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This chapter provides an introduction to mathematical modelling in economics through the study of supply and demand sets, equilibrium and the effect of the imposition of an excise tax.
Chapter 4 reviews the underlying concepts of human capital theory, including a short introduction to the concepts of demand and supply and the relation between marginal productivity and wages. The first section of the chapter reviews the key assumptions of human capital theory – especially the importance of individual choice, the role of individuals’ initial endowments in making choices regarding investments in education and training, and the causal relation between individual skill acquisition and individual labor productivity. The second and third section of the chapter review some fundamental concepts of supply and demand and the relationship between productivity and wages – these sections are meant for students who have had little or no economics. The final section of the chapter discusses the fundamentals of the model of demand for and supply of human capital – first, in the early model of Becker and Chiswick (1966), followed by the more recent life-cycle investment model as described in Neal (2017). These conceptual foundations allow us to move on to more specific human capital analyses in the next two chapters.
The first element of understanding how to improve the health and well-being of a population relies on a thorough assessment of the needs of the specified population, be it a local population defined by geography, a specific age group or those with certain characteristics. This chapter begins by considering how ‘health need’ can be conceptualized; the distinction between need, demand and supply; and the difference between health needs and the need for health-care. Secondly, the wider determinants of health are introduced and their relation to health needs discussed. Finally, the steps involved in a systematic assessment of the health needs of a defined population are explained, including tools and resources used to achieve this. Practical challenges are considered.
Chapter 3 develops the fundamentals of demand analysis through the lens of demand for medical care. The chapter discusses how to read and use demand curves and why demand for health is not commonly used (there is no direct market for health). Then various demand elasticities are covered: price elasticity of demand, income elasticity of demand, and cross-price elasticity of demand. Each elasticity is developed along with examples specific to the market for medical care and health decision-making. The chapter also develops important tools for using demand curves: how to think through demand shifters, Engel curves, how to calculate consumer surplus, and how to aggregate from individual to market demand. The end of chapter supplement walks through how to calculate elasticities.
To explain countries’ varying participation in the Belt and Road Initiative, this chapter begins with a discussion of recipient country characteristics that impact the demand for Chinese spending, including the political regime, clientelism, and the public-private orientation of the corporate sector. It then discusses the supply-side factors that influence Chinese foreign spending, including the Chinese Communist Party (CCP), state-owned entities (e.g., SOEs), and private firms. Finally, it evaluates the compatibility of these demand and supply characteristics. The key prediction is that electoral autocracies will display the strongest compatibility with Chinese foreign construction spending. This is amplified when the leaders of these regimes have a weak or insecure hold on power. Electoral autocracies are also predicted to be the most avid adopters of Chinese standards stemming from their eagerness for Chinese infrastructure spending.
The unsustainable use of wildlife increases the risk of species extinction. In biodiversity-rich Indonesia, information on the scale of wildlife use is limited and requires further study. To address this, we explored the potential of text messaging (short message service; SMS) surveys to investigate levels and spatial patterns of domestic wildlife use, using songbird keeping and shark consumption as case studies because of their widespread occurrence in all 34 Indonesian provinces. We sent 340,000 messages for each survey during October–November 2018 and incentivized responses with a mobile data package as reward. We obtained survey response rates of 1.4% (songbird ownership) and 1.5% (shark consumption). Our results revealed an estimated 175.7 million songbirds being kept by 35% (80.4–86.6 million) of the Indonesian population and 33.5 million people (14% of the Indonesian population) to have consumed shark products in their lifetime. We identified hotspots of songbird ownership in several provinces in Java, corroborating previous findings, and new ones in the North Sumatra province, for example. The provinces of Maluku, Aceh and East Nusa Tenggara had the highest numbers of reported shark consumers per 1,000 people. Responses indicated a wide variety of shark products being consumed, highlighting the need for in-depth research to understand the explanatory factors behind these practices. These findings demonstrate the potential of SMS surveys to be a cost-effective approach for conducting large-scale studies on wildlife consumption patterns over a short period of time.
There is some evidence that rats benefit from social housing and from some forms of environmental enrichment, such as platforms and shelters. It is less clear whether they benefit from more spacious cages. There is a lack of information about the relative benefits of social contact, enrichment and increased space, because existing studies tend to concentrate on only one of these variables at a time. The current experiment used economic demand procedures as a method to compare, on a single scale, qualitatively different environments with a standard home cage. The data indicate that rats show a high demand for social contact, and a low demand for a larger cage or one containing pillars or novel objects. This finding suggests that social housing of laboratory rats should be strongly advocated.
Animals should be given the opportunity to perform behaviours that they are motivated to show if we are to maximise their welfare. Research studies into motivation and appropriate methods of studying it are therefore important. Different factors may need to be taken into consideration depending on the form of the behaviour being studied. Certain commodities, such as a perch for night-time roosting, have a value only if the animal is given full access to them until it has completed the behaviour. For other commodities, such as food and water, the amount can be varied along a continuous scale without affecting the animals’ demand for that resource. The commonly used operant techniques generating demand curves are based on the assumption that demand is not affected by the size of the reward (ie how much of the commodity the animal gains access to). As a consequence, these techniques are appropriate only for assessing motivation for resources of which the size can be varied. Resources of the ‘all-or-none’ type, on the other hand, require a different approach. We discuss different adaptations of the push-door technique as a measure of motivation, and we present results that validate a version with fixed, individually adapted levels of resistance. The method was validated using laying hens (Gallus gallus domesticus) tested at different levels of food deprivation and exposed to two series of increasing door resistances. The results show that the level of food-deprivation affects the amount of resistance that is overcome. We conclude that this method could be used to study hens’ motivation for commodities of the ‘all-or-none’ type.
While the linkage between team performance and attendances is well established, there has been negligible previous research using club memberships as an alternative indicator of demand for sport. Little attention has been paid to how the number of memberships is affected by common measures of team performance, such as the team’s win-ratio. This study utilises a previously unavailable long range time-series data set of annual memberships for an Australian Football League (AFL) club, Hawthorn FC. A succession of basic correlation analyses demonstrates that, while the relation between club membership numbers and win-ratios is strongly positive as it is for attendances (for most of the sample), some of the finer properties are substantially different. It is suggested that much of the reason for this lies in differences between the segmented nature of these markets for attendances and memberships.
Communities are integral parts of health systems and their engagement in defining health needs, priorities, solutions and in the delivery of services is essential to improving health and well-being. All communities, regardless of how they are defined, include individuals or sub-groups who, for a host of reasons are disadvantaged and experience a disproportionate burden of ill health. Identifying and engaging them is both essential and challenging, and should be prioritized. Communities interface with the health system with varying degrees of engagement ranging from passively receiving information at one end of the spectrum to actively engaging in decision making through mutually accountable relationships at the other. This chapter explores the concepts of community and community engagement and consider their role in health systems. It examines the concept of health, the changing health needs of communities and the influence of community in defining health issues and informing solutions, including the delivery of services. Finally, the chapter discusses the modalities of community engagement for health systems, particularly within low- and middle-income countries (L&MICs).
The market in ancient Greece should be understood as a specific institutional construct, that of the city-state, which allowed its citizens to exercise private property rights guaranteed by law. By extension, free foreigners were also acknowledged these rights, which however extended to the private ownership of human beings (slavery). The city-state also created the conditions for an unusually high division of labour. Each city was a market space of its own, with its own rules and logic, which could include the control over sales margins and even sometimes the establishment of maximum prices for some perishable fresh goods. The network of hundreds of Greek city-states also created the conditions for the development of an original form of international market.
This chapter examines public responses to new urban shopping spaces and interrogates the idea of voracious consumer demand which underpinned major retail developments. I show that the projections of ‘demand’ which were put together in support of redevelopment were not borne out by the poor trading experience of many new shopping facilities after opening. The politically embarrassing failures of high-profile ‘white elephants’ prompted both government and the development industry to take much more seriously the complexities and limits of ‘demand’ in the affluent society. The chapter also probes some broader questions about the nature of Britain’s post-war affluent society. By the later 1960s, it was already clear that projections of inexorably expanding prosperity were misjudged, and the installation of expensive new shopping facilities at the heart of British urban life began to look somewhat misplaced. I highlight the rising currents of protest against the commercially driven course of urban transformation which became increasingly pronounced at this time. Citizens, activists and academics began to critique the encroachment of the retail economy over ever more of the city’s shared spaces. The chapter also considers the political implications of the widespread installation of enclosed, privately owned shopping spaces across the urban centres of post-war Britain.
This chapter examines the marketing of consumer goods. Shops proliferated in the eighteenth century, as did the ranks of peddlers, smugglers, and street sellers. While most shops sold basic goods over rough-hewn counters or through open street-windows, many luxury and semiluxury shops adopted new strategies to lure well-off customers into their establishments. “Shopping,” a word coined in this period, became a leisure activity for women and men of the upper and middling classes. Retailers extended credit to customers to boost sales. New methods of advertising fueled demand. Marketing occurred mainly at the site of the shop, but printed trade cards and handbills, some of which were illustrated with exotic images, increasingly stimulated interest in goods. Advertisements also appeared in newspapers and fashion journals. Mediated by merchants and retailers, new channels of dialogue opened between producers and consumers, supporting a reciprocal relationship between supply and demand. Not only were more points of contact between retailers and customers established but more information flowed between them. The information exchanged in this dialogue created feedback loops between producers and consumers that often (though not always) stimulated supply and demand. Thus, demand was neither a direct emanation of primordial human needs nor an automatic response to commercial manipulation. It was a social and cultural force that developed through communication systems mediated by information brokers of all types.
Chapter 4 presents the basic formulation of the structural reliability problem. It starts with the so-called R-S problem with R denoting a capacity (resistance, supply, strength, etc.) value and S denoting a measure of the corresponding demand (load, stress, etc.), both modeled as random variables. Solutions in integral form are presented for the failure probability by conditioning on R or S, or using formulations in terms of the safety margin or safety factor that lead to the introduction of the concept of reliability index. Exact solutions are presented for specific distributions of R or S. This allows examination of the so-called tail-sensitivity problem, i.e., the sensitivity of the failure probability to the selected probability distributions. It is shown that small failure probabilities are sensitive to the shape of the selected distributions in the tail. The formulation of the structural reliability problem is then generalized and presented in terms of a limit-state function of basic random variables. Using this formulation, the probability of failure is expressed as a multifold integral over the outcome space of the basic random variables. Descriptions of several example applications of the generalized structural reliability formulation conclude the chapter.
Chapter 2 describes the enabling environment in which orphanage trafficking occurs. It examines how the utility of the orphan child for aid and development is manipulated for the purpose of the orphanage-trafficking business model in order to profit from donor funding and orphanage tourism. It demonstrates how governments and non-governmental organisations utilise the orphan child as a focal point to increase aid and tourism, leading to a financial dependence on the orphan child. This utility is manipulated and exploited by both governments and non-government organisations to encourage what has been termed an ‘orphan addiction’. This chapter describes the political and social imperatives behind the creation, encouragement and maintenance of the orphan addiction, which in turn drives orphanage tourism and the production of paper orphans. The increasing demand for orphanage tourism creates a demand for the maintenance of an orphan population to visit and volunteer with, which is achieved through orphanage trafficking. Finally, this chapter explains the financial incentives of orphanage trafficking for developing nation governments.
Chapter 3 establishes orphanage tourism as a demand driver for orphanage trafficking. Orphanage tourism has increased in popularity in the last decade which, in combination with an enabling environment, has led to a proliferation of orphanages being established in developing states and the emergence of orphanage trafficking. The chapter examines the interrelationship between supply and demand in orphanage trafficking and argues that in order to understand how orphanage trafficking functions, a reconceptualisation of demand is required. Demand in trafficking is generally regarded as the embodiment of consumer desire, which may be illegal or at other times morally challenging. However, demand for orphanage tourism functions differently as it is not initially predicated on consumer desire, but instead on a perceived supply of orphans who require assistance. It is this perceived supply which orphanage tourism responds to. To address the demand of orphanage tourism, the perception of the supply of vulnerable orphans must be countered. Orphanage tourism needs to be addressed bilaterally as both a threat to child protection and as a demand driver for child trafficking into orphanages.
Actions receive teleological descriptions and reason explanations. In some circumstances, these descriptions and explanations might appeal not just to the agent’s own purposes and reasons, but also to the purposes and reasons of others in her social surroundings. Some actions have a social teleology. I illustrate this phenomenon and I propose a concept of vicarious action to account for it. An agent acts vicariously when she acts in response to the demand of another agent who knew that her demand was likely to succeed. I argue that vicariousness grounds the social teleology of the resulting actions.
Bilateral trade agreements between Japan and major wine-exporting countries have resulted in tariff eliminations in Japan. This raises questions about how tariffs affect the competitiveness of wine-exporting countries. The generalized dynamic Rotterdam model was used in estimating Japanese wine demand by source. Estimates were then used to project the impact of tariffs on imports of Australian, Chilean, French, German, Italian, Spanish, and U.S. wine. Tariff reductions primarily benefit affected countries, with limited adverse effects on competing countries. The elimination of tariffs on U.S. wine should offset any losses from competing trade agreements.
Addictive disorders effect millions of people and have an economic impact that continues to grow each year. Although research is making headway in dealing with addictive substances and behavioral disorders, finding underlying mechanisms that span across disorders is less common. Behavioral economics is one continually developing and refining tool researchers have been using as a means to understand addictions. The first, and most researched area of behavioral economics is delay discounting (DD), which is the subjective devaluation of a reward as a function of the time to receiving it. Researchers use DD to evaluate choice and how that underlies addictive disorders and decision making; yet, they still debate whether discounting rates are stable or change over time. Probability discounting (PD) is another piece of the behavioral economics puzzle. Commonly used in gambling disorder research, PD evaluates behavioral decision making involving the chance of receiving the reinforcer, as opposed to the time delay to receiving it. The final major piece of behavioral economics is demand. This area looks at the amount of effort or resources an organism is willing to expend to access a reinforcer. In this chapter each of these areas will be further explored and understood through the lens of behavioral economics as a whole.
Prior tests of Hicks’ Induced Innovation Hypothesis (IIH) have been greatly hampered because the lack of supply-side data implicitly requires the untenable assumption that the marginal research cost is the same for different inputs. We document that, with appropriate model specification and panel data, a two-way fixed-effects estimator can account for much of the non-neutrality of the innovation function. Using a test procedure that is robust to a time-variant and non-neutral innovation function, we test the IIH in U.S. agriculture for the period 1960–2004. We use only readily available data for innovation demand and total public research expenditures.