Enterprise Workshops

The Enterprise Initiative recently hosted workshops focusing on current research in the areas of free enterprise, wealth creation, and poverty alleviation.  Video footage, PowerPoint presentations, and brief summaries from several of these discussions are posted below. Full length videos are available on YouTube, and the links to these playlists are listed for those presentations for which they are available. Please check back for updates.

Sharing Wage Risk

Pierre Andre Chiappori of Columbia University presented insights from his collaborative research paper with Robert Townsend, “Sharing Wage Risk.” Chiappori addresses the issue of risk sharing as a crucial component of individual and social welfare and of innovation and growth. He discusses testing risk sharing via the mutuality principle, as developed by Townsend in 1994, and tackles the issue of conflicting data and theory availability for individuals and households. Please visit YouTube for the full video of this presentation.

Matching, Hedonic Equilibrium Contracts & the Structure of the Credit Market: Evidence from the Mexican Banking System

Jorge O. Moreno, a Ph.D. candidate in Chicago’s Department of Economics, presents research on lending institutions in Mexico that examines typical bank-client relationships and loan contracts and exposes the role of financial intermediation in successful enterprise. He shares analysis on entrepreneurs, their capital requirements, and the contracts they enter. Preliminary findings indicate that increased financial intermediation not only attracts new entrepreneurs, but also leads to lower interest rates and higher profits for entrepreneurs previously involved in the credit market. Please visit YouTube for the full video of this presentation.

Wealth Accumulation and Factors Accounting for Success

Anan “Lek” Pawasutipaisit, a Post-Doctoral Scholar at MIT, shares research with Robert Townsend that examines factors which enable successful individuals to flourish. Looking at 531 households in Thailand over time, they find high inequality among households, but are able to document success stories of households that overcome constraints and establish profitable enterprise. Specifically, Pawasutipaisit shares the story of a dairy cow farmer who attributes education from a local milk cooperative as part of his success, evident by a 16.5% ROA.

The Impact of Climate Change on Rice Production in Thailand

John Felkner of the National Opinion Research Center and Kamilya Tazhibayeva of the University of Chicago discuss their research paper, "The Impact of Climate Change on Rice Production in Thailand" (American Economic Review 99(2), May 2009: 1-10). In collaboration with Robert Townsend, the two evaluate highly complex models to find variations in rice production, given likely climate changes in Southeast Asia, and evaluate how individual cultivation decisions made by farmers impact crop yields. They find that overall farmers are unable to neutralize the adverse effects of more extreme climate change, but seem able to cope with milder climate change and even benefit slightly from changes in rainfall. However, poor farmers are less likely to make adjustments to climate change than others, an important lesson for enterprise. Please visit YouTube for the full video of this presentation.

Wealth Inequality and Capital Misallocation in Developing Countries

Benjamin Moll, a Ph.D. Candidate in the Department of Economics at the University of Chicago, looks at financial frictions and capital misallocation. He specifically examines the effect of these on TFP and GDP, as well as wealth inequality and underdevelopment. Moll also investigates shocks of entrepreneurial ability – for example, a child who inherits wealth and draws new entrepreneurial ability – and their effect on the allocation of capital. Please visit YouTube for the full video of this presentation.

Technology Innovation and the Transactions Demand for Cash

Fernando Alvarez, Economics Professor at the University of Chicago, discusses his joing paper with Franceso Lippi. The two use data from France, India and Thailand to study the impact of technology -- for example, the presence of ATMs -- on the demand for cash and household welfare. Alvarez is working with Robert Townsend to extend this transactions-based model Thailand to determine how cash is used to store value and facilitate consumption, among other uses. This research will help to better identify patterns of wealth creation in the developing world. Please visit YouTube for the full video of this presentation.

Hierarchical Estimation of Structural Models with Endogenous Interactions

Computational scientist Victor Zhorin speaks about the Townsend-Ueda GJ model and work with BANSEFI, the Mexican development bank, on the use of financial services. He also discusses applications of the LEB model in Thailand to locate centers of entrepreneurship growth. Both models are utilized in efforts to determine keys to successful entrepreneurship, be it access to financial services or geographic location. Please visit YouTube for the full video of this presentation.

Tools for Computational Economics

Tiberiu Stef-Praun of the Computation Institute discusses how complex systems often encounter modeling and computational constraints. Specifically, Stef-Praun discusses computational modeling related to the Lloyd-Ellis and Bernhardt (LEB) model that features wealth-constrained entry into business and allows for variation in ability and occupational structures. This model enables researchers to better distinguish what makes entrepreneurial individuals different from others. Please visit YouTube for the full video of this presentation.