Economics

<p>Shiv Nadar University is a comprehensive, multidisciplinary, research-focused, and student-centric University offering a full range of academic programs at the undergraduate, postgraduate and doctoral level. With state-of-the-art infrastructure, the University comprises of academic wings, sophisticated labs, international standard sports facilities, amphitheaters, auditorium, conference rooms and smart classrooms. The University&rsquo;s goal is to become internationally recognized for the quality of its research and creative endeavors and their applicability to improving quality of life, generating new insights and expanding the boundaries of human knowledge creativity. Committed to excellence in teaching, research and service, the University aims to serve the higher education needs of India and the world beyond.</p>

Shiv Nadar University

We show in this paper that the class of Lipschitz functions provides a suitable framework for the generalization of classical envelope theorems for a broad class of constrained programs relevant to economic models, in which nonconvexities play a key role, and where the primitives may not be continuously differentiable. We give sufficient conditions for the value function of a Lipschitz program to inherit the Lipschitz property and obtain bounds for its upper and lower directional Dini derivatives. With strengthened assumptions we derive sufficient conditions for the directional differentiability, Clarke regularity, and differentiability of the value function, thus obtaining a collection of generalized envelope theorems encompassing many existing results in the literature. Some of our findings are then applied to decision models with discrete choices, to dynamic programming with and without concavity, to the problem of existence and characterization of Markov equilibrium in dynamic economies with nonconvexities, and to show the existence of monotone controls in constrained lattice programming problems. © 2018, Springer Science+Business Media, LLC, part of Springer Nature.

World University root node

(SoHSS) School of Humanities and Social Sciences

Journal of Optimization Theory and Applications

Generalized Envelope Theorems: Applications to Dynamic Programming

Revenue Management for Strategic Buyers with Time% inconsistency

Human populations and their socio-economic conditions, such as road networks and poverty, are thought to be the main drivers of deforestation. However, a high deforestation rate can also alter the species composition of forests, providing further feedback to the socio-economic drivers of deforestation as well as weakening the community forest management institutions. In this paper, we model the feedback linkages associated with the degradation of forests and the weakening of the local institutions to understand how they impact the long-term sustainability of these linked socio-economic-ecological systems. In particular, we explore the impact of excessive harvesting of forests for fuelwood and fodder on a shift in the species composition from oak to pine trees in the central Himalayan region of India. This shift provides adverse feedback to the communities’ livelihoods and erodes the quality of their participatory management institutions. A change in the species composition also increases forest fire risks, which further exacerbates the ecological as well as socio-economic feedback effects. We develop and apply a dynamic optimization model of community forest management where, through optimally controlling harvesting efforts over time, a weighted sum of community and environmental objectives is maximized. Findings indicate that factors such as population size, the extent of dependence of the community on fuelwood, the strength of community institutions, and the degree of feedback effects, affect the long-term sustainability of forests. When faced with forest fire risks, there is a discounting effect present which increases deforestation and institutional entropy. © 2018 Elsevier B.V.

Forest Policy and Economics

What drives forest degradation in the central Himalayas? Understanding the feedback dynamics between participatory forest management institutions and the species composition of forests

Mining of mineral resources entails significant deforestation in developing countries. The large financial rewards associated with mining create corrupt linkages between the government regulators and mining industry, often resulting in illegal extraction of minerals in environmentally sensitive areas. We develop a model of political-industry corrupted relationship to explore the problem of illegal mining of iron ore and its impact on deforestation in Goa, India. For the regulator, the decision to allow illegal extraction and relaxation from environmental remediation requirement is made with the objective of accumulating illegal wealth while simultaneously mitigating the risks of political ouster and conviction. Results suggest that several factors, such as the relative risks of political survival and conviction, the degree of impatience displayed by the regulator as well as the contribution of the mining sector to the economy, play a role in influencing the extent of illegal mining activity. When the regulator faces a low risk of political ouster, an increase in conviction risk may not provide enough deterrence to illegal mining, resulting in high levels of deforestation. © 2018 Elsevier Ltd

Resources Policy

The role of political-industry nexus in promoting illegal extraction of mineral resources and deforestation: A case of iron ore mining in Goa

This paper explores the impact of salinity on livelihood choices of rural households in south-western Bangladesh. We find interdependence among households' decisions involving various livelihood choices. High salinity reduces a household's probability of entrepreneurship while those households that stick only to agriculture suffer significant crop losses because of salinity. Households also face a trade-off between subsistence and entrepreneurial activities, that is, participation in one type of activity reduces the probability of participation in the other. Households with more agricultural land, in fact, benefit from high salinity levels by taking up fisheries related activities, whereas marginal households resort to increasing labour supply. Copyright © 2018 John Wiley & Sons, Ltd. Copyright © 2018 John Wiley & Sons, Ltd.

Journal of International Development

Estimating the Impact of Salinity Stress on Livelihood Choices and Incomes in Rural Bangladesh

Through a cross-sectional survey of 1600 households, we analyse the impact of water scarcity on livelihood patterns of rural households in three districts of Bihar and West Bengal. We find significant correlation between water scarcity and livelihood profiles. Households involved in farming and rural labour, or a mix of farming, rural labour and enterprises, earn 30–50% less than what they would have earned through alternative livelihoods. Yet, 50% of the sampled households were engaged in farming and rural labour. When accounting for endogeneity, urban migration provides much higher returns compared to rural labour supply or entrepreneurship. © 2018, © 2018 Oxford Department of International Development.

Oxford Development Studies

Water scarcity and livelihoods in Bihar and West Bengal, India

We consider a dynamic posted-price mechanism of a seller who must sell a single unit of a good to a number of buyers before a deadline. The seller cannot pre-commit to any price-path. Even when the buyers are symmetric (though non-anonymous) to the seller, the seller can charge different prices to different buyers. We show that this asymmetric treatment of symmetric buyers revenue-dominates the optimal symmetric mechanism. We change the random tie-breaking allocation rule, used for symmetric mechanisms, to generate higher revenue for the seller. We show that the result holds even in static environment, though the marginal benefit of price discrimination increases with the time horizon of the game.

Treating Symmetric Buyers Asymmetrically

We present a model of bargaining between farmers and middlemen in which long-term risk considerations by farmers constrain their ability to engage in hard bargaining. In order to avoid the risk of middlemen exiting their region in the future due to hard bargaining, farmers settle for lower prices for their produce. The risks of prolonged drought-induced decline in produce quality and future oversupply of the perishable agricultural commodity also result in lower price outcomes under bargaining. If farmers join a collective that enhances their bargaining power, they tend to be better off when the group is homogeneous. © Copyright 2017 Western Agricultural Economics Association.

Journal of Agricultural and Resource Economics

Challenges to farm produce marketing: A model of bargaining between farmers and middlemen under risk

Abstract: We model tradeoffs arising between protecting biodiversity hotspots and promoting economic growth in developing economies. Environmental valuation and economic growth are assumed to be inherently linked, whereas, the ability to enforce stricter environmental regulations is constrained by the presence of regulator-commercial nexus. A dynamic optimization framework is adopted to derive optimal time path of forest acreage preservation efforts from the perspective of a regulator, whose utility function may not be fully aligned with that of the society. Results indicate that due to the presence of a regulator-commercial nexus, the regulator's optimal plan leads to a discounting of biodiversity preservation goals in favor of short-term economic growth. Further, when the degradation of the environment provides negative feedback to local economic growth, the regulator's optimal plan deviates significantly from the socially optimal plan, resulting in losses to both economic growth and the biodiversity. Recommendations for Resource Managers: Regulator-commercial nexus can undermine the goal of preserving biodiversity hotspots. A regulator having significant nexus with the commercial exploiters of biodiversity would underinvest toward biodiversity preservation efforts. The resulting lax environmental regulations, even though they may appear to be providing beneficial results to the economy in the short term, could harm the environment as well as the economy in the long term. Short-term economic gains that materialize through the overexploitation of the biodiversity also help disguise and sustain the regulator-commercial nexus. When environmental degradation could provide negative feedback to economic growth, the differences in biodiversity preservation efforts under a socially optimal plan and that under a regulator-commercial nexus stand in sharp contrast. A socially optimal plan leads to lower rate of economic growth in the short term; however, the long-term outcomes for the environment as well as the economy are significantly higher as compared to what is possible under a regulator-commercial nexus. Copyright © 2017 Wiley Periodicals, Inc.

Natural Resource Modeling

Preserving ecologically sensitive hotspots under endogenous regulation and valuation constraints

We analyze dynamic private provision of a discrete public good by heterogeneous agents, who differ in terms of their levels of impatience, in a differential game framework. In contrast to the strategic complementarity result for homogeneous individuals, we show that an asymmetric completion Markov perfect equilibrium exists, where the individual contributions and the strategic behaviors depend crucially on an impatience differential: the difference in rates of time preference across groups of individuals. When this differential is insignificant, contributions of both types of individuals are strategic complements. On the other hand, when this impatience differential exceeds a threshold, the contributions of impatient individuals become strategic substitutes, whereas the contributions of patient individuals remain strategic complements. We show that group size has an interesting role to play in the strategic behavior: increasing the number of patient individuals aggravates the incentives to free-ride by the impatient agents. We also derive a condition under which all the socially beneficial projects get completed in the equilibrium. © 2017 Wiley Periodicals, Inc.