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Chapter in Poor economics specifically sought to answer the question why people don’t lend more to the poor. In addition the chapter heavily explored the principles of microfinance. Originally the authors called attention to the alarmingly high interest rates in India. These rates compound daily and if left uncheck, they spiral out of control leaving a family in complete and total financial devastation.  Formal and informal are two options the poor have in India. Formal loans from lending institutions are often avoided due to discrimination and astronomically high interest rates. Informal loans on the other hand are much more manageable. They are often repaid within days of being taken out and have a much lower interest rate.  This is a cultural phenomenon.  Informal loans in other countries would not get repaid, but the importance of honor and integrity is so high in India that the chance of people running away from these loans is low.

                Formal loans from banks were also political in nature. Banks who lent to farmers in particular were often at risk. Farming is a highly volatile market that depends largely on factors that are out of the control of man. If a farmer takes out a substantial loan to plant his crops for the year, he is risking much more than just money. Sometimes prolonged droughts occur within India which cause a great deal of injury to crops and the farmers are not able to pay back their loans. This results in farmer suicides which is an Indian bank’s worst nightmare. In addition to this negative publicity loan and debt forgiveness is also used a political tool by governors to secure votes.

                However, in order to combat these issues, microfinance institutions were created to give Indians a third way of obtaining loans. Muhammad Yunus and the Grameen Bank are the premier service of microfinance in India. The program gives out small loans and requires weekly payment on these loans. The loans can only be taken out by groups of people who know each other, and everyone is responsible for everyones debt. This way the other people who have taken out money will put pressure on their counterpart who has not yet paid. This often removes the need for any kind of debt collector. The Spandana evaluation experiment looked at multiple households and examined those who started a business with loans and those who did not. Those who started a business spent remarkably less than those who did not. This could be due to the fact that those who had taken out the loan were afraid of overspending and not having enough to pay the loan back. I think it would be interesting to also look at returns on these businesses and the sustainability of them as well. I think it is important to know, on average, how long these family run businesses last.

Forbes wrote an article about 5 days ago that pertained to the income gap in male and female CEOs. the article itself was very revealing. Although the income gap has shrunk by 12% in two years it is still prevalent. THis is due to a wide variety of reasons. The first being that generally female owned businesses are far smaller than male owned businesses. This is a factor that is slowly changing, but has not yet levelled out completely. In addition, Forbes believes that women generally write checks for themselves last. This impacts how much they give to themselves. This is important to my research because it reinforces the fact that when women are bargaining just for themselves they always pursue lower options than when bargaining on behalf of others. I may need to control for the size of companies. It’s hard to say because my data is dangerously close to being abnormal so adding another dummy variable would only injure my regression. I should read more on womans bargaining power in the wokplace. I think this is a crucial part of the compensation process and the differences between  men and women  in this process could say a lot. It would also be beneficial to see if these CEOs answered to boards on a regular basis or what kind of corporate structure thy participated in.

Outline for Paper


The CEO position has been stereotyped as a primarily male position, but the achievement of women throughout the business industry has worked to change this perception. As in most professions, gender discrimination is an important issue to examine. Discrimination often takes place on a subconscious level, but it can be tracked and understood. Gender gaps in CEO compensation are important to analyze because they delineate that discrimination can even occur at the top of companies; in addition attention should also be drawn to how gender corresponds to what corporation a CEO heads. The goal of this paper is to examine the CEO compensation gaps for the 2011 fiscal year. I have obtained statistics from the DEF-14A files that all corporations must submit to the IRS. In these files the compensation of major executives is reported. I have obtained data on 35 of the top male and female CEOs. I will examine numerous factors comparing the two genders. First, I will primarily look at the overall compensation. Second I will analyze bonuses and stock options as a function of overall compensation. Third I will examine age and the sector of economy which the CEO is situated. In the following sections I will utilize studies of gender. Some of these studies relate to the behavior of women in general and others relate specifically to women in the corporate world. It is my hope that these studies will bolster my research and findings. In section twoI will analyze my data and point out flaws in it. In section three I will use a developed model to show if there is a correlation between age, sector of the economy, stock options, bonuses and gender. In my fourth section I will evaluate the results in regards to my model, and in my last section I will present my result with the potential error I may have encountered.



Literature Review

Article 1: Influence of Firm Performance and Gender on CEO Compensation

  • By Nancy Mohan and John Ruggiero
  • Mohan analyzed the compensation and company size through a regression analysis to determine if women were more risk adverse than men. Mohan hypothesized that since men were inclined to take risks they were more suited to be CEOs.

Article 2: The State Courts and Equal Opportunity for Female CEO’s in US Organizations

  • By Doug Guthrie
  • Examined the relationships between institutional environments and due process structures in combating gender discrimination in CEO positions. Guthrie revealed that decisions on EEO laws are not often followed based on the spirit of law, but are followed and enforced with concerns of organization and market efficiency.

Article 3: Gender and Executive Pay in the S&P Mid-Cap and Small Cap Companies

  • Celia J. Renner, William F.Bowlin and Janet M Rives
  • There was 26%-29% difference in compensation between male and female CEOs (2005). This finding is important because the study uses a large sample size of smaller companies. The study reveals that in smaller companies there is a large gender gap in CEO compensation.


Article 4: Negotiating Gender Roles: Gender Differences in Assertive Negotiating

  • Emily T. Amanatullah and Michael W. Morris
  • The study showed that males were able to bargain more effectively for themselves and their company. This was because of the traits associated with the male gender: forwardness, risk taking, courage and self advocacy. Women on the other hand bargained less efficiently for themselves and more efficiently on the behalf of others.



2011 Compensation of S&P500 Female CEOs



Total Compensation

Salary & Bonus

Stock & Options


Irene Rosenfield






Debra Cafaro






Indra Nooyi






Meg Whitman






Carol Bartz






Ellen Kullman






Angela Braly






Ursula Burns






Carol Meyrowitz






Patricia Woertz

Archer Daniels Midland





Andrea Jung






Grethen McClain






Patti Hart

Inti Game Technology





Lynn Elsenhans






Debra Reed

Sempra Energy





Mary Agnes Wilderotter

Frontier Communications





Sara Mathew

Dun & Bradstreet





Beth E. Mooney






Gracia Martore

Gannet Co









1-Year Pay ($mil)

5 Year Pay ($mil)

Shares Owned ($mil)




Mueller, Edward AEdward A Mueller

Qwest Communications







Iger, Robert ARobert A Iger

Walt Disney







Paz, GeorgeGeorge Paz

Express Scripts







Frankfort, LewLew Frankfort








Lauren, RalphRalph Lauren

Polo Ralph Lauren







Martin, John CJohn C Martin

Gilead Sciences







Hackett, James TJames T Hackett

Anadarko Petroleum







Chambers, John TJohn T Chambers

Cisco Systems







Seidenberg, Ivan GIvan G Seidenberg

Verizon Commun







Pyott, David E IDavid E I Pyott








Lucier, Gregory TGregory T Lucier

Life Technologies







Davidson, Charles DCharles D Davidson

Noble Energy







Hammergren, John HJohn H Hammergren








Tucci, Joseph MJoseph M Tucci








Huang, Jen-HsunJen-Hsun Huang








Boyce, Gregory HGregory H Boyce

Peabody Energy







Merelli, F HF H Merelli

Cimarex Energy







Palmisano, Samuel JSamuel J Palmisano








Camilleri, Louis CLouis C Camilleri

Philip Morris Intl






Watford, Michael DMichael D Watford

Ultra Petroleum







Schultz, Howard DHoward D Schultz








Novak, David CDavid C Novak

Yum Brands







Thiry, Kent JKent J Thiry








Farr, David NDavid N Farr

Emerson Electric







Cutler, Alexander MAlexander M Cutler








Solomon, HowardHoward Solomon

Forest Labs




















  • Formula is still subject to change
    • Income Gap= Alpha+ Gender B1+ Compensation B2 + Stock Options B3+ Sector of the economy B4 + Ui
    • Although this formula is far from perfect I expect to look if gender really determines how much a CEO is paid. I hope to control for Compensation, Stock Options and Sector of the economy. Overall I would imagine that the gap exists, but my question is more to what extent is there a gender gap.
    • I will be including dummy variables to account for the differing sectors of the economy as well as gender.
    • Finally I am interested to see if there pay gaps within similar sectors of the economy. This would be interesting to research more heavily.

Determining the Solution

  • A Gender Gap does exist, but I want to use this study to find out to what extent. I am especially curious to see if it has grown or shrunk since 2009 after the economic collapse.


  • My conclusion will addresses errors in my data and how these could be reconciled. I will talk about how regressions were changed in order for them to produce more accurate results.

Schools out for the Summer.

                The Millennium Development Goals (MDG) was decided upon by the UN in 2000. Among these developmental goals, education was one of the highest priorities. Zimbabwe is a country that, on the surface, is very close to meeting these goals. With a literacy rate of 92%, Zimbabwe is the most literate country in Africa. However the economic situation for Zimbabwe has worsened considerably in the past 6 years. In Poor Economics the supply wallahs believe in what Zimbabwe has been trying to accomplish. The country has over 6,400 schools and over 3.2 million pupils. Education is being supplied, but to what extent? Nelson Chenga believes that many populations in Zimbabwe are marginalized, and as a result do not receive the appropriate amount of monetary help from the state. Furthermore, in accordance with Poors the main problem facing schooling is getting the children to the institution.

In Zimbabwe schools are sometimes as far as 5 kilometers away from towns. The lack of public transportation creates an issue for the children. In rural provinces of Zimbabwe, 20% of children live over 5 kilometers from their respective schools. This creates an absenteeism issue.  The government is suffering from hard economic times. As a result it cannot provide transportation for these students. Furthermore these dire economic straits have forced Zimbabwe to become primarily reliant on donors for educational reform. Investment has now become an issue for Zimbabwe as well. This parallels Poors Demand Wallahs concept. The investment in education is not occurring as planned, and as a result the schools are suffering.

This story contains some similarities to the chapter we read, but there are distinct differences as well. I think that the Poor’s chapter fails to take into complete account the importance of financial aid in these endeavors. Many of these African countries rely on large donations from the UN and other organizations. If the world economy worsens, donations will begin to fall. This has a direct affect on the ability of these schools to be effective. Overall, I think that Poor’s was more persuasive, but only because of the length and breadth of the text. The Zimbabwe piece offers crucial insight into the on the ground efforts to reform education. I think that both of these articles have merit to them. As far as statistical analysis, Poor’s utilizes large case studies of over 18 countries. The percentages created from this set are persuasive and offer a rational picture of the situation in these countries. The article on Zimbabwe offers little statistics, but uses firsthand experience to create a picture of the country and its struggles.

Male and Female CEO Compensation

I chose to do my project on male and female CEO compensation. I think that these two categories serve as microcosms for the workforce. These high profile Executives all make upwards of two million dollars and even more in stock options. The variables I am examining  are direct compensation, age, gender, stock options, education, and sectors of the economy. I think that these variables will result in the creation of noticeable statistical differences. However, information on these CEO’s is very tedious to obtain. I have to work through quarterly earnings reports to obtain stock options and compensation. However obtaining information in this way sheds light on other variables i am interested in. These variables include the structure of the Executive Board and time spent at the company. I have had a lot of prior experience with this topic. I have done a fair amount of research with gender based topics.  I enjoy learning about these differences in an effort to combat them. My hope is to refine this thesis further. I want to look specifically at sectors of the economy to discover whether or not these sectorial income gaps exist. I personally can’t imagine income gaps existing at the top tier of the economy, but I am excited to learn about this. Mainly I am focusing on the S&p 500 companies because these are the strongest indicators of the United States economy. I am interested in refining these numbers more and discovering where the findings lead me.




What is a hunger-based poverty trap? How do the authors use statistics to show its existence? Do you believe them?


The hunger based poverty trap is an interesting concept. It revolves around the idea that a human being cannot financially progress unless they have a healthy diet. This was the case with Pak Solhin. Since he was unable to get work in the agrarian sector he was unable to purchase enough food. As a result of this he was suffering from malnutrition. He was weak and therefore he was unable to continue his job. He was now stuck in the hunger-based poverty trap. The author uses a wide variety of studies to prove this. The author used an 18 country data set in order to create widely accepted statistics. Primarily the author used percentages and other works in the field to prove the point of the trap. IN the second piece the author relies on statistics from the WHO, which has a very large data pool. However I find that even with statistics the Hunger based poverty trap is a hard point to prove. There are many factors at work besides hunger in these poor countries. Political unrest and economic turmoil. I do not think that economics alone can prove why these people are out of work. I think the problem is much more complex and spans multiple facets of society. The hunger based poverty trap is but a small piece to a much larger puzzle. Developed countries have been attempting to solve this problem for most of the 20th century, but starvation is not the only cause for the poverty trap. Call me a cynic, but I think there are some places in the world that can never be fixed.

Assignment 1

I think that blogging is a very interesting concept. This form of social media has grown immensely since I entered college. This year I am keeping three blogs for three separate classes on campus. So needless to say, I will be blogging a lot. I think that blogging is a good way to express your own personal beliefs as well as expand your knowledge. Everyone has an opinion and this form of social media works to give an outlet for all thoughts. Blogging is a more informal way to express ideas. I feel under less pressure when I blog. Sometimes it is better to express ideas in a more relaxed way. I feel that this can lead to a better understanding of the material and help craft a stronger, more well informed opinion.

I just subscribed to a wide variety of economics blogs. I never really knew how often people blogged. I really enjoy the blog on Austrian Economics. I have always been a fan of this system of economic thought. I used to read a lot of Milton Friedman and Ludwig Von Mises in high school. I think the blog is run by 6 different economists, but I am not entirely sure. The blog itself is updated almost everyday. The approach and content of the blog is of the Austrian School. This primarily deals with a return to the gold standard. The blog is well written and informative. I look forward to continue following it.

The next Blog is called Carpe Diem. It is penned by Professor Mark Perry of the University of Michigan. This blog is more technical and dense than the Austrian blog i mentioned earlier. Professor Perry relies heavily on statistics and logic to prove his points. When compared to the previous blog, Professor Perrys is more empirical and the Austrian blog more philosophical. I think the mix of the two together enables a reader to have a very diverse view of economics.

The Economix blog by the New York Times is similar to Carpe Diem. It offers an analysis of a wide variety of economics issues and relies primarily on empiricism to justify conclusions. The blog invites prominent economists to write a guest blog. This means that the blog offers a wide variety of opinions on fiscal matters. This is crucial. It is nice because the blog is not overtly liberal or conservative, but rather, strikes a nice balance between the two.

Hello world!

Welcome to! This is your very first post. Click the Edit link to modify or delete it, or start a new post. If you like, use this post to tell readers why you started this blog and what you plan to do with it.

Happy blogging!