ABANDONED PROJECTS


As in every field, there are ideas and projects that are abandoned for numerous reasons. Below are unpublished works that were either not cost effective to write into something of interest to academic journal referees, or rewrite after receiving responses from academic journal referees. Alternatively there was no interest in the paper from potential referees.

There is no copyright on these ideas. Anyone is welcome to use and develop them further. If you do use them, mentioning the origin of the idea would be greatly appreciated.

The ideas are evaluated on a scale of 1 to 3 in terms of their potential for further use and eventual publication.

1. Implies absolutely no chance

2. Implies a reasonable chance

3. Implies a very good chance given sufficient effort

 

1. How to measure unofficial incomes in Russia

“The extent to which incomes are under-reported in Russian surveys.” by Paul Frijters 

It is well known that in some countries like Russia, individuals obtain incomes from many sources, some of which are `unofficial’. This chapter tries to deal with the problem of how to estimate incomes in such situations.

In a large scale Russian survey, respondents were asked how much an employer would have to pay them if they had to work full-time for them, thus requiring all other money-earning activities to be stopped.

This is an income measure that should incorporate all the sources of income an individual at the moment has, be they legal, highly illegal, monetised, or non-monetised.

This income measure, called one-job equivalent income, is therefore probably an upper bound for monetary incomes. The results suggest that on average incomes are underreported by some 190%.

Some 96% of the respondents to our questionnaires were probably earning more than their reported incomes suggested. Although yielding reasonable results for Russia, the alternative measure should be validated in other surveys before it can be used.

Why the project was abandoned

No-one trusted the data and there was insufficient time and resources to get this question into other surveys. This project may be taken up a later date when data becomes available.

Evaluation: 2.

Finished article in tex-format is available via email

 

2. Unemployment and capital costs in the European Union

“Skill-biased technological change, minimum employment costs, unemployment and fixed natural resources.” by Paul Frijters. TI discussion report 173/3, 1996

This paper considers the effect of skill-biased technological change on unemployment when there are minimum employment costs and non-transferable fixed-supply resources such as land, infrastructure and social capital.

Firstly, the existence of minimum resource costs per worker implies that if skill levels increase workers must have ever-higher productivities to obtain any wages at all.

Secondly, if non-transferable resources are not only production inputs but are also consumer goods, growing output and growing consumption increases the price of the nontransferable goods even higher, thereby increasing again the minimum wages one needs to avoid unemployment.

The different unemployment experiences of the US and some Western-European countries over the last 20 years could therefore be related to their different population densities, resource endowments and skill distributions.

Why the project was abandoned

No referee liked the basic idea that some people had negative net productivities.

Some thought it too simple. Some didn’t get it. Others did get it but just didn’t believe it. Differing presentational options were tried, but to no avail.

Evaluation: 1.

Finished article in tex-format is available via email

 

3. Price coordination and complementarities

“Consumption complementarities, monopolies, and coordination” by Paul Frijters. TI discussion report 048/3, 1998 

This paper analyses price-coordination and investment coordination in a monopolistic multi-sector general equilibrium model with consumption complementarities.

Possible solutions to the investment coordination problem are consistent with historical examples of government intervention in investment, the different roles of banking sectors in different countries, and the effect of optimism on the development of new sectors.
Price coordination within sectors between monopolists of complementary intermediaries lowers prices and increases welfare because the competition between the final goods of different sectors then becomes the paramount concern of each monopolist.

With no price coordination, each monopolist sets infinite prices as the effect of price increases on-demand is shared by all other intermediary monopolists due to the complementarities.

Why the project was abandoned

The main idea had already appeared in a handbook of development economics. Besides that, the model in this paper was too specific to be really interesting. It would make a good student’s paper though.

Evaluation: 1.

Finished article in tex-format is available via email

 

4. “Uncertainty, reference incomes and the shape of the utility function” by Paul Frijters 

In this paper, I examine the hypothesis that individuals use a reference income when they evaluate how satisfied they are with their own income.

The reference income hypothesis allows us to:

  • predict the temporal pattern of changes in welfare as a result of changes in income
  • empirically examine to what extent the income of others affects the welfare of an individual
  • take a look at the welfare effects of uncertainty
  • empirically examine the shape of the welfare function itself: if future incomes are uncertain, the reference income will be uncertain and the precise effect will depend on the shape of the welfare function.

We find that the log-normal distribution performs better than the logarithmic or Cobb-Douglas utility function.

Why the project was abandoned

The empirical work needed cost too much time and such indirect evidence of reference incomes and utility shapes is not very convincing anyway. This paper was never submitted.

Evaluation: 1.

Preliminary article in tex-format is available via email

 

5. “Limited rationality in general equilibrium” by Paul Frijters

This paper is really a basic idea in some simple math attempting to make the argument that if there are strong equilibrium effects, then only a fraction of the population need play rational for the ‘as if’ assumption to hold.

Basically, when there are strong equilibrium effects the behavioural reaction of a few rational people will make a new equilibrium rational too in the sense that in the equilibrium no person can improve their action by choosing differently. This is illustrated in an extremely simple 2-sector model.

Why the project was abandoned

Although the project has a point I couldn’t convince myself it was worthwhile pursuing. This paper was never submitted.

 Evaluation: 1.

Article in tex-format is available via email

 

6. “Crime, investments, and government lethargy: when being slow to react can be a good thing.” by P. Frijters and A.F. Tieman

Conventional wisdom has it that one of the major disadvantages of the democratic legislative system, compared for instance with dictatorial legislation, is that it takes a very long time for any major intended change in the law to go through all the different procedures and to be effectuated (see Olsen, 1982).

In this paper it is argued that this lethargy of the democratic legislative system can also be an advantage from the viewpoint of utility maximization because it implies pre-commitment of laws. We present two illustrative models that explore some of the issues.

Why the project was abandoned

Referees universally disliked this paper. Though none disagreed with the basic idea, most seemed to think it had been examined before.

Evaluation: 1.

Article in tex-format is available via email

 

7. Why do families have to pay a dowry for their girls?

“A hard working bride and money too? Some theoretical considerations and empirical evidence on the Indian dowry system” by Paul Frijters

If ever a cultural practice seems bizarre to economists convinced that all humans are selfish utility maximizes, the Indian dowry system must be it. Existing in many parts of India for more than two thousand years and still widely practiced beyond its traditional birthplace in rural North India, this cultural system guides marriage agreements between households whereby the household of the groom receives not only the services, off-spring, and labour of the bride, but a handsome bride treasure as well. Such a seemingly voluntary transfer of resources from one household to another is surely irrational?

The main reason for the existence of a dowry in my model is that the marginal productivity of workers is below subsistence levels. Hence the marginal person in a household produces less than he or she consumes. Couple this with the wish for each household to continue itself via a son who will occupy the household land, the problem arises what to do with the daughters, whose marginal benefit is negative to the household that has to marry them off. As no household can procreate without women it is argued that cultural institutions, laws and religious customs prevent infanticide and bride murders.

Why the project was abandoned

The model was too simple. Setting up a proper model that would satisfy referees would expend too much time whilst most likely not adding any more insight. This paper was never submitted.

Evaluation: 2.

Preliminary article in word format is available via email

 

8. The influence of the media on the outbreaks of wars.

“Wars, information and media morality” by Paul Frijters

Why do groups who have lived together for hundreds of years, suddenly turn on each other?

Why does the media play such an important role in creating stereotypes about the ”enemy” and often seems to be the primary way in which groups are turned against each other?

Put more generally: where does the manipulative power of the media come from?

The answer in this paper is simple: individuals basing their decisions partly on information obtained by media will give some credibility to whatever they hear from the media because they find it in their interest to do so in general.

The idea is that media gives information on K aspects of life, while the media itself is only interested in 1 area of life: the utility of the person(s) controlling the media only depends on one factor.

Because the media can be trusted to give correct information on the K-1 other aspects of life, individuals will assign a positive probability to everything the media claims.

If a fraction of individuals do not know with certainty what the interest of the media is, all the information given by the media will have effect.

Why the project was abandoned

Reading the relevant literature necessary to sell the paper to political scientists would cost too much time and would have a large chance of failure anyway. This paper was never submitted.

Evaluation: 2.

Preliminary article in tex-format is available via email

 

9. Poverty in Russia

Frijters, P. and B.M.S. Van Praag (1998), “Estimates of poverty ratios and equivalence scales for Russia and parts of the former USSR”, revised version of the Tinbergen Discussion Paper no. 95-149.

This paper analyses the extent of poverty in Russia and the former USSR using relative and subjective poverty lines.

Relative poverty lines based on the distribution of income suggest that poverty has slightly decreased from 1991 to 1995, although income inequality rose sharply.

Analysis based on subjective poverty lines indicates that some 83% of the Russian households felt poor in 1991, compared to 78% in 1995.

The costs of adults rose sharply while the costs of children and old age rose slightly during the period.

Why the project was abandoned

All referees rejected the paper because of the basic weakness of the data, despite a massive effort by us to deal with this.

It might be used in the future if it turns out that these estimates were more reasonable than those dominant at the time.

Evaluation: 2.

Finished article in word format is available here

 

10. Irreversible investments with private information and complementarities.

This paper considers that in most circumstances higher volatility decreases the proportion of investors that actually invest.

Consider the case that investments are irreversible, and that different investors have different private information about the profitability of investments. Then, the proportion of investors that actually invests is smaller when there are complementarities and further decreases with the number of investors.

YEL-codes: C72, D82, E22, F21.

Why the project was abandoned

Several referees liked the ideas but they wanted a much bigger model, which did not seem cost-effective or intellectually worthwhile.

Evaluation: 2.

Article in rap-format is available via email

 

11. “Simple estimation strategies for dynamic discrete choice models” by Paul Frijters

This is a short, simple paper that looks at the behavioural assumptions under which one can estimate discrete-choice models by rough simulation techniques.

It turns out that the full rationality models or the total ignorance models are best suited for simulation techniques, whereby the currently dominant limited rationality models are suited.

Why the project was abandoned

It was too simple for the referee’s taste. Getting the paper further than just the simple idea and a short illustration would be too time consuming.

Evaluation: 2.

Article in tex-format is available via email

 

12. Income and subjective well-being: what can we learn from regional differences?

In this paper, we examine the relationship between income and subjective well-being (SWB) at the aggregated level.

From country-comparisons it is known that higher average income and higher levels of trust are positively correlated with higher SWB. Because there are many other characteristics that co-vary with average incomes the causality is in question.

By using regional variation we can control for any relationship between incomes and social indicators at the country level. Controlling also for regional variation in equality and trust, we find no positive relationship between income and SWB. We attribute this to comparison effects and to the negative effects of greater economic activity, such as noise, pollution and the loss of local social cohesion.

Why the project was abandoned

All referees liked the idea and even the editor urged me on to stick to this one, but each simply wanted to see this idea accompanied by a large load of extra work that wasn’t very relevant.

Evaluation: 3.

Article in tex-format is available via email