Template-Type: ReDIF-Paper 1.0 Author-Name: Stephen Knowles Author-Name-First: Stephen Author-Name-Last: Knowles Author-Email: stephen.knowles@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Maroš Servátka Author-Name-First: Maroš Author-Name-Last: Servátka Author-Email: maros.servatka@canterbury.ac.nz Author-Workplace-Name: Department of Economics and Finance, University of Canterbury, New Zealand Title: Transaction costs, the Opportunity Cost of Time and Inertia in Charitable Giving: Abstract: We conduct a laboratory experiment to analyze the effect transactions costs and inertia have on charitable giving. We conjecture that transaction costs will have a greater effect on donations if the solicitation is received when the opportunity cost of time is high. Inertia could become a factor if people intend to give, but postpone making the payment until they have more time, and having postponed making the donation once, keep doing so. We find evidence of a transaction cost effect, with the size of this effect depending on the opportunity cost of time, but no statistically significant inertia effect. Length: 47 pages Creation-Date: 2014-01 Revision-Date: 2014-01 File-URL: http://www.otago.ac.nz/economics/news/otago078304.pdf File-Format: Application/pdf File-Function: First version, 2014 Number: 1401 Classification-JEL: C91, D64 Keywords: charitable giving; dictator game; transaction costs; opportunity cost of time; inertia Handle: RePEc:otg:wpaper:1401 Template-Type: ReDIF-Paper 1.0 Author-Name: Nathan Berg Author-Name-First: Nathan Author-Name-Last: Berg Author-Email: nathan.berg@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Todd Gabel Author-Name-First: Todd Author-Name-Last: Gabel Author-Email: tgabel@yahoo.com Author-Workplace-Name: Middle Tennessee State University Title: New Reform Strategies and Welfare participation in Canada: Abstract: This paper measures the extent to which declines in Canadian welfare participation were associated with novel and aggressive welfare reforms. Referred to as new reform strategies, these welfare policy variables are: work requirements, diversion, earning exemptions, and time limits. Controlling for province-specific benefit levels, eligibility requirements, GDP growth, labor market conditions and demographics, the data suggest that welfare participation rates were more than one percentage point lower (equivalent to at least a 13% decline in welfare participation) in provinces where new reforms were present. Work requirements with strong sanctions for non-compliance had the sharpest negative associations with participation rates. Adoption of new reform strategies explains at least 10 percent of observed declines in welfare participation from 1994 to 2009, roughly twice as much as cuts to benefit levels and stricter eligibility requirements can explain. Length: 52 pages Creation-Date: 2014-03 Revision-Date: 2014-03 File-URL: http://www.otago.ac.nz/economics/news/otago078305.pdf File-Format: Application/pdf File-Function: First version, 2014 Number: 1402 Classification-JEL: H53, I38 Keywords: Social Assistance, PRWORA, TANF, Work Requirements, Diversion, Earnings Exemptions, Time Limits, Natural Experiments Handle: RePEc:otg:wpaper:1402 Template-Type: ReDIF-Paper 1.0 Author-Name: Dan Farhat Author-Name-First: Dan Author-Name-Last: Farhat Author-Email: dan.farhat@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Artificial Neural Networks and Aggregate Consumption Patterns in New Zealand: Abstract: This study engineers a household sector where individuals process macroeconomic information to reproduce consumption spending patterns in New Zealand. To do this, heterogeneous artificial neural networks (ANNs) are trained to forecast changes in consumption. In contrast to existing literature, results suggest that there exists a trained ANN that significantly outperforms a linear econometric model at out-of-sample forecasting. To improve the accuracy of ANNs using only in - sample information, methods for combining private knowledge into social knowledge are explored. For one type of ANN, relying on an expert is beneficial. For most ANN structures, weighting an individual’s forecast according to how frequently that individual’s ANN is a top performer during in - sample training produces more accurate social forecasts. By focusing only on recent periods, considering the severity of an individual’s errors in weighting their forecast is also beneficial. Possible avenues for incorporating ANN structures into artificial social simulation models of consumption are discussed. Length: 17 pages Creation-Date: 2014-03 Revision-Date: 2014-03 File-URL: http://www.otago.ac.nz/economics/news/otago078307.pdf File-Format: Application/pdf File-Function: First version, 2014 Number: 1404 Classification-JEL: C45, E17, E27 Keywords: Artificial neural networks, forecasting, aggregate consumption, social simulation Handle: RePEc:otg:wpaper:1404 Template-Type: ReDIF-Paper 1.0 Author-Name: Dan Farhat Author-Name-First: Dan Author-Name-Last: Farhat Author-Email: dan.farhat@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Information Processing, Pattern Transmission and Aggregate Consumption Patterns in New Zealand: Abstract: This study explores the value of information transmission in training heterogeneous Artificial Neural Network (ANN) models to identify patterns in the growth rate of aggregate per-capita consumption spending in New Zealand. A tier structure is used to model how information passes from one ANN to another. A group of ‘tier 1’ ANNs are first trained to identify consumption patterns using economic data. ANNs in subsequent tiers are also trained to identify consumption patterns, but they use the patterns constructed by ANNs trained in the preceding tier (secondary information) as in-puts. The model’s results suggest that it is possible for ANNs downstream to outperform ANNs trained using empirical data directly on average. This result, however, varies from time period to time period. Increasing access to secondary information is shown to increase the similarity of heterogeneous predictions by ANNs in lower tiers, but not substantially affect average accuracy. Length: 15 pages Creation-Date: 2014-03 Revision-Date: 2014-03 File-URL: http://www.otago.ac.nz/economics/news/otago078308.pdf File-Format: Application/pdf File-Function: First version, 2014 Number: 1405 Classification-JEL: C45, C63, E27 Keywords: Artificial neural networks, aggregate consumption patterns, information transmission Handle: RePEc:otg:wpaper:1405 Template-Type: ReDIF-Paper 1.0 Author-Name: Jeong-Yoo Kim Author-Name-First: Jeong-Yoo Author-Name-Last: Kim Author-Email: jyookim@khu.ac.kr Author-Workplace-Name: Department of Economics, Kyung Hee University, Korea Author-Name: Nathan Berg Author-Name-First: Nathan Author-Name-Last: Berg Author-Email: nathan.berg@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: : Quantity restrictions with imperfect enforcement in an over-used commons: Permissive regulation to reduce over-use? Abstract: This paper presents a model of quantity regulation aimed at mitigating externalities from over-use of a commons: for example, restrictions on use of automobiles, fisheries, computer networks and electronic stock quotation systems with high-frequency traders. The model provides a counter-intuitive answer to the question of what happens when quantity restrictions are legislated but enforcement is imperfect. If the probability of enforcement depends on both violation rates and enforcement expenditures, then equilibrium congestion can become worse as the quantity restriction becomes more severe. Stricter regulation causes more agents to violate the regulation which consequently reduces the probability of detection. Aggregate payoffs respond nonmonotonically to stricter regulatory rules. We find an interior near-optimal solution which is neither too permissive nor too strict. We show, however, that this near-optimal quantity regulation falls short of achieving socially optimal levels of use. Moreover, socially optimal levels of use can never be achieved in the sense that there exist some agents who rationally choose to violate the regulation if the regulator sets the restricted activity level at the socially optimal level. We also discuss optimal enforcement. Length: 31 pages Creation-Date: 2014-05 Revision-Date: 2014-05 File-URL: http://www.otago.ac.nz/economics/news/otago078309.pdf File-Format: Application/pdf File-Function: First version, 2014 Number: 1406 Classification-JEL: K42 Keywords: congestion, emissions cap, regulation standard, tragedy of the commons Handle: RePEc:otg:wpaper:1406 Template-Type: ReDIF-Paper 1.0 Author-Name: Meltem Ucal Author-Name-First: Meltem Author-Name-Last: Ucal Author-Email: msengun@khas.edu.tr Author-Workplace-Name: Department of Economics, Kadir Has University, Istanbul, Turkey Author-Name: Mehmet Hüseyin Bilgin Author-Name-First: Mehmet Author-Name-Last: Bilgin Author-Email: mehmet.bilgin@medeniyet.edu.tr Author-Workplace-Name: Department of International Relations, Istanbul Medeniyet University, Istanbul, Turkey Author-Name: Alfred Haug Author-Name-First: Alfred Author-Name-Last: Haug Author-Email: alfred.haug@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: : Income Inequality and FDI: Evidence with Turkish Data Abstract: This paper explores how foreign direct investment (FDI) and other determinants impact income inequality in Turkey in the short- and long-run. We apply the ARDL (Auto-Regressive Distributed Lag) modelling approach, which is suitable for small samples. The data for the study cover the years from 1970 to 2008. The empirical results indicate the existence of a cointegration relationship among the variables. The positive impact of the FDI growth rate on income inequality, worsening inequality, is shown to be significant in the short-run, though at the 10% significance level only and with a quantitatively small impact, and insignificant in the long-run. In other words, FDI increases income inequality initially somewhat but this effect disappears in the long run. The literacy rate clearly reduces inequality in the long run, but also in the short run. On the other hand, population growth worsens inequality in the long run, and the effect is quite large, though it has no statistically significant effect on inequality in the short run. Also, an increase in GDP growth reduces inequality especially in the short run (at a 5% level of significance) but also in the long run (though only at the 10% level). Length: 30 pages Creation-Date: 2014-06 Revision-Date: 2014-06 File-URL: http://www.otago.ac.nz/economics/news/otago078310.pdf File-Format: Application/pdf File-Function: First version, 2014 Number: 1407 Classification-JEL: D31, F21, C32, C13 Keywords: Income inequality, foreign direct investment, ARDL estimation, FM-OLS estimation, Turkey Handle: RePEc:otg:wpaper:1407 Template-Type: ReDIF-Paper 1.0 Author-Name: Svetlana Adrianova Author-Name-First: Svetlana Author-Name-Last: Adrianova Author-Email: s.andrianova@le.ac.uk Author-Workplace-Name: University of Leicester Author-Name: Badi H. Baltagi Author-Name-First: Badi Author-Name-Last: Baltagi Author-Email: bbaltagi@maxwell.syr.edu Author-Workplace-Name: Syracuse University and University of Leicester Author-Name: Panicos Demetriades Author-Name-First: Panicos Author-Name-Last: Demetriades Author-Email: pd28@le.ac.uk Author-Workplace-Name: University of Leicester Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: ETHNIC FRACTIONALIZATION,GOVERNANCE AND LOAN DEFAULTS IN AFRICA: Abstract: We present a theoretical model of moral hazard and adverse selection in an imperfectly competitive loans market that is suitable for application to Africa. The model allows for variation in both the level of contract enforcement (depending on the quality of governance) and the degree of market segmentation (depending on the level of ethnic fractionalization). The model predicts a specific form of non-linearity in the effects of these variables on the loan default rate. Empirical analysis using African panel data for 111 individual banks in 29 countries over 2000-2008 provides strong evidence for these predictions. Our results have important implications for the conditions under which policy reform will enhance financial development. Length: 36 pages Creation-Date: 2014-10 Revision-Date: 2014-10 File-URL: http://www.otago.ac.nz/economics/otago087297.pdf File-Format: Application/pdf File-Function: First version, 2014 Number: 1408 Classification-JEL: G21, O16 Keywords: Ethnic fractionalization, Governance, Financial development, African Banks, Panel data Handle: RePEc:otg:wpaper:1408 Template-Type: ReDIF-Paper 1.0 Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Mapping Medieval and Modern chauvinism in England: Abstract: There is evidence for the long-run persistence of geographical variation in tolerance towards other ethnicities. However, existing studies of tolerance use data from countries with long-standing patterns of ethnic diversity, so it is unclear whether the inter-generational transmission is in attitudes towards specific ethnic groups or in an underlying cultural trait of which such attitudes are just one expression. This paper presents evidence for the latter, identifying geographical variation in the intensity of anti-immigrant sentiment in England that has persisted over eight centuries, spans the arrival and departure of different immigrant groups, and is correlated with authoritarianism. Length: 63 pages Creation-Date: 2014-10 Revision-Date: 2014-10 File-URL: http://www.otago.ac.nz/economics/otago087298.pdf File-Format: Application/pdf File-Function: First version, 2014 Number: 1409 Classification-JEL: Keywords: Minorities, Immigration, Anti-Semitism, Prejudice Handle: RePEc:otg:wpaper:1409 Template-Type: ReDIF-Paper 1.0 Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Shef Rogers Author-Name-First: Shef Author-Name-Last: Rogers Author-Email: shef.rogers@otago.ac.nz Author-Workplace-Name: Department of English and Linguistics, University of Otago, New Zealand Title: Monopoly Power in the Eighteenth Century British Book Trade: Abstract: In conventional wisdom, the reform of British copyright law during the eighteenth century brought an end to the monopoly on the sale of books held by the Stationers’ Company, and the resulting competition was one of the driving forces behind the expansion of British book production during the Enlightenment. In this paper, we analyze a new dataset on eighteenth century book prices and author payments, showing that the legal reform brought about only a temporary increase in competition. The data suggest that by the end of the century, informal collusion between publishers had replaced the legal monopoly powers in place at the beginning of the century. The monopoly power of retailers is not so easily undermined. Length: 28 pages Creation-Date: 2014-12 Revision-Date: 2014-12 File-URL: http://www.otago.ac.nz/economics/otago087299.pdf File-Format: Application/pdf File-Function: First version, 2014 Number: 1410 Classification-JEL: D42, L12, N83, Z11 Keywords: book trade; publishing; copyright; retail monopoly Handle: RePEc:otg:wpaper:1410