Measuring Mobility

April 27, 2011

By: Frank A. Cowell (STICERD – London School of Economics)
Emmanuel Flachaire (GREQAM – Groupement de Recherche en Économie Quantitative d’Aix-Marseille – Université de la Méditerranée – Aix-Marseille II – Université Paul Cézanne – Aix-Marseille III – Ecole des Hautes Etudes en Sciences Sociales (EHESS) – CNRS : UMR6579)


Our new approach to mobility measurement involves separating out the valuation of positions in terms of individual status (using income, social rank, or other criteria) from the issue of movement between positions. The quantification of movement is addressed using a general concept of distance between positions and a parsimonious set of axioms that characterise the distance concept and yield a class of aggregative indices. This class of indices induces a superclass of mobility measures over the different status concepts consistent with the same underlying data. We investigate the statistical inference of mobility indices using two well-known status concepts, related to income mobility and rank mobility.

Keywords: Mobility measures; axiomatic approach; inference

Happiness on Tap: Piped Water Adoption in Urban Morocco

April 25, 2011

By: Florencia DEVOTO (Paris School of Economics and J-PAL)
Esther DUFLO (MIT and NBER)
Pascaline DUPAS (UCLA and NBER)
William PARIENTE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
Vincent PONS (MIT (Massachusetts Institute of Technology))


We study the demand for household water connections in urban Morocco, and the effect of such connections on household welfare. In the northern city of Tangiers, among homeowners without a private connection to the city’s water grid, a random subset was offered a simplified procedure to purchase a household connection on credit (at a zero percent interest rate). Take-up was high, at 69%. Because all households in our sample had access to the water grid through free public taps (often located fairly close to their homes), household connections did not lead to any improvement in the quality of the water households consumed; and despite significant increase in the quantity of water consumed, we find no change in the incidence of waterborne illnesses. Nevertheless, we find that households are willing to pay a substantial amount of money to have a private tap at home. Being connected generates important time gains, which are used for leisure and social activities, rather than productive activities. Because water is often a source of tension between households, household connections improve social integration and reduce conflict. Overall, within 6 months, self-reported well-being improved substantially among households in the treatment group, despite the financial cost of the connection. Our results suggest that facilitating access to credit for households to finance lump sum quality-of-life investments can significantly increase welfare, even if those investments do not result in income or health gains.

The emergence of norms from conflicts over just distributions

April 11, 2011

By:Luis Miller (CESS, Nuffield College, Oxford, Great Britain)
Heiko Rauhut (ETH Zurich, Swiss Federal Institute of Technology)
Fabian Winter (Max Planck Institute of Economics, Jena, Germany)
Why is it that well-intentioned actions can create persistent conflicts? While norms are widely regarded as a source for cooperation, this article proposes a novel theory in which the emergence of norms can be understood as a bargaining process in which normative conflicts explain the finally emerging norm. The theory is tested with a dynamical experiment on conflicts over the consideration of equality, effort or efficiency for the distribution of joint earnings. Normative conflict is measured by the number of rejected offers in a recursive bargaining game. The emerging normative system is analyzed by feedback cycles between micro- and macro-level. It is demonstrated that more normative cues cause more normative conflict. Further, under the structural conditions of either simple or complex situations, the convergence towards a simple and widely shared norm is likely. In contrast, in moderately complex situations, convergence is unlikely and several equally reasonable norms co-exist. The findings are discussed with respect to the integration of sociological conflict theory with the bargaining concept in economic theory.
Keywords:social norms, normative conflict, bargaining, cooperation, experiment

Are Intra-Household Allocations Policy Neutral? Theory and Empirical Evidence

April 4, 2011

By: Chiappori, Pierre-André (Columbia University), Iyigun, Murat (University of Colorado, Boulder), Lafortune, Jeanne (University of Maryland), Weiss, Yoram (Tel Aviv University)

We develop a collective household model with spousal matching in which there exists marital gains to assortative matching and marriage quality for each couple is revealed ex post. Changes in alimony laws are shown to affect existing couples and couples-to-be differently. For existing couples, legislative changes that favor (wo)men benefit them especially if the marriage match quality is low, while, for couples not yet formed, they generate offsetting intra-household transfers and lower intra-marital allocations for the spouses who are the intended beneficiary. We then estimate the effect of granting alimony rights to cohabiting couples in Canada using a triple-difference framework since each province extended these rights in different years and requiring different cohabitation length. We find that obtaining the right to petition for alimony led women to lower their labor force participation. These results, however, do not hold – and, in some cases, are reversed – for newly formed cohabiting couples.
Keywords: intra-household allocations, matching, cohabitation, alimony laws
JEL: J12