Poor people and risky business

We try to explain why economic conflicts and illegal business often take place in poor countries. We use the concept of subsistence level of consumption (d) and assume a regular concave utility function for consumption levels higher than d. For consumption levels lower than d utility is constant and...

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Autor Principal: Zuleta, Hernando
Formato: Documento de trabajo (Working Paper)
Lenguaje:Español (Spanish)
Publicado: Universidad del Rosario 2006
Materias:
Acceso en línea:http://repository.urosario.edu.co/handle/10336/10826
id ir-10336-10826
recordtype dspace
spelling ir-10336-108262019-09-19T12:37:01Z Poor people and risky business Zuleta, Hernando Producción Desarrollo económico Pobreza::Aspectos Económicos Distribución de la riqueza Ilegalidad::Aspectos Económicos Poverty Income Distribution Illegal Business We try to explain why economic conflicts and illegal business often take place in poor countries. We use the concept of subsistence level of consumption (d) and assume a regular concave utility function for consumption levels higher than d. For consumption levels lower than d utility is constant and equal to zero. Under this framework poor agents are risk-lovers. This result helps to explain why economic conflicts are more likely to appear in poor economies and why poor agents are more willing to undertake illegal business. 2006 2015-09-18T15:21:09Z info:eu-repo/semantics/workingPaper info:eu-repo/semantics/acceptedVersion Zuleta, H. (2006). Poor people and risky business. Bogotá: Universidad del Rosario. http://repository.urosario.edu.co/handle/10336/10826 spa info:eu-repo/semantics/openAccess application/pdf Universidad del Rosario Facultad de Economía instname:Universidad del Rosario reponame:Repositorio Institucional EdocUR instname:Universidad del Rosario Brito, D.L. and M.D. Intriligator, 1992 ” Narco-Traffic and Guerrilla Warfare: A New Symbiosis” Defense Economics, 3 (4), 263-274. Burrus, R 1999 ” Do Efforts to Reduce the Supply of Illicit Drugs Increase Turf War Violence? A Theoretical Analysis” Journal of Economics and Finance, 23 (3), 226-234. Campbell, J.I and J.H. Cochrane, 1999 "By Force of Habit: A Consumption Base Explanation of Aggregate Stock Market Behavior" Journal of Political Economy, 107 (2), 205-251. Cussen, M. and W. Block, 2000 ”Legalize Drugs Now! an Analysis of the Benefits of Legalize Drugs” American Journal of Economics and Sociology, 59 (3), 525-536. Edwards, K.1996 ”Prospect Theory: A literature review” International Review of Financial Analysis, 5 (1), 19-38. Flower, T.B. 1996 ”The International Narcotics Trade: Can it be Stopped by Interdiction?” Journal of Policy Modeling, 18 (3), 273- 270. Friedman, M. and L.J Savage, 1948 ” The utility analysis of choices involving risk” The Journal of Political Economy, 56 (4), 279-304. Grossman, H.I. 1991 ”A General Equilibrium Model of Insurrections” American Economic Review, 81(4), 912-921. Grossman, H.I. 1994 ” Production, Appropriation and Land Reform” American Economic Review, 84(3), 705-712. Horowitz, A.W.1993 ”Time Paths and Land Reform Dynamics” American Economic Review, 83 (4), 1003-1010. Jullie, B. and B. Salanie, 2000 ”Estimating preferences under risk: the case of racetrack bettors” Journal of Political Economy, 108 (3), 503-30. Kennally, G 2001 ” Regulating the Trade in recreational Drugs” European Journal of Law and Economics , 11, 69-82. Kahneman, D. and A. Tversky, 1979 ”Prospect theory: Analysis of decision under risk” Econometrica 47, 263-291. Murphy, K.M. ; A. Shleifer and R.W. Vishny, 1993 ”Why is Rent Seeking so Costly to Growth?” AEA Papers and Proceedings, 83 (2), 263-291. Piron, R. and L.R Smith, 1995 ”Testing risklove in an experimental racetrack” Journal of Economic Behavoir and Organization., 27 (3), 465-74. Roemer, J.E. 1998 ” Why the Poor do Not Expropriate the Rich: An Old Argument in a New Garb” Journal of Public Economics, 70, 399-424. Skaperdas, S. 1992 ”Cooperation, Conflict and Power in the Absence of Property Rights” American Economic Review, 82 (4), 720-739. Skaperdas, S. and c. Syropoulos, 1997 ”Distribution of Income in the Presence of Appropiative Activities”, Economica, 64, 101-117.Press. Chapter 3, 70-73. Whynes, D.K. 1991 ”Illicit Drugs Production and Supply-side Policy in Asia and South America” Development and Change, 22 (3), 475-496. http://www.cicad.oas.org/es/Principal/Recursos/Estadisticas.htm. Zuleta, H. 2004 “Persistence and Expansion of Guerrilla Activities: the case of Colombia” Journal of Income Distribution, forthcoming.
institution EdocUR - Universidad del Rosario
collection DSpace
language Español (Spanish)
topic Producción
Desarrollo económico
Pobreza::Aspectos Económicos
Distribución de la riqueza
Ilegalidad::Aspectos Económicos
Poverty
Income Distribution
Illegal Business
spellingShingle Producción
Desarrollo económico
Pobreza::Aspectos Económicos
Distribución de la riqueza
Ilegalidad::Aspectos Económicos
Poverty
Income Distribution
Illegal Business
Zuleta, Hernando
Poor people and risky business
description We try to explain why economic conflicts and illegal business often take place in poor countries. We use the concept of subsistence level of consumption (d) and assume a regular concave utility function for consumption levels higher than d. For consumption levels lower than d utility is constant and equal to zero. Under this framework poor agents are risk-lovers. This result helps to explain why economic conflicts are more likely to appear in poor economies and why poor agents are more willing to undertake illegal business.
format Documento de trabajo (Working Paper)
author Zuleta, Hernando
author_facet Zuleta, Hernando
author_sort Zuleta, Hernando
title Poor people and risky business
title_short Poor people and risky business
title_full Poor people and risky business
title_fullStr Poor people and risky business
title_full_unstemmed Poor people and risky business
title_sort poor people and risky business
publisher Universidad del Rosario
publishDate 2006
url http://repository.urosario.edu.co/handle/10336/10826
_version_ 1645141514379067392
score 10,662984