The basis for asset pricing in financial markets was provided by Bachelier (1900) in his magnificent dissertation “Théorie de la Spéculation” submitted at Sorbonne (Université de Paris). Although from today’s perspective, the mathematics and economics he applied were flawed, yet the great genius, Markowitz, declares this early work as an inspiration for his own classical paper of “Portfolio Selection”. The risk return relationship has always been a debatable issue in financial theory. “Portfolio Selection” came up with a meaningful measure of quantifying the risk associated with investment; the variance of returns. The equilibrium model of Capital Asset Pricing (CAPM) (Sharpe 1964, Lintner 1965, Mossin 1966) further classified the risk as relevant and irrelevant risk. According to the CAPM, the relevant risk is the systematic risk or non diversifiable risk. The systematic risk is the volatility of returns of a particular stock to the market returns.
KEYWORDS: Risk analysis, comparative, financial markets, banking sector, United States, South-East Asia, Western Europe.
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Khadija Haq, (Edited) The South Asian Challenge, Oxford University Press 2002, Second impression: OUP Pakistan 2003, pp 333. The South Asian Challenge is a compilation of nine essays on South Asia by eminent economists and social science researchers. The idea was initiated by Dr. Mahbubul Haq who had set up a South Asia Commission to analyse and identify the challenges facing the region, in order to publish a report on its recurrent issues of poverty and economic crises, and to offer new directions for meaningful change. Before the Commission could draft an outline of the Report, Dr. Mahbubul Haq passed away. Subsequently it was decided by the Human Development Centre in Islamabad to publish this collection of essays as a tribute to his memory and his quest for a new world.
KEYWORDS: Book review, South Asia, South Asia Commission.
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It is becoming obvious that all large multi-ethnic societies, after attaining the beatific status of development, lose interest in removing poverty. The undying myth of development, that it will remove all poverty forever from all comers of the world, now lies shattered. It comes somewhat as a surprise that so many people believed it for so many years with a sense of naivety and innocence. Even affluent economies such as the US have not been able to rid their societies entirely of the plague of poverty from within their borders. That said, it appears that somebody somewhere means business. The Centre for Research on Poverty Reduction and Income Distribution (CRPRID), an autonomous body with its own board of directors, has published its rather glossy Human Condition Report 2003, the second in its series. The main intent of the Report, as stated in the Forward, is to guide and influence policy makers and be an autonomous tool for monitoring and evaluating the progress made towards achieving the targets laid out in the Poverty Reduction Strategy of Pakistan as well as the Millenium Development Goals.
KEYWORDS: Book review, UN, united nations, Human Condition report.
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This paper examines the temporal interdependence between gross domestic product and health expenditure per capita for Pakistan in an augmented Solow growth model suggested by Mankiw, Romer and Weil (1992) for the period of 1973-2001. This paper is an extension of the MRW model by incorporating health capital proxied by health expenditure to the augmented Solow model. Moreover, an openness variable is also included in the model in order to capture the effect of technological changes on growth. The paper employs co-integration, ECM methodology and several diagnostic and specification tests. The empirical findings show a significant and positive relationship between GDP and Health Expenditure, both in the long- and short-run.
KEYWORDS: Pakistan, GDP, health expenditure, income, spending, modelling.
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Pakistan as a multilingual country faces numerous problems in language planning in higher education. As educational standards in higher education decline, there are concerns about student difficulties in English and lack of required materials in Urdu, The research reported here is a nation wide survey of 2136 students, 121 Subject and English teachers of public and private sector colleges and universities from all the capital cities of Pakistan, as well as 63 parents who responded to the questionnaire. The survey examines the learner's background, attitudes to languages and motivational orientation, availability and quality of materials in different mediums, learner difficulties in English, provision of English support programmes, and language outcomes. Results point to the significant differences between private sector and public sector students in terms of socio-economic status, and other variables. The study recommends that public sector students be provided more state support by adopting an 'English for all policy', and strengthening the English programmes through a revision of courses, development of materials, and training of teachers so as to meet the students' learning and target needs.
KEYWORDS: Pakistan, language, higher education, access, English language teaching, Urdu, educationists.
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In the traditional sense, governments have predominantly funded social sectors. But in the face of limited financial resources and other constraints, governments have found it easier to formulate policies rather than to implement them. Thus the private sector has begun to play an increasingly important role both in the financing and in the provision of social services. However, neither sector can be relied upon completely to deliver comprehensive results independently. It seems apparent, therefore, that a public private mix of financing and provision will be the most sensible approach to achieve economic efficiency and equity in the provision of social services. Governance structures and degrees of progress towards governance goals vary widely and appear to be systematically related to the organisation, composition, location, and activity of each partnership. This paper highlights how a successful partnership can be evolved in the presence of synergy between partners; strong leadership; shared objectives; success in coalition building; appropriate change in governance structure; a proper legal framework; and building in of safeguards and outside patronage. It examines successful interventions of the public private partnership in the health sector between a private medical college in Abbottabad and a public hospital in Mansehra, both within the province of NWFP, Pakistan. This paper has seven sections: An overview; The Partners; The Process of Building a Partnership; The Model of the Partnership; Workings of the Partnership; Evaluation of the Partnership and finally, some conclusions.
KEYWORDS: Pakistan, health sector, PPP, nationalised institutions, private sector participation.
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The health sector in Pakistan is replete with multifarious problems. It is not responding to the needs of the masses in a way that would provide high-quality care to all in need. Despite the announcements our governments make about health care each year, it limits people’s life chances. That international financial institutions claim that state subsidies to health care create undesirable ‘ market distortions’ that benefit the rich is another contradiction faced by the health sector. In the name of greater equity and efficiency, they argue that users of primary health care services should pay user fees, even if they are from the impoverished class. These institutions have provided structural adjustment loans to remove short-term problems. This lending has not contributed to the improvement of health facilities. The state has significantly withdrawn itself from health matters: it only spent 0.7 % of GDP in 2000. According to the 1995-96 PIHS the private sector controls 80% of the health care provisions in Pakistan. Ongoing privatisation of hospitals is likely to strengthen the private sector further. In sum, the neo liberal medicine is not having the desired effect on the health status of the population
KEYWORDS: Pakistan, healthcare, adjustment, overall expenditure, health expenditures, household incomes.
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This paper examines the trends in marginal rates of return to various levels of education for paid employees and how rewards for additional investments at a particular level of education has changed over time. Although the findings are indicative of increasing returns at different educational levels (excluding Graduation) over the years, we find no evidence that additional investments at successive levels bring consistently higher returns as highlighted by certain previous studies in Pakistan. The changes in returns at the primary and pre secondary levels have been found to be miniscule, taking the time span into consideration. The paper has also examined the returns to education between males and females and across urban and rural areas in view of the large disparities that exist by gender and region. Our findings indicate that although the wage structure may be biased in favour of males, additional investments made in female education accrue higher returns in comparison to males. Moreover, higher education is better rewarded in the urban areas whereas medium of instruction is a significant indicator of earning differentials in the labour market.
KEYWORDS: Pakistan, education, labour market, investment, schools, educational profile.
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The twin problems of low school enrolment and high gender disparity have widely been addressed in the literature. In this paper we investigate the determinants of schooling of children overall and separately for boys and girls using primary data of rural households. The contribution of this paper lies in integrating the child schooling decisions of the households by rigorous econometric analysis. The empirical estimates based on the model point to certain findings. The first enrolment of children in schools is delayed and it is more severe for girls. There exists gender disparity in children’s schooling. The head of the household education significantly increases the probability of overall children’s schooling. It has a greater effect on boy’s schooling and does not matter in girl’s schooling. The head of household income has a slight impact on overall children’s enrolment but for girls it is significantly higher than boys. Parental education also significantly increases the probability of child’s schooling. Mother’s education exerts a much stronger effect of increasing school enrolment. The estimates of the gender specific determinants suggest that maternal education increases the likelihood of girl’s schooling enrolment than of boys. Higher per capita income of households and ownership of assets by households increases the probability of school attendance. Family size and household composition also plays a significant role. Children from large families are more likely to go to school but children from households with a large number of children (up to 15 years) are less likely to go to school. Similarly, children from households with larger number of children (in the age group of 5-15) are less likely to go to school. It is sibling size (in both age groups) which hinders the schooling of children, not the family size.
KEYWORDS: Pakistan, gender disparity, education, enrolment, human resources, agricultural productivity, poverty alleviation.
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Based on the Pakistan Integrated Household Survey (PIHS) 1998-99 the paper highlights the factors that influence the decision of married women in their participation/economic activities in rural Pakistan. Employing the probit model on 9427 observations it is found that married women in Sindh and Punjab are more likely to engage in economic activities than their counterparts in Balochistan and NWFP. Women’s age, family size and husbands working in agriculture have a significant positive effect on the involvement of rural women in economic activities. Household annual income, nuclear family system, number of children and husbands' literacy level and age have a strong negative effect. No significant relationships of education, migration status and the female being head of the household have been found.
KEYWORDS: Pakistan, rural, employment, gender, women, household, unemployment.
JEL: N/A.