Three faces of international inequality

Recent studies of international inequality have focused mostly on the trend in international income inequality. This article extends the analysis of international inequality to also include inequalities in education and health. Analyses of time-series data for more than 100 countries show that international income inequality declined from 1980 to 2003 as several large, poor Asian countries outpaced many Western countries in national income growth. By contrast, international health inequality followed a U-shaped trend, falling in the 1980s before rising in the 1990s. The turnaround in health inequality coincides with a trend of declining life expectancy in sub-Saharan Africa. International educational inequality experienced the sharpest recent decline, spurred by the global expansion of formal schooling. These findings confirm that there is more to international inequality than income inequality alone and suggest that patterns of inequality in the current era of globalization are likely more complex than many leading theories suggest.     

EMPIRICAL UTILITY FUNCTIONS AND RANDOM DEVICES: AN EXPERIMENT

The primary purpose of the present experiment was to examine the effects on the empirical derivation of executive's utility functions caused by the use of random device analogues. The results indicate that utility functions obtained using a random device analogue imply more risk aversion than when these functions are determined by simulating actual decision situations. Furthermore, there is also evidence that the bias is directly related to the monetary amounts involved.     

APPLICATIONS OF SPECTRAL ANALYSIS

The basic concepts and application of spectral analysis are explained. Stationary time series and autocorrelation are first defined. Autocorrelation is related to the familiar concepts of variance and covariance. The use of autocorrelation analysis is explained in estimating the interdependent relationship of a time series over discrete time lags. In order to measure the behavior of the time series using autocorrelation, it would be necessary to examine a very large number of autocorrelation lags. Alternatively, the technique of Fourier analysis can be used to transform the autocorrelation function of the time series into a continuous function, termed a spectrum. The spectrum has a one to one correspondence to the autocorrelation for the time series and has the advantage of representing all possible autocorrelations over the discrete time lags. The spectrum can then be examined as a measure of the behavior of the time series. Spectral analysis indicates the reliability of the analysis of autocorrelated variables when familiar statistical techniques such as sample means and variances are used. The application of spectral analysis to management science problems in three general areas is illustrated: (1) inventory demand, (2) transportation simulation, and (3) stock market price behavior. Spectral analysis was used to detect cycles and trends in the data. Analyses were focused on the spectrum which provides a measure of the relative contribution of cycles in a band of frequencies to the total variance of the data.     

CONFLICT RESOLUTION IN INVESTMENT DECISIONS: IMPLEMENTATION OF GOAL PROGRAMMING METHODOLOGY FOR DUAL-PURPOSE FUNDS*

Goal programming (GP) is designed to resolve allocation problems with conflicting goals. Both goals and constraints are incorporated in the allocational decision, and the objective function is stated in a way that, upon solution, yields a result “as close as possible” to the priority-weighted goals. The present paper applies GP methodology to the investment decision of dual-purpose funds (DPFs), that are required by law to pursue allocational decisions with potentially conflicting objectives. It provides an empirical demonstration that DPF managers could have improved their investment selection and subsequent performance by the use of GP methodology. Finally the paper stresses the importance of sensitivity analysis to improve both the goal-ranking and target-selection aspects of the methodology and provides a limited but illuminating empirical demonstration of post-optimality analysis.     

DETERMINING THE APPROPRIATE DISCOUNT RATES IN PURE CAPITAL RATIONING

This paper proposes an interpretation of the pure capital rationing problem as it is faced by many managers in decentralized firms in which budgets serve as the principal means of control. It is argued that the appropriate objective for situations such as these is the maximization of either undiscounted earnings over the planning horizon or total value of the investments at the horizon. When either objective function is used in conjunction with the frequently encountered linear programming models for the capital rationing problem, shadow prices result which give rise to discount rates that will reproduce the optimal solution using discounted cash flow as a criterion. These results are then used as a means for clarifying several confusing and misleading statements that have appeared in the literature.     

AUTOCORRELATED CASH FLOWS AND THE SELECTION OF A PORTFOLIO OF CAPITAL ASSETS *

Capital budgeting models for analyzing real assets typically are based on a set of restrictive assumptions that influence financial managers' decisions and may prevent optimization of the firm's objectives. This research examines the common restrictive assumption that cash flows are intertemporally independent by first developing an economic state and simulation model based on a Markov process for including autocorrelated cash flows in the capital budgeting decision process and then demonstrating why managers should include autocorrelated cash flows in capital budgeting models by empirically testing the impact of assuming intertemporally independent cash flows on capital budgeting decisions. The results indicate that ignoring autocorrelated cash flows seriously limits the ability of capital budgeting models to provide optimal investment decisions. The model also is very attractive for practical application because it can be implemented with a minimum number of estimates and provides the set of input data required by a number of capital budgeting models. A discussion of the implementation of the model is included.     

DYNAMIC OPERATING RULES FOR MOTEL RESERVATIONS

When customers call a motel or a hotel to reserve a particular room (large, small, suites, single-bed, double-bed, etc.) decisions have to be made concerning the allocation of the available rooms. This paper presents a model for determining the maximum number of specific bookings that should be made for each type of room. The objective is to maximize the expected contribution to profit per rental day. The model considers the distribution of requests for reservations over time as well as cancellations. Also included are the effects of late (unbooked) arrivals and overbookings.     

'I made some mistakes . . . but I love them dearly' the views of parents of children in informal kinship care

In-depth semi-structured interviews with 30 parents of children living with relatives in informal kinship care arrangements revealed the parents' views of the reasons for the informal kinship care arrangements, quality of their relationships with the children and their caregivers, their current and future roles in their children's lives, feelings experienced when with and away from the children, positive and negative aspects of kinship care, future goals and dreams for their children, and their assessments of their own strengths and challenges. Results of these interviews suggest several implications for social work practice and research.     

Policy relevant heterogeneity in the value of statistical life: New evidence from panel data quantile regressions

We examine differences in the value of statistical life (VSL) across potential wage levels in panel data using quantile regressions with intercept heterogeneity. Latent heterogeneity is econometrically important and affects the estimated VSL. Our findings indicate that a reasonable average cost per expected life saved cut-off for health and safety regulations is 7 million to7 million to 8 million per life saved, but the VSL varies considerably across the labor force. Our results reconcile the previous discrepancies between hedonic VSL estimates and the values implied by theories linked to the coefficient of relative risk aversion. Because the VSL varies elastically with income, regulatory agencies should regularly update the VSL used in benefit assessments, increasing the VSL proportionally with changes in income over time.