Amnon Levy

Rational eating: can it lead to overweightness or underweightness?

Although a deviation from the physiologically optimal weight increases the probability of dying, the steady state for an expected lifetime-utility maximiser is a state of overweightness. However, even a small initial deviation from this rationally stationary weight is followed by explosive oscillations. These oscillations might lead to severe and chronic underweightness in a late stage of life. In the presence of socio-cultural norms of appearance, the rationally stationary weight of fat people is lower than otherwise and the rationally stationary weight of lean people is greater than otherwise.

A lifetime portfolio of risky and risk-free sexual behaviour and the prevalence of AIDS.

A lifetime portfolio of risky and risk-free sexual activities is conceptually constructed in this paper. Peoples time allocation between risky and risk-free sexual activities affects, and is affected by, the prevalence of AIDS. A small satisfaction differential between risky and risk-free sex can lead to a significant prevalence of AIDS. Numerical simulations suggest that the reduction in the prevalence of AIDS generated by a 1% improvement in the sensual quality of freely distributed condoms can be 0.855% when the initial satisfaction differential between risky and risk-free sex is 50% or 0.464% when the initial satisfaction differential is 100%.

Macroeconomic aspects of firm bankruptcy analysis

Abstract This study provides theoretical and empirical insights into the relationships between the probability of corporate bankruptcy and macroeconomic factors. The theoretical part hypothesizes that fluctuations in aggregate income and price level adversely affect the well-being of the business sector and links the likelihood of firm failure to structural parameters governing the business cycles. Our empirical findings for the United States indicate that the annual rate of bankruptcy is positively correlated with the variances of the GNP and the GNP deflator and negatively correlated with the covariance of these variables.

MACROECONOMIC ASPECTS OF SUBSTANCE ABUSE: DIFFUSION, PRODUCTIVITY AND OPTIMAL CONTROL

This paper deals dynamically with macroeconomic aspects of widespread substance abuse with a reference to illicit drugs as an example. Substance-abuse impedes the productivity of the labour force and subsequently economic growth. The labour force is divided into non-using and therefore fully productive workers, a number of whom are employed by the government in drug-control activities, and drug users who are only partially productive. An efficient management of the nations portfolio of workers is taken to be the trajectory of drug-control that maximises the present value of the stream of disposable national incomes.

The consequences of mutually secured debts: the case of Israeli Moshavim

This paper explores the long-run consequences of the farm’s own debt and the moshav’s average debt on the farm household investment in productive capital stock, borrowing and consumption. In particular, the analysis focuses on the financial externalities that might arise from the moshav’s organizational principle of mutual responsibility for members’ debts. These externalities can have a considerable adverse effect on the capital stock and borrowing of the more efficient farms, and hence on their productive activity. These effects are studied within the framework of an optimal control model and summarized by a number of optimality conditions. The effects of the individual member’s position and the moshav’s financial position on the individual member’s investment and borrowing are estimated and tested in two cross-section regression analyses, which also take into account observed variations in characteristics among the family farms.

The equalizing role of human resource intensive growth strategies: A theoretical model

Abstract Empirical evidence concerning the relationship between education-intensive development strategies and income distribution is used to formulate a growth model in which the variance of the dispersion rate of income is linked to the human and physical capital intensity of production. It is shown that, under plausible assumptions, the growth trajectory does not have a unique steady state. Of the possible steady states, for any two steady states characterized by equal per capita output and by different combinations of physical capital-labor ratio and average human capital, the income distribution associated with the steady state with the higher level of average human capital is Lorenz superior.

The Costs of Equal Land Distribution: The Case of the Israeli Moshavim

Equal land distribution achieved by government policy may adversely affect aggregate output. Israeli moshavim (cooperative villages) operate under an equal land allocation rule. This study assesses the production and distributional consequences of three alternative hypothetical allocation rules: a free market allocation, a value-maximizing policy of distributing land to current farmers, and a policy that maximizes value-added without discrimination based on nativity or ethnicity. Production and supply functions are estimated using sample data on Israeli family farms. Then the four allocation rules are simulated. The output loss from distributing land equally is found to be modest compared to the income inequality generated by the other rules.

A decision-rule for transplanting non-cadaveric organs

This paper conceptually analyzes the minimum probability of success required for transplanting non-cadaveric organs, its relationship with the initial, and possible rates of change in the, quality-adjusted life-years of the recipient and donor and its relationship with the expected medical knowledge gain.

A pareto optimal collaboration period: The role of financial, industrial and macroeconomic conditions in liquidation decision and timing

In this paper, the author highlights the nexus of interactions among financial, industrial and macroeconomic factors determining the Pareto optimal date on which the firm’s claimants stop collaborating and force the firm into liquidation. The condition for optimal liquidation time summarizes the effects of volatility of the aggregate consumer income and the overall price level, demand elasticity, the industry’s concentration level and depreciation on the firm’s going-concern value. It also takes into account the effects of the firm’s level of indebtedness, foregone interest on alternative usages of the financial resources extended to the firm and the costs of risk bearing perceived by the firm’s claimants from continued collaboration.

Regional Income Inequality in China

This chapter is concerned with analyzing developments in income inequality in China during the period of its economic reform. An overview of regional income disparity is conducted, focusing upon that between the coastal, central and western provinces, and the key factors behind this. A conceptual framework for measuring income disparity both between and within provinces is presented, and utilizing appropriate data the Theil index is calculated. It is found that income disparities within provinces have declined. However, income disparities between regions and provinces have increased significantly during the period of the 1990s. The government’s policy response to such a widening disparity and its prospects of being successful is discussed.