Economic Development

Financial Performance and Outreach: A Global Analysis of Leading Microbanks

Financial Performance and Outreach: A Global Analysis of Leading Microbanks
Economic Journal, February 2007, Vol. 117, Issue 517, pp. F107-F133

Morduch, J., Cull, R. & Demirguc-Kunt, A.
02/01/2007

Microfinance promises to reduce poverty by employing profit-making banking practices in low-income communities. Many microfinance institutions have secured high loan repayment rates but, so far, relatively few earn profits. We examine why this promise remains unmet. We explore patterns of profitability, loan repayment, and cost reduction with unusually high-quality data on 124 institutions in 49 countries. The evidence shows the possibility of earning profits while serving the poor, but a trade-off emerges between profitability and serving the poorest. Raising fees to very high levels does not ensure greater profitability and the benefits of cost-cutting diminish when serving better-off customers.

Does Federally Subsidized Rental Housing Depress Neighborhood Property Values?

Does Federally Subsidized Rental Housing Depress Neighborhood Property Values?
Journal of Policy Analysis & Management, Spring 2007, Vol. 26 Issue 2, p257-280, 24p.

Ellen, I.G., Schwartz, A.E., Voicu, I. & Schill, M.H.
01/01/2007

Few communities welcome federally subsidized rental housing, with one of the most commonly voiced fears being reductions in property values. Yet there is little empirical evidence that subsidized housing depresses neighborhood property values. This paper estimates and compares the neighborhood impacts of a broad range of federally subsidized rental housing programs, using rich data for New York City and a difference-in-difference specification of a hedonic regression model. We find that federally subsidized developments have not typically led to reductions in property values and have, in fact, led to increases in some cases. Impacts are highly sensitive to scale, though patterns vary across programs.

Two Wrongs Do Not Make a Right

Two Wrongs Do Not Make a Right
National Tax Journal, Sep 2006, Vol. 59 Issue 3, p491-508, 18p.

Furman, J.
09/01/2006

This paper analyzes proposals to remedy tax-induced distortions in health care by using new tax incentives and retaining all of the existing distortionary tax incentives. In the process of remedying some distortions, this approach magnifies others--most notably increasing the total tax preference for health care. The paper considers two examples--the Bush administration's FY 2007 budget proposal and a plan by Cogan, Hubbard and Kessler (2005)--and shows that both could result in higher health spending and reduced welfare. Finally, the paper discusses the circumstances in which tax incentives could be warranted to remedy market failures in health insurance.

Gasoline Prices, Interest Rates, and the 2008 Election

Gasoline Prices, Interest Rates, and the 2008 Election
The New York Observer June

Moss, M.
06/01/2006

Forget immigration, global warning, Donald Rumsfeld and abortion rights.

The hot issues of today will quickly fade away if the current surge in gasoline prices and home-mortgage rates continues unabated. And all indications are that both the price of gas and the cost of borrowing are moving in one direction only: north.

 

Risks and Costs of a Terrorist Attack on the Electricity System

Risks and Costs of a Terrorist Attack on the Electricity System
The Economic Impacts of Terrorist Attacks Volume 2, edited by H.W. Richardson, P. Gordon and J.E. Moore II, Cheltenham, UK: Edward Elgar Publishers.

Zimmerman, R., Restrepo, C., Simonoff, J.S. & Lave, L.B.,
01/01/2006

As suggested by the title, this is a collection of essays on the economic effects of successful terrorist attacks focusing on the electrical transmission, and transportation infrastructure of the United States. Those familiar with the literature on the economic effects of natural disasters will
find the arguments and economic models quite familiar. The individual essays are by leading experts who do not necessarily agree on the most appropriate methods or policy conclusions. This provides a refreshing measure of potential controversy.

Do Changes in Pension Incentives Affect Retirement? A Longitudinal Study of Subjective Retirement Expectations

Do Changes in Pension Incentives Affect Retirement? A Longitudinal Study of Subjective Retirement Expectations
Journal of Public Economics 88(7), July 2004

Sewin Chan & Ann Huff Stevens
07/01/2004

This paper investigates the responsiveness of individuals’ retirement decisions to forward-looking measures of pension accumulations. In contrast to previous research, we use within-person variation in retirement incentives and are able to control for unobserved heterogeneity in tastes for retirement by studying a panel of subjective retirement expectations. We confirm that individuals do respond as expected to pension incentives, even when we control for individual fixed effects. However, the magnitude of these responses differs when estimated from models based on within-person versus cross-sectional variation: the inclusion of fixed effects reduces the response by about half.

Children Facing Economic Hardship in the United States: Differentials and Changes in the 1990's

Children Facing Economic Hardship in the United States: Differentials and Changes in the 1990's
Demographic Review, June 2004, Vol 10, Article 11.

Lu, H.H., Palmer, J., Song, Y., Lennon, M.C. & Aber, J.L.
06/18/2004

This paper helps document significant improvements in the child low-income rate as well as the significant decrease in the proportion of children who relied on public assistance in the United States during the 1990s. Many disadvantaged groups of children were less likely to live in poor or low-income families in the late 1990s than such children a decade earlier. The improvement in the child low-income rates of these disadvantaged groups was accompanied by a substantial increase in parental employment. However, parental employment appears to do less to protect children from economic hardship than it did a decade earlier. This paper shows that working families� children in many disadvantaged social groups, especially groups in medium risk ranks�children in families with parents between ages 25 to 29, with parents who only had a high-school diploma, and in father-only families�suffered the largest increase in economic hardship. Our results indicate that the increased odds of falling below low income lines among children in working families facing multiple disadvantaged characteristics and the increased proportion of these children in various subgroups of working families in the 1990s can help explain the increased economic hardship among subgroups in the medium risk ranks listed above. Finally, the paper also notes that the official measure of poverty tends to underestimate low-income rates.

City Taxes, City Spending: Essays in Honor of Dick Netzer

City Taxes, City Spending: Essays in Honor of Dick Netzer
Northampton, Mass: Edward Elgar Publishing Ltd.,

Schwartz, A.E.
01/01/2004

In a festschrift to Netzer a public finance economist well known for his research on state and local taxation, urban public services, and nonprofit organizations eight chapters apply microeconomics to problems facing urban areas and use statistical analysis to gain insight into practical solutions. The essays look at alternative methods of financing urban government, such as a land value tax and the impact of sales and income taxes on property taxation; at government expenditures, including housing subsidies; and at subsidies to nonprofit arts groups as well as the role of the nonprofit sector in providing K-12 education. Of interest to the fields of public finance, urban economics, and public administration.

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