Improving Women’s Education Improves Maternal Health: Evidence from Peru

Maternal mortality in Peru declined over 70 percent between 1990 and 2015. Women’s education levels rose during the same period. This brief by PRC faculty research associate Abigail Weitzman indicates that Peruvian women’s rising education levels contributed to falling maternal mortality rates by reducing the risk of maternal complications and increasing the use of modern contraception and reproductive healthcare.Population Research Cente

Neighborhood Preservation in New York City

The push to the suburbs, financed in large part by federal mortgage guarantees and highway construction moneys and bolstered by exclusionary zoning, has generated forces which tend to leave old urban neighborhoods in shambles. The syndrome of housing deterioration is well known. The dilemma of the deteriorating neighborhood is heightened in a city such as New York, where a large proportion of its population lives in old multiple family buildings. After almost forty years marked by a succession of programs designed to eliminate slums and blighted areas, New York City has concluded that its older neighborhoods must be protected from the devastation of the deterioration process so that they can be recycled or used by new generations of urban dwellers. On May 23, 1973 the Mayor of the City of New York created the Neighborhood Preservation Program, the first truly comprehensive effort in the nation aimed at preserving sound urban neighborhoods. The purpose of this article is to examine how the program is designed to operate, and analyze how well its objectives have been, and potentially may be, achieved

Structural Uncertainty and the Value of Statistical Life in the Economics of Catastrophic Climate Change

Using climate change as a prototype motivating example, this paper analyzes the implications of structural uncertainty for the economics of low-probability high-impact catastrophes. The paper shows that having an uncertain multiplicative parameter, which scales or amplifies exogenous shocks and is updated by Bayesian learning, induces a critical "tail fattening" of posterior-predictive distributions. These fattened tails can have strong implications for situations (like climate change) where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages. The essence of the problem is the difficulty of learning extreme-impact tail behavior from finite data alone. At least potentially, the influence on cost-benefit analysis of fat-tailed uncertainty about the scale of damages -- coupled with a high value of statistical life -- can outweigh the influence of discounting or anything else.

Chinese Township Village Enterprises as Vaguely Defined Cooperations

This paper concerns the paradoxes and dilemmas that the very successful "Chinese model" presents for transition theory. The "Chinese model" is centered on the development of township-village enterprises. The main purpose of this paper is to make the case that TVE's are not just some form of disguised capitalist institution; they are much better described as "vaguely defined cooperatives" - meaning an essentially communal organization extremely far removed from having well defined ownership structure. That a transition strategy based on vaguely defined cooperatives should be so successful presents a severe challenge for traditional property theory. We speculate that to address this challenge properly, traditional property rights should be extended by including a dimension corresponding to the degree of individualism/cooperation existing in a society. A model of the required extension is described. Implications and application are discussed.

How Should the Distant Future be Discounted When Discount Rates are Uncertain?

It is not immediately clear how to discount distant-future events, like climate change, when the distant-future discount rate itself is uncertain. The so-called “Weitzman-Gollier puzzle” is the fact that two seemingly symmetric and equally plausible ways of dealing with uncertain future discount rates appear to give diametrically opposed results with the opposite policy implications. We explain how the “Weitzman-Gollier puzzle” is resolved. When agents optimize their consumption plans and probabilities are adjusted for risk, the two approaches are identical. What we would wish a reader to take away from this paper is the bottom-line message that the appropriate long run discount rate declines over time toward its lowest possible value.

How Should the Distant Future be Discounted when Discount Rates are Uncertain?

It is not immediately clear how to discount distant-future events, like climate change, when the distant-future discount rate itself is uncertain. The so-called “Weitzman-Gollier puzzle” is the fact that two seemingly symmetric and equally plausible ways of dealing with uncertain future discount rates appear to give diametrically opposed results with the opposite policy implications. We explain how the “Weitzman-Gollier puzzle” is resolved. When agents optimize their consumption plans and probabilities are adjusted for risk, the two approaches are identical. What we would wish a reader to take away from this paper is the bottom-line message that the appropriate long run discount rate declines over time toward its lowest possible value.discount rate, term structure, climate change, cost-benefit analysis

Patterns of behavior in biodiversity preservation

Conservation budgets are limited, so it is right to ask of biodiversity programs, What should be preserved? How much should be preserved? Where? Recent papers on optimal preservation policy have tried to integrate three considerations: the relative uniqueness of different species or habitats, the degree of risk to their continued survival, and the opportunity cost of the resources needed to enhance their prospects for survival. It is natural to ask, How are we doing? Have biodiversity conservation resources been optimally allocated? What determines government decisions about the preservation of endangered species? The authors submit the first report card, an empirical analysis of U.S. species preservation policy, the best-documented country experience currently available. The authors discuss the most common normative justifications for biodiversity preservation and identify measurable proxies for a subset of those justifications. Proxies include"scientific"species characteristics, such as"degree of endangerment"and"taxonomic uniqueness,"as well as"visceral"characteristics, such as physical size and to what extent a species is considered a"higher form of life."They find that both kindsof characteristics, but especially"visceral"characteristics, influence government decisions on whether to protect a species under the Endangered Species Act. The authors find that"visceral"characteristics- especially physical size and taxonomic class - are also important in explaining how much is spent on endangered species. Perhaps more surprising is their finding that more is spent on animals with lower risk of extinction than on animals with a higher risk of extinction. The author's results are sobering. Many millions have been spent on species preservation, but neither uniqueness nor risk has weighed heavily in resource allocation. Instead there has been a heavy bias toward"charismatic megafauna"- large, well-known birds and mammals ("higher forms of life,"in the human value system). Other classes of fauna - including, say, eels or wild toads - and all flora, have gotten extremely short shrift. Prominent examples of species with high charisma, high attention, and relatively low endangerment are the bald eagle, the Florida scrub jay, and the grizzly bear. Other species may have less charisma but could have more scientific value or species risk.Wildlife Resources,Wetlands,Environmental Economics&Policies,Information Technology,Biodiversity

Bonuses and Employment in Japan

Japan has a relatively unique system of labor compensation. Most Japanese workers are paid large bonuses twice a year. This paper examines the cyclical movement of bonuses compared with wages and the relation of bonuses to employment in the context of the Weitzman "share economy." The paper makes three basic points:(1) The Japanese bonus is much more pro-cyclical than Japanese base wages,but not as cyclically variable as profits. Bonuses can be interpreted as containing a quantitatively significant revenue or profit-sharing component.(2) Bonuses have quite different employment consequences than do base wages. Even after controlling for other economic factors, bonuses are positively related to employment, whereas base wages are negatively related to employment.(3) The bonus system of paying workers, while far from explaining the whole macroeconomic story in Japan, seems to play a role in helping to stabilize Japanese unemployment at comparatively low levels.