Role Of Income Research Articles

Markets and the measurement of value

Consumer's surplus and the Hicksian measures of compensating and equivalent variation have a long history in empirical economic analysis. However, at both the theoretical and the empirical level, economists, psychologists, and public choice theorists have not been able to reach a significant consensus regarding the usefulness of these measures. Economic theorists have only recently dissected the differences which exist between alternative welfare measures in a systematic and transparent fashion. In Willig (1976), Hausman (1981), and Takayama (1984), the role of income in determining the correct, theoretical measurements of compensating and equivalent variations was exposed. During this same period of time, theoretical results obtained by the psychologists Kahneman and Tversky (1979) indicated that the fundamental structure of preferences upon which the theoretical economic results are based is flawed. The so-called prospect theory of decision developed by these authors indicated that measured of welfare based upon payment will differ from measures of welfare based upon compensation because of the fact that individuals will value losses at a greater marginal rate than gains. This difference was then predicted to dominate any income effect important in the economist 's model. Finally, this period recorded the emergence of many demand revealing processes which provide individuals with appropriate incentives to accurately reveal their preferences. As summarized in Coursey and Schulze (1986), one interpretation of the literature on incentive compatibility suggests a set of well defined guidelines for improving both the accuracy and validity of compensating and equivalent variation measures. These differences in professional preferences regarding what is important in improving the accuracy of economic welfare measurements led John

Transport demand and users' benefits with fixed income: The goods/leisure trade off revisited

Usually accepted assumptions on the role of income in transport demand modelling are changed, in order to better account for the reality within developing countries. The usual specification of representative utility is shown to be inadequate and new forms are suggested. In particular, an expenditure rate is proposed to replace the wage rate which usually divides mode cost. Measures of both users' benefits and value of time are also shown to change. Some empirical results previously reported within developed countries are shown to be better explained under this new approach.

Determinants of Mobility in Two-Earner Families: Does the Wife's Income Count?

2 recently emerging US mobility trends are that 1) families with employed wives are less migratory than families with nonemployed wives especially when the wifes job attachment is strong and 2) more career-oriented wives are initiating family moves with husband and children following. This study examines demographic predictors--age wifes employment status the number of children education and income--of family mobility as well as attitudinal predictors--role salience and sex role orientation. Using a national subsample of 107 employed married couples factor analysis was used to analyze data separatley by gender. For wives sex role orientation role salience and individual income influenced mobility although individual income was by far the most critical predictor. As wives income increased they influenced past and future mobility more. For husbands individual income role salience sex role orientation and wifes employment status were the variables significantly related to mobility. As husbands income and provider-parental roles increased in importance so did the likeliness that his job had the most influence on past and future moves. However husbands who were more egalitarian in their sex role preferences and who were married to women with higher job status were more likely to consider their wives job requirements in future moves. Mobility decisions in dual earner families are becoming more complex.

More evidence on nutrition demand: Income seems overrated and women's schooling underemphasized

Malnutrition is widespread in the developing world. Controversy continues concerning the roles of income, household size, and women's schooling on nutrient demand. Empirical estimates for Nicaragua suggest that income elasticities are small and inversely associated with income levels, there are some economies of scale in household size, the elasticity for women's schooling is higher than those for income or household size, and women's backgrounds are important. The results cast doubt on the strong emphasis the World Bank and others have placed on income and suggest that schooling may be working through tastes, not only through productivity.

Who is schooled in developing countries? The roles of income, parental schooling, sex, residence and family size

This paper explores schooling determinants in Nicaragua. Results include: (1) schooling is determined simultaneously with number of children, although simultaneous estimates do not indicate sharp ‘quantity-quality’ trade-offs. (2) Rural boys receive less schooling than rural girls, possibly because of higher opportunity costs for boys in agricultural work. (3) Family background is quite important, suggesting limited intergenerational mobility. (4) Income has permanent and transitory effects. However, women's full income does not seem particularly important. (5) Parental schooling partially represents taste and genetic effects. Thus the interpretation of schooling as representing only efficiency is misleading and may lead to important distortions in the allocation of resources and ambiguous private welfare effects.

The Kinder-Economy: A Case Study of Kindergarten Pupils' Acquisition of Economic Concepts

University of California, Los Angeles Who is economically literate? Certainly not the young couple that took a second mortgage on their home at an annual interest rate of 18 percent. Nor the black consumers in a low-income neighborhood who unknowingly pay for each grocery item from two cents to twenty cents more than their counterparts in a more affluent area. Nor the three out of every four students in thirteen thousand junior high schools sampled throughout the USA who, in a recent survey by the Joint Council on Economic Education, were unable to differentiate between descriptions of a capitalistic economy and a socialistic economy. Surely not the average citizen of the USA who, in another survey by the same Council, thought that the typical business made a profit of 50 percent or more on its investment (1). At what point must educators take action to create an economically literate citizenry? Kindergarten is not too soon! A primary education program, developed by the author (2) and piloted throughout California, has taken this vital first step. The Kinder-Economy is a teacher-guided program that introduces basic economic concepts to children in the primary grades through a program of action, simulation, and participation based on three precepts: 1. An important goal of education is to increase the decision-making skills of children at the earliest possible age. 2. Children should be allowed to make