Is Social Capital a Good Concept?

This paper explores whether the concept of social capital as popularized by Robert Putnam is a good social science concept. Taking Gerring’s work on concept evaluation as the starting point, the paper first presents a set of criteria for conceptual ‘goodness’ and discusses how social capital performs on these criteria. It is argued that social capital eventually may be a good concept if it can be shown empirically to be a unidimensional concept. An empirical section therefore explores the validity of the unidimensionality assumption and rejects it in four separate tests at both the individual and aggregate level. We conclude that even if social capital has been a remarkably productive idea, it is not a good concept as most popular conceptualizations define social capital as several distinct phenomena or as phenomena that already have been conceptualized under other labels.     

A Happy Nation? Opportunities and Challenges of Using Subjective Indicators in Policymaking

This article seeks to combine decades of academic research with emerging policy demands by systematically assessing the state of the knowledge on using subjective indicators in public policy. In particular, it outlines opportunities that arise from a new focus on subjective information as a basis for policy decisions and challenges that ought to be overcome. The paper presents pros and cons of using subjective (versus objective) indicators, and it discusses six ways in which information on citizens’ subjective well-being (SWB) can advance the policymaking process: Monitoring progress, informing policy design, policy appraisal, examining the divergence of objective and subjective quality of life, ranking public institutions and allocating resources, as well as informing development strategies and goals. In doing so, best practice examples are presented and put in context. Finally, subjective measures “beyond SWB” are discussed and a new measure for the overall satisfaction with society is suggested. The next frontier for research and practice will be to build on the potential outlined here and to address the deficits in order make the most out of subjective indicators and the unique value they can add to the policymaking process.     

The Impact of Adaptive Preferences on Subjective Indicators: An Analysis of Poverty Indicators

Subjective indicators are often criticized since they are thought to be particularly affected by the phenomenon of adaptive preferences and social comparison. For social policy purposes, processes of downward adaptation in disadvantaged individuals are of particular importance, i.e., it is supposed that such people compare themselves with others who are in the same precarious situation or even worse off and, as a result, lower their expectations and adapt their aspirations and preferences to their material and financial constraints. Based on the 2006–2010 waves of the Swiss Household Panel study, this contribution examines whether, and to what degree, indicators of material deprivation, subjective poverty and subjective well-being are affected by such downward adaptations. Our empirical analysis demonstrates that the bias caused by adaptation processes varies considerably among different measures and that, although subjective indicators are indeed often affected by this phenomenon, there are also robust measures, notably Townsend’s deprivation measure, Halleröd’s proportional deprivation index and the subjective well-being measure of general life satisfaction.     

Horizon Length and Portfolio Risk

In this paper, we compare the attitude towards current risk of two expected-utility-maximizing investors who are identical except that the first investor will live longer than the second one. It is often suggested that the young investor should take more risks than the old investor. We consider as a benchmark the case of complete markets with a zero risk-free rate. We show that a necessary and sufficient condition to assure that younger is riskier is that the Arrow-Pratt index of absolute tolerance (T) be convex. If we allow for a positive risk-free rate, the necessary and sufficient condition is T convex, plus T(0) = 0. It extends the well-known result that rational investors can behave myopically if and only if the utility function exhibits constant relative risk aversion.     

Decision-Making Under Scientific Uncertainty: The Economics of the Precautionary Principle

The Precautionary Principle has provided the foundations for building a new risk regulatory pattern under scientific uncertainty. This paper investigates how classical economic theory may, or may not, justify the Precautionary Principle. It examines the link between irreversibility, the prospect of increasing information over time and risk management. In doing so, it brings closer the notion of option value to that of precaution. Using a general modelling framework, it identifies the conditions so that the Precautionary Principle is an efficient economic guideline. It also explains why precautionary policies are not likely to emerge in a competitive economy or in the presence of a global pollution problem.     

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.     

On Least Absolute Value Estimators for Poisson Processes

We consider the problem of parameter estimation for an inhomogeneous Poisson process observed on the time interval [0, τ]. We introduce the minimum L ₁-norm estimator of the unknown parameter and study the asymptotical behaviors of the estimates when the number of observations increases. It is established that this estimator is consistent and we show that the corresponding differences converge to certain variables. These limit variables are asymptotically normal as τ tends to infinity.     

Lesbian, gay, and bisexual homeless youth: an eight-city public health perspective

This article reports on results of a one-day public health survey conducted in six states by homeless youth providers to measure and compare risk factors between lesbian, gay, and bisexual (LGB) homeless youth and non-LGB homeless youth. This article intends to inform the child welfare field on existing gaps in services and areas where more training and technical support is necessary in providing services to homeless LGB youth. The findings point to substantial differences within the homeless youth sample and demonstrate that in addition to the public health risks young people face merely by being homeless, the risks are exacerbated for those who self-identify as lesbian, gay, or bisexual. The article informs child welfare providers and policymakers about the substantial vulnerability of LGB youth beyond that of non-LGB homeless youth and the need to fund programming, training, technical assistance and further research to specifically respond to the complex needs of this population.