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2851. Determinants of Recent Online Purchasing and the Percentage of Income Spent Online

Author:
Kristina M. Lybecker and Brendan Hannah
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Department of Economics and Business, Colorado College
Abstract:
The recent stagnation of electronic commerce highlights the need to understand contemporary online consumer behavior. This study incorporates current user demographics and emerging Internet activities to dynamically model the determinants of two key measurements of recent online shopping, a purchase within the last year and the novel dependent variable, percentage of income spent online in the last three months. Logistic regression is applied to a nationally representative 2007 survey of the U.S. online population. Determinants of a recent online purchase include, ownership of a credit card, an online payment account (PayPalTM), listening to podcasts, participating in online auctions, and for the first time, female gender. In a second regression, positive determinants for the percentage of income spent online include male gender, educational attainment, online auctions, instant messenging and online dating. Online spending increases with time online and appears to compete with other forms of online entertainment and social networking.
Topic:
Economics, Gender Issues, Markets, and Science and Technology
Political Geography:
United States

2852. An Ounce of Prevention or a Pound of Cure? Short- and Long-Run Effects of Pharmaceutical Patents on U.S. Health Care

Author:
Daniel K. N. Johnson and Hilary S. Johnson
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Department of Economics and Business, Colorado College
Abstract:
This study examines the relationship between pharmaceutical R and health care expenditures, distinguishing between the short- and long-run impacts. To measure these relationships quantitatively, we focus on patents as a key factor driving the costs of pharmaceuticals, and develop a structured vector autoregressive (SVAR) model to measure the social rate of return to pharmaceutical research as protected by patents. We conclude with unambiguous results that pharmaceutical patents are not correlated with higher short-run prices in any measure of medical costs. They are associated with higher long-run prices in pharmaceuticals themselves, but with lower long-run prices in the aggregate medical sector which includes pharmaceuticals as a component part. Further, the TRIPS Agreement and Hatch-Waxman Act to enable generic competition have both been demonstrably effective at lowering prices across the spectrum of medical sector prices. We conclude that pharmaceutical patents may be economically medicinal themselves, acting as the 'ounce of prevention' that saves a 'pound of cure', the cure which would come in the form of even higher costs elsewhere in the medical sector.
Topic:
Economics, Health, and Markets

2853. How globalization shapes individual risk perceptions and policy preferences

Author:
Stefanie Walter and Linda Maduz
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Weatherhead Center for International Affairs, Harvard University
Abstract:
How does globalization affect individuals and their perceptions and policy preferences? This paper uses new developments in international trade theory to propose a new way of conceptualizing and measuring the extent to which an individual can be characterized as globalization winner or loser. We argue that the distributional effect of exposure to international competition is conditional on individuals' ability. Low-ability workers exposed to the international economy face lower wages and higher risk of unemployment, and can therefore be characterized as globalization losers. In contrast, high-ability workers receive higher wages when they are exposed to international competition are therefore identified as globalization winners. To illustrate the usefulness of this approach for political scientists, the paper revisits the debate about the determinants of social policy preferences. Using crossnational survey data from 16 countries we show that globalization has significant and heterogenous individual-level effects. Exposure to globalization increases risk perceptions and demands for more income redistribution among individuals with low levels of education (as a proxy for ability), but decreases these perceptions and demands among highly educated respondents.
Topic:
Economics, Globalization, Markets, and Political Theory

2854. Commodity Price Shocks and the Australian Economy since Federation

Author:
Sambit Bhattacharyya and Jeffery G. Williamson
Publication Date:
07-2009
Content Type:
Working Paper
Institution:
Weatherhead Center for International Affairs, Harvard University
Abstract:
Even though Australia has experienced frequent and large commodity export price shocks like the Third World, it seems to have dealt with the volatility better. Why? This paper explores Australian terms of trade volatility since 1901. It identifies two major price shock episodes before the recent mining-led boom and bust. It assesses their relative magnitude, their de-industrialization and distributional impact, and policy responses. In what way has Australia been different from other commodity exporters experiencing volatile prices?
Topic:
Economics and International Trade and Finance
Political Geography:
Australia/Pacific

2855. The Human Cost of Economic Crises

Author:
Marcus Alexander, Matthew Harding, and Carlos Lamarche
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Weatherhead Center for International Affairs, Harvard University
Abstract:
Policy makers rely on a mix of government spending and tax cuts to address the imbalances in the economy during an economic crisis, by promoting price stability and renewed economic growth. However, little discussion appears to focus explicitly on the costs of economic crises in terms of human lives, especially the lives of the most vulnerable members of society, infants. This paper quantifies the effect that economic crises, periods of prolonged economic recession, have on infant mortality. Moreover, we investigate whether different levels of public spending on health across advanced industrialized democracies can mitigate the impact of crises on infant mortality. We find that economic crises are extremely costly and lead to a more than proportional increase in infant mortality in the short-run. Substantial public spending on health is required in order to limit their impact.
Topic:
Economics, Health, Monetary Policy, and Financial Crisis

2856. Commodity Price Volatility and World Market Integration since 1700

Author:
David S. Jacks, Kevin H. O'Rourke, and Jeffrey G. Williamson
Publication Date:
02-2009
Content Type:
Working Paper
Institution:
Weatherhead Center for International Affairs, Harvard University
Abstract:
Poor countries are more volatile than rich countries, and we know this volatility impedes their growth. We also know that commodity price volatility is a key source of those shocks. This paper explores commodity and manufactures price over the past three centuries to answer three questions: Has commodity price volatility increased over time? The answer is no: there is little evidence of trend since 1700. Have commodities always shown greater price volatility than manufactures? The answer is yes. Higher commodity price volatility is not the modern product of asymmetric industrial organizations - oligopolistic manufacturing versus competitive commodity markets - that only appeared with the industrial revolution. It was a fact of life deep into the 18th century. Does world market integration breed more or less commodity price volatility? The answer is less. Three centuries of history shows unambiguously that economic isolation caused by war or autarkic policy has been associated with much greater commodity price volatility, while world market integration associated with peace and pro-global policy has been associated with less commodity price volatility. Given specialization and comparative advantage, globalization has been good for growth in poor countries at least by diminishing price volatility. But comparative advantage has never been constant. Globalization increased poor country specialization in commodities when the world went open after the early 19th century; but it did not do so after the 1970s as the Third World shifted to labor-intensive manufactures. Whether price volatility or specialization dominates terms of trade and thus aggregate volatility in poor countries is thus conditional on the century.
Topic:
Economics, Globalization, and Monetary Policy
Political Geography:
Africa, South Asia, and Latin America

2857. Ottoman De-Industrialization 1800-1913: Assessing the Shock, Its Impact and the Response

Author:
Jeffrey G. Williamson and Şevket Pamuk
Publication Date:
02-2009
Content Type:
Working Paper
Institution:
Weatherhead Center for International Affairs, Harvard University
Abstract:
India and Britain were much bigger players in the 18th century world market for textiles than was Egypt, the Levant and the core of the Ottoman Empire, but these eastern Mediterranean regions did export carpets, silks and other textiles to Europe and the East. By the middle of the 19th century, they had lost most of their export market and much of their domestic market to globalization forces and rapid productivity growth in European manufacturing. Other local industries also suffered decline, and these regions underwent de-industrialization as a consequence. How different was Ottoman experience from the rest of the poor periphery? Was de-industrialization more or less pronounced? Was the terms of trade shock bigger or smaller? How much of Ottoman de-industrialization was due to falling world trade barriers—ocean transport revolutions and European liberal trade policy, how much due to factory-based productivity advance in Europe, how much to declining Ottoman competitiveness in manufacturing, how much to Ottoman railroads penetrating the interior, and how much to Ottoman policy? The paper uses a price-dual approach to seek the answers. It documents trends in export and import prices, relative to each other and to non-tradables, as well as to the unskilled wage. The impact of globalization, European productivity advance, Ottoman wage costs and policy are assessed by using a simple neo-Ricardian three sector model, and by comparison with what was taking place in the rest of the poor periphery.
Topic:
Economics, Globalization, International Trade and Finance, and Markets
Political Geography:
Britain, Europe, Turkey, India, and Egypt

2858. Vanishing Third World Emigrants?

Author:
Jeffrey G. Williamson and Timothy J. Hatton
Publication Date:
02-2009
Content Type:
Working Paper
Institution:
Weatherhead Center for International Affairs, Harvard University
Abstract:
This paper documents a stylized fact not well appreciated in the literature. The Third World has been undergoing an emigration life cycle since the 1960s, and, except for Africa, emigration rates have been level or even declining since a peak in the late 1980s the early 1990s. The current economic crisis will serve only to accelerate those trends. The paper estimates the economic and demographic fundamentals driving these Third World emigration life cycles to the United States since 1970-the income gap between the US and the sending country, the education gap between the US and the sending country, the poverty trap, the size of the cohort at risk, and migrant stock dynamics. It then projects the life cycle up to 2024. The projections imply that pressure on Third World emigration over the next two decades will not increase. It also suggests that future US immigrants will be blacker and fewer will speak Spanish.
Topic:
Demographics, Economics, Migration, and Third World
Political Geography:
Africa and United States

2859. The Political Economy of Heterogeneous Development: Quantile Effects of Income and Education

Author:
Marcus Alexander, Matthew Harding, and Carlos Lamarche
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
Weatherhead Center for International Affairs, Harvard University
Abstract:
Does development lead to the establishment of more democratic institutions? The key to the puzzle, we argue, is the previously unrecognized fact that based on quantitative regime scores, countries over the past 50 years have clustered into two separate, very distinct, yet equally-common stages of political development—authoritarian states with low levels of freedom on one side an d democracies with liberal institutions on the other side of a bimodal distribution of political regimes. We develop a new empirical strategy—exploiting exogenous world economic factors and introducing new panel data estimators—that allows for the first time to estimate the effects of development as well as unobserved country effects in driving democracy at these different stages of political development. We find that income and education have the least effect on democracy when authoritarian regimes are consolidated and that only country effects, possibly accounting for institutional legacies, can lead to political development. Ironically, it is in highly democratic and wealthiest of nations that income and education start to play a role; however greater wealth and better educated citizenry can both help and hurt democracy depending again on what the country's institutional legacies are. Far from accepting the notion that much of the developing world is cursed by unchanging and poor long-run institutions, policy-makers should take note that with democratization we also see country-specific factors that in turn condition the difference income and education make for democracy.
Topic:
Democratization, Development, Economics, Political Economy, and Third World
Political Geography:
Africa, United States, China, Asia, and Germany

2860. EIU Quarterly Global Outlook Webinar

Publication Date:
09-2009
Content Type:
Working Paper
Abstract:
No abstract is available.
Topic:
Economics, Markets, and Financial Crisis