of resources can emerge. Specifically, we show that stable corner equilibria with a winner-take-all (top dog) individual arise that are Pareto optima although the remaining individuals are no better off than with zero consumption and resources can be unused. Because of heterogenous complementarities, market mechanisms are weak and cannot overcome the top dog’s power. Voting mechanisms or taxation policies can reduce the top dog’s privileged position.

Voting for the distribution rule in a Public Good Game with heterogeneous endowments

This paper analyzes the impact of inequality in the distribution of endowments on cooperation. We conduct a lab experiment using a dynamic Public Good Game to test this relation. We introduce the possibility of choosing among three different redistribution rules: Equidistribution, Proportional to contribution and Progressive to endowment. This novelty in a dynamic environment allows us to analyze how the inequality within groups changes according to individual choices and to investigate if players show inequity averse preferences. Results show that inequality has a negative impact on individual contribution. Players act in order to reduce the initial exogenous inequality. Indeed, in the Treatment with the highest level of inequality, agents vote for reducing the endowment heterogeneity. Moreover, individual contribution is strongly influenced by others’ contributions.

The Patron Game with Heterogeneous Endowments: A Case Against Inequality Aversion

In this paper we provide a direct test of the inequality aversion hypothesis based on aggregate outcomes using the Patron Game, a version of a Public Good Game that mandates that only one member of a group contributes to the public good. We find evidence that inequality aversion does not play any role, as the average contribution does not increase when the distribution of endowments is manipulated to generate a situation of favorable inequality for the patron, compared to the case in which there is no inequality ex ante.

Education, gender, and state-level disparities in the health of older Indians: Evidence from biomarker data

Using new biomarker data from the 2010 pilot round of the Longitudinal Aging Study in India (LASI), we investigate education, gender, and state-level disparities in health. We find that hemoglobin level, a marker for anemia, is lower for respondents with no schooling (0.7g/dL less in the adjusted model) compared to those with some formal education and is also lower for females than for males (2.0g/dL less in the adjusted model). In addition, we find that about one third of respondents in our sample aged 45 or older have high C-reaction protein (CRP) levels (>3mg/L), an indicator of inflammation and a risk factor for cardiovascular disease. We find no evidence of educational or gender differences in CRP, but there are significant state-level disparities, with Kerala residents exhibiting the lowest CRP levels (a mean of 1.96mg/L compared to 3.28mg/L in Rajasthan, the state with the highest CRP). We use the Blinder–Oaxaca decomposition approach to explain group-level differences, and find that state-level disparities in CRP are mainly due to heterogeneity in the association of the observed characteristics of respondents with CRP, rather than differences in the distribution of endowments across the sampled state populations.

Cooperation in teams: The role of identity, punishment, and endowment distribution

Common identity and peer punishment have been identified as crucial means to reduce free riding and promote cooperation in teams. This paper examines the relative importance of these two mechanisms under two income distributions in team cooperation. In a repeated public good experiment, we use different combinations of homogeneous/heterogeneous endowments, strong/weak identity, and absence/presence of peer punishment. We find that without punishment, a strong identity can raise cooperation in homogenous and heterogeneous teams, but that the effect depends on the strength of the identity. When punishment is introduced, the impact of punishment depends on the strength of the identity-building activity and the effectiveness of punishment. Furthermore, we find no evidence of stronger cooperation or punishment in teams with strong identity. These findings provide important implications for management policy makers in organizations: ex ante income heterogeneity should be implemented in teams with caution, and the decision of whether identity or punishment is a more effective norm enforcement mechanism in teams is rather sensitive to their interaction and relative strengths.

Public–private wage differentials in euro-area countries: evidence from quantile decomposition analysis

We evaluate the public–private wage differential for men in ten euro-area countries in the period 2004–2007. Using the most recent methodologies on a Mincerian equation, we assess how much of the differential depends on differences in endowments and how much on differences in the remuneration of such skills. For the first time, we look at the contribution of specific covariates at different quantiles of the wage distribution and decompose the variance into an explained and an unexplained component. We find that the pay gap is often decreasing over the distribution and that it is mostly determined by higher endowments in the upper tail of the wage distribution and by higher returns of such endowments at the low tail, with considerable heterogeneity across countries. We further find that the wage distribution in the public sector is more compressed than in the private sector in some countries. This is the result, for all countries, of more dispersed distributions of endowments in the public sector and of returns in the private sector.

Public-Private Wage Differentials in Euro Area Countries: Evidence from Quantile Decomposition Analysis

We evaluate the public-private wage differential in ten euro area countries for men in the period 2004-2007. Using the most recent methodologies on a Mincerian equation, we assess how much of the pay differential between public and private sector workers depends on differences in endowments and how much on differences in the remuneration of such skills. For the first time, we look at the contribution of specific covariates at different quantiles of the wage distribution and decompose the variance into an explained and an unexplained component. We find that the pay gap is often decreasing over the distribution, and it is mostly determined by higher endowments in the upper tail of the wage distribution and by higher returns of such endowments at the low tail, with considerable heterogeneity across countries. We further find that the wage distribution in the public sector is more compressed than in the private sector in some countries but not in all countries. This is the results, for all countries, of more dispersed distributions of endowments in the public sector and of returns in the private sector.

Social Costs of Inequality Heterogeneous Endowments in Public-Good Experiments

We compare voluntary contributions to the financing of a public good in a symmetric setting to those in asymmetric settings, in which four players have different, randomly allocated endowments. We observe that a weak asymmetry in the endowment distribution leads to the same contribution level as symmetry. Players tend to contribute the same proportion of their respective endowment. In a strongly asymmetric setting, where one player has a higher endowment than the three other players together, we observe significantly lower group contributions than in the other settings. The super-rich player does not contribute significantly more than what the others contribute on average and thus a much lower proportion of the endowment.

Accounting for Mexican Income Inequality During the 1990s

The present study measures the extent to which income disparities in Mexico can be attributed to sectoral asymmetries and differences in skill endowments. The results show that close to 40 per cent of per capita household income inequality in Mexico during the 1990s is attributable to incomes derived from formal self-employment; this refers to entrepreneurial activities, an income factor rarely analyzed in the inequality literature. We show that education endowments (skills) are unevenly distributed among the Mexican population, with positive shifts in the market returns to schooling being associated with increases in inequality. Asymmetries in the distribution of education endowments explain around 20 per cent of overall household income disparities in Mexico during the 1990s. Moreover, the results show that the proportion of inequality attributable to education endowments increased during stable periods and reduced during the 1994--1995 economic crisis. This pattern is mostly explained by shifts in returns to schooling rather than changes in the distribution of skills. Applying the same techniques to decompose within-sector income differences, the study show that skill endowments can account for as much as 25 per cent of differences in earnings, but as little as 10 per cent of income dispersion among formal self-employed workers.

Prenatal Equality of Opportunity

AbstractIn this article, we defend a normative theory of prenatal equality of opportunity, based on a critical revision of Rawls's principle of fair equality of opportunity (FEO). We argue that if natural endowments are defined as biological properties possessed at birth and the distribution of natural endowments is seen as beyond the scope of justice, Rawls's FEO allows for inequalities that undermine the social conditions of a property‐owning democracy. We show this by considering the foetal programming of disease and the possibility of germ‐line modifications. If children of lower socioeconomic background are more likely to develop in a poor foetal environment and germ‐line enhancements are available only to the rich, initial inequalities between the rich and the poor would grow, and yet FEO would be satisfied. In order to avoid the problem, we propose a revised FEO principle omitting any reference to the comparison of natural endowments. Our revised FEO requires that institutions mitigate social class effect from reproduction and gestation to the greatest extent compatible with parental freedoms and the value of the family.

Education, Gender, and State-Level Gradients in the Health of Older Indians: Evidence from Biomarker Data

This paper examines health disparities in biomarkers among a representative sample of Indians aged 45 and older, using data from the pilot round of the Longitudinal Aging Study in India (LASI). We document an educational gradient in hemoglobin (Hb) level, a marker used for diagnosing anemia. Survey respondents with no schooling have substantially lower Hb levels (0.6 g/dL less in the adjusted model) than those with some formal education. Individuals among the oldest old and those with greater body-mass index (BMI) had higher levels of C-reactive protein (CRP), an indicator of inflammation and a risk factor for cardiovascular disease. We find no evidence of educational or gender differences in CRP but do find respondents living in rural areas have CRP levels that are 0.7 to 0.8 mg/L lower than urban ones. We also find state-level disparities, with Kerala residents exhibiting the lowest CRP levels (1.96 mg/L compared to the overall mean of 3.28 mg/L in Rajasthan). This finding is consistent with data on access to health-care services across states. We use the Oaxaca-Blinder decomposition approach to explain group-level differences, and find that state-level gradients in CRP are mainly due to heterogeneity in the effect of the observed characteristics of respondents, as opposed to differences in the distribution of endowments across the sampled state populations.

The Problem of Natural Inequality: A New Problem of Evil

In this paper, I argue that there is a kind of evil, namely, the unequal distribution of natural endowments, or natural inequality, which presents theists with a new evidential (not logical or incompatibility) problem of evil. The problem of natural inequality is a new evidential problem of evil not only because, to the best of my knowledge, it has not yet been discussed in the literature, but also because available theodicies, such the free will defense and the soul-making defense, are not adequate responses in the face of this particular evil, or so I argue.

Efficient contract enforcement

We study how the efficient choice of contract enforcement interacts with the efficient allocation of capital in a simple production economy. Contract enforcement makes trade possible but requires an aggregate investment of capital that is no longer available for production. In such an economy, more dispersion in ex-ante marginal products makes it optimal to invest more resources in enforcement. Furthermore, implementing the optimal allocation requires a specific distribution of the cost for enforcement across agents that is not monotonic and results in a redistribution of endowments. At the efficient solution, agents at the bottom of the endowment distribution benefit the most from investment in enforcement and these investments lead to a reduction in consumption and income inequality.

International Productivity Differences, Trade and the Distributions of Factor Endowments

AbstractThis paper presents a model of task assignment and worker matching to explore how the distributions of labor endowments within countries influence aggregate productivity and international trade patterns. Higher moments of the skill distribution have complex relationships with the organization of the labor force. First, labor endowments skewed toward high abilities exhibit positive assortment of workers across tasks, while countries with distributions of ability skewed towards low abilities exhibit underemployment. Second, greater dispersion improves aggregate productivity in countries that experience underemployment, but worsens productivity where there is assortative assignment. Furthermore, the shape and size of factor endowments are shown to jointly determine a global pattern of comparative advantage. Countries are more likely to export their abundant factors when labor markets organize heterogenous workers effectively. These predictions receive empirical support from Organization for Economic Co‐operation and Development (OECD) countries using measures of diversity constructed from educational attainment.

How exposure to markets can favor inequity-averse preferences

This paper shows how market exposure can support the evolution of non-individualistic preferences. In a group, one agent is randomly selected to divide an exogenous endowment. Endowment shares are used for either consumption or market exchange with external merchants. As a more equal endowment distribution attenuates the scope of merchants’ price discrimination, we argue that inequity-averse preferences may lead to a higher utility of consumption and so survive evolutionary pressures. This effect arises from an opportunity to create and extract information rents. We offer a new explanation to the empirical finding that a society's exposure to markets has a positive effect on its members’ sociality.

A Top Dog Tale with Preference Rigidities

With preference rigidities we find Pareto optima of an exchange economy, some of which involve unconsumed endowments. We show that such Pareto Optima can only be attained as market equilibria if there is a top dog in the initial endowment distribution who is richer than the other individuals. The most inegalitarian efficient allocation favouring the top dog is globally stable and is in the core. For endowment distributions with a top dog, the core contains efficient allocations more equal than the market equilibrium. A voting mechanism or government policy can also offset the top dog’s power.

INFORMATION AND THE EQUITY PREMIUM

We determine how better information affects the average equity premium in a standard representative-agent exchange economy. Perfect information obviously eliminates the equity premium, and a particular kind of information about the level of future consumption always lowers the average equity premium. Surprisingly, information sometimes raises the average equity premium, no matter what the preferences of the representative agent. Information purely about the volatility either of consumption or the marginal utility of consumption raises the equity premium for a wide class of preferences. Moreover, information can raise the average equity premium by an arbitrarily large percentage (while still matching important magnitudes, such as average growth and the risk-free rate). We consider two different economies: a two-period economy with arbitrary preferences for the representative agent; and an infinite horizon economy, in which we restrict both preferences and the endowment distribution.

Modeling Petroleum Resources in Provinces of the Former Soviet Union

This paper estimates petroleum endowment volumes for provinces of the Former Soviet Union (FSU) that have not been previously assessed by other organizations. The study uses the United States Geological Survey World Petroleum Assessment (USGS, 2000) as a starting point. It then utilizes nonlinear regression to estimate parameters of a Variable Shape Distribution (VSD) model that calculates the total petroleum endowment throughout the FSU. Earlier size distribution models used to evaluate unassessed petroleum resources relied mainly on the fractal and lognormal distributions. In fact, all the methods used historically have been based on an assumed form of the size distribution of nature's endowment of petroleum resources. The VSD model is different in that it allows the actual petroleum resource data from USGS (2000) to determine the form of the size distribution of petroleum resources. The model is validated by a good fit of actual data, supported by coefficients of determination ( R2) equal to 0.98 or greater. It is concluded that there is a large petroleum endowment in the FSU that will last for several decades and can contribute significantly to domestic energy needs as well as export requirements.