http://aladinrc.wrlc.org:80/handle/1961/5475 2013-05-21T21:13:57Z http://aladinrc.wrlc.org:80/handle/1961/5005 Socially Responsible Investment and Pro-social Change Starr, Martha A. Socially responsible investment (SRI) refers to investing in companies based on financial and social performance, where the latter includes such concerns as the environment, sweatshop labor, and animal testing. This paper argues that SRI strongly resembles pro-social behaviors and social dynamics found in experimental settings. The role of fairness-related sanctioning is emphasized, wherein companies that treat their various stakeholders “fairly” are screened into SRI portfolios, while those treating them poorly are screened out. It is argued that, because SRI creates opportunities for businesses to thrive relative to their competitors by improving social performance, it creates some scope for pro-social change. Still, the magnitude of changes that can be expected from voluntary changes in business behavior remains to be determined. Working Paper No. 2007-23. 28 pages. 2007-07-01T00:00:00Z http://aladinrc.wrlc.org:80/handle/1961/5004 The Macro/Social Economics of Corporate Social Responsibility: Informational Abundance and Collective Action Starr, Martha A. In the past 15 years, the idea of “corporate social responsibility” (CSR) has become an important part of contemporary business life. This paper looks at CSR through a social-economics lens, examining the role of broadly-held social values in shaping its objectives, identifying the sources of market pressures on firms to bring their operations into better conformity with these values, and examining how these pressures work in practice through a case study of the “No Dirty Gold” campaign. It is argued that an important part of the effectiveness of CSR rests in informational abundance: because information and communication technologies like the internet make it much easier to publicize ethically problematic behavior by firms, it is much easier to get mainstream consumers and investors (whose behavior is not systematically shaped by ethical concerns) to participate in efforts to sanction them. The case study points to both the promise and the limitations of relying on CSR to improve the social responsibility of the profit system. Working Paper No. 2007-22. 31 pages. 2007-08-01T00:00:00Z http://aladinrc.wrlc.org:80/handle/1961/5003 Disagreement, Regional Representation, and Federal Reserve Transcript Publication Meade, Ellen E. This short paper looks at disagreement within the Federal Reserve's monetary policy committee, the Federal Open Market Committee or FOMC, following a change in transparency practices taken in 1993 to publish verbatim transcripts of FOMC meetings. Other literature has examined the effects of opening the FOMC's deliberations to public view, and provided empirical evidence that the publication of transcripts made policymakers less willing to voice disagreement with the chair-man's policy proposal. This paper adds to that work by examining whether regional variables are important to the analysis and whether the transcription effects change when regional variables are included in the estimation. The results suggest that regional effects, as represented by the voting share of each Federal Reserve district, are important in explaining disagreements voiced during FOMC deliberations and do not diminish transcription effects. Working Paper No. 2007-21. 13 pages. 2007-10-01T00:00:00Z http://aladinrc.wrlc.org:80/handle/1961/5002 Central Bank Independence and Transparency: Evolution and Effectiveness Crowe, Christopher; Meade, Ellen E. While central banks have existed since the seventeenth century, their purpose, functions, and operations have evolved over time. Over the past two decades, the pace of reforms in terms of institutional independence and transparency has been particularly brisk. This paper examines the current level of central bank independence (CBI) and transparency in a broad sample of countries using newly constructed measures, and looks at the evolution in both measures from an earlier time period. The legal independence of central banks (measured using an index first constructed by Cukierman, Webb, and Neyapti, 1992) has increased markedly since the 1980s, particularly for emerging market and developing countries, while the rise in transparency since the late 1990s (measured using an index based upon the work of Eijffinger and Geraats, 2006) has been less impressive. Increases in CBI have tended to occur in more democratic countries and in countries with high levels of past inflation. More independent central banks in turn tend to be more transparent, while transparency is also positively correlated with measures of national institutional quality. Exploiting the time dimension of our data to eliminate country fixed effects and using instrumental variable estimation to overcome endogeneity concerns, we present robust evidence that greater CBI is associated with lower inflation. We also find that enhanced transparency practices are associated with the private sector making greater use of information provided by the central bank, consistent with a simple signal extraction model in which the public signal becomes more precise as our transparency measure increases. Working Paper No. 2007-20. 30 pages. 2007-11-01T00:00:00Z http://aladinrc.wrlc.org:80/handle/1961/5001 Heteroskedasticity-Robust Elasticities in Logarithmic and Two-Part Models Hertz, Tom Logarithmic models are widely used to study highly skewed positive outcomes, either alone or in combination with an equation that first distinguishes between zero and non-zero values (the two part model). A well-known drawback of such models is that to obtain marginal effects that pertain to the arithmetic mean, rather than the mean of logs, we must exponentiate, and this retransformation is complicated in the presence of heteroskedasticity. This paper presents a simple method for correcting estimated elasticities for the effects of heteroskedasticity, in both log-linear and log-log (constant elasticity) equations. An example, drawing on Bulgarian farm survey data, demonstrates that this correction leads to significantly different estimates of the elasticity of expenditures on agricultural inputs with respect to land area and the age of the household head. Working paper No. 2007-19. 13 pages. 2007-01-01T00:00:00Z http://aladinrc.wrlc.org:80/handle/1961/5000 School Construction and Intergenerational Mobility in Indonesia Hertz, Tom; Jayasundera, Tamara Working Paper No. 2007-18. 27 pages. 2007-08-01T00:00:00Z http://aladinrc.wrlc.org:80/handle/1961/4999 Changes in the Volatility of Household Income in the United States: A Regional Analysis Hertz, Tom Working Paper No. 2007-17. 36 pages. 2007-07-01T00:00:00Z http://aladinrc.wrlc.org:80/handle/1961/4998 A Group-Specific Measure of Intergenerational Persistence Hertz, Tom This paper outlines a decomposition technique that allows for inter-group comparisons of intergenerational persistence in economic status, for groups whose means are different. It takes account of both within- and between-group sources of the covariance of parents’ and children’s outcomes, and yields results that are quite different, and arguably more meaningful, than the simple comparison of within-group regression estimates. Working Paper No. 2007-16. 12 pages. 2007-07-01T00:00:00Z