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This collection of essays covers a diverse set of topics related to household behavior and welfare. Prices play a key role in several of the essays, particularly the distributional implications of price movements, and the effects of changes in relative prices on inequality and poverty. This book shows the shift in the literature on prices from being an exclusively macro topic featuring the study of inflation and cross-country comparisons to one that is firmly rooted in micro theory-based analysis of household behavior. It also includes recent developments in the poverty measurement literature, documenting the shift from the exclusively money metric and unidimensional poverty measures to multidimensional poverty encompassing a wider view of deprivation. Largely, but not exclusively, focusing on India, the book also features global comparisons of welfare. Intra country spatial comparisons along with cross country comparisons of household behavior and welfare feature in several of the essays in this book. The book also compares the effects of selected public delivery schemes in India on the health of its children. It is a useful resource for researchers and serves as reading material for advanced graduate courses on development in India and elsewhere.
This book investigates the relationships between economies of scale in food consumption and a number of socio-economic and demographic characteristics of households and household behavioural choices since food is the major share of household expenditure for poor households. The characteristics considered comprise household size, location, income, and gender of the head of household while the behavioural choices considered comprise the decision to consume home-grown food and the decision to adopt domestic technology to aid food preparation and consumption. The book proposes two theoretical models to rationalize the role of the consumption of home-grown food and the adoption of domestic technology in enhancing economies of scale in food consumption. Econometric models are also used to empirically test the validity of the two theoretical models while adjusted poverty estimations are derived numerically using the estimated equivalence scales. Although data used in applying these techniques are based on four Household Income and Expenditure Surveys conducted by the Department of Census and Statistics (DCS) in Sri Lanka, the methodology can be used for similar analysis in relation to any other country.
In the history of science "paradoxes" are not only amusing puzzles and chal lenges to the human mind but also driving forces of scientific development. The notion of "paradox" is intimately related to the notion of "contradiction". Logi cal paradoxes allow for the derivation of contradictory propositions (e.g. "Rus sell's set of all sets not being members of themselves" or the ancient problem with propositions like "I am lying" 1), normative paradoxes deal with contradic tions among equally well accepted normative postulates (Arrow's "impossibility theorem", Sen's "Impossibility of a Paretian Liberal") and "factual" paradoxes refer to conflicts between conventional opinion based on an accepted empirical theory and contradictory empirical evidence (e.g. the "St. Petersburg paradox" or the "Allais paradox" in decision theory2). Paradoxes, either logical, normative or factual, also contradict our intui tions. The counter-intuitive property which seems to be a common feature of all paradoxes plays an important part in the empirical social sciences, particularly in the old research tradition of scrutinizing the unintended consequences of pur posive actions. Expectations based on naive theories ignoring interdependencies between individual actions are very often in conflict with "surprising" empirical evidence on collective results of social behavior. Examples are numerous reach ing from panic situations, the individual struggle for status gains resulting in collective deprivation, the less than optimal supply of collective goods etc. to global problems of the armament race and mismanagement of common resources.
In my third essay, I estimate a learning-by-doing model using PSID data. By working longer hours in the present, an individual receives higher wages in the future. Estimates reveal that by increasing hours worked in a given year by 10%, next year's wage should increase by 1%.