Abramitzky, R, Delavande, A & Vasconcelos, L 2011, 'Marrying Up: The Role of Sex Ratio in Assortative Matching', American Economic Journal: Applied Economics, vol. 3, no. 3, pp. 124-157.
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We assemble a novel dataset to study the impact of male scarcity on marital assortative matching and other marriage market outcomes using the large shock that WWI caused to the number of French men. Using a difference-in-differences approach, we find that postwar in regions with higher mortality rates: men were less likely to marry women of lower social classes; men were more likely and women less likely to marry; out-of-wedlock births increased; divorce rates decreased; and the age gap decreased. These findings are consistent with men improving their position in the marriage market as they become scarcer. (JEL J12, J16, N34)
Cairns, J & Slonim, R 2011, 'Substitution effects across charitable donations', Economics Letters, vol. 111, no. 2, pp. 173-175.
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Chiarella, C & Di Guilmi, C 2011, 'The financial instability hypothesis: A stochastic microfoundation framework', JOURNAL OF ECONOMIC DYNAMICS & CONTROL, vol. 35, no. 8, pp. 1151-1171.
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This paper examines the dynamics of financial distress and in particular the mechanism
of transmission of shocks from the financial sector to the real economy. The analysis is
performed by representing the linkages between microeconomic financial variables and
the aggregate performance of the economy by means of a microfounded model with
firms that have heterogeneous capital structures. The model is solved both numerically
and analytically, by means of a stochastic approximation that is able to replicate quite
well the numerical solution. These methodologies, by overcoming the restrictions
imposed by the traditional microfounded approach, enable us to provide some insights
into the stabilization policies which may be effective in a financially fragile system.
Craig, L & Siminski, P 2011, 'If Men Do More Housework, Do Their Wives Have More Babies?', Social Indicators Research, vol. 101, no. 2, pp. 255-258.
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We analyze data from the Household, Income and Labour Dynamics in Australia (HILDA) survey waves 1-6, to investigate whether the housework and childcare contributions of coupled Australian men with one child affect the likelihood that their wives will have a second child. We find no evidence that the way housework or childcare is shared has an effect, nor that the amount of men's contribution to housework or childcare has an effect. In addition, the effect of men's housework and childcare time on fertility does not appear to be mediated through its effect on their wives' housework and childcare. © 2010 Springer Science+Business Media B.V.
Delavande, A & Rohwedder, S 2011, 'Differential Survival in Europe and the United States: Estimates Based on Subjective Probabilities of Survival', Demography, vol. 48, no. 4, pp. 1377-1400.
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Abstract Cross-country comparisons of differential survival by socioeconomic status (SES) are useful in many domains. Yet, to date, such studies have been rare. Reliably estimating differential survival in a single country has been challenging because it requires rich panel data with a large sample size. Cross-country estimates have proven even more difficult because the measures of SES need to be comparable internationally. We present an alternative method for acquiring information on differential survival by SES. Rather than using observations of actual survival, we relate individuals’ subjective probabilities of survival to SES variables in cross section. To show that subjective survival probabilities are informative proxies for actual survival when estimating differential survival, we compare estimates of differential survival based on actual survival with estimates based on subjective probabilities of survival for the same sample. The results are remarkably similar. We then use this approach to compare differential survival by SES for 10 European countries and the United States. Wealthier people have higher survival probabilities than those who are less wealthy, but the strength of the association differs across countries. Nations with a smaller gradient appear to be Belgium, France, and Italy, while the United States, England, and Sweden appear to have a larger gradient.
Delavande, A & Rohwedder, S 2011, 'Individuals' uncertainty about future social security benefits and portfolio choice', Journal of Applied Econometrics, vol. 26, no. 3, pp. 498-519.
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AbstractLittle is known about the degree to which individuals are uncertain about their future Social Security benefits, how this varies within the US population, and whether this uncertainty influences financial decisions related to retirement planning. To illuminate these issues, we present empirical evidence from the Health and Retirement Study Internet Survey and document systematic variation in respondents' uncertainty about their future Social Security benefits by individual characteristics. We find that respondents with higher levels of uncertainty about future benefits hold a smaller share of their wealth in stocks. Copyright © 2011 John Wiley & Sons, Ltd.
Delavande, A, Giné, X & McKenzie, D 2011, 'Eliciting probabilistic expectations with visual aids in developing countries: how sensitive are answers to variations in elicitation design?', Journal of Applied Econometrics, vol. 26, no. 3, pp. 479-497.
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AbstractEliciting subjective probability distributions in developing countries is often based on visual aids such as beans to represent probabilities and intervals on a sheet of paper to represent the support. We conduct an experiment in India which tests the sensitivity of elicited expectations to variations in three facets of the elicitation methodology: the number of beans, the design of the support (predetermined or self‐anchored), and the ordering of questions. Our results show remarkable robustness to variations in elicitation design. Nevertheless, the added precision offered by using more beans and a larger number of intervals with a predetermined support improves accuracy. Copyright © 2011 John Wiley & Sons, Ltd.
Delavande, A, Giné, X & McKenzie, D 2011, 'Measuring subjective expectations in developing countries: A critical review and new evidence', Journal of Development Economics, vol. 94, no. 2, pp. 151-163.
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Docherty, P 2011, 'Keynes's Analysis of Economic Crises and Monetary Policy in theGeneral Theory: Its Relevance after 75 Years', Review of Political Economy, vol. 23, no. 4, pp. 521-535.
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This paper argues that Keyness treatment of economic fluctuations and monetary policy in the General Theory is still relevant after 75 years. His treatment of severe economic crises provides considerable insight into the possibility of crises emanating from financial markets, and for understanding how financial disturbances may have real economic effects. Keyness insights into the potential limitations of using monetary policy to deal with periods of crisis and how these limitations may be addressed are also shown to be relevant to the recent global financial crisis. The paper also argues that the General Theory has insights to offer on the use of Taylor rules and on the possibility of addressing persistent unemployment.
Edwards, B, Taylor, M & Fiorini, M 2011, 'Who gets the 'gift of time' in Australia? Exploring delayed primary school entry', Australian Review of Public Affairs, vol. 10, no. 1, pp. 41-60.
Garbarino, E, Slonim, R & Sydnor, J 2011, 'Digit ratios (2D:4D) as predictors of risky decision making for both sexes', Journal of Risk and Uncertainty, vol. 42, no. 1, pp. 1-26.
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Hafalir, IE & Yektaş, H 2011, 'Selling goods of unknown quality: forward versus spot auctions', Review of Economic Design, vol. 15, no. 3, pp. 245-256.
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Hunter, K & Docherty, P 2011, 'Reducing variation in the assessment of student writing', Assessment & Evaluation in Higher Education, vol. 36, no. 1, pp. 109-124.
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This paper extends the literature on grader variation and the role of moderation and socialisation processes in reducing this variation. It offers a fresh categorisation of academics' assessment beliefs and expectations, and uses this categorisation to analyse the interaction between implicit and explicit expectations in relation to grader variation and socialisation processes. A combination of quantitative and qualitative data from a large class grading moderation process was used to identify the existence and character of residual implicit grader expectations, the impact of these implicit expectations in causing grader variation, and the effectiveness of socialisation in reducing the extent of variation. An effective strategy for designing and focusing socialisation processes is also outlined.
Johar, M & Maruyama, S 2011, 'Does Coresidence Improve an Elderly Parent’s Health?', UNSW Australian School of Business Research Paper, vol. 29, no. 2011, pp. 965-983.
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© 2013 John Wiley & Sons, Ltd. It is generally believed that intergenerational coresidence by elderly parents and adult children provides old-age security for parents. Although such coresidence is still the most common living arrangement in many countries, empirical evidence of its benefits to parental health is scarce. Using Indonesian data and a program evaluation technique that accounts for non-random selection and heterogeneous treatment effect, we find robust evidence of a negative coresidence effect. We also find heterogeneity in the coresidence effect. Socially active elderly parents are less likely to be in coresidence, and when they do live with a child they experience a better coresidence effect.
Johar, M & Maruyama, S 2011, 'INTERGENERATIONAL COHABITATION IN MODERN INDONESIA: FILIAL SUPPORT AND DEPENDENCE', HEALTH ECONOMICS, vol. 20, no. S1, pp. 87-104.
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Informal filial care plays an important role for elderly parents facing health challenges. Ageing, however, exacerbates the burden of filial care because the ratio of older to younger individuals is higher and disabled parents live longer. The well-being of elderly parents is even more insecure in Asian developing countries that are undergoing unprecedented ageing and drastic changes in social norms and values, whereas old-age support systems have yet to be developed. In this paper, we investigate factors that influence cohabitation decision by elderly parents and their adult children using the longitudinal Indonesian Family Life Survey (IFLS). Focusing on new cohabitation in which a parent who lives independently starts to cohabitate with a child, we conduct transition analysis to make a more convincing causal interpretation than the standard cross-sectional approach. We find that, while parental needs are important, cohabitation is influenced to a larger extent by the costs and gains of children. The elderly facing health and economic challenges are at higher risk of not receiving filial support than other elderly individuals.
Johar, M, Jones, G, Keane, M, Savage, E & Stavrunova, O 2011, 'WAITING TIMES FOR ELECTIVE SURGERY AND THE DECISION TO BUY PRIVATE HEALTH INSURANCE', HEALTH ECONOMICS, vol. 20, no. SUPPL. 1, pp. 68-86.
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More than 45% of Australians buy health insurance for private treatment in hospital. This is despite having access to universal and free public hospital treatment. Anecdotal evidence suggests that avoidance of long waits for public treatment is one possible explanation for the high rate of insurance coverage. In this study, we investigate the effect of waiting on individual decisions to buy private health insurance. Individuals are assumed to form an expectation of their own waiting time as a function of their demographics and health status. We model waiting times using administrative data on the population hospitalised for elective procedures in public hospitals and use the parameter estimates to impute the expected waiting time and the probability of a long wait for a representative sample of the population. We find that expected waiting time does not increase the probability of buying insurance but a high probability of experiencing a long wait does. On average, waiting time has no significant impact on insurance. In addition, we find that favourable selection into private insurance, measured by self-assessed health, is no longer significant once waiting time variables are included. This result suggests that a source of favourable selection may be aversion to waiting among healthier people. Copyright © 2011 John Wiley & Sons, Ltd.
Keane, M & Stavrunova, O 2011, 'A smooth mixture of Tobits model for healthcare expenditure', Health Economics, vol. 20, no. 9, pp. 1126-1153.
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AbstractThis paper develops a smooth mixture of Tobits (SMTobit) model for healthcare expenditure. The model is a generalization of the smoothly mixing regressions framework of Geweke and Keane (J Econometrics 2007; 138: 257–290) to the case of a Tobit‐type limited dependent variable. A Markov chain Monte Carlo algorithm with data augmentation is developed to obtain the posterior distribution of model parameters. The model is applied to the US Medicare Current Beneficiary Survey data on total medical expenditure. The results suggest that the model can capture the overall shape of the expenditure distribution very well, and also provide a good fit to a number of characteristics of the conditional (on covariates) distribution of expenditure, such as the conditional mean, variance and probability of extreme outcomes, as well as the 50th, 90th, and 95th, percentiles. We find that healthier individuals face an expenditure distribution with lower mean, variance and probability of extreme outcomes, compared with their counterparts in a worse state of health. Males have an expenditure distribution with higher mean, variance and probability of an extreme outcome, compared with their female counterparts. The results also suggest that heart and cardiovascular diseases affect the expenditure of males more than that of females. Copyright © 2011 John Wiley & Sons, Ltd.
Maruyama, S 2011, 'Socially Optimal Subsidies for Entry: The Case of Medicare Payments to HMOs', International Economic Review, vol. 52, no. 1, pp. 105-129.
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The U.S. Medicare program has increased its spending on private Medicare plans in anticipation of larger consumer surplus and higher efficiency. To evaluate the welfare consequences of such policy interventions, I develop an empirical model with endogenous entry. Counterfactual simulation reveals the following: subsidizing HMO entry can be justified to enhance national welfare (no excessive entry); the level of price subsidies in 2008, however, is far beyond the optimal level; and the geographic inconsistency between the subsidies and the Medicare fee-for-service costs is another source of inefficiency. Resolving this geographic inconsistency significantly raises national welfare by restructuring entry. © (2011) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
Moreno, D & Wooders, J 2011, 'Auctions with heterogeneous entry costs', RAND JOURNAL OF ECONOMICS, vol. 42, no. 2, pp. 313-336.
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If bidders have independent private values and homogeneous entry costs, a first- or second-price auction with a reserve price equal to the seller's value maximizes social surplus and seller revenue. We show that if entry costs are heterogeneous and private information, then the revenue-maximizing reserve price is above the seller's value, a positive admission fee (and a reserve price equal to the seller's value) generates more revenue, and an entry cap combined with an admission fee generates even more revenue. Social surplus and seller revenue may either increase or decrease in the number of bidders, but they coincide asymptotically.
Mukherjee, A & Vasconcelos, L 2011, 'Optimal job design in the presence of implicit contracts', The RAND Journal of Economics, vol. 42, no. 1, pp. 44-69.
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We characterize the optimal job design in a multitasking environment when the firms use implicit contracts (i.e., bonus payments). Two natural forms of job design are compared: (i) individual assignment, where each agent is assigned to a particular job and (ii) team assignment, where a group of agents share responsibility for a job and are jointly accountable for its outcome. Team assignment mitigates the multitasking problem but may weaken the implicit contracts. The optimal job design follows a cutoff rule where only the firms with high reputation concerns opt for team assignment. However, the cutoff rule need not hold if the firm can combine implicit incentives with explicit pay‐per‐performance contracts.
Shahriar, Q & Wooders, J 2011, 'An experimental study of auctions with a buy price under private and common values', GAMES AND ECONOMIC BEHAVIOR, vol. 72, no. 2, pp. 558-573.
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eBays Buy It Now format allows a seller to list an auction with a buy price at which a bidder may purchase the item immediately and end the auction. When bidders are risk averse, then theoretically a buy price can raise seller revenue when values are private (but not when values are common). We report the results of laboratory experiments designed to determine whether in practice a buy price is advantageous to the seller. We find that a suitably chosen buy price yields a substantial increase in seller revenue when values are private, and a small (but statistically insignificant) increase in revenue when values are common. In both cases a buy price reduces the variance of seller revenue. A behavioral model which incorporates the winners curse and the overweighting by bidders of their own signal explains the common value auction data better than the rational model.
Siminski, P 2011, 'Are Low Skill Public Sector Workers Really Overpaid? A Quasi-Differenced Panel Data Analysis', Applied Economics, vol. 45, no. 14, pp. 1915-1929.
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Public-private sectoral wage differentials have been studied extensively using quantile regression techniques. These typically find large public sector premiums at the bottom of the wage distribution. This may imply that low skill workers are ‘overpaid’, prompting concerns over efficiency. We note several other potential explanations for this result and explicitly test whether the premium varies with skill, using Australian data. We use a quasi-differenced GMM panel data model which has not been previously applied to this topic, internationally. Unlike other available methods, this technique identifies sectoral differences in returns to unobserved skill. It also facilitates a decomposition of the wage gap into components explained by differences in returns to all (observed and unobserved) skills and by differences in their stock. We find no evidence to suggest that the premium varies with skill. One interpretation is that the compressed wage profile of the public sector induces the best workers (on unobserved skills) to join the public sector in low wage occupations, vice versa in high wage occupations. We also estimate the average public sector premium to be 6% for women and statistically insignificant (4%) for men.
Stavrunova, O & Yerokhin, O 2011, 'An Equilibrium Model of Waiting Times for Elective Surgery in NSW Public Hospitals', ECONOMIC RECORD, vol. 87, no. 278, pp. 384-398.
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This article studies the effects of waiting times on the demand and supply of elective surgery in NSW public hospitals. The demand and supply equations are estimated at the level of postal code areas using data on public hospital elective surgery admissions in 2004 2005, postal code area characteristics and area-level provisions of public and private hospital capacities. Empirical results imply that demand for elective surgery is affected negatively, and supply positively, by waiting time. The estimated elasticity of demand with respect to waiting time is higher in NSW than estimates reported in studies based on data from the UK National Health Service.
Ville, S & Siminski, P 2011, 'A Fair and Equitable Method of Recruitment? Conscription by Ballot into the Australian Army during the Vietnam War', Australian Economic History Review, vol. 51, no. 3, pp. 277-296.
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Australia’s commitment to the Vietnam War drew on the selective conscription of additional manpower through 16 biannual ballots. 20-year-old men were liable to serve if their date of birth was drawn out. The random nature of the ballot was seen asan equitable method of selection for a system of labour coercion that was potentially life-threatening. We investigate the various stages of conscription of these ‘national servicemen’ to undertake service in Vietnam throughout the war and evaluate theextent to which the processes provided for fair and equitable selection. Comparisons are drawn with a similar process of Vietnam-War era conscription in the United States.
Walker, M, Wooders, J & Amir, R 2011, 'Equilibrium play in matches: Binary Markov games', GAMES AND ECONOMIC BEHAVIOR, vol. 71, no. 2, pp. 487-502.
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We study two-person extensive form games, or "matches," in which the only possible outcomes (if the game terminates) are that one player or the other is declared the winner. The winner of the match is determined by the winning of points, in "point games." We call these matches binary Markov games. We show that if a simple monotonicity condition is satisfied, then (a) it is a Nash equilibrium of the match for the players, at each point, to play a Nash equilibrium of the point game; (b) it is a minimax behavior strategy in the match for a player to play minimax in each point game; and (c) when the point games all have unique Nash equilibria, the only Nash equilibrium of the binary Markov game consists of minimax play at each point. An application to tennis is provided.
Al-Sharawneh, JA, Williams, M, Wang, X & Goldbaum, D 1970, 'Mitigating Risk in Web-Based Social Network Service Selection: Follow the Leader', The Sixth International Conference on Internet and Web Applications and Services (ICIW 2011), International Conference on Internet and Web Applications and Services, The International Academy, Research and Industry Association (IARIA), St. Maarten, The Netherlands Antilles, pp. 156-164.
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In the Service Web, a huge number of Web services compete to offer similar functionalities from distributed locations. Since no Web service is risk free, this paper aims to mitigate the risk in service selection using 'Follow the Leader' principle as a new approach for risk-reducing strategy. First, we define the user credibility model based on the 'Follow the Leader' principle in web-based social networks. Next we show how to evaluate the Web service credibility based on its trustworthiness and expertise. Finally, we present a dynamic selection model to select the best service with the perceived performance risk and customer risk-attitude considerations. To demonstrate the feasibility and effectiveness of the new 'Follow the Leader' driven approach to alleviate the risk in service selection, we used a Social Network Analysis Studio (SNAS) to verify the validity of the proposed model. The empirical results incorporated in this paper, demonstrate that our approach is a significantly innovative approach as riskreducing strategy in service selection.
Chiarella, C & Di Guilmi, C 1970, 'A Reconsideration of the Formal Minskyan Analysis: Microfundations, Endogenous Money and the Public Sector', MDEF2012, Urbino, Italy.
Chiarella, C & Di Guilmi, C 1970, 'Limit Distribution of Evolving Strategies in Financial Markets', 11th Workshop on Optimal Control, Dynamic Games and Nonlinear Dynamics, Amsterdam, The Netherlands.
Keane, M & Stavrunova, O 1970, 'Adverse Selection, Moral Hazard and the Demand for Medigap Insurance', 13th Australian Labour Econometrics Workshop, Melbourne, Australia.
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The size of adverse selection and moral hazard effects in health insurance markets has important policy implications. For example, if adverse selection effects are small while moral hazard effects are large, conventional remedies for inefficiencies created by adverse selection (e.g., mandatory insurance enrolment) may lead to substantial increases in health care spending. Unfortunately, there is no consensus on the magnitudes of adverse selection vs. moral hazard. This paper sheds new light on this While both adverse selection and moral hazard effects of Medigap have been studied separately, this is the first paper to estimate both in an unified econometric framework. We develop an econometric model of insurance demand and health care expenditure, where adverse selection is measured by sensitivity of insurance demand to expected expenditure. The model allows for correlation between unobserved determinants of expenditure and insurance demand, and for heterogeneity in the size of moral hazard effects. Inference relies on an MCMC algorithm with data augmentation. Our results suggest there is adverse selection into Medigap, but the effect is small. A one standard deviation increase in expenditure risk raises the probability of insurance purchase by 0.037. In contrast, our estimate of the moral hazard effect is much larger. On average, Medigap coverage increases health care expenditure by 32%.
