Widely used "purchasing power parity" comparisons of per capita GDP are not true quantity indexes and are subject to systematic substitution bias. This bias may distort measurement of convergence and divergence. Extending Varian's nonparametric construction of a true index gives the set of true indexes, including the new Ideal Afriat Index. These indexes are utility-consistent and independent of arbitrary reference price vectors. We establish bounds on the dispersion of true multilateral indexes, hence bounds on convergence. International price indexes understate both true GDP dispersion and, where prices are converging over time, the rate of true quantity convergence.

The regret theory of choice under uncertainty is known to admit intransitivities in preference relations. In this paper, the stochastic dominance properties of the theory are examined. It is shown that the usual definition of first stochastic dominance is not satisfied by regret-theoretic preferences and that, in general, violations of first stochastic dominance are not merely permitted but required. An exact characterization of the stochastic dominance rule corresponding to regret-theoretic preferences is presented. This concept is weaker than the usual definition, but stronger than the notion of statewise dominance in which one prospect yields a preferred outcome with probability 1.

The Impact of Global Warming on Agriculture: A Ricardian Analysis: Comment by John Quiggin and John K. Horowitz. Published in volume 89, issue 4, pages 1044-1045 of American Economic Review, September 1999

We analyze financial markets in which agents face differential constraints on the set of assets in which they can trade. In particular, the assets available to each agent span a partition of the state space that can be strictly coarser than the partition spanned by the assets available in the market. We first show that the existence of differential constraints has an impact on prices and allocations as compared to a complete financial market with unconstrained agents. We consider the implications for survival, taking the work of Blume and Easley (2006) as a starting point. We show that whenever agents have identical correct beliefs and equal discount factors, and their partitions are nested, all agents survive. When agents have heterogeneous beliefs, differential constraints may allow agents with wrong beliefs to survive. Provided constraints are relevant (in a sense we define more precisely), the condition for an agent to survive is that his survival index is at least as large as that of the agents with finer partitions. We also study the impact of deregulation (an increase in the set of assets available to some agents). Unless the agent can adopt beliefs that are closer to the truth on the newly refined partition than those of less constrained agents, increasing his opportunities for trade might harm his chances for survival.

The Risk Premium for Equity: Implications for the Proposed Diversification of the Social Security Fund by Simon Grant and John Quiggin. Published in volume 92, issue 4, pages 1104-1115 of American Economic Review, September 2002