The Singapore Economic Review

This study employed the survey-based choice modeling (CM) approach to determine people's age preferences for life-saving programs in Metro Manila, Philippines. Two social welfare models — social welfare as a function of the number of lives saved in each of the age groups (Model 1) and social welfare as a function of the number of lives saved irrespective of age and total life-years saved (Model 2) — were specified and ran using binary probit regression. Our results from both models indicate a general preference for saving younger lives. Based on Model 1 estimates, saving a child aged below one year was considered to be equivalent to saving four retirees (60 years old and above), and saving a life in the 1–19 years age group was equivalent to saving five retirees. The working age group's (20–59 years old) life was judged equivalent to three lives in the retired age group. Regression results for Model 2 indicated that both number of lives and total number of life-years saved (and hence age group of lives saved) significantly affected the choices of the respondents.

The Developing 8 (D-8) comprises of eight developing countries (Turkey, Malaysia, Indonesia, Bangladesh, Pakistan, Iran, Egypt and Nigeria), all of which are OIC members with large Muslim populations. The D-8 has formed a freer trade alliance with the objectives to create new opportunities and enhance intra-trade relations while providing better standards of living for its citizens. This paper examines the trade impact of possible trade liberalization among the D-8 countries using a multi-country computable general equilibrium model, i.e., GTAP. Results indicate that while the D-8 intra-trade is expected to increase very substantially, not all member countries will experience a welfare gain under a free trade arrangement. Likewise, the impact on economic sectors differs substantially across countries.

This paper quantifies the extent to which trade liberalization in Malaysia between 1991 and 2000 has contributed to the expansion in the most skilled labor, which in turn can validate the trade-enhanced quality upgrading hypothesis. By using an input–output structural decomposition analysis (SDA), results confirm the theoretical predication that skills help to upgrade the quality of exporting commodities, by documenting that trade growth is associated with increases in the use of the higher skilled labor. We observe that Chinese and Indian ethnic groups contribute the most to the quality upgrading of exporting commodities, more so than the Malays, which imply productivity differentials among the ethnic groups.

This paper concerns an industry with two complementary goods. It is demonstrated that if a good is active in Cournot equilibrium, then it is active in either one of the socially optimal solution and the monopoly solution; but, the converse is not true. When demands are linear, a good is active in the monopoly solution if and only if it is socially desirable. Therefore, the monopoly would be socially better than the Cournot duopoly in selecting products. We establish that each Cournot output falls below its corresponding monopoly output regardless of whether the solutions are interior or not. However, in the monopoly solution, a good should be cross-subsidized if and only if it is a supplemental good. This result has two implications. First, a small decrease in the output level of a supplemental good raises the welfare, implying that when there exists a supplement good, lower quantities are not necessarily worse in welfare terms. Second, if each good is a base good, then the Cournot equilibrium indeed is less welfare-efficient than the monopoly solution. In order to verify whether it is possible to have a welfare reversal, we consider the case where demands are linear. We demonstrate that prices are lower in the monopoly solution, and that lower prices are better in the welfare terms. These two results imply that welfare is higher in the monopoly solution. Again, these results hold regardless of whether the solutions are interior or not.

We examine statistical importance of a number of institutional factors, which have been alleged by market investors and policy commentators as significant barriers on cross-border portfolio investment in East Asian economies, but never been put to empirical tests yet. Taking advantage of the novel data set constructed by the ABMI-GoE, we empirically investigate the explanatory power of such institutional factors as market access-hindering regulations, foreign exchange controls, credit controls, taxation and inefficient post-trading infrastructure. We find that these alleged barriers indeed have significantly negative impacts on cross-border portfolio investment in East Asian economies. In addition, we find some support for the "pecking order" hypothesis in barriers on cross-border portfolio investment in the sense that barriers on post-trading efficiency and cost barriers are not effective unless barriers on market access are significantly lowered.

This paper investigates the interactions between foreign direct investment (FDI) and country-level individual governance indicators for a sample of 173 countries from 1996 to 2007, and also the effect of legal origin, international financial reporting standards (IFRS) and ownership diffusion on them. We find evidence of positively significant two-way relationships between each of the six individual governance indicators and lagged FDI inflows scaled by lagged GDP to confirm that governance is a function of FDI inflows and vice-versa. The overall interpretation of the results is that FDI inflows, IFRS, ownership diffusion and legal framework of a country 'matter' for macro-level governance in a competitive global business environment while FDI inflows are dependent on individual governance indicators and other macro-economic variables to a large extent. Both IFRS and legal origin have no direct link to FDI inflow. These findings have policy implications for individual governments and international donor organizations to undertake tenable actions for the improvement of country-level individual governance indicators to attract more FDI inflow.

Using the Indonesian Family Life Survey, this paper elucidates the factors related to happiness in Indonesia. Some factors yield results consistent with those in the literature, but other factors such as unemployment and the female gender turn out not to be robust. Some attempts are made to purge endogeneity for past income mobility, social trust, and political environment. Also, measures with a more immediate impact on happiness are exploited for social trust and political environment. The sign of the coefficient on past income mobility is reversed once the variable has been purged of endogeneity. In addition, social trust and political environment are found to have little relationship with happiness.