Showing papers by "London School of Economics and Political Science published in 1983"
TL;DR: In this article, the authors show that the optimal way of implementing an action by an agent can be found by solving a convex programming problem, and they use this to characterize the optimal incentive scheme and to analyze the determinants of the seriousness of an incentive problem.
Abstract: Most analyses of the principal-agent problem assume that the principal chooses an incentive scheme to maximize expected utility subject to the agent’s utility being at a stationary point. An important paper of Mirrlees has shown that this approach is generally invalid. We present an alternative procedure. If the agent’s preferences over income lotteries are independent of action, we show that the optimal way of implementing an action by the agent can be found by solving a convex programming problem. We use this to characterize the optimal incentive scheme and to analyze the determinants of the seriousness of an incentive problem.
2,743 citations
TL;DR: The basic structural model is a univariate time series model consisting of a slowly changing trend component, a slowly different seasonal component, and a random irregular component as mentioned in this paper, which is part of a class of models that have a number of advantages over the seasonal ARIMA models adopted by Box and Jenkins (1976).
Abstract: The basic structural model is a univariate time series model consisting of a slowly changing trend component, a slowly changing seasonal component, and a random irregular component. It is part of a class of models that have a number of advantages over the seasonal ARIMA models adopted by Box and Jenkins (1976). This article reports the results of an exercise in which the basic structural model was estimated for six U.K. macroeconomic time series and the forecasting performance compared with that of ARIMA models previously fitted by Prothero and Wallis (1976).
279 citations
TL;DR: The authors discusses the issues involved in assigning inequality contributions to various components of income and highlights the problems that follow from having a number of possible decomposition rules, and warn against the indiscriminate use of decomposition formulae without first investigating their properties.
Abstract: Attempts have recently been made to assign inequality contributions to various components of income. This paper discusses the issues involved in such assignments and highlights the problems that follow from having a number of possible decomposition rules. U. S. data on the distribution of family incomes are used to examine the relative influence of these income components and to evaluate empirically the performance of different decomposition rules. A wide range of inequality contributions can be obtained, even when restricted to only “naturally†derived decomposition rules. Some of the results are plainly absurd and serve to warn against the indiscriminate use of decomposition formulae without first investigating their properties.
269 citations
TL;DR: The Review of Economic Studies has introduced a series of lectures to be given annually by a "younger" British economist at the Association of University Teachers of Economics Meetings as mentioned in this paper, whose choice of lecturer is determined by a panel whose members are currently Professors Hahn, Mirrlees and Nobay.
Abstract: The Review of Economic Studies has instituted a new series of lectures to be given annually by a "younger" British economist at the Association of University Teachers of Economics Meetings. The choice of lecturer is determined by a panel whose members are currently Professors Hahn, Mirrlees and Nobay. This paper is a revised version of the first lecture in the series. It was presented at the AUTE Meeting held at the University of Surrey in April 1982, and was refereed in the usual way.—MAK.
254 citations
TL;DR: With rare exceptions the provision of actuarially fair health insurance tends to substantially increase the demand for medical care by redistributing income from the healthy to the sick, suggesting the efficiency costs of health insurance may be overestimated.
210 citations
TL;DR: In this article, real wage rigidity has been measured in a way which would in fact predict how much unemployment would result from a given real shock, and the authors have focused on the degree of nominal inertia in the system, rather than on the effect of unemployment in the Phillips curve.
196 citations
01 Jan 1983
144 citations
TL;DR: The results indicate that the factor structure of the Coping Behaviours Inventory is stable over time and with different alcoholic patient populations.
Abstract: Summary
The results of a principal components analysis of the Coping Behaviours Inventory administered to 256 hospitalized alcoholic patients are compared with a reanalysis of data obtained from a different group of patients five years ago. These results indicate that the factor structure of the Inventory is stable over time and with different alcoholic patient populations. The four factors emerging from the present study, which account for 54% of the variance, were:
(i)
Positive Thinking
(ii)
Negative Thinking
(iii)
Avoidance/Distraction
(iv)
Seeking Social Support
The possible uses of this instrument in monitoring and informing some types of alcoholism-treatment programmes are discussed.
128 citations
TL;DR: The relationship between nationalism and social space has been left largely to ethnologists, or social psychologists like Leonard Doob (Doob, 1964) as discussed by the authors, who have consistently neglected these political dimensions of 'land' and 'territory' in their treatment of environment and society.
Abstract: Whatever else it may be, nationalism is always a struggle for control of land; whatever’else the nation may be, it is nothing if not a mode. of constructing and interpreting social space. Yet, despite the fact that both land and space have become political territories and national homelands, geographers and sociologists alike have consistently neglected these political dimensions of ’land’ and ‘territory’ in their treatment of environment and society; and though territorial conflicts between states and nations remain the fiercest and most intractable in the modern world, research into the relationships between nationalism and social space has been left largely to ethnologists, or social psychologists like Leonard Doob (Doob, 1964). Quite often, the territorial dimensions of such struggles are reduced to crude
123 citations
TL;DR: In this article, the authors explored the reasons behind the rapid growth of the population of England in the eighteenth century in comparison with the rest of Europe, using data compiled from over 400 parish registers by the Cambridge Group for the History of Population and Social Structure.
Abstract: The reasons behind the rapid growth of the population of England in the eighteenth century in comparison with the rest of Europe are explored. Using data compiled from over 400 parish registers by the Cambridge Group for the History of Population and Social Structure the author shows that life expectancy increased from around 32.4 years in the 1670s and 1680s to around 38.7 years in the 1810s and 1820s. Over the same period fertility as measured by the gross reproduction rate rose from 1.98 to 2.94. The author calculates that the rise in fertility contributed about two-and-a-half times as much to the rise in population growth rates as did the decline in mortality. It is suggested that the primary cause of this fertility increase is to be found in changes in the timing and incidence of marriage. Factors affecting marriage patterns are then discussed.
108 citations
TL;DR: It is argued that by far the most promising avenue for establishing the existence and extent of any causal relationship between unemployment an either morbidity or mortality is through the analysis of longitudinal survey in which members who do not experience unemployment are included.
Abstract: The object of the paper is to provide a satisfactory intellectual context to discuss the effects of unemployment both on morbidity and on mortality. The paper consists of three main sections and an introduction and conclusion. In the first section the methodological problems involved in establishing a causal relationship between unemployment and ill-health are discussed given the incidence of poverty, ill-health and unemployment and their interrelationships. In the second section evidence from social surveys including both surveys from the 1930s and the 1978 DHSS Cohort Study of the Unemployed is presented. The last section is concerned with evidence from cross-sectional and longitudinal regression models. It is argued that by far the most promising avenue for establishing the existence and extent of any causal relationship between unemployment an either morbidity or mortality is through the analysis of longitudinal survey in which members who do not experience unemployment are included.
TL;DR: The results indicate that the factor structure of the Relapse Precipitants Inventory is stable over time and with different populations of alcoholic patients.
Abstract: Summary
The results of a Principal Components analysis of the Relapse Precipitants Inventory administered to 256 hospitalized alcoholic patients are compared with a reanalysis of data obtained from a different sample 5 years ago. These results indicate that the factor structure of the Inventory is stable over time and with different populations of alcoholic patients. The three factors emerging from the present study, accounting for 55 per cent of the variance were:
1
Unpleasant Mood States
2
External Events and Euphoria
3
Lessened Cognitive Vigilance
The factor scores at intake on‘Unpleasant Mood States’and‘External Events and Euphoria', and the total number of situations seen as dangerous were found to have a predictive relationship to subsequent outcome 6 to 12 months later. Some gender differences on relapse precipitants were also found. The clinical application of this instrument is discussed both in terms of prediction of relapse and informing person-specific treatment programmes.
TL;DR: In fact, it was very much part of the orthodoxy in philosophy of science that there is no room for what might be called rational heuristics in physical science as discussed by the authors, and it was argued that the process of discovery rests on what Einstein called "empathy with nature".
Abstract: This paper can be viewed as an attempt to answer the following two questions: is there in physical science such a thing as rational heuristics, and, if so, how does it operate? Until recently, it was very much part of the orthodoxy in philosophy of science that there is no room for what might be called rational heuristics. Popper, Reichenbach and other members of the Vienna Circle all agreed that there is a sharp distinction between the 'context of discovery' and the 'context of justification'. Only the latter lies within the domain of methodology, whose proper task is to evaluate theories supposed to be laid on the table, i.e. supposed to have already been constructed. As for the context of discovery, it belongs to the psychology of invention. Neither calling for, nor even being susceptible of, any rational reconstruction, the process of discovery allegedly rests on what Einstein called 'empathy with nature'. Most philosophers have said little about how theories arrive 'on the table' in the first place. An exception was Popper in a book entitled Die beiden Grundprobleme der Erkenntnistheorie, which was written in 1930-1 but has only recently been published ([ 1979]). Popper's account of the emergence of new theories is linked to an overall Darwinian world-view: if new theories turn out to explain certain facts, this is not the result of rational and concerted efforts on the part of the scientists; it is an effect of the superabundance of available theories. New hypotheses emerge like spon-
TL;DR: The results suggest that participative design is a much more complicated phenomenon than the literature contends and is not normally formally evaluated, is almost universally praised by the participants, and is, however, not normally used a second time.
TL;DR: In this article, conditions for the existence of solutions of linear matrix equations are given, when it is known a priori that the solution matrix has a given structure (e.g. symmetric, triangular, diagonal).
Abstract: Conditions for the existence of solutions, and the general solution of linear matrix equations are given, when it is known a priori that the solution matrix has a given structure (e.g. symmetric, triangular, diagonal). This theory is subsequently extended to matrix equations that are linear in several unknown ‘structured’ matrices, and to partitioned matrix equations.
TL;DR: In this article, the authors consider the asymptotic properties of two families of statistics for testing non-nested hypotheses, one based on the maximum likelihood estimator and the other based on Instrumental Variables (IV) estimator.
Abstract: This paper develops Instrumental Variables statistics for testing non-nested hypotheses when the hypotheses considered are single equations from a system of linear dynamic simultaneous equations. Asymptotic distributions of those statistics and of comparable Maximum Likelihood statistics are derived under the null hypothesis, a local non-nested alternative hypothesis, and a local "comprehensive" alternative hypothesis. The asymptotic powers of the non-nested hypothesis tests are compared with those of tests of nested hypotheses, and a numerical application is given. This paper considers the asymptotic properties of two families of statistics for testing non-nested hypotheses, one based on the Maximum Likelihood (ML) estimator and the other based on the Instrumental Variables (IV) estimator. The models being considered are single equations, linear in their parameters, with serially uncorrelated identically distributed errors. For those statistics based on the IV estimator, each equation being estimated may be from a system of dynamic simultaneous equations with contemporaneously correlated but serially uncorrelated disturbances. For those statistics based on Maximum Likelihood, each model is a classical regression model with normally distributed errors. More explicitly, consider the two non-nested hypotheses,
TL;DR: In this paper, the authors developed a test that the trend and seasonal components are deterministic using the approach of Lehmann and extended the procedure to test for deterministic components in a model formulated in first differences.
Abstract: SUMMARY A univariate time series model can be set up as the sum of trend, seasonal and irregular components. The trend and seasonal components will normally be stochastic, but deterministic components arise as a special case. This paper develops a test that the trend and seasonal components are deterministic using the approach of Lehmann. The procedure is then extended to test for deterministic components in a model formulated in first differences. Both tests are exact and critical values are tabulated.
TL;DR: The notion of the "the Don" at the heart of corporatism is that interest organizations constrain and discipline their own members for the sake of some presumed "general" interest as well as (or even instead of) representing them as discussed by the authors.
Abstract: Someone who managed to remain unaware of the presence of the Don throughout a performance of Don Giovanni would give us a strange account of the opera, and we would be entitled to regard his powers of perception as equally strange. ‘I couldn’t see the point of it’, he might remark. ‘All those women getting upset, and those men becoming so angry, all for no apparent reason.’ ‘But that was the effect Don Giovanni’s behaviour had on them.’ ‘I didn’t notice anyone called that.’ To our subsequent expression of incredulity at that remark, he may of course object that it is the job of the production to make him aware of the central characters, and if he fails to perceive them, then it is not his fault. Ross Martin’s paper on ‘Pluralism and the New Corporatism’ in the March 1983 issue of Political Studies raises similar questions. The crucial characteristic, ‘the Don’, at the heart of corporatism is that interest organizations constrain and discipline their own members for the sake of some presumed ‘general’ interest as well as (or even instead of) representing them. Those cases where representation is entirely replaced by the disciplinary role are those which merit the title authoritarian corporatism; those in which the dual function is performed are instances of what has been variously described as liberal, pluralist, bargained or societal corporatism. It is this aspect of corporatism that differs so sharply from the kind of organization best described by pluralist theory, and it is a characteristic well rehearsed in the literature surveyed in Professor Martin’s paper. Schmitter’s well known definition speaks of organizations: . . . recognized or licensed (if not created) by the state and granted a deliberate representational monopoly within their respective categories in exchange for observing certain controls on their selection of leaders and articulation of demands and supports.’
TL;DR: In this article, the problem of multivariate analysis of ordered categorical data is first posed in very general terms and then specialized to particular cases for which statistical methods are available or in course of development.
TL;DR: A detailed ethnography of such crises in two families in a London Borough will illuminate two levels of analysis: the cultural frameworks which give meaning to these events and the network mobilized by the families in an attempt to cope with the situation.
TL;DR: The Large Manufacturing Employers of 1907 as mentioned in this paper, a survey of the largest manufacturing employers of the early 20th century, is a good starting point for this paper, but it is incomplete.
Abstract: (1983). The Large Manufacturing Employers of 1907. Business History: Vol. 25, No. 1, pp. 42-60.
TL;DR: In this paper, three paradigms are identified as crucial to interpretations of results in most studies of heuristics and biases in probabilistic thinking, including the view of people as "intellectual cripples", who exhibit severe and systematic biases in making judgements, is shown to be a value judgement on the part of the investigator.
Abstract: Three paradigms are identified as crucial to interpretations of results in most studies of heuristics and biases in probabilistic thinking. The paradigms are criticised as being so limited and inadequate that generalisations from current research on heuristics and biases cannot be justified. In particular, the view of people as ‘intellectual cripples’, who exhibit severe and systematic biases in making judgements, is shown to be a value judgement on the part of the investigator. The implicit acceptance of the paradigms is shown to have created four problems in current research. An alternative perspective, the generation paradigm, emphasizes the role of problem structuring, in particular the subject's internal representation of the task, within which information is processed. The generation paradigm sees decision making and the forming of judgements as dynamic, generative processes, conducted interactively between people within a social and cultural context. From this perspective, research would attempt to discover the conditions under which people can do well, aiding rather than de-biasing procedures would be investigated, and expected utility theory would be seen as neither a normative nor descriptive model, but rather as a guide to thinking that polices consistency within a small-world representation of a problem.
TL;DR: The reasons which led Wundt to separate his social from his experimental psychology are examined in some detail and the nature and significance of his Volkerpsychologie (1900-1920) is briefly reviewed as discussed by the authors.
Abstract: Some of the inadequacies and inaccuracies in the historical accounts of Wundt's life and work which are currently available in English are identified and discussed. The reasons which led Wundt to separate his social from his experimental psychology are examined in some detail and the nature and significance of his Volkerpsychologie (1900–1920) is briefly reviewed. Attention is drawn to Wundt's influence on the development of social sciences other than psychology with special reference being made to his influence on Durkheim and to the nature of the relationship between his Volkerpsychologie and the social psychology of G. H. Mead.
TL;DR: In this paper, a small macroeconometric model that allows explicitly for the existence of rationing on the goods and labour markets is presented, which clearly distinguishes the three well-known regimes: Keynesian unemployment, classical unemployment and repressed inflation.
TL;DR: In this paper, a thorough analysis of economic growth, inflation and fluctuations resulting from the class struggle is presented, and an alternative extension of the model based on maximising the reduction in unit costs subject to Kaldor's technical progress function is also provided.