Showing papers by "London School of Economics and Political Science published in 1976"

Real National Income

Abstract: Real national income comparison is one of the most frequently performed exercises in empirical economics. While the welfare implications of such comparisons are often not spelt out, there is little doubt that the significance that is attached to comparisons of real national income depend greatly on their implicit welfare content. This also influences the statistical procedures that are chosen, and as has been observed, " the basic conventions that have been adopted by the statisticians of most countries for purposes of GNP-measurement are still founded on some notion of what measure of economic activity can best represent the contribution of that activity to welfare ". (Beckerman [2], p. 80). The welfare theory of real national income comparisons is, however, incomplete in several important ways, despite outstanding contributions by several distinguished economists, including Hicks [17], [18], Scitovsky [40], Kuznets [24], Samuelson [38], [39], Little [26] and Graaff [12], among others. Perhaps the most serious difficulty is with the treatment of income distribution. The starting point of thispaper lies in treating the same commodity going to two different persons as two different goods. The weighting of " goods ", thus defined, will incorporate distributional judgements. (The approach presented in this paper is best seen in the context of Graaff's [12] analysis of the need to " dispense with the time-honoured device of drawing a distinction between the size and the distribution of the national income and saying that welfare depends upon them both ", and his penetrating observation that welfare "depends (if we must use the term) on size only-and we do not know what the size is until we know the distribution" ([12], p. 92).) This will permit a welfare interpretation of real income comparisons without the usual restrictive assumptions, e.g. leaving out distributional considerations explicitly (cf. Hicks [17], [18]), or making the peculiarly unrealistic assumption that distribution is made " optimal" by lump-sum transfers (cf. Samuelson [38], pp. 28-29, [39]). The important point to note is that typically social welfare can be seen to be a function of the vector of " goods " as defined here, but not as a function of the vector of commodities in the usual sense (i.e. irrespective of who gets them). Another departure lies in the explicit recognition of the fact that real national income comparisons involve different groups of people.' In this, these comparisons differ from traditional welfare economics (e.g. the use of " Pareto Optimality " or of " Compensation Tests "), collective choice theory, (e.g. the use of Arrowian " social welfare functions "), and the standard theory of national planning (e.g. " cost-benefit analysis ", or " optimal growth theory "), which are concerned with comparing alternative positions of the same group of people. One way of avoiding the complex problems of inter-group contrasts is to confine real income comparisons to contrasting the actual position of a group with what its position " would have been " if it were plhced in the position of another group. (Cf. Pigou: " If the German population with German tastes were given the national dividend of England, . . ." [34], pp. 52-53.) But this problem is ill-defined. For two groups of n people each, there are n! different ways of placing one group in the position of another. And, for two groups of different sizes, the interpretation of such " as if" comparisons is totally ambiguous.

Welfare Inequalities and Rawlsian Axiomatics

Abstract: This paper is concerned with ordinal comparisons of welfare inequality and its use in social welfare judgements, especially in the context of Rawls’ ‘difference principle’. In Section 1 the concept of ordinal inequality comparisons is developed and a theorem on ordinal comparisons of welfare inequality for distributional problems is noted. Section 2 is devoted to Harsanyi’s (1955) argument that a concern for reducing welfare inequalities among persons must not enter social welfare judgements. In Section 3 an axiomatic derivation of Rawls’ lexicographic maximin rule is presented; this relates closely to results established by Hammond (1975), d’Aspremont and Gevers (1975), and Strasnick (1975). In the last section the axioms used are examined and some alternative axioms are analysed with the aim of a discriminating evaluation of the Rawlsian approach to judgements on social welfare.

Rational Choice and Revealed Preference

Abstract: According to the currently dominant view, the choice behaviour of an agent is construed to be rational if there exists a preference relation R such that, for every set S of available states, the choice therefrom is the set of " R-optimal " points in S.' There are at least two alternative definitions of R-optimality-R-maximality and R-greatestness. On the one hand, an x in S is said to be R-maximal in S if there exists no y in S which is strictly preferred to x in terms of R. On the other, an x in S is said to be R-greatest in S if, for all y in S, x is at least as preferable as y in terms of R. The former viewpoint can claim its relevance in view of the prevalent adoption of the concept of Pareto-efficiency in the theory of resource allocation processes.2 The latter standpoint is deeply rooted in the well-developed theories of the integrability problem, revealed preference and social choice. The difference between these two definitions of rational choice is basically as follows. Any two states in a choice function which is R-maximal rational are either R-indifferent or R-incomparable, while any two states in a choice function which is R-greatest rational are R-indifferent. A condition for rational choice has been put forward in terms of the R-greatestness interpretation of optimality (Hansson [4] and Richter [9, 10]). In this paper, a condition for rational choice in its R-maximality interpretation will be presented. The condition in question will, in a certain sense, synthesize both concepts of rationality, because it can be seen that the rational choice in terms of R-maximality is rational in terms of R-greatestness as well. The role of various axioms of revealed preference and congruence in the theory of rational choice will also be clarified. In this kind of analysis, special care should be taken with the domain of the choice function. It was Arrow [1] who first suggested that " the demand-function point of view would be greatly simplified if the range over which the choice functions are considered to be determined is broadened to include all finite sets ". This line of enquiry was recently completed by Sen [13].' It is true, as was persuasively discussed by Sen [13, Section 6], that there is no convincing reason for our restricting the domain of the choice function to the class of convex polyhedras representing budget sets in the commodity space. At the same time, however, it should be admitted that there exists no specific reason for our extending the domain so as to include all finite sets. This being the case, no restriction whatsoever will be placed on the domain of the choice function in this paper except that it should be a non-empty family of non-empty sets. In Section 2, our conceptual framework will be presented. The main results will be stated in Section 3, proofs thereof being given in Section 4. In Section 5 we will present some examples which will negate the converse of our theorems. Finally, Section 6 will be devoted to comparing our results with the Arrow-Sen theory, on the one hand, and the Richter-Hansson theory, on the other.

The functional properties of the referendum

Abstract: This article outlines a way in which the wide range of experience of the referendum in Western Europe can be brought together by means of a “functional” approach. Two important perspectives appear to be: the degree of “control” exercised by the political authorities and the general “hegemonic effect” as seen in the consequences of the referendum. The variations that are possible, both in control and effect, provide the basis for a matrix of functional variance from which a broad typology can be established. The five basic types of referendum – including a non-functional category – are illustrated and elaborated by reference to a range of examples. These show that each referendum poses problems of interpretation. The conclusion is that a functional analysis of this type could be further refined by concentrating on the relationship a referendum bears to the prevailing party system.

Multi-Product Inventory Situations with One Restriction

Abstract: The problem of maintaining inventories for a number of products when there is a restriction on the maximum inventory investment, or on maximum warehouse space, is considered. A method of adjusting the order intervals of the products, the Equal Order Interval Method, is shown in general often to produce significantly better cost solutions to these problems than the well known Lagrangian Multiplier Method. Examples are given which demonstrate how the Equal Order Interval Method can be applied effectively and efficiently by heuristics.

Continuous time diffusion models with random duration of interest

Abstract: This paper proposes a continuous time version of a diffusion model introduced by Gray and von Broembsen (1974). The new formulation allows a deeper analysis of the stochastic aspects, of the diffusion process and, in particular, of the threshold effect which occurs in the absence of an outside transmitting source. Attention is drawn to important similarities and differences between the stochastic and the deterministic versions of the model. Simple approximations for the distribution of the ultimate number of hearers are given as well as the exact distribution. Some generalizations are suggested and it is shown that their analysis in deterministic terms is relatively easy.

Some methods for statistical analysis of multimodal distributions and their application to grain-size data

Abstract: Some of the methods used in the resolution of mixed normal distributions are discussed under three headings: analytical, graphical, and numerical methods. Attention is given to their applicability in the analysis of grain-size data as derived from sieving. Comparisons are made by applying several methods to published data. It is concluded that the numerical methods offer most scope, especially the method of nonlinear least squares. Some analyses of beach sediments, using this method, are presented. The adoption of a convention for the number of individuals in the sample increases ease of interpretation.

The Evolution of Landslide Slopes in Dorset

Abstract: The form and evolution of Fairy Dell, an active landslide complex on the Dorset coast, is described using a combination of cartographic, air photograph and field survey techniques. Erosion rates for the main landslide scars, undercliffs and sea cliffs are calculated and the spatial patterns of landslide evolution demonstrated by the use of sequences of maps and geological cross sections. Two dominant mechanisms are identified and described: (1) rotational landsliding and (2) block disruption, the breakup of originally large landslide units as they move downslope and over time. The role of small-scale erosion, in combination with the infilling of depressions by scree, wash debris and mudslides so as to produce an increasingly subdued topography as the landslides degrade, is emphasized and simple evolutionary models are proposed. The active landslide complex is then compared with the now stable, degraded landslide slopes inland. It is shown how the spatial patterns of landforms recognized in these areas on morphological maps and the complex subsurface forms revealed in sections can be better understood by reference to the suggested evolutionary sequence developed for the active complex. The sections in the stable but degraded slopes clearly support the idea of retrogressive rotational landsliding followed by block disruption, infilling and the downslope reduction of topographic expression of landslide units. Finally, it is suggested that this evolutionary interpretation might assist in the understanding of similar areas elsewhere and, if used in conjunction with geomorphological surveys, could result in the planning of more efficient site investigations.

Capitalism and the development of agriculture

Abstract: In this chapter I shall try to complement as well as to make more concrete some of the theoretical points of the two previous chapters by a detailed analysis of two books on development: (a) S. Amin and K. Vergopoulos, La question paysanne et le capitalisme;1 and (b) K. Vergopoulos, The agrarian problem in Greece: The issue of the social incorporation of agriculture.2 These two works reflect, in varying degrees, two recent interconnected trends in Marxism which have stimulated important theoretical debates and fruitful empirical research in a number of different areas. The first refers to Althusser’s work which, by advocating a return to the type of rigorous analysis found in Marx’s mature writings, constitutes the basis for a critique of theories which were alleged to have been only superficially or eclectically Marxist.3 The second trend is the development of a new type of Marxist anthropology which, influenced to some extent by Althusser’s work, has tried to assess how far certain Marxist concepts (especially that of modes of production and their varied articulation in social formations) could help in their study of the so-called primitive societies — in particular, how these societies are incorporated into the world capitalist system.4 In fact, these two books constitute an interesting attempt to use some of these new insights in order (a) to build up a general theory on the development of agriculture under capitalism, and (b) to apply this theory to a specific social formation, namely that of Greece.

Oil and nigeria's economic development

Abstract: OVER THE PAST fifteen years the Nigerian petroleum industry has grown by leaps and bounds. Both production and exports have increased enormously since commercial production began in 1958. For example, crude oil output increased from a mere 257,000 tonnes in 1958 to 112-8 million tonnes in 1974; while exports rose from 230,000 tonnes to 110 million tonnes during the same period (see Table 1, p. 313). At the same time crude oil reserves have increased significantly from a mere 17 million tonnes in 1958 to 4,800 million tonnes in 1974; while proved and probable reserves in fields already discovered are now of the order of 7,000 million tonnes. Besides crude oil huge reserves of natural gas, both associated and non-associated, have been discovered in Nigeria and these were estimated at about 45,000 billion cubic feet at the end of 1974.' What is more, the prospects of finding more reserves of crude oil and natural gas are good because only a relatively small proportion of the possible oilbearing strata in Nigeria-both onshore and offshore-has so far been investigated. In this respect, it is significant that over half of Nigeria's surface area of 357,000 square miles is covered by sedimentary basins where oil-bearing rocks are most likely to be found. These basins cover most of Eastern and Mid-Western Nigeria and extend northwards to the confluence of the Niger and Benue rivers. From there one arm of the basin extends in a north-easterly direction along the banks of the Benue River to the Chad Basin, while the other arm extends in a north-westerly direction, along the valleys of the Niger River, to Sokoto Province and beyond. Similar geological features also extend far into the continental shelf2. In a recent report to the British Government, the International Management and Engineering Group (IMEG) commented that 'offshore Niger Delta is regarded as one of the most prolific oil-producing prospects in the world, and the excellent quality of its crude and Nigeria's relative proximity to markets in Western Europe, North and South America, should ensure that it will continue to be a major area of offshore interest and activity'.3

Persistent job changing—Is it a problem?

Abstract: Persistent job changers amongst early school leavers in the National Survey have been followed up in three studies. In the first, young people particularly at risk of not settling at work are identified from information available to school teachers and careers officers. In the second, the effects of job changing on job satisfaction, use of abilities, pay and unemployment are assessed, and persistent job changers found to be at no real disadvantage. Finally, the relationships between job changing and social and psychiatric problems are explored, with frequent job changing in the early years being shown to be an indicator of later personal problems. These findings, and their implications, are discussed in the context of alternative hypotheses for the relationship between job changing and later problems. It is concluded that although persistent job changing in the early years at work may indicate problems of personal adjustment, there is no evidence that it leads, by the mid-twenties, to occupational problems or 10 a secondary, low paid, labour market.

The Social-Work Process

Abstract: Process is defined in the Oxford English Dictionary as ‘continuous and regular action or succession of actions taking place or carried out in definite manner and leading to the accomplishment of some result’. The important features in this definition are the purposeful nature of a process and the complexity inherent in its being a construction consisting of a number of interdependent elements. These characteristics are certainly applicable to social work given the wide range of its activities, and this fact underlines in turn the importance of a unifying concept within which to analyse these separate elements.

Some Further Comments on the Social Responsibility of Operational Research

Abstract: (1976). Some Further Comments on the Social Responsibility of Operational Research. Journal of the Operational Research Society: Vol. 27, Volume 27, issue 1, pp. 266-272.

The rate of return on investment in education in Thailand

Abstract: This paper summarizes the findings of a study carried out in 1970 by a small team of Thai and foreign research workers under the auspices of the National Education Council of Thailand. The study consisted essentially of (1) a statistical analysis of the structure of personal earnings in Greater Bangkok as revealed by a household survey specially conducted for the purpose; (2) an analysis of the costs of education in the entire country from data gathered by a mailed questionnaire to public and private schools; and (3) a calculation of private and social rates of return on educational investment in Thailand, making use oj (1) and (2).1 An earlier paper reported on the statistical analysis of earnings (Blaug 1974). The present paper concentrates on the rate‐of‐return calculations, with a passing glance at the cost figures.

International Trade Theory in Vintage Models

Abstract: There are two main reasons why it is interesting to extend international trade theory to vintage capital models (1) If one is concerned with the causes and effects of trade in actual machines, then it seems natural to use the vintage approach This applies in particular to trade in secondhand machines, an issue which has been much discussed in the literature on development (see [9] section 1), where only in vintage models can one hope to capture the essential points (2) Almost the entire theoretical literature on international trade assumes capital malleability, and much of it assumes a two-sector economy If the results of this theorizing are attributable to the specific nature of the models used, then it is clear that one should not attach much significance to them If, by contrast, it can be shown that the principal features of trade theory carry over to alternative models of capitalist production, then the confidence with which we apply the theory to the real world should be strengthened The vintage models discussed in this paper should be distinguished from the models of Bardhan [1], [2] and Petith [7] Bardhan's model is a two-sector model with fixed proportions vintage production functions and no trade in used machines It turns out to resemble very closely the two-sector model with differentiable production functions Petith's model has no trade at all in capital goods: the vintage technology is used solely as an illustration of the effects of joint production By contrast, it is of the essence of the models I discuss here that they are vintage models, there are no restrictions on trade, and, indeed, in dealing only with one-sector models my aim is to focus purely on the issues raised by trade across vintages It must also be noted that my concern is with the effects of trade on growth There is a considerable literature on the effects of growth on trade (See Hanson [6] for a survey of this literature, and an attempt to consider both sets of effects together) Since the models here have only one consumption good, nothing may be said on such important questions as the effects of capital accumulation on the relative prices of, say, primary and manufactured products