Pub Date : 2019-08-28DOI: 10.1093/acrefore/9780190625979.013.91
D. Street, R. Viney
Discrete choice experiments are a popular stated preference tool in health economics and have been used to address policy questions, establish consumer preferences for health and healthcare, and value health states, among other applications. They are particularly useful when revealed preference data are not available. Most commonly in choice experiments respondents are presented with a situation in which a choice must be made and with a a set of possible options. The options are described by a number of attributes, each of which takes a particular level for each option. The set of possible options is called a “choice set,” and a set of choice sets comprises the choice experiment. The attributes and levels are chosen by the analyst to allow modeling of the underlying preferences of respondents. Respondents are assumed to make utility-maximizing decisions, and the goal of the choice experiment is to estimate how the attribute levels affect the utility of the individual. Utility is assumed to have a systematic component (related to the attributes and levels) and a random component (which may relate to unobserved determinants of utility, individual characteristics or random variation in choices), and an assumption must be made about the distribution of the random component. The structure of the set of choice sets, from the universe of possible choice sets represented by the attributes and levels, that is shown to respondents determines which models can be fitted to the observed choice data and how accurately the effect of the attribute levels can be estimated. Important structural issues include the number of options in each choice set and whether or not options in the same choice set have common attribute levels. Two broad approaches to constructing the set of choice sets that make up a DCE exist—theoretical and algorithmic—and no consensus exists about which approach consistently delivers better designs, although simulation studies and in-field comparisons of designs constructed by both approaches exist.
{"title":"Design of Discrete Choice Experiments","authors":"D. Street, R. Viney","doi":"10.1093/acrefore/9780190625979.013.91","DOIUrl":"https://doi.org/10.1093/acrefore/9780190625979.013.91","url":null,"abstract":"Discrete choice experiments are a popular stated preference tool in health economics and have been used to address policy questions, establish consumer preferences for health and healthcare, and value health states, among other applications. They are particularly useful when revealed preference data are not available. Most commonly in choice experiments respondents are presented with a situation in which a choice must be made and with a a set of possible options. The options are described by a number of attributes, each of which takes a particular level for each option. The set of possible options is called a “choice set,” and a set of choice sets comprises the choice experiment. The attributes and levels are chosen by the analyst to allow modeling of the underlying preferences of respondents. Respondents are assumed to make utility-maximizing decisions, and the goal of the choice experiment is to estimate how the attribute levels affect the utility of the individual. Utility is assumed to have a systematic component (related to the attributes and levels) and a random component (which may relate to unobserved determinants of utility, individual characteristics or random variation in choices), and an assumption must be made about the distribution of the random component. The structure of the set of choice sets, from the universe of possible choice sets represented by the attributes and levels, that is shown to respondents determines which models can be fitted to the observed choice data and how accurately the effect of the attribute levels can be estimated. Important structural issues include the number of options in each choice set and whether or not options in the same choice set have common attribute levels. Two broad approaches to constructing the set of choice sets that make up a DCE exist—theoretical and algorithmic—and no consensus exists about which approach consistently delivers better designs, although simulation studies and in-field comparisons of designs constructed by both approaches exist.","PeriodicalId":211658,"journal":{"name":"Oxford Research Encyclopedia of Economics and Finance","volume":"49 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114078775","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-28DOI: 10.1093/acrefore/9780190625979.013.346
Charles R. Korsmo
Law and economics has proved a particularly fruitful scholarly approach in the field of mergers and acquisitions. A huge law and economics literature has developed, providing critical insights into merger activity in general and the proper role of corporate and securities law in regulating this activity. Early economic research examined the motivations for merger activity and the antitrust implications of mergers. Later scholarship elucidated the important disciplining effects on management from merger activity and the market for corporate control. If management performs poorly, causing a firm to become undervalued relative to a well-managed firm, the firm becomes vulnerable to a takeover where management will be replaced. This prospect provides a powerful incentive for management to perform well. More recent work has revealed the limitations of market discipline on management actions in the merger context, and the corresponding role of corporate law in protecting stockholders. Because a merger is generally the final interaction between management and the other stakeholders in a firm, the typical constraints and mechanisms of accountability that otherwise constrain managerial opportunism may be rendered ineffective. This work has played a central role in informing modern jurisprudence. It has shaped the application of enhanced judicial scrutiny of management actions in the merger context, as embodied in the landmark Delaware cases Unocal and Revlon. The law and economics literature has also made important contribution to more recent developments in stockholder appraisal. The law and economics tradition has also provided a useful framework for evaluating the dynamics of merger litigation, including stockholder appraisal, and the extent to which such litigation can be made to serve a useful role in corporate governance.
{"title":"The Law and Economics of Mergers and Acquisitions","authors":"Charles R. Korsmo","doi":"10.1093/acrefore/9780190625979.013.346","DOIUrl":"https://doi.org/10.1093/acrefore/9780190625979.013.346","url":null,"abstract":"Law and economics has proved a particularly fruitful scholarly approach in the field of mergers and acquisitions. A huge law and economics literature has developed, providing critical insights into merger activity in general and the proper role of corporate and securities law in regulating this activity.\u0000 Early economic research examined the motivations for merger activity and the antitrust implications of mergers. Later scholarship elucidated the important disciplining effects on management from merger activity and the market for corporate control. If management performs poorly, causing a firm to become undervalued relative to a well-managed firm, the firm becomes vulnerable to a takeover where management will be replaced. This prospect provides a powerful incentive for management to perform well.\u0000 More recent work has revealed the limitations of market discipline on management actions in the merger context, and the corresponding role of corporate law in protecting stockholders. Because a merger is generally the final interaction between management and the other stakeholders in a firm, the typical constraints and mechanisms of accountability that otherwise constrain managerial opportunism may be rendered ineffective. This work has played a central role in informing modern jurisprudence. It has shaped the application of enhanced judicial scrutiny of management actions in the merger context, as embodied in the landmark Delaware cases Unocal and Revlon. The law and economics literature has also made important contribution to more recent developments in stockholder appraisal. The law and economics tradition has also provided a useful framework for evaluating the dynamics of merger litigation, including stockholder appraisal, and the extent to which such litigation can be made to serve a useful role in corporate governance.","PeriodicalId":211658,"journal":{"name":"Oxford Research Encyclopedia of Economics and Finance","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131293583","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-28DOI: 10.1093/acrefore/9780190625979.013.545
S. Berlinski, M. Vera-Hernandez
A set of policies is at the center of the agenda on early childhood development: parenting programs, childcare regulation and subsidies, cash and in-kind transfers, and parental leave policies. Incentives are embedded in these policies, and households react to them differently. They also have varying effects on child development, both in developed and developing countries. We have learned much about the impact of these policies in the past 20 years. We know that parenting programs can enhance child development, that centre based care might increase female labor force participation and child development, that parental leave policies beyond three months don’t cause improvement in children outcomes, and that the effects of transfers depend much on their design. In this review, we focus on the incentives embedded in these policies, and how they interact with the context and decision makers to understand the heterogeneity of effects and the mechanisms through which these policies work. We conclude by identifying areas of future research.
{"title":"The Economics of Early Interventions Aimed at Child Development","authors":"S. Berlinski, M. Vera-Hernandez","doi":"10.1093/acrefore/9780190625979.013.545","DOIUrl":"https://doi.org/10.1093/acrefore/9780190625979.013.545","url":null,"abstract":"A set of policies is at the center of the agenda on early childhood development: parenting programs, childcare regulation and subsidies, cash and in-kind transfers, and parental leave policies. Incentives are embedded in these policies, and households react to them differently. They also have varying effects on child development, both in developed and developing countries. We have learned much about the impact of these policies in the past 20 years. We know that parenting programs can enhance child development, that centre based care might increase female labor force participation and child development, that parental leave policies beyond three months don’t cause improvement in children outcomes, and that the effects of transfers depend much on their design. In this review, we focus on the incentives embedded in these policies, and how they interact with the context and decision makers to understand the heterogeneity of effects and the mechanisms through which these policies work. We conclude by identifying areas of future research.","PeriodicalId":211658,"journal":{"name":"Oxford Research Encyclopedia of Economics and Finance","volume":"211 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116407276","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-28DOI: 10.1093/acrefore/9780190625979.013.323
James Lake, P. Krishna
In recent decades, there has been a dramatic proliferation of preferential trade agreements (PTAs) between countries that, while legal, contradict the non-discrimination principle of the world trade system. This raises various issues, both theoretical and empirical, regarding the evolution of trade policy within the world trade system and the welfare implications for PTA members and non-members. The survey starts with the Kemp-Wan-Ohyama and Panagariya-Krishna analyses in the literature that theoretically show PTAs can always be constructed so that they (weakly) increase the welfare of members and non-members. Considerable attention is then devoted to recent developments on the interaction between PTAs and multilateral trade liberalization, focusing on two key incentives: an “exclusion incentive” of PTA members and a “free riding incentive” of PTA non-members. While the baseline presumption one should have in mind is that these incentives lead PTAs to inhibit the ultimate degree of global trade liberalization, this presumption can be overturned when dynamic considerations are taken into account or when countries can negotiate the degree of multilateral liberalization rather than facing a binary choice over global free trade. Promising areas for pushing this theoretical literature forward include the growing use of quantitative trade models, incorporating rules of origin and global value chains, modeling the issues surrounding “mega-regional” agreements, and modelling the possibility of exit from PTAs. Empirical evidence in the literature is mixed regarding whether PTAs lead to trade diversion or trade creation, whether PTAs have significant adverse effects on non-member terms-of-trade, whether PTAs lead members to lower external tariffs on non-members, and the role of PTAs in facilitating deep integration among members.
{"title":"Preferential Trade Agreements: Recent Theoretical and Empirical Developments","authors":"James Lake, P. Krishna","doi":"10.1093/acrefore/9780190625979.013.323","DOIUrl":"https://doi.org/10.1093/acrefore/9780190625979.013.323","url":null,"abstract":"In recent decades, there has been a dramatic proliferation of preferential trade agreements (PTAs) between countries that, while legal, contradict the non-discrimination principle of the world trade system. This raises various issues, both theoretical and empirical, regarding the evolution of trade policy within the world trade system and the welfare implications for PTA members and non-members. The survey starts with the Kemp-Wan-Ohyama and Panagariya-Krishna analyses in the literature that theoretically show PTAs can always be constructed so that they (weakly) increase the welfare of members and non-members. Considerable attention is then devoted to recent developments on the interaction between PTAs and multilateral trade liberalization, focusing on two key incentives: an “exclusion incentive” of PTA members and a “free riding incentive” of PTA non-members. While the baseline presumption one should have in mind is that these incentives lead PTAs to inhibit the ultimate degree of global trade liberalization, this presumption can be overturned when dynamic considerations are taken into account or when countries can negotiate the degree of multilateral liberalization rather than facing a binary choice over global free trade. Promising areas for pushing this theoretical literature forward include the growing use of quantitative trade models, incorporating rules of origin and global value chains, modeling the issues surrounding “mega-regional” agreements, and modelling the possibility of exit from PTAs. Empirical evidence in the literature is mixed regarding whether PTAs lead to trade diversion or trade creation, whether PTAs have significant adverse effects on non-member terms-of-trade, whether PTAs lead members to lower external tariffs on non-members, and the role of PTAs in facilitating deep integration among members.","PeriodicalId":211658,"journal":{"name":"Oxford Research Encyclopedia of Economics and Finance","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123951687","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-28DOI: 10.1093/acrefore/9780190625979.013.315
C. Burnside
The uncovered interest parity (UIP) condition states that the interest rate differential between two currencies is the expected rate of change of their exchange rate. Empirically, however, in the 1976–2018 period, exchange rate changes were approximately unpredictable over short horizons, with a slight tendency for currencies with higher interest rates to appreciate against currencies with lower interest rates. If the UIP condition held exactly, carry trades, in which investors borrow low interest rate currencies and lend high interest rate currencies, would earn zero average profits. The fact that UIP is violated, therefore, is a necessary condition to explain the fact that carry trades earned significantly positive profits in the 1976–2018 period. A large literature has documented the failure of UIP, as well as the profitability of carry trades, and is surveyed here. Additionally, summary evidence is provided here for the G10 currencies. This evidence shows that carry trades have been significantly less profitable since 2007–2008, and that there was an apparent structural break in exchange rate predictability around the same time. A large theoretical literature explores economic explanations of this phenomenon and is briefly surveyed here. Prominent among the theoretical models are ones based on risk aversion, peso problems, rare disasters, biases in investor expectations, information frictions, incomplete financial markets, and financial market segmentation.
{"title":"Exchange Rates, Interest Parity, and the Carry Trade","authors":"C. Burnside","doi":"10.1093/acrefore/9780190625979.013.315","DOIUrl":"https://doi.org/10.1093/acrefore/9780190625979.013.315","url":null,"abstract":"The uncovered interest parity (UIP) condition states that the interest rate differential between two currencies is the expected rate of change of their exchange rate. Empirically, however, in the 1976–2018 period, exchange rate changes were approximately unpredictable over short horizons, with a slight tendency for currencies with higher interest rates to appreciate against currencies with lower interest rates. If the UIP condition held exactly, carry trades, in which investors borrow low interest rate currencies and lend high interest rate currencies, would earn zero average profits. The fact that UIP is violated, therefore, is a necessary condition to explain the fact that carry trades earned significantly positive profits in the 1976–2018 period. A large literature has documented the failure of UIP, as well as the profitability of carry trades, and is surveyed here. Additionally, summary evidence is provided here for the G10 currencies. This evidence shows that carry trades have been significantly less profitable since 2007–2008, and that there was an apparent structural break in exchange rate predictability around the same time.\u0000 A large theoretical literature explores economic explanations of this phenomenon and is briefly surveyed here. Prominent among the theoretical models are ones based on risk aversion, peso problems, rare disasters, biases in investor expectations, information frictions, incomplete financial markets, and financial market segmentation.","PeriodicalId":211658,"journal":{"name":"Oxford Research Encyclopedia of Economics and Finance","volume":"275 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116424435","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-28DOI: 10.1093/acrefore/9780190625979.013.101
C. Kohli-Lynch, A. Briggs
Cost-effectiveness analysis is conducted with the aim of maximizing population-level health outcomes given an exogenously determined budget constraint. Considerable health economic benefits can be achieved by reflecting heterogeneity in cost-effectiveness studies and implementing interventions based on this analysis. The following article describes forms of subgroup and heterogeneity in patient populations. It further discusses traditional decision rules employed in cost-effectiveness analysis and shows how these can be adapted to account for heterogeneity. This article discusses the theoretical basis for reflecting heterogeneity in cost-effectiveness analysis and methodology that can be employed to conduct such analysis. Reflecting heterogeneity in cost-effectiveness analysis allows decision-makers to define limited use criteria for treatments with a fixed price. This ensures that only those patients who are cost-effective to treat receive an intervention. Moreover, when price is not fixed, reflecting heterogeneity in cost-effectiveness analysis allows decision-makers to signal demand for healthcare interventions and ensure that payers achieve welfare gains when investing in health.
{"title":"Heterogeneity in Cost-Effectiveness Analysis","authors":"C. Kohli-Lynch, A. Briggs","doi":"10.1093/acrefore/9780190625979.013.101","DOIUrl":"https://doi.org/10.1093/acrefore/9780190625979.013.101","url":null,"abstract":"Cost-effectiveness analysis is conducted with the aim of maximizing population-level health outcomes given an exogenously determined budget constraint. Considerable health economic benefits can be achieved by reflecting heterogeneity in cost-effectiveness studies and implementing interventions based on this analysis. The following article describes forms of subgroup and heterogeneity in patient populations. It further discusses traditional decision rules employed in cost-effectiveness analysis and shows how these can be adapted to account for heterogeneity.\u0000 This article discusses the theoretical basis for reflecting heterogeneity in cost-effectiveness analysis and methodology that can be employed to conduct such analysis. Reflecting heterogeneity in cost-effectiveness analysis allows decision-makers to define limited use criteria for treatments with a fixed price. This ensures that only those patients who are cost-effective to treat receive an intervention. Moreover, when price is not fixed, reflecting heterogeneity in cost-effectiveness analysis allows decision-makers to signal demand for healthcare interventions and ensure that payers achieve welfare gains when investing in health.","PeriodicalId":211658,"journal":{"name":"Oxford Research Encyclopedia of Economics and Finance","volume":"332 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114380138","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-28DOI: 10.1093/acrefore/9780190625979.013.39
M. Suhrcke
While definitional and measurement problems pose a challenge, there is no doubt that disability affects a noticeable share of the population, the vast majority of whom live in low- and middle-income countries (LMICs). The still comparatively scarce empirical data and evidence suggests that disability is closely associated with poverty and other indicators of economic deprivation at both the country and—if with slightly greater nuance—at the individual/household level. There is also a growing body of evidence documenting the sizeable additional costs incurred by persons with disabilities (PwDs) as a direct or indirect consequence of their disability, underlining the increased risk of PwDs (and the households they are part of) falling under the absolute poverty line in any given LMIC. Looking ahead, there remains considerable scope for more evidence on the causal nature of the link between disability and poverty, as well as on the (cost-)effectiveness of interventions and policies attempting to improve the well-being of PwDs.
{"title":"Disability and Economic Development","authors":"M. Suhrcke","doi":"10.1093/acrefore/9780190625979.013.39","DOIUrl":"https://doi.org/10.1093/acrefore/9780190625979.013.39","url":null,"abstract":"While definitional and measurement problems pose a challenge, there is no doubt that disability affects a noticeable share of the population, the vast majority of whom live in low- and middle-income countries (LMICs). The still comparatively scarce empirical data and evidence suggests that disability is closely associated with poverty and other indicators of economic deprivation at both the country and—if with slightly greater nuance—at the individual/household level. There is also a growing body of evidence documenting the sizeable additional costs incurred by persons with disabilities (PwDs) as a direct or indirect consequence of their disability, underlining the increased risk of PwDs (and the households they are part of) falling under the absolute poverty line in any given LMIC.\u0000 Looking ahead, there remains considerable scope for more evidence on the causal nature of the link between disability and poverty, as well as on the (cost-)effectiveness of interventions and policies attempting to improve the well-being of PwDs.","PeriodicalId":211658,"journal":{"name":"Oxford Research Encyclopedia of Economics and Finance","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134503679","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-28DOI: 10.1093/acrefore/9780190625979.013.294
C. Leung, Cho Yiu Joe Ng
This article summarizes research on the macroeconomic aspects of the housing market. In terms of the macroeconomic stylized facts, this article demonstrates that with respect to business cycle frequency, there was a general decrease in the association between macroeconomic variables (MV), such as the real GDP and inflation rate, and housing market variables (HMV), such as the housing price and the vacancy rate, following the global financial crisis (GFC). However, there are macro-finance variables, such as different interest rate spreads, that exhibited a strong association with the HMV following the GFC. For the medium-term business cycle frequency, some but not all patterns prevail. These “new stylized facts” suggest that a reconsideration and refinement of existing “macro-housing” theories would be appropriate. This article also provides a review of the corresponding academic literature, which may enhance our understanding of the evolving macro-housing–finance linkage.
{"title":"Macroeconomic Aspects of Housing","authors":"C. Leung, Cho Yiu Joe Ng","doi":"10.1093/acrefore/9780190625979.013.294","DOIUrl":"https://doi.org/10.1093/acrefore/9780190625979.013.294","url":null,"abstract":"This article summarizes research on the macroeconomic aspects of the housing market. In terms of the macroeconomic stylized facts, this article demonstrates that with respect to business cycle frequency, there was a general decrease in the association between macroeconomic variables (MV), such as the real GDP and inflation rate, and housing market variables (HMV), such as the housing price and the vacancy rate, following the global financial crisis (GFC). However, there are macro-finance variables, such as different interest rate spreads, that exhibited a strong association with the HMV following the GFC. For the medium-term business cycle frequency, some but not all patterns prevail. These “new stylized facts” suggest that a reconsideration and refinement of existing “macro-housing” theories would be appropriate. This article also provides a review of the corresponding academic literature, which may enhance our understanding of the evolving macro-housing–finance linkage.","PeriodicalId":211658,"journal":{"name":"Oxford Research Encyclopedia of Economics and Finance","volume":"736 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131621127","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-28DOI: 10.1093/acrefore/9780190625979.013.490
Nikolaus Robalino, A. Robson
Modern economic theory rests on the basic assumption that agents’ choices are guided by preferences. The question of where such preferences might have come from has traditionally been ignored or viewed agnostically. The biological approach to economic behavior addresses the issue of the origins of economic preferences explicitly. This approach assumes that economic preferences are shaped by the forces of natural selection. For example, an important theoretical insight delivered thus far by this approach is that individuals ought to be more risk averse to aggregate than to idiosyncratic risk. Additionally the approach has delivered an evolutionary basis for hedonic and adaptive utility and an evolutionary rationale for “theory of mind.” Related empirical work has studied the evolution of time preferences, loss aversion, and explored the deep evolutionary determinants of long-run economic development.
{"title":"The Biological Foundations of Economic Preferences","authors":"Nikolaus Robalino, A. Robson","doi":"10.1093/acrefore/9780190625979.013.490","DOIUrl":"https://doi.org/10.1093/acrefore/9780190625979.013.490","url":null,"abstract":"Modern economic theory rests on the basic assumption that agents’ choices are guided by preferences. The question of where such preferences might have come from has traditionally been ignored or viewed agnostically. The biological approach to economic behavior addresses the issue of the origins of economic preferences explicitly. This approach assumes that economic preferences are shaped by the forces of natural selection. For example, an important theoretical insight delivered thus far by this approach is that individuals ought to be more risk averse to aggregate than to idiosyncratic risk. Additionally the approach has delivered an evolutionary basis for hedonic and adaptive utility and an evolutionary rationale for “theory of mind.” Related empirical work has studied the evolution of time preferences, loss aversion, and explored the deep evolutionary determinants of long-run economic development.","PeriodicalId":211658,"journal":{"name":"Oxford Research Encyclopedia of Economics and Finance","volume":"81 2","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132984274","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-28DOI: 10.1093/acrefore/9780190625979.013.481
Hilario Casado Alonso, T. Ruiz
The period between 1085 to 1815 witnessed important transformations in Spain’s economic history. The transition from a frontier society to one of the largest empires in the world was soon followed by its subsequent decline. During Spain’s Middle Ages two kinds of economies, societies and political structures, existed side by side: One represented by the various Muslim kingdoms and another by the Christians. Their frontiers shifted constantly between 1035 and 1212 to the detriment of Al-Andalus (Muslim Spain), concluding with the conquest of Granada in 1492. Economic dynamism resulted in Christian expansion, reflected in demographic, agricultural, livestock, and commercial growth during the 11th, 12th, and 13th centuries and comparable to that of other medieval kingdoms. Under the stress of the mid-14th-century crisis (plagues, wars, and civil conflicts), economic growth came to a partial halt in the second half of the century. Yet, unlike other areas in Europe, the late medieval crisis had less of an impact in Spain, differently affecting some of the Iberian realms. After the second third of the 15th century, as it was the case in Portugal, the economy in the Crown of Castile began to grow once more. Castile became the demographic and economic hub of Spain to the detriment of other areas, such as Catalonia, Navarra, or Aragón, which had been more developed in earlier times. The Catholic Monarchs’ rule and their reforms made Spain one of the most prosperous economies in Europe and the center of a sprawling empire. The colonisation of the Americas and the Philippines with their untold wealth further bolstered Spain’s economy. As a result, most researchers agree that Spain reached the height of its economic growth in the mid-16th century, although in a number of regions growth extended into the 1580s. Based mostly in agriculture, the economy also benefitted from the development of crafts and, above all, trade, generating vast tax revenue for the Habsburg monarchy’s expansive policy of war. After the late 16th century, however, the Spanish economy began to show signs of fatigue, leading to severe crisis that lasted until at least the mid-17th century. This recession heralded a major shift in Spain’s history. Whereas it was the inland areas of Spain that were the most populated and wealthy during the 12th and 13th centuries, these areas were also most affected by the crisis, while the coastal regions would be the first to emerge from the recession. Although Spain failed to reach the heights attained in other countries such as Britain, France, or the Netherlands, an economic revival occurred during the 18th century, moving the Spanish economy beyond what it had been during the final third of the 16th century. Nonetheless, as had occurred in the 17th century, coastal areas developed more intensely than inland, leading to the economic geography of modern-day Spain.
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