The Undeserving Rich: “Moral Values” and the White Working Class1

White working‐class citizens who vote for the Republican Party have been fodder for much political discussion and speculation recently, and a debate has arisen about the role that “moral values” played in the political decision making of this segment of voters. In this article, we defend a version of the moral values claim. We show that although the Republicans’ policies are unpopular, they are bundled with an overarching moral framework that is extremely resonant to this set of voters, and we use in‐depth interviews to uncover this framework. A key feature of this framework, on which in the 2004 presidential election George W. Bush scored high and John Kerry scored low, is the appropriate attitude to wealth, which serves as an indicator for a candidate’s general moral philosophy and as a heuristic about whether the candidate will govern with working‐class voters’ interests in mind. National Election Studies data support the argument that this was a key influence on the voting decision in 2004, even controlling for voters’ partisan identification.     

"There Must Be a Reason": Osama, Saddam, and Inferred Justification

One of the most curious aspects of the 2004 presidential election was the strength and resilience of the belief among many Americans that Saddam Hussein was linked to the terrorist attacks of September 11. Scholars have suggested that this belief was the result of a campaign of false information and innuendo from the Bush administration. We call this the information environment explanation. Using a technique of "challenge interviews" on a sample of voters who reported believing in a link between Saddam and 9/11, we propose instead a social psychological explanation for the belief in this link. We identify a number of social psychological mechanisms voters use to maintain false beliefs in the face of disconfirming information, and we show that for a subset of voters the main reason to believe in the link was that it made sense of the administration's decision to go to war against Iraq. We call this inferred justification : for these voters, the fact of the war led to a search for a justification for it, which led them to infer the existence of ties between Iraq and 9/11.     

The Effect of Remittances on Economic Growth in Kyrgyzstan and Macedonia: Accounting for Financial Development

Kyrgyzstan and Macedonia have experienced a reasonable increase in remittances over the last twenty‐five years. Subsequently, the extent to which remittances can be instrumental for economic development of the two countries has gained serious attention in recent development dialogues. The aim of this study is to examine the impact of remittances versus financial development on the economic growth of the two counties, complementing the burgeoning interest and focus on remittances for policy. The short‐run and the long‐run effects and the causality dynamics of remittances and financial development, are explored. The results show a long‐run positive impact of remittances on the economic growth of these countries. The impact of financial development is negative, significant only for Kyrgyzstan and not statistically significant for Macedonia. The causality results show that remittances support economic growth for Kyrgyzstan, whereas economic growth appears to propel remittances for Macedonia.     

Small area estimation with auxiliary survey data

Large governmental surveys typically provide accurate national statistics. To decrease the mean squared error of estimates for small areas, i.e., domains in which the sample size is small, auxiliary variables from administrative records are often used as covariates in a mixed linear model. It is generally assumed that the auxiliary information is available for every small area. In many cases, though, such information is available for only some of the small areas, either from another survey or from a previous administration of the same survey. The authors propose and study small area estimators that use multivariate models to combine information from several surveys. They discuss computational algorithms, and a simulation study indicates that if quantities in the different surveys are sufficiently correlated, substantial gains in efficiency can be achieved.     

Integrated Procurement Planning in Multi‐division Firms

For large multi‐division firms, coordinating procurement policies across multiple divisions to leverage volume discounts from suppliers based on firm‐wide purchasing power can yield millions of dollars of savings in procurement costs. Coordinated procurement entails deciding which suppliers to use to meet each division's purchasing needs and sourcing preferences so as to minimize overall purchasing, logistics, and operational costs. Motivated by this tactical procurement planning problem facing a large industrial products manufacturer, we propose an integrated optimization model that simultaneously considers both firm‐wide volume discounts and divisional ordering and inventory costs. To effectively solve this large‐scale integer program, we develop and apply a tailored solution approach that exploits the problem structure to generate tight bounds. We identify several classes of valid inequalities to strengthen the linear programming relaxation, establish polyhedral properties of these inequalities, and develop both a cutting‐plane method and a sequential rounding heuristic procedure. Extensive computational tests for realistic problems demonstrate that our integrated sourcing model and solution method are effective and can provide significant economic benefits. The integrated approach yields average savings of 7.5% in total procurement costs compared to autonomous divisional policies, and our algorithm generates near‐optimal solutions (within 0.75% of optimality) within reasonable computational time.     

Does Hospitalization Make Elderly Households Poor? An Examination of the Case of Kerala,India

Physical and health risks are very high among aged persons. The precise implications of population ageing for future levels of health and healthcare utilization depend on whether the increases in life expectancy experienced in general are accompanied by an increase or a decrease in health problems in later life. The health risks of the presence of an aged person in a household can result in a catastrophic shock for the family and render such households more exposed to poverty. The increased cost of medical bills means that large numbers of the elderly in the developing world are deprived of access to health and to better health treatment. This article examines this question empirically, using the largest national survey in the Indian state of Kerala, comparing elderly with non‐elderly households. We also attempt to find the impact of unhealthy lifestyles on the financial status of these households, due to hospitalization as a result of an aged person's illness.     

Advance Selling by a Newsvendor Retailer

Retailers often face a newsvendor problem. Advance selling helps retailers to reduce demand uncertainty. Consumers, however, may prefer not to purchase in advance unless given a discount because they are uncertain about their valuation for the product in advance. It is then unclear whether or when advance selling to pass some uncertainty risk to consumers is optimal for the retailer. This paper examines the advance selling price and inventory decisions in a two‐period setting, where the first period is the advance selling period and the second is the selling (and consumption) period. We find that an advance selling strategy is not always optimal, but is contingent on parameters of the market (e.g., market potential and uncertainty) and the consumers (e.g., valuation, risk aversion, and heterogeneity). For example, we find that retailers should sell in advance if the consumers' expected valuation exceeds consumers' expected surplus when not buying early by a certain threshold. This threshold increases with the degree of risk aversion but decreases with stock out risk. If the degree of risk aversion varies across consumers, then a retailer should sell in advance if the probability for a consumer to spot buy is less than a critical fractile.