This article uses various micro data sets to study entrepreneurship. Consistent with the existence of capital constraints on potential entrepreneurs, the estimates imply that the probability of self‐employment depends positively upon whether the individual ever received an inheritance or gift. When directly questioned in interview surveys, potential entrepreneurs say that raising capital is their principal problem. Consistent with our theoretical model's predictions, the self‐employed report higher levels of job and life satisfaction than employees. Childhood psychological test scores, however, are not strongly correlated with later self‐employment.

/pdf/what-makes-an-entrepreneur-55xfa4ufr7.pdf

What Makes an Entrepreneur

Founders' human capital and the growth of new technology-based firms: A competence-based view

https://www.nber.org/system/files/working_papers/w7486/w7486.pdf

Self-employment in OECD countries

How effective are technology incubators?: Evidence from Italy

https://www.andrewoswald.com/docs/eeaentrepjan2001.pdf

Latent entrepreneurship across nations

This paper investigated the extent to which the supply of collateral affects business formation in the UK. Bank loans are typically secured on the entrepreneur’s house. Using a variety of data and formulations, evidence is found that a 10% rise in the value of unreleased net housing equity increased the number of new VAT registrations by some 5%. Since we find that businesses formed in response to increases in the value of housing assets seem to be of at least average quality as measured by survival chances, there appears to be a large pool of untapped entrepreneurial talent.

House prices, the supply of collateral and the enterprise economy

Identical cases of wine are often auctioned one immediately after another. Ashenfelter (1989) reports that on average, the later lots fetch less. Such a systematic price difference seems anomalous, the more so because it is shown here that rational expectations imply not equal, but rising, prices. Risk aversion is an obvious way of reconciling the evidence with rational behavior. There is an alternative explanation. The auctions observed by Ashenfelter involved a buyer's option, whereby the first-round winner could purchase further cases at the same price. It is shown that this feature may both account for the observed price trajectory and raise seller revenue.

Systematic Price Differences Between Successive Auctionsare no Anomaly

A decision maker wishes to pick b to maximise E[u(z(x, b))] where x is a random variable. A shift in the probability density function of x fromf(x) to g(x) is considered where g(x) can be interpreted as representing greater uncertainty. A set of conditions on the behavior of the ratio of f(x) to g(x) over the support of .x are derived sufficient to sign the effect of the shift on the decision variable. In most decision making models there is an element of uncertainty about the outcome. An important question is how changes in the distribution of beliefs about the underlying variables will affect the optimal value of some choice variable. In particular it is of interest to analyse whether any general statements can be made about shifts in the distributions which allow the sign of the effect on the decision variable to be analysed. In this paper we consider the case where a decision maker wishes to maximise E[u(z(x, b))] where x is a random variable and b is a decision variable. For this model the results of Rothschild and Stiglitz (1971) cannot in general be used, as shown by Meyer and Ormiston (1983). Meyer and Ormiston derive a set of sufficient conditions on changes in the distribution of x which permit the effect on the optimal choice of b to be signed. We show that these conditions are unduly restrictive and derive a less stringent set of sufficient conditions. The direct argument of the decision maker's utility function, z, is assumed to be a function of a random variable, x, and the decision variable, b. In the analysis which follows we assume that z(x, b) is such that zx > 0, Zbx 0, Zbb 0 and u"(z) < 0, i.e. the decision maker is risk neutral or risk averse. The random variable, x, is assumed to have an initial distribution characterised by the cumulative distribution function (c.d.f.) F(x) with associated probability density function (p.d.f.), or probability functionf(x). The comparative statics of a shift to a c.d.f. G(x) with associated p.d.f. g(x) are analysed. In the analysis x is assumed to be a continuous random variable but Lemma 1 and Theorem 1 can be adapted for the case where x is discrete. G(x) is assumed to represent a distribution which can be considered to represent greater uncertainty than F(x). The supports of x under G(x) are [x1, x6] and under F(x) are [X2, X5] where x1 < X2 < X5 < X6. If the strict inequalities hold extreme values of x which cannot occur under F(x) become possible under G(x). Meyer and Ormiston

Jane Black

Papers

House prices, the supply of collateral and the enterprise economy

Systematic Price Differences Between Successive Auctionsare no Anomaly

A ratio criterion for signing the effects of an increase in uncertainty

Everyone may benefit from subsidising entry to risky occupations

Asset price variability in a rational expectations equilibrium