ECON 164: The Indian Economy PROBLEM SET-4 Q1. A. Why do development economists study gender discrimination and care to reduce it? B. How does Amartya Sen's concept of "Missing Women" provide a measure of gender discrimination? What do you think it reflects? C. What paper studied in class provides evidence of in-utero discrimination against the girl child? How does the paper study this, and what are its main results? Q2. There are 2 households in country "Low_HDI" deciding whether or not to send their child to school. There are 4 time periods in this problem (period 0, 1, 2, and 3). The families need to decide if they will send their child to school at all, and if they do, then whether to have them stop after completing primary school or to continue on to secondary school. Attending primary school will take up all of period 0 and attending secondary school will take up all of period 1. The out of pocket "net benefit" (benefit minus cost) to each option is given below: No School Primary School Secondary School Time Period Net Benefits (in $) 1 2 3 100 110 120 130 0 140 160 180 0 -20 230 280 A) What is the out of pocket cost of attending primary school, and of attending secondary school implied by the figures above. B) What is the opportunity cost of attending primary school, and of attending secondary school implied by the figures above. C) Household 1 (HH1) has a discount rate of 5%, and Household 2 (HH2) has a discount rate of 10%. Show the following clearly. To make it easy for you, we have provided a grid in which you can write your answers to this question. a. The discount factor for each HH for each time period b. The discounted value of the cost/benefit of each of the 3 options above for each HH for each time period c. The Net Present Value (NPV) of each option for each HH D) What choice will each household make about the level of education for their child? E) The government has infinite patience (discount rate of 0%). What level of education would the government like the child to get (show the calculation)? F) The government now considers offering a conditional cash transfer (CCT) program to encourage all households to obtain more education for their children. What is a conditional cash transfer and how could it help ensure that all children go to school? G) In this example, what should the minimum value of the transfer be to ensure that all children go to primary school (round your answer to the minimum whole dollar amount)? H) What is the minimum amount of transfer required to ensure that all children go to secondary school? Grid for 3C.- Please fill your numbers in here. Household1 No School Discount Factor Discounted Value Primary School Discount rate=5% Time Period 0 1 2 3 NPV 100 110 120 130 140 160 180 Household2 Time Period Discount rate=10% 0 1 2 3 NPV No School 100 110 120 130 Discount Factor Discounted Value Primary School Discount Factor Discounted Value Secondary School Discount Factor Discounted Value Discount Factor Discounted Value Secondary School Discount Factor Discounted Value 0 140 160 180 0 -20 230 280 0 -20 230 280 Q3. As discussed in class, "Poverty lines in developing countries reflect the bare minimum calorie level required for the basic functioning of the body." How do people below poverty line maintain basic metabolism then? What are the anthropometric measures used to cover the deficiency caused by lack of food among children? Q4. What are the main causes of poor child nutrition in India? Why does income growth not seem to be translating into proportional reduction in malnutrition in India? What are some of the policy options that the Govt. of India is implementing (or considering implementing) to improve nutrition outcomes. Q5. What is the NREGS? How did the biometric Smartcards program in the state of Andhra Pradesh aim to improve the implementation of NREGS? What was the impact of Smartcards on the implementation quality of NREGS and how was this evaluated? What were the broader impacts on the labor market and economy from improving NREGS implementation quality? Q6. What is the difference between "bribes" and "speed money"? Clearly illustrate with examples. Why do economists believe that in some settings "speed money" can improve efficiency though it is illegal? Give an example of legal "speed money" and how it can improve welfare for all concerned?