Two conversion schemes are usually employed for assessing personalincome inequality from household equivalent incomes: to weight household units by size or by needs. Using data from the Luxembourg Income Study, the authors show the sensitivity of country inequality rankings to conversion schemes and explain the finding by means of inequality decomposition. A bootstrap approach is implemented to...

This article reexamines the problem of labor exploitation in advanced capitalist economies, especially the United States. The article specifies the concept of labor exploitation by using both the Marxian and marginalist notions and measures. The implicit neoclassical presumption of no or little labor exploitation in a capitalist economy is rejected by the results. The alternative heterodox argu...

We consider the generalization of Shapley and Scarf’s (1974) [Shapley, L., Scarf’s, H., 1974. On cores and indivisibility. Journal of Mathematical Economics 1, 23–37.] model of trading indivisible objects (houses) to so-called multiple-type housing markets. We show that the prominent solution for these markets, the coordinate-wise core rule, is second-best incentive compatible. © 2007 Elsevier ...

We examine methods for evaluating interventions designed to improve decision-making quality when people misunderstand the consequences of their choices. In an experiment involving financial education, conventional outcome metrics (financial literacy and directional behavioral responses) imply that two are equally beneficial even though only one reduces average severity errors. trace these failu...

We quantify reference dependence and loss aversion in the housing market using rich Danish administrative data. Our structural model includes aversion, dependence, financial constraints, a sale decision, matches key nonparametric moments, including “hockey stick” listing prices with nominal gains, bunching at zero realized gains. Households derive substantial utility from gains over original ho...

Subjective beliefs are crucial for economic inference, yet behavior can challenge the elicitation. We propose that belief elicitation should be incentive compatible not only theoretically but also in a de facto behavioral sense. To demonstrate, we show binarized scoring rule, state-of-the-art elicitation, violates two weak conditions compatibility: (i) within information on incentives increases...

We study subgame-perfect implementation (SPI) mechanisms that have been proposed as a solution to incomplete contracting problems. show these mechanisms, which are based on off-equilibrium arbitration clauses impose large fines for lying and the inappropriate use of arbitration, severe behavioral constraints because induce retaliation against legitimate uses arbitration. Incorporating reciproci...

Information provision experiments allow researchers to test economic theories and answer policy-relevant questions by varying the information set available respondents. We survey emerging literature using in economics discuss applications macroeconomics, finance, political economy, public economics, labor health economics. also design considerations provide best-practice recommendations on how ...

Most individual life insurance policies lapse, with lapsers cross-subsidizing non-lapsers. We show that and lapse patterns predicted by standard rational expectations models are the opposite of those observed empirically. propose two behavioral consistent evidence: (i) consumers forget to pay premiums (ii) understate future liquidity needs. conduct surveys a large insurer. New buyers believe th...

We conduct lab experiments to investigate demand for consumption agency in married couples from Pakistan. Most subjects are no better at guessing their spouse's preferences than those of a stranger, suggesting that individual executive has instrumental value. find significant evidence all experiments, varying with the cost and anticipated benefit agency. But often make choices incompatible pure...