Off The Z Table

Amidst all the possible mechanisms that are used to tackle the problem of poverty, almost everyone would agree on the importance of welfare programmes implemented by governments all over the world. These programmes take the form of subsidies provided by the government for necessities like housing, food, energy and healthcare. But critiques of these poverty alleviation programmes have pointed out the ironic effect they have on people struck in poverty. This phenomenon is known as the ‘welfare trap’. Here’s how it works. The governmental assistance is provided to people who are unable to find work and whose income falls below a particular level. The benefits are then phased out when they enter the job market and their income crosses the threshold level. Now, since people in poverty are also rational actors, they are disincentivised from taking up work even when they are able to, when they realise that there is no net benefit that they gain from working. This happens since the jobs t

Since the last century, the era of military wars appears to have come to an end, leading the global community on a quest to find alternative ways of conflict resolution and protecting international law. One of these ways is imposing economic sanctions on other countries. These are restrictions or outright ban on trade, currency flows or investments from the other country.  But do economic sanctions achieve their objective?  History tells us that arguably, the answer to this question is that they don't. Formerly imposed sanctions on countries like Iraq, Iran, North Korea and recently, Russia, indicate that these sanctions not only turn out to be inefficient in barring the sanctioned countries from violating international peace, but also prove detrimental to other countries who are dependent on the sanctioned countries for necessities like food supplies, oil, etc. For instance, the recent imposition of economic sanctions on Russia by the US in the light of the Ukrainian war caused th

India experienced an enormous GDP growth of 8.7% (World Bank,2021) and is said to be one of the fastest growing economies in the world. One would expect that such stable and high GDP would create the rising jobs and this would somehow improve the Labor Force Participation Rates(LFPR) . But the official periodic labor survey on employment and unemployment by the National Sample Survey Organisation (NSSO) for 2011-12 estimated LFPR to be roughly 25 percent for women between 16-60 years, down from 30 percent in 1999- 2000. This becomes a puzzling situation, specially when we see that the fertility rates have also declined over the years, and hence LFPR for women should have improved. When searching for the reasons for this declining LFPR for women, we came across the following few possibilities. The first hypothesis is based on the reason that long run changes in female labor supply follows a U-shaped relationship between national income and female labor force participation rates. This i

Many of us would read the title and feel- Why Not? I had the same thought.  We all have friends and know very well that friendship is something which cannot be traded. If traded, the good itself (friendship) would lose its value. But that is not the case with kidneys, right? You trade kidneys, transplant them and they would work well. So, what is the issue in making a market for kidneys if both sellers and buyers are willing to trade. Won't it be helpful to that poor person who can live a good life by selling something she does not even need? What needs to be focused here is whether this market is fair enough? The adverse conditions of the poor might make them vulnerable to commercial traders who would spare them no bargaining power. Severe inequality can undermine voluntary nature of exchange. Just the fact that buyers and sellers are ready to deal is not enough to make a market. Should university seats be sold? Should there be a market for babies? Or should votes be sold? In some

Being students of economics, we have been made to study the Z table excessively throughout our statistics journey. Hence, before going off the Z table, we decided to explore more about the Z table itself.  In other words, having learned its technical use in solving a wide variety of statistical problems, we now delve into the interesting history of the normal distribution, unarguably the most popular distribution in modern statistics. The distinctive characteristics of symmetricity and bell-shaped structure impart normality a wide range of real-life applications in physics, biology, finance, hydrology, etc. Abraham DeMoivre Interestingly, the major credit for the origin of the normal distribution, also called the Gaussian distribution, does not go to Carl Gauss, but rather to Abraham de Moivre,  a mathematician and a contemporary of Isaac Newton. He used to plot the results of multiple binomial distribution simulations. Consequently, he discovered a pattern that resembled a bell shape.