ALBERT

Description: Zusammenfassung Die vorliegende Studie präsentiert einen Methodenvorschlag für gemeinde- und kreisscharfe Abgrenzungen von Arbeitsmarktregionen auf der Basis von Pendlerverflechtungen. Die Abgrenzung nutzt als Verfahren eine Weiterentwicklung der graphentheoretischen Methode, deren Güte mit dem Modularitätsmaß Q aus der Netzwerkforschung gemessen wird. Die Studie basiert auf Gemeindedaten für Deutschland für die Jahre 1993 bis 2008. Als Ergebnis der Analysen werden gemeinde- und kreisscharfe Abgrenzungen mit 50 Arbeitsmarktregionen vorgestellt. Dieses Abgrenzungsergebnis liefert recht größenheterogene Regionen, besitzt aber über den betrachteten Zeitraum eine hohe zeitliche Stabilität. Es wird dargelegt, dass auch eine kreisscharfe Abgrenzungsvariante ein sehr gutes Ergebnis für die Erfassung von Pendlerverflechtungen und einen hohen Selbstversorgungsgrad der Regionen liefert. Der Vergleich mit bisherigen Abgrenzungen funktionaler Räume in Deutschland anhand verschiedener Merkmale bestätigt die Güte der gefundenen Abgrenzung.

Description: Urban systems analysis and especially the seminal contributions of the Globalization and World Cities Research Network (GaWC) so far mainly rely on the analysis of national and international office geographies of advanced producer services firms. This paper shows how the geography of demand-supply relationships and associated knowledge flows adds important qualitative information to the office geographies of the Globalization and World Cities Research Network. It contributes to our understanding of intercity relations and networks—and thus of urban systems more generally. We illustrate our approach by looking at private equity firms and their knowledge management strategies in Germany. Empirically, we analyze private equity firms’ business relations and networks with external partners as well as their geographical organization. While private equity firms’ geographical organization in Germany is characterized by decentralized concentration with nodes in Frankfurt and regional financial centres, there is evidence that among the latter Munich plays a special role. Only in Munich has private equity—cross-fertilized by other local financial actors—initiated a self-supporting development which strengthens Munich as a financial centre. The paper illustrates how the dynamics of private equity and its knowledge management lead to Germany’s financial system having a more tiered structure and how qualitative network analysis can help deepen our understanding of urban systems development.

Description: Zusammenfassung Henri Lefebvres Theorien nehmen seit einigen Jahren einen selbstverständlichen Platz in den Stadt- und Raumwissenschaften ein, insbesondere im englischsprachigen Raum. So oft Lefebvre zitiert wird, so oft stiften seine Theorien allerdings auch wegen ihrer Komplexität und sprachlichen Umsetzung Verwirrung. Der vorliegende Beitrag arbeitet zunächst zentrale Begrifflichkeiten Lefebvres auf, um anschließend deren gegenwärtige Relevanz in Bezug auf empirische Stadtforschung und die Theoretisierung von Stadt zu diskutieren. Im Vordergrund der Lefebvre-Rezeption steht neben der Anknüpfung an den Entwurf der Produktion des Raumes auch die These der „Urbanisierung der Gesellschaft“. Dabei bleiben häufig Unklarheiten zwischen den Begriffen „Stadt“ und „Urbanes“ sowie zwischen aktuellen gesellschaftlichen Realitäten und virtuellen Möglichkeiten bestehen. Vor diesem Hintergrund wird „Stadt“ eine historische Bedingung, die mit der Industrialisierung weitgehend verschwunden ist. Das „Urbane“ benennt hingegen eine zukünftige, auf Differenzen basierende Gesellschaft. Der Begriff der urbanisierten Gesellschaft ist somit untrennbar mit dem differenziellen Raum verwoben, mit dem sie entsteht. Die Erörterung dieser Thesen stellt die dialektische Bewegung zwischen drei Begriffen als zentralen Zugang zur Anwendung Lefebvres in der Stadt- und Raumforschung heraus und bildet letztlich eine Aktualisierung der Lefebvre’schen Theorien.

Description: Zusammenfassung Überregionale Partnerschaften zwischen Metropolen und ländlichen Räumen sowie peripheren Räumen werden als wichtiger Ansatz zur Förderung von Wachstum und Innovation und zur Weiterentwicklung der Regional Governance angesehen. Mit diesem Ansatz sind Erwartungen verbunden, die im Hinblick auf bisherige Aufgaben und Funktionen von Raumentwicklungspolitik im Beitrag kritisch hinterfragt werden. Dazu wird auf Ergebnisse einer Untersuchung von Modellvorhaben der Raumordnung zu überregionalen Partnerschaften zurückgegriffen. Es wird deutlich, welche Potenziale überregionale Partnerschaften eröffnen können, aber auch, welche Voraussetzungen damit verbunden sind und wo die Grenzen liegen.

Description: Zusammenfassung Der Artikel untersucht die Paradoxien der Stadtplanung mittels Lefebvres Raumkonzeption. Er zeigt, wie eines der prestigeträchtigsten „Waterfront“-Projekte der aktuellen Stadtplanung in Europa mit der Komplexität der Urbanität kämpft. Letztere wird dabei als spontane, nichtinstrumentelle Erfahrung urbaner Räumlichkeit verstanden, die auf Lefebvres espace vécu verweist, und die innerhalb der Rationalitäten moderner Planung kaum zu erreichen ist. Um dies zu zeigen, untersucht der Artikel empirische Daten, Bildrepräsentationen und Teile des Masterplans, um die Idee zu entwickeln, dass geplante Urbanität eine Antinomie im Žižekschen Sinne darstellt: Sie verunmöglicht Urbanität. Einige Einsichten in dieses Problem werden vorgestellt, das als ernsthafte Restriktion der – wenngleich reflektierten und gut informierten – urbanen Entwicklungsprojekte gelten kann. Indem diese Antinomien reflektiert werden, soll weiteres kritisches Denken zur Verbesserung urbaner Projekte beitragen.

Description: Zusammenfassung Die wachsende Zahl älterer Menschen in den Kommunen führt zu der Notwendigkeit, die Planung für diese Zielgruppe anzupassen und so die Voraussetzungen zur Erhaltung von Lebensqualität zu schaffen. Um die Planungen für ältere Menschen in der rheinland-pfälzischen Stadt Pirmasens zu unterstützen, wurden im Rahmen eines Projektes neben einer repräsentativen Seniorenbefragung und Experteninterviews sechs Zukunftswerkstätten in unterschiedlichen Stadtteilen durchgeführt. In diesem Aufsatz wird aufgezeigt, inwieweit Zukunftswerkstätten ein geeignetes Instrument darstellen, um einerseits Wünsche und Bedürfnisse zu ermitteln und andererseits ältere Menschen anzuregen, sich selbst für die Umsetzung ihrer geäußerten Anliegen zu engagieren.

Description: Zusammenfassung In diesem Beitrag werden die Ausprägungen des regionalplanerischen Instruments Eigenentwicklung in Niedersachsen untersucht und eine Verbesserung der Siedlungssteuerung diskutiert. Dazu wird mit der vergleichenden Plananalyse eine neue Methode angewandt, welche einen systematischen Vergleich aller Planelemente einer Festlegung im Regionalplan ermöglicht. Als Ergebnis kann festgehalten werden, dass der Beitrag des regionalplanerischen Instruments Eigenentwicklung zu einer nachhaltigen Siedlungsentwicklung in weiten Teilen Niedersachsens als gering einzuschätzen ist. Die Regionalplanung vermag es vielerorts kaum, die Zersiedlung einzudämmen. Dies liegt jedoch nicht daran, dass es an geeigneten Instrumenten mangelt, sondern daran, dass die Regionalplanung ihre Möglichkeiten nicht ausschöpft.

Description: ZusammenfassungWie Menschen ihren Weg finden, wird in der englischsprachigen Forschung bereits seit den 1980er Jahren unter dem Stichwortwayfindinguntersucht. Aufgrund der Einbettung dieser Forschung in die Umweltpsychologie fokussierte sie allerdings stark auf die Informationsverarbeitung während des Orientierungsprozesses. Dementsprechend bleibt die Bedeutung des konkreten räumlichen Kontexts in derwayfinding-Forschung unterbelichtet, wodurch sie nur begrenzten Anwendungsbezug für die Stadtplanung erhält. Dieser Beitrag stellt einen praxeologischen Zugang zumwayfindingvor, der das praktische Wissen deswayfinderssowie die sinnliche Erfahrbarkeit von Umwelt und damit den Kontext deswayfindingin den Mittelpunkt rückt. Mit denkommentierten Parcourswird einein situ-Interviewmethode vorgestellt, die den Anforderungen an einen derartigen Zugang zumwayfindinggerecht wird. Zwei Fallbeispiele demonstrieren das Potenzial des alternativen Zugangs.

Description: Zusammenfassung Der Bodenseeraum ist ein ökologisch sehr hochwertiges Gebiet und zählt gleichzeitig zu den innovativsten und wachstumsstärksten High-Tech-Regionen der Bundesrepublik. Hierdurch ergeben sich erhebliche Nutzungskonflikte um die zunehmend knapper werdende Ressource Raum. Am Beispiel des Mittelzentrums Radolfzell, in welchem sich die Flächenkonkurrenzen in besonders hohem Ausmaß zeigen, wird untersucht, inwiefern das Instrument des Flächenrecyclings von Konversionsflächen, welche durch den wirtschaftsstrukturellen Wandel anfallen, einen effektiven Beitrag zu einer nachhaltigen Stadt- und Wirtschaftsentwicklung leisten kann.

Description: Zusammenfassung Absehbar ist mit Vorgaben der EU für die maritime Raumordnung zu rechnen, die auf Harmonisierung des Rechts der Raumordnung in den Mitgliedstaaten gerichtet sein und dabei auch Auswirkungen auf das Raumordnungsrecht zu Lande haben werden. Dieser Prozess sollte von deutscher Seite aktiv begleitet werden, um nationale Erfahrungen einzubringen – nicht zuletzt, um im innerstaatlichen Bereich erkannte Fehlentwicklungen auf europäischer Ebene zu verhindern. Zu den dergestalt harmonisierenden Maßgaben des Europarechts zählen organisationsrechtliche Regelungen über eine von den Mitgliedstaaten zu benennende „einheitliche Stelle“: materiellrechtlich solche über eine Verpflichtung der Raumordnung auf Nachhaltigkeit und überörtliches wie überfachliches Handeln, instrumentell über einen abgestimmten Einsatz von planerisch-verbindlichen Festsetzungen in Raumordnungsplänen einerseits und informeller Instrumente andererseits, über einen Einsatz des Raumordnungsverfahrens im maritimen Bereich, ferner über die Zuweisung neuer Aufgaben an die Raumordnung(sstellen), wie Monitoring und Mediation. Schließlich muss die bisherige Vorrangigkeit des europäischen Naturschutzrechts zugunsten einer abwägenden Berücksichtigung im Rahmen der Raumordnung abgelöst werden.

Description: Zusammenfassung In Anbetracht einer Bioenergiebereitstellung, die voraussichtlich weiter an Bedeutung gewinnt und weiter Raum greift, stehen viele Regionen vor der Frage, mit welchen Entwicklungen sie konkret zu rechnen haben und wie sie diesen Entwicklungen begegnen können. Um Antworten auf diese Fragen zu finden und in der Konsequenz regionale Steuerungsmöglichkeiten für eine nachhaltige räumliche Entwicklung der Bioenergiebereitstellung zu ermitteln, wurde am Beispiel der Planungsregion Westsachsen eine Methode entwickelt, die auch als Handreichung für andere Regionen dienen kann. Sie erlaubt, die regionalen räumlichen Potenziale für die Bioenergiebereitstellung nach Fruchtarten und Anlagentypen differenziert zu ermitteln, mögliche Entwicklungen in qualitativen Szenarien zu vergegenwärtigen und voraussichtliche Umweltauswirkungen und Flächenkonkurrenzen zu beurteilen. Instrumentell kann die Methode in einem Biomasseentwicklungskonzept umgesetzt werden, das auch als Beitrag zu möglichen künftigen Regionalen Energiekonzepten dienen kann. Konzipiert ist es weniger als finales Konzept, vielmehr als flexibles Instrument in Form eines planerischen Rahmens. Dies hat den Vorteil, anpassungsfähig zu sein und dem regionalen Diskurs Raum zu eröffnen. Damit hat die Methode das Potenzial, einen Beitrag zur regionalen Zielfindung zu leisten.

Description: Zusammenfassung Die erstmalige Aufstellung eines Regionalen Flächennutzungsplanes in der Region Frankfurt/Rhein-Main zeigt, dass dieser Plantyp durchaus geeignet ist, eine effektivere Aufgabenwahrnehmung der planerischen Handlungserfordernisse in metropolitanen Stadtregionen zu leisten. Dies konnte in einer ersten begleitenden Untersuchung des Planungsprozesses durch eine Arbeitsgruppe der Akademie für Raumforschung und Landesplanung belegt werden. Wesentliche Aspekte bei der Einführung sind die inhaltliche Struktur und die zentralen Elemente des Planes, das Planaufstellungsverfahren sowie die Akzeptanz bei den betroffenen Kommunen. Zudem können aus dem laufenden Planungsprozess erste Erkenntnisse zu zukünftigen Anforderungen an den Regionalen Flächennutzungsplan abgeleitet sowie erste Überlegungen zur Anwendung dieses Planungsinstrumentes in der deutschen Planungspraxis allgemein formuliert werden. Dennoch muss der Regionale Flächennutzungsplan nach seinem Inkrafttreten im Jahr 2011 seine Bewährungsprobe in der planungspraktischen Anwendung noch bestehen, um seine Tauglichkeit als effektives und auch effizientes Planungsinstrument unter Beweis zu stellen.

Description: This study uses Monte Carlo analysis to characterize the uncertainty associated with per-ton damage estimates for 565 electric generating units (EGUs) in the contiguous United States (U.S.) This analysis focuses on damage estimates produced by an Integrated Assessment Model (IAM) for emissions of five local air pollutants: sulfur dioxide (SO 2 ), nitrogen oxides (NO x ), volatile organic compounds (VOCs), ammonia (NH 3 ), and fine particulate matter (PM 2.5 ). For each power plant and pollutant, the Monte Carlo procedure yields an empirical distribution for the damage per ton, or marginal damage. The paper links uncertainty in marginal damages to air pollution policy in two ways. First, the paper characterizes uncertainty in the magnitude of the marginal damages which is relevant to policymakers in determining the stringency of pollution controls. Second, the paper explores uncertainty in the relative damages across power plants. Relative damages are important if policymakers elect to design efficient regulations that vary in stringency according to where emissions are released. The empirical section of the paper finds that the marginal damage distributions are positively skewed and they are more variable for sources in urban areas than rural locations. The paper finds that uncertainty in three input parameters has the greatest impact on uncertainty in the magnitude of damages: the adult mortality dose-response parameter, the mortality valuation parameter, and air quality modeling. The analysis also finds that for each pollutant except for NO x only uncertainty in air quality modeling impacts efficient trading ratios calibrated to each firm's marginal damages.

Description: This paper estimates the pattern of consumer expenditures in Iran in an attempt to measure the welfare cost of price subsidies in that country and shed light on possible fiscal reforms. We use the Quadratic Almost Ideal Demand System (Banks et al. (1997)) as our framework for estimation. We show that the general equilibrium fiscal interaction effects play a crucial role in determining the amount the government saves by eliminating the price subsidy of a particular good. Interestingly, eliminating price subsidies on utilities saves the government little by way of revenues and is welfare reducing. Comparing the gains for non-marginal with marginal reforms a la Ahmad and Stern (1984), we also show that the two approaches may not necessarily recommend the same reform.

Description: This paper presents an experiment measuring how lab-induced group identity affects trust and trustworthiness in a repeated trust game with random matching. Identity had positive in-group and negative out-group effects on trust. However, the in-group effect was small and statistically insignificant, while the out-group effect was large. Trustworthiness was determined mainly by reciprocity effects.

Description: We construct daily market-based measures of distance to default for large U.S. financial institutions since 1973. These measures have significant predictive power for institution bankruptcy more than one year in advance. We aggregate the distances to default across institutions to provide an index of the overall health of the financial-services industry. We show that deteriorations in this Financial Institution Health Index are associated with tighter lending standards and higher interest rates on bank loans and precede declines in employment and industrial production. We argue that this points to the condition of financial institutions as an independent source of macroeconomic variability, distinct from traditional accelerator mechanisms.

Description: We investigate the effect of immigration on the labor supply of skilled women, using data on Spain’s large recent immigration wave. We adopt a spatial correlations approach and instrument for current immigration using ethnic networks. We find that female immigration increases the local availability of household services and reduces their price. It also increases the labor supply of skilled native women, by allowing them to return to work earlier after childbirth, and to continue working while caring for elderly dependents. Immigration can account for one third of the recent increase in the employment rate of college-educated women providing child or elderly care.

Description: This paper investigates the standard finding that instituting a minimum quality standard within a vertically differentiated market unambiguously benefits consumers of high quality products. A competitive model is specified in which random cost shocks lead some firms to cheat in equilibrium on their reputation for high quality. When cheating occurs, instituting or raising the level of a minimum standard can lead to the price of high quality products either increasing or decreasing. The effect of a minimum quality standard on the price of high quality products becomes an empirical rather than a theoretical issue.

Description: We provide a unified assessment of a striking disparity in the United States: the differential rate at which white and black infants die. We separate the overall mortality gap into three temporal components—fitness at birth, conditional neonatal mortality, and conditional post-neonatal mortality—and quantify the extent to which each of the components can be predicted using a flexible reweighting method. Almost 90 percent of the overall mortality gap is due to differential fitness at birth, little of which can be predicted by racial differences in background characteristics. The remaining mortality gap stems from conditional post-neonatal mortality differences, nearly all of which can be predicted by background characteristics. The predictability of the mortality gap has declined substantially over the past two decades, largely because the mortality gap among extremely low-fitness infants is increasingly unrelated to background characteristics.

Description: We develop a duopoly model with advertising supported platforms and analyze incentives of a superior firm to license its advanced technologies to an inferior rival. We highlight the role of two technologies characteristic for media platforms: the technology to produce content and to place advertisements. Licensing incentives are driven solely by indirect network effects arising from the aversion of users to advertising. We establish a relationship between licensing incentives and the nature of technology, the decision variable on the advertiser side, and the structure of platforms’ revenues. Only the technology to place advertisements is licensed. If users are charged for access, licensing incentives vanish. Licensing increases the advertising intensity, benefits advertisers and harms users. Our model provides a rationale for technology-based cooperations between competing platforms, such as the planned Yahoo-Google advertising agreement in 2008.

Description: Optimal recycling of minerals can be thought of as an integral part of the theory of the mine. In this paper, we consider the role that wastewater recycling plays in the optimal extraction of groundwater, a renewable resource. We develop a two-sector dynamic optimization model to solve for the optimal trajectories of groundwater extraction and water recycling. For the case of spatially increasing recycling costs, recycled water serves as a supplemental resource in transition to the steady state. For constant unit recycling cost, recycled wastewater is eventually used as a sector-specific backstop for agricultural users, while desalination supplements household groundwater in the steady state. In both cases, recycling water increases welfare by shifting demand away from the aquifer, thus delaying implementation of costly desalination. The model provides guidance on when and how much to develop resource alternatives.

Description: This paper investigates whether rent control affects community socioeconomic composition. In particular, do rent controls increase the presence of poor and minority residents in a locale? Theoretically, the effect of rent control on community composition is ambiguous, as it depends upon several factors including willingness to occupy controlled apartments, landlord imposed rationing mechanisms, and spillover effects of rent controlled housing on uncontrolled units. Using census data on how Cambridge, Massachusetts and nearby communities responded to the state imposed end of rent control, I find evidence that rent control increased the presence of minority residents but also decreased the proportion of poor residents. This evidence is robust to alternate control areas and several specification checks. I also find that despite its positive impact on minority membership, rent control is associated with an increase in traditional measures of residential segregation.

Description: We analyze dynamic models with negative externalities occurring from production capital and input use. We uncover a puzzle related to such models: evaluated with a social welfare function, the steady-state outcome of a socially optimal policy, and thus the tail of the corresponding payoff sequence, may yield a smaller social payoff than a market outcome. The main questions we address are under what conditions this phenomenon arises and how general it is. We show that there are always Pareto-optimal policies which lead to the puzzle when the discount rate is fixed. In addition to discounting, the driving force of our results is that the periodic pollution and profits are linked to production capital. We demonstrate the puzzle with a model for controlling phosphorus losses from crop production. We argue that the puzzle should be taken into account in the policy analysis of dynamic problems, including negative externalities.

Description: We present a model of sequential innovation in which innovators use several research inputs to invent new goods. We extend work by Shapiro (2001) and Lerner and Tirole (2004) by studying the effects of increases in the number of patented research inputs on innovation incentives and optimal patent policy. We consider not only the effects on the incentives to invent final goods, but also on the incentives to invent research inputs (ex-ante effect). We find increasing complexity has a negative effect on innovation activity in the final goods sector when research inputs are complements. Either limiting market power through weaker patents or reducing the lack of coordination through patent pools may solve this problem. We also find the optimal patent breadth and show it is increasing in the elasticity of substitution between the inputs used in research and decreasing (increasing) in the complexity of the R&D process when research inputs are complements (substitutes).

Description: Approximately 100,000 visitors came to Denver, Colorado and Minneapolis, Minnesota to attend the 2008 Democratic and Republican National Conventions. Economic theory suggests that men in transit can shift demand for commercial sex work. We estimate the responsiveness of labor supply to these two conventions, focusing on a previously neglected but increasingly important segment of the prostitution market: indoor sex workers who advertise on the Internet. Using a differences-in-differences estimator of prostitution advertisements posted on a major classified ads website, we find that the conventions caused a 29-44 percent increase in advertisements in Minneapolis and a 47-77 percent increase in Denver. Given the key role prostitution plays in the transmission of STIs, these results imply that focusing public health resources on men in transit may be beneficial.

Description: Using data on the B.E. Journals that rank articles into four quality tiers, this paper examines the accuracy of the research evaluation process in economics. We find that submissions by authors with strong publication records and authors affiliated with highly-ranked institutions are significantly more likely to be published in higher tiers. Citation success as measured by RePEc statistics also depends heavily on the overall research records of the authors. Finally and most importantly, we measure how successful the B.E. Journals’ editors and their reviewers have been at assigning articles to quality tiers. While, on average, they are able to distinguish more influential from less influential manuscripts, we also observe many assignments that are not compatible with the belief that research quality is reflected by the number of citations.

Description: Many recent studies estimate cost function parameters to measure the influence of capital-skill complementarity on changes in skill demand. This paper argues that standard cost function estimates assuming quasi-fixed capital systematically overestimate the effect of complementarity when subject to skill-biased technological change. While previous work has considered bias due to measurement error or general endogeneity concerns, this paper shows that upward bias results directly from cost minimizing behavior. I also develop a novel instrumental variables strategy based on the tax treatment of capital to more accurately measure the effect of complementarity. Although somewhat imprecise, the IV results support the model's prediction that the standard approach overestimates the effect of complementarity.

Description: We study income responses to income tax changes by using a large panel of Swedish tax payers over the period 1991–2002. Changes in statutory tax rates as well as changes in tax bracket thresholds provide exogenous variations in tax rates that can be used to identify income responses. We estimate dynamic income models which allow us to distinguish between short-run and long-run effects in a straightforward fashion. For men, the estimates of the long-run elasticity of income with respect to the net-of-tax rate hover in a range between 0.10 and 0.30. The estimates for women are statistically insignificant. We simulate the fiscal consequences of a tax reform that reduces the top marginal tax rate by five percentage points. Such a reform may have negligible effects on tax revenues when the interactions between income taxes and other taxes are taken into account.

Description: Do public insurance programs crowd out private savings? I examine the relationship between Medicaid and wealth and make a contribution to the literature on this issue in two primary ways. First, I apply the instrumental-variables approach developed by Gruber and Yelowitz (1999) to a different dataset, the National Longitudinal Survey of Youth, 1979 (NLSY79), while at the same time examining an alternative instrument. The results turn out to differ depending on the instrument and, for one of the instruments, to be sensitive to assumptions needed to identify Medicaid’s effects. Second, I make use of the SIPP data employed by Gruber and Yelowitz themselves, and examine the sensitivity of their conclusions to omitted factors that may be related to both Medicaid eligibility and to wealth accumulation. While more robust than the results using the NLSY79, the SIPP estimates are found to depend both on the sample used and on certain specification restrictions. Taken together, the results suggest caution in making inferences about the impact of Medicaid on wealth.

Description: How much does the current social security system redistribute from rich to poor? We propose alternative concepts of well-being that can be used to classify individuals from rich to poor, and we show how social security redistributes differently under each concept. We use the PSID to estimate lifetime wage profiles and actual earnings each year for a sample of 1778 individuals, and we use mortality probabilities to calculate expected payroll taxes and social security benefits. For a given set of “facts” about the net flows experienced each year by each individual, measured progressivity depends on many assumptions. This paper attempts to capture and to quantify all of the data and characteristics relevant to determine each individual’s “income” under several definitions. We then use each definition of income to classify individuals from rich to poor and to calculate the progressivity of social security. We proceed in seven steps. First, we classify individuals by annual income and use Gini coefficients to find that social security is highly progressive. Second, we reclassify individuals on the basis of lifetime income and find that social security is less progressive. Third, we remove the cap on measured earnings and find that social security is even less progressive. Fourth, we switch from actual to potential lifetime earnings (the present value of the wage rate times 4000 hours each year). This measure captures the value of leisure and home production, so those out of the labor force are less poor, and net payments to them are less progressive. Fifth, we assign to each married individual half of the couple’s income. The low-wage spouse is then not so poor, and social security becomes even less progressive. Sixth, we incorporate mortality probabilities that differ by potential lifetime income. Since the rich live longer and collect benefits longer, social security is no longer progressive. Finally, we increase the discount rate from 2% to 4%, which puts relatively more weight on the earlier-but-regressive payroll tax and less weight on the later-but-progressive benefit schedule. Depending on the definition of income used to classify people, the overall social security system could be deemed progressive, only mildly progressive, or neutral. With an even-higher discount rate, it could even be deemed regressive.

Description: We examine changes in environmental monitoring and enforcement activity in the presence of state legislation prohibiting Strategic Lawsuits Against Public Participation (anti-SLAPP laws). Using data on the Clean Air Act from the Environmental Protection Agency’s ECHO database, we find evidence that state inspections increase by almost 50% after a state passes anti-SLAPP legislation. In addition, we find strong evidence that the ratio of findings of noncompliance to inspections more than doubles in the presence of anti-SLAPP legislation.

Description: While the effect of risk aversion on farmers' decision-making has long been documented, far less is known about the effect of ambiguity aversion. We argue that ambiguity aversion is just as relevant to their decision-making process because they are uncertain about the yield distributions generated by new technologies. By experimentally measuring risk and ambiguity aversion in rural Peru, we provide new evidence on the role of ambiguity aversion on farm decisions in developing countries: ambiguity aversion, not risk aversion, reduces the likelihood that farmers plant more than one variety of their main crop.

Description: Building on the framework developed by Qiu (1997) we investigate the influence of product market competition on incentives to invest in cooperative R&D. For that we disentangle the three components that make up the combined-profits externality. The strategic component is always negative and the size component is always positive. The spillover component is negative (positive) with Bertrand (Cournot) competition. Cournot competition thus yields more cooperative R&D, which could drive the Cournot-Nash price below the Bertrand-Nash price. Our decomposition also explains why, under Cournot competition, cooperative R&D exceeds non-cooperative R&D only if spillovers are “high enough.”

Description: The literature on collusive cartels has mainly focused on the impact of antitrust fines on the sustainability of cartels, in infinitely repeated games. This approach, however, does not allow us to study the effect of antitrust fines on the incentives to form cartels in the first place. In this paper, we adopt a coalitional game approach to modeling collusive agreements, showing that antitrust fines may drive firms from partial cartels to a monopolistic cartel. Moreover, by introducing uncertainty on market demand, we show that the socially optimal competition policy can call for a finite or even zero antitrust penalty, even if there are no enforcement costs. We provide a sufficient condition for these results to apply to any coalitional game of cartel formation with symmetric firms. Then, we discuss the extension to asymmetric firms and dynamic collusion.

Description: Consumerism arises when patients acquire and use medical information from sources other than their physicians. This practice has been hailed as a means of improving quality. This need not be the result. Our theoretical model identifies a channel through which consumerism may reduce quality: consumerist patients place additional demands on their doctors’ time, thus imposing a negative externality on other patients. Relative to a world in which consumerism does not exist, consumerism may harm other consumerists, non-consumerists, or both. Data from a large national survey of physicians confirm the negative effects of consumerism: high levels of consumerist patients are associated with lower perceived quality among physicians.

Description: This paper contributes to the ongoing debate regarding the appropriate approach to use in identifying the impact of immigration on native workers’ labor market outcomes. The initial regression analysis makes use of German administrative data and is based on the variation of foreign workers’ shares within education-experience cells over time. It confirms previous findings suggesting that immigration in Germany had no adverse impact on native wages. However, the paper highlights that in Germany immigrants and natives with similar education and experience are likely to work in different occupations. The subsequent analysis based on occupational clustering uses the same data and finds significant adverse wage effects for natives, particularly for those in basic service occupations. The paper argues, therefore, that an identification strategy based on formal education characteristics might lead to biased estimates if a country’s labor market is characterized by occupational segmentation of immigrants.

Description: We estimate a dynamic model of health that is rooted in "stress models" from Epidemiology. Health is determined by time-invariant endowments, permanent shocks, and transitory shocks. We estimate that the variance in health at age 60 ranges between 2.5 and five times its variance at age 25 depending on which demographic group we consider. We show that the stress model performs better than a simple alternative, the random effects Probit, particularly for less educated people.

Description: Government policies that promote on-the-job training have different effects when, due to unemployment, workers value job security. In this case, an increase in specific training leads to greater job security and lower wages. The wage result, although perhaps counterintuitive, is supported by, and helps explain, published empirical work. Even with lower wages, training policies may be Pareto-improving or may lower welfare, depending on the elasticity of demand for labor. Training mandates and subsidies to training, because of their differing impacts on job security, have different unemployment and welfare effects; mandates are preferred. If government policy can influence specific training and job security independently, training is never optimally encouraged. Policies that promote general training and policies that promote specific training can both raise employment, but in different ways. Specific training lowers the employment outflow; general training raises the employment inflow.

Description: This paper uses a simple model of duopoly competition to study the market provision of program quality offered by television broadcasters under three different regimes. In regime 1, two broadcasters are financed only with subscription fees (i.e., fee-based or pay TV). In regime 2, the two broadcasters generate their revenues only from advertising (i.e., free TV). In regime 3, one pay TV broadcaster competes with one free TV broadcaster. We show that the broadcasters in regime 3 (but not in regimes 1 and 2) vertically differentiate their channel programs if, for a given level of advertising market profitability, viewers strongly or weakly dislike the presence of advertising. In such cases, although the two pay TV broadcasters in regime 1 will unambiguously offer higher or lower quality programming than the two free TV broadcasters under regime 2, it is not clear which broadcaster will provide higher or lower program quality in regime 3 because this depends on the degree of horizontal differentiation between the channel programs. However, the levels of quality offered under regimes 1 and 2 fall between the quality levels offered by the two broadcasters in regime 3.

Description: This study investigates the explanatory variables affecting the agricultural cooperatives decision of downstream vertical integration into the transformation of the products supplied by their members. The study also analyses the effect of the vertical integration decision on the efficiency obtained. This analysis has been carried out by means of a two-step methodology suggested by Heckman (1979) over a sample of Spanish agricultural cooperatives belonging to the Qualified Denomination of Origin La Rioja. The results obtained show that those cooperatives, which have adopted Actualisation Mechanisms of social capital, high dedication to agricultural activity, and high rate of capacity utilization are more likely to integrate within the cooperative another stage of the production cycle. Furthermore, the results show that the most efficient cooperatives are those with a higher level of downstream vertical integration.

Description: This paper models information transmission in an electoral campaign. The voters have conflicting policy interests, but they are congruent in their desire to elect a competent politician. They hold private information about the candidates for office, and they use endorsements and campaign contributions to signal their information, so as to advertise their most preferred candidates. Endorsements are cheap talk, but campaign contributions are costly, hence, contributions are stronger signals than endorsements. Therefore, contributions help to transmit information when voter interests are relatively divergent (however, not so much that campaigning is useless).

Description: This paper explores the relationship between income distribution, prices, production efficiency and aggregate output in a decentralized search economy. We show that income distribution determines how competitive prices are and thereby affects production efficiency and aggregate output. It is shown that, under reasonable assumptions, it is possible to engineer a judicious transfer of income from high to low income individuals, which increases income equality, leads to more competitive prices, and increases aggregate output.

Description: We determine the impact of free trade on the sustainability of an international environmental agreement (IEA) and incorporate it into the assessment of the net benefits of opening up to free trade. We show that such an analysis can reverse the conclusions reached within a standard one-shot game framework. We first examine a one shot game and show that the benefits from an increase in economic activity due to free trade outweigh the extra cost of free trade associated with larger environmental damage. We then consider the infinite repetition of the one-shot game where countries can use trigger strategies and show that there exist circumstances where an IEA is sustainable under autarky but not under free trade. This aggravates the environmental damages caused by free trade and leads to the possibility that welfare may be smaller under free trade than under autarky. This conclusion remains valid even when (i) countries adopt the most cooperative environmental policy when the âfully cooperativeâ environmental policy is not sustainable or (ii) we consider âintermediate tariff reductions.â

Description: Drawing on Grossman & Helpman (2004) and Antràs & Helpman (2004), we identify general conditions that result in an unambiguous mapping of a firmâs productivity level into the organizational form and location of its input sourcing. Using a detailed 2006-2008 data set for Spanish manufacturing firms, we then establish a number of stylized facts about firm-level heterogeneity in sourcing strategies that have largely gone unnoticed in existing literature on input sourcing. Finally, we explore this heterogeneity through econometric estimation of productivity premia associated with different sourcing strategies. We find a robustly significant premium on a strategy that features offshore production of intermediate inputs through a related party (vertical integration). Lower productivity premia are found for strategies that rely on outsourcing to unrelated parties abroad or on vertical integration within the home economy. Across all specifications employed, estimated mean productivity is lowest for domestic-outsourcing firms.

Description: Noting that developing countries may not have the administrative capacity to levy a âpureâ carbon tax, we compare the impact of alternative energy taxes with that of a carbon tax in an economy with multiple distortions. We use a disaggregated computable general equilibrium (CGE) model of the South African economy and simulate a range of tax policies that reduce CO2 emissions by 15 percent. Consistent with a âfirst-bestâ economy, a carbon tax will have the lowest marginal cost of abatement. But the relationship between a tax on energy commodities and one on pollution-intensive commodities depends critically on other distortions in the system and on structural rigidities in the economy. We demonstrate that if South Africa were able to remove distortions in the labor market, the cost of carbon taxation would be negligible. We conclude that the welfare costs of taxing carbon emissions in developing countries depend more on other distortions than on the countryâs own carbon emissions.

Description: In small and open economies, absorption of foreign knowledge through international trade often plays a more important role for domestic innovation and growth than investment in domestic R&D. This suggests that trade policies can increase knowledge spillovers from abroad. Public support to R&D can be motivated both by positive internal knowledge externalities and by its ability to expand absorptive capacity. This dynamic, empirical, general equilibrium analysis models these interplays between R&D, trade and productivity. It compares public R&D support and export promotion of R&D based products with respect to long term growth and welfare impacts. We find that export promotion is inferior to R&D support in spurring R&D. However, it is not outperformed in terms of welfare generation. The reason is that existing and politically persistent policy interventions create inefficiencies that can be counteracted by R&D-based export promotion as a second-best policy.

Description: In this paper, we consider three U.S. public policies that potentially influence the work decisions of mothers of infants—parental leave laws, exemptions from welfare work requirements, and child care subsidies for low-income families. We estimate the effects of these policies on the timing of work participation after birth, and on a range of outcomes in the subsequent four years, using a group difference-in-difference technique suitable for analysis of cross-sectional data. We find that the three policies affect early maternal work participation, but obtain no evidence of significant consequences for child well-being.

Description: We compare four datasets that researchers might use to study competition in the health insurance industry. We show that the two datasets most commonly used to estimate market concentration differ considerably from each other (both in levels and in changes over time), and reflect implausibly high volatility in market shares. By comparison, market share volatility is much lower in a private dataset gathered by a leading investment bank, and in state-level hospital discharge data. We also demonstrate that the outcome of regressions using these data vary considerably by the source used. We conclude that researchers should be cautious about using available data and recommend a new source be developed for public use.

Description: With asymmetric information between investors and firms, credit availability is affected by the resale value of collateralized productive assets. If liquidation occurs, investors recover a greater value the higher the probability to find a buyer and the higher his willingness to pay to use the assets for production. We extend the idea of complementarities among firms in the same industry (as in Shleifer and Vishny, 1992) to study under which conditions credit availability is enhanced by competition in the product market when assets are industry specific.

Description: This paper defines, discusses, and measures “expenditure substitution” in charitable giving. Motivated by a model of conditional demand, I consider the extent to which a “temporary shock” that increases an individual's donation to one cause by a particular amount displaces her gifts to other charitable causes. I use the 2001-2007 waves of the PSID/COPPS, the first data set of its kind, to identify this. Households that give more to one type of charity tend to give more to others. However, many of the correlations between the residuals after fixed-effects regressions are negative and significant, particularly for larger donors and for certain categories of charitable giving. Given plausible econometric assumptions, the negative correlations are strong evidence of expenditure substitution. Overall, these results suggest heterogeneous motivations for giving: small givers may be mainly driven by temporary shocks and personal appeals while larger givers may have concave multi-charity warm-glow preferences.

Description: We explore the economic impact of boycotts of French automobiles in China during the time of the 2008 Beijing Olympics. Conditions were favorable for a boycott, enabling Chinese consumers to overcome the collective action problems that can prevent boycott success and other voluntary contributions to public goods. We use brand and model level data in a difference-in-difference specification to investigate the boycotts’ effects on sales. A robust pattern of large impacts emerges: sales of French automobile brands fell 25-33 percent or more. Consumers substituted mostly toward Chinese and other Asian cars. The sales of the French models did not experience similar relative sales declines in countries other than China—triple-difference estimates point toward even larger relative loss of market share in China. Our results provide evidence that commerce can be used as an effective political weapon.

Description: I estimate the welfare provided to beneficiaries by the Medicare managed care program, and its net costs, for the years 1999-2002. I measure beneficiary welfare with a nested logit model of demand for Medicare HMO plans using detailed data on plan benefits. From this, I find that total beneficiary welfare provided by the program over the four-year period is about $61 billion (2000 $). I also use data on and estimates of the favorable selection enjoyed by Medicare HMOs from the research literature to estimate net costs of the program, which range from $21 billion to $31 billion (2000 $). Estimated net beneficiary welfare of the program therefore ranges from $30 billion to $40 billion and the estimated return on government spending ranges from 96 percent to 186 percent. Even though managed care plans are overpaid by Medicare, the program still enjoys a substantial return due to the popularity of its offerings.

Description: In many credence goods markets, a seller simultaneously diagnoses a problem and offers a recommendation to fix it. One might wonder what prevents these sellers from always exaggerating their customer’s needs. In this paper, we offer a simple explanation, namely, consumers may spurn sellers who have a reputation for such “demand inducement.” We test this explanation by examining patient choice of obstetrician in Florida. In most of the counties that we study, we find that maternity patients are significantly less likely to choose obstetricians who perform more than the expected number of cesarean sections. We address simultaneity by instrumenting for “inducement propensity” using information about the obstetrician's training. Although the instrument is weak, a series of robustness tests suggests that our findings are plausible while ruling out alternative explanations.

Description: We investigate the dynamics of a firm whose advertisements and sales contribute to its customers’ stock of goodwill. An advertising campaign precedes the firm’s sales when the marginal product of advertisement is sufficiently large (e.g., Amazon Kindle and Apple Macintosh), whereas sales of a new brand of a familiar product may start without advertising (e.g. Crocs shoes). When the firm chooses both advertising and sales policies, the optimal solutions can be divided into two groups typified by low and high demand elasticities. When demand elasticity is low, a massive increase in the quantity sold causes a considerable drop in the product's price. Therefore, the firm prefers to use advertising, rather than excess sales. With high demand elasticity, a massive increase in the quantity sold reduces the price only marginally, thus sales becomes a relatively cheap way to build up the stock of goodwill, compared with advertising.

Description: The purpose of this paper is to present a new methodology for evaluating the distributional impacts of climate policy. This methodology builds directly on the framework introduced by Jorgenson, Slesnick, and Wilcoxen (1992), but generalizes it by including leisure time, as well as goods and services, in the measure of household welfare. We provide detailed results for 244 different types of households distinguished by demographic characteristics. In addition, we evaluate the overall impact of a cap-and-trade system, as represented in Energy Modeling Forum 22. While there is a wide range of outcomes for different demographic groups, the impact on economic welfare is regressive and generally negative but relatively small.

Description: Using an analytical general equilibrium model, we find solutions for the effect of energy policy on factor prices as well as output prices. We calibrate the model to the U.S. economy, and we consider a tax on carbon dioxide. By looking at expenditure and income patterns across household groups, we quantify the uses-side and sources-side incidence of the tax. When households are categorized either by annual income or by total annual consumption as a proxy for permanent income, the uses-side incidence is regressive. This result is robust to sensitivity analysis over various parameter values. The sources-side incidence can be progressive, U-shaped, or regressive. Results on the sources side are sensitive to parameter values.

Description: While interest group explanations have considerably advanced our understanding of governmental outcomes, much remains to be understood about the specific country-level, industry-level and firm-level characteristics that underlie the influence firms have on the establishment of governmental rules, laws and regulations. In this study, we draw upon a unique database of roughly 6000 international firms to investigate the abilities of firms to affect governmental policies. We find that country-level institutional characteristics, such as the legal origin and political diversity of the firmâs home country, significantly affect the ability to influence government. We also find that industry-level characteristics, such as the number of industry competitors, and firm-level characteristics, such as size and age, are determinants of firm influence on governments.

Description: Individual countries are in the process of legislating responses to the challenges posed by climate change. The prospect of rising carbon prices raises concerns in these nations about the effects on the competitiveness of their own energy-intensive industries and the potential for carbon leakage, particularly leakage to emerging economies that lack comparable regulation. In response, certain developed countries are proposing controversial trade-related measures and allowance allocation designs to complement their climate policies. Missing from much of the debate on trade-related measures is a broader understanding of how climate policies implemented unilaterally (or subglobally) affect all countries in the global trading system. Arguably, the largest impacts are from the targeted carbon pricing itself, which generates macroeconomic effects, terms-of-trade changes, and shifts in global energy demand and prices; it also changes the relative prices of certain energy-intensive goods. This paper studies how climate policies implemented in certain major economies (the European Union and the United States) affect the global distribution of economic and environmental outcomes and how these outcomes may be altered by complementary policies aimed at addressing carbon leakage.

Description: We investigate the hypothesis that rising wage inequality caused declines in the U.S. aggregate marriage hazard since 1970. Despite confirming previous findings that inequality accounts for much of the decline among young adults before 1990, we find that the aggregate marriage hazard became much less sensitive to inequality thereafter. Our explanation for the weakened relationship relies on the theoretical prediction, which we verify empirically, that inequality influences marital decisions of young singles much more than those of older singles. The aggregate marriage hazard thus became less responsive to inequality over this period because the unmarried population became older.

Description: We study an oligopolistic market in which consumers located around the perimeter of a Salop circle buy either from firms around this perimeter (providing horizontally differentiated goods) or from a firm located at the centre of the circle (providing a homogeneous good). An entry-pricing game is studied. The market equilibria and social optima indicate various possible market failures, including cases in which the market is served only by perimeter firms whilst central provision would be socially optimal (in this sense, more extreme than the standard Salop excessive product differentiation). Moreover, for some parameters, the standard Salop result might be reversed.

Description: Pooling data for 1905 to 2000, we find no systematic relationship between top income shares and economic growth in a panel of 12 developed nations observed between 22 and 85 years. After 1960, however, a one percentage point rise in the top decileâs income share is associated with a statistically significant 0.12 point rise in GDP growth during the following year. This relationship is not driven by changes in either educational attainment or top tax rates. If the increase in inequality is permanent, the increase in growth appears to be permanent. However, our estimates imply that it would take 13 years for the cumulative positive effect of faster growth on the mean income of the bottom nine deciles to offset the negative effect of reducing their share of total income.

Description: High prices for patented pharmaceuticals have prompted many governments to consider allowing competition from âparallel imports,â or products first sold at lower prices in other countries. This paper examines how pharmaceutical firms have responded to changes in intellectual property rights and trade barriers that legalized parallel imports within the European Union (EU). The threat of arbitrage by parallel traders reduces the ability of firms to price discriminate across countries. Due to regulations on price and antitrust law on rationing supply, pharmaceutical firms may rely on non-price responses. Such responses include differentiation of products across countries and selective âcullingâ of product lines to reduce arbitrage opportunities, as well as raising arbitrageursâ costs through choice of packaging. Using a dataset of drug prices and sales from 1993-2004 covering 30 countries, I find evidence that the behavior of pharmaceutical firms in the EU with respect to their product portfolios is consistent with attempts to reduce parallel trade. This may at least partially explain why parallel trade has not yet resulted in significant price convergence across EU countries. Accounting for non-price strategic responses may therefore be important in assessing the welfare effects of competition from parallel imports.

Description: We evaluate the impact of the Medicare HMO program and prescription drug coverage on elderly mortality using data from 1993 to 2000. We specify a model of plan entry and benefit choice and Medicare enrollee plan choice and health outcomes. We derive an estimator that is consistent with endogenous plan selection by using the quasi-experimental variation caused by peculiarities of the Medicare reimbursement system for HMOs. We find that, relative to traditional Medicare, enrollment in an HMO without drug coverage increases mortality while enrollment in an HMO with drug coverage has no significant impact. The economic value of the reduction in mortality from drug coverage far outweighs the costs. HMOs, those without drug coverage in particular, attract healthier enrollees than average.

Description: Health insurance companies seek to influence the type of care patients receive in order to increase value in relation to cost. Traditional health insurance relies primarily on price mechanisms to affect patients' and doctors' choices, whereas managed care plans such as HMOs, as the name implies, affect choices directly thorough various forms of âmanaged care.â I investigate the effect of pecuniary and non-pecuniary incentives used by health insurance companies to influence prescription decisions in an important class of pharmaceuticals, cholesterol-lowering drugs called Statins, using a discrete-choice demand model on patient-level data. My results suggest that HMOs are significantly more successful at influencing drug choice than traditional indemnity insurers. In conjunction with volume-contingent discounts given by drug producers, this could explain part of the cost-effectiveness differential between HMOs and traditional indemnity insurers.

Description: The potential for greenhouse gas (GHG) restrictions in some nations to increased emissions in other nations, or leakage, is a contentious issue in climate change negotiations. We evaluate the impact of border carbon adjustments (BCAs) outlined in the American Clean Energy and Security Act of 2009 (H.R. 2454), using an economy-wide model. For 2025, we find that BCAs reduce leakage by up to two-thirds, but result in only modest reductions in global emissions and significantly reduce welfare. In contrast, BCA-equivalent leakage reductions can be achieved by very small emission charges or efficiency improvements in nations targeted by BCAs, which have negligible welfare effects. We conclude that BCAs are a costly method to reduce leakage, but may be an effective coercion strategy.

Description: The objective of this paper is to re-evaluate the effect of the 1985 âEmployment Services for Ex-Offendersâ (ESEO) program on recidivism in San Diego, Chicago and Boston. The initial group of program participants was split randomly in a control group and a treatment group. The actual treatment (mainly being job related counseling) only takes place conditional on finding a job and not having been arrested for those selected in the treatment group. We use interval-censored proportional hazard models for job search and recidivism time, where the latter model incorporates the conditional treatment effect, depending on covariates. We find that the effect of the program depends on location and age. The ESEO program reduces the risk of recidivism only for ex-inmates over the age of 27 in San Diego and Chicago and over the age of 36 in Boston, but increases the risk of recidivism for the other ex-inmates in the treatment group.

Description: Several papers have attempted to derive computable analytical formulas for the Marginal Cost of Funds (MCF). However, this literature is often cast in the pure labor supply general equilibrium model, which is not completely consistent with real tax systems where Labor Income Taxation (LIT) is not the only instrument used by governments. Hence, we explicitly introduce Value-Added Taxation (VAT) on consumption goods in the conventional model, and we derive an analytical formula for the MCF which does incorporate general equilibrium interactions between the different tax bases. Then, we illustrate how much this matter for empirical estimates of MCF using French data. Our numerical example suggests that, when computing MCF for a LIT reform, taking account of the impact of LIT reform on tax revenue from VAT can make a great deal of difference, typically increasing MCF and accounting for around 0.2 to 0.8 of estimates. In addition, MCF is then really less likely to be less than one than in the conventional framework.

Description: Ethanol is increasingly being used as a gasoline oxygenate and a volume extender in the refinery and blender industry in the U.S. This paper estimates refinery and blender factor demand and evaluates price responsiveness of inputs. The study also tests hypotheses regarding existence of structural change in the industry’s demand for inputs. It determines the common shift point and adjustment rate characterizing the transition path of structural change for the set of inputs using gradual switching multivariate regression techniques and maximum likelihood methods. Results suggest structural change in factor demand for inputs in the refinery and blender industry has been initiated in January 2001 at slow adjustment rates. Results also suggest that with the exception of labor and capital, demand responsiveness for inputs to own price changes has decreased over time. The Hicks-Allen cross price elasticity estimates also suggests role-reversal for usage of ethanol in the refinery industry across regimes, with the latter being increasingly used as a substitute than as a complement with time.

Description: I analyze price and quality competition in a model that captures important institutional features of U.S. hospital markets. I first consider duopoly hospitals serving a population of patients who are covered by insurance that their employers purchase from duopoly health plans. I show that second-best quality levels can be sustained as equilibrium outcomes under both indemnity insurance and managed care even when patients are fully insured. I also demonstrate that a monopoly hospital system can yield efficient quality levels and that prices may be lower under monopoly than duopoly even when there are no technical efficiencies associated with monopoly. The latter result arises when employers and health insurance plans view the hospitals as complements even though any given consumer views them as substitutes.

Description: We develop a model in which two insurers and two health care providers compete for a fixed mass of policyholders. Insurers compete in premium and offer coverage against financial consequences of health risk. They have the possibility to sign agreements with providers to establish a health care network. Providers, partially altruistic, are horizontally differentiated with respect to their physical address. They choose the health care quality and compete in price. First, we show that policyholders are better off under a competition between conventional insurance rather than under a competition between integrated insurers (Managed Care Organizations). Second, we reveal that the competition between a conventional insurer and a Managed Care Organization (MCO) leads to a similar equilibrium than the competition between two MCOs characterized by a different objective, i.e. private versus mutual. Third, we point out that the ex ante providers' horizontal differentiation leads to an exclusionary equilibrium in which both insurers select one distinct provider. This result is in sharp contrast with frameworks that introduce the concept of option value to model the ( ex post ) horizontal differentiation between providers.

Description: Studies of moral hazard in employment-limiting social insurance programs such as Unemployment Insurance or Workers Compensation have demonstrated that higher benefits discourage work, emphasizing the price distortion inherent in benefit provision. Utilizing administrative data linking Workers’ Compensation claim records to wage records from an Unemployment Insurance payroll tax database, I explore a different explanation and implement tests for “income effects” that exploit the fact that claimants no longer experience a distorted price of non-employment after an employment-limiting benefit ends. A pair of legislative changes to a Workers’ Compensation benefit rate show little or no evidence of income effects and moderate evidence of income effects, respectively.

Description: I analyse a dataset of news from The New York Times , from 1946 to 1997. Controlling for the activity of the incumbent president and the U.S. Congress across issues, I find that during a presidential campaign, The New York Times gives more emphasis to topics on which the Democratic party is perceived as more competent (civil rights, health care, labor and social welfare) when the incumbent president is a Republican. This is consistent with the hypothesis that The New York Times has a Democratic partisanship, with some “anti-incumbent” aspects, in that—during a presidential campaign—it gives more emphasis to issues over which the (Republican) incumbent is weak. To the extent that the interest of readers across issues is not systematically related with the political affiliation of the incumbent president and the election cycle, the observed changes in news coverage are consistent with The New York Times departing from demand-driven news coverage. In fact, I show that these findings are robust to controlling for Gallup data on the most important problem facing the country, which I use as a proxy for issue tastes of Times’ readers.

Description: This paper analyzes, under convex costs, the price effects of mergers involving two Stackelberg followers that together become a leader and revisits the “merger paradox” and the insiders' dilemma. Contrary to what might be expected, prices are more likely to increase with cost convexity than with linear costs. Also, the incentive to free-ride may reappear.

Description: We analyze the central features of economic policies to mitigate climate change. The basic structure of Pigouvian “carbon pricing” is shown to follow from a standard Hotelling problem for the intertemporal pricing of an exhaustible resource. We extend this analysis to consider the strength and timing of research incentives, the costs of implementation delay and the impact of anticipated future technologies on current carbon prices. We study a variety of issues related to the valuation of climate investments, including uncertainty as to the future timing and distribution of climate impacts and the appropriate social rate of discount for valuing policies. Under reasonable circumstances the insurance properties of climate investments may warrant unusually low discount rates. We use the same framework to argue that policy makers in developing countries will discount the expected returns from climate investments more heavily, because such investments have weaker insurance value in the developing world.

Description: Distortions under the value-added tax (VAT) arise partly from the exemption of specific services and sectors. This paper develops an analytical model that is applicable to any sector characterized by asymmetric VAT exemptions of services and activities. We analyze the effects of such asymmetric tax regimes on market shares, optimal prices, tax receipts, and social welfare. The analytical model shows how asymmetric VAT exemptions distort competition by strengthening the competitive position of non-rated firms. The net effect of such tax exemptions depends on the fraction of VAT-rated inputs versus the fraction of non-rated customers. We further elucidate main competitive impacts of VAT policies, while showing their consequences on overall welfare by presenting simulation results based on a calibrated quantitative model of a selected sector. Our paper provides guidance on how to resolve the policy trade-off between a level playing field in the market, consumer surplus, and government tax revenue.

Description: Recent dramatic declines in U.S. stock and housing markets have led to widespread speculation that shrinking retirement accounts and falling home equity will lead workers to delay retirement. Yet the weakness in the labor market and its impact on retirement are often overlooked. If older job seekers have difficulty finding work, they may retire earlier than expected. The net effect of the current economic crisis on retirement is thus far from clear. In this paper, we use 30 years of data from the March Current Population Survey to estimate models relating retirement decisions to fluctuations in equity, housing, and labor markets. We find that workers age 62 to 69 are responsive to the unemployment rate and to long-run fluctuations in stock market returns. Less-educated workers are more sensitive to labor market conditions and more-educated workers are more sensitive to stock market conditions. We find no evidence that workers age 55 to 61 respond to these fluctuations or that workers at any age respond to fluctuating housing markets. On net, we predict that the increase in retirement attributable to the rising unemployment rate will be almost 50 percent larger than the decrease in retirement brought about by the stock market crash.

Description: We introduce unemployment and endogenous selection of workers into different skill-classes in a trade model with two sectors and heterogeneous firms. This allows us to identify three different channels through which trade liberalization can affect unemployment: specialization, changes in productivity, and mobility. These three channels may work in opposite directions and their relative importance depends on the type of trade (intra-industry trade vs. inter-industry trade) and the skill-class of a worker. We show that the gains from trade are distributed very unequally. When a skilled worker abundant country opens up to trade with a country that is unskilled worker abundant, the biggest losers are the skilled workers in the import sector in the skill abundant country. However, average unemployment among skilled workers goes down, while average unemployment among unskilled workers goes up.

Description: Spatial connectivity of renewable resources induces a spatial externality in extraction. We explore the consequences of decentralized spatial property rights in the presence of spatial externalities. We generalize the notion of unitization—developed to enhance cooperative extraction of oil and gas fields—and apply it to renewable resources which face a similar spatial commons problem. We find that unitizing a common pool renewable resource can yield first-best outcomes even when participation is voluntary, provided profit sharing rules can vary by participant.

Description: This paper, which contributes to the literature that rigorously models religious markets, offers a theoretical framework that incorporates demand and supply sides. The model can accommodate Adam Smith’s view that competition may possibly improve on monopoly’s performance and also David Hume’s opposite view that, because the clergy have an incentive to distort the message of religion, monopoly might possibly improve on competition. Impacts on religiosity of greater diversity and of increased competition in the marketplace for religion are isolated. It is shown that while greater diversity benefits the devout (as claimed by “supply-side” theorists), increased competition dilutes spiritual standards by encouraging monetary donations at the expense of genuine piety. These opposing effects of diversity and competition help reconcile apparently contradictory empirical findings on the American religious market and also those suggesting European “exceptionalism.”

Description: Intergenerational disparity in income and health violates the norm of equal opportunity and deserves the attention of researchers and policy makers. To understand changes in intergenerational disparity, we created the intergenerational mobility index (IMI), which can simultaneously measure changes in income rankings and in health outcomes across two generations. We selected obesity as one health outcome to illustrate the application of IMI due to its severe health and financial consequences for society and the significant changes in the distribution of obesity across income groups. Although obesity has increased in all income groups in the last four decades, higher income groups have tended to have a faster increase in obesity, which has reduced the disparity in obesity across income groups. The strength of our intergenerational approach within families is to control the genetic influence, which is one of the strongest determinants of obesity. The decomposition of the IMI illustrates that it captures changes in obesity distribution (holding constant income rankings between generations) and changes in income rankings (holding constant the obesity distribution across generations), simultaneously. We used the data of the Panel Study of Income Dynamics (PSID), which have been collected since 1967, is the longest longitudinal survey in the U.S. The PSID surveyed respondents’ height and weight were recorded in 1986 and from 1999 to 2007. We selected respondents from 1986 as the parental generation and respondents from 2007 as the adult children’s generation. To make the adult children’s body weight status and income comparable to their parents’, we stratified the analysis by gender. For the pairs of fathers and adult sons, we found the intergenerational disparity in overweight, a less severe indicator of excessive fatness, across income was decreasing. This was partially due to the up-swing in the adult children’s income status. For the pairs of mothers and adult daughters, we found a similar decrease in socioeconomic disparity in obesity. However, decomposition of the IMI indicated that changes in income distributions between mothers and adult daughters contributed smaller effects than that between fathers and adult sons. Our study has demonstrated that the IMI and its decomposition are useful tools for analyzing intergenerational disparity in income and health.

Description: U.S. welfare and tax policies targeting single mothers were transformed over a decade ago. What was the impact on single mothers’ happiness? Using data from the General Social Survey, difference in difference estimators are calculated. The results appear to indicate that the package of welfare and tax policy changes increased happiness. The results are largely consistent across three comparison groups and robust to various specification checks. This research nicely complements the literature by examining the impact of the welfare and tax policy changes on a novel outcome measure, self-reported happiness.

Description: Using national data from the U.S., we find that poor health at birth and limited parental resources (including low income, lack of health insurance, and unwanted pregnancy) interfere with cognitive development and health capital in childhood, reduce educational attainment, and lead to worse labor market and health outcomes in adulthood. These effects are substantial and robust to the inclusion of sibling fixed effects and an extensive set of controls. The results reveal that low birth weight ages people in their 30s and 40s by 12 years, increases the probability of dropping out of high school by one-third, lowers labor force participation by 5 percentage points, and reduces labor market earnings by roughly 15 percent. While poor birth outcomes reduce human capital accumulation, they explain only 10 percent of the total effect of low birth weight on labor market earnings. Taken together, the evidence is consistent with a negative reinforcing intergenerational transmission of disadvantage within the family; parental economic status influences birth outcomes, birth outcomes have long reaching effects on health and economic status in adulthood, which in turn leads to poor birth outcomes for one’s own children.

Description: This paper presents new estimates of sibling correlations in health and socioeconomic outcomes over the life course in the U.S. Sibling correlations provide an omnibus measure of the importance of all family and community influences. I find that sibling correlations in a range of health and socioeconomic outcomes start quite high at birth and remain high over the life course. The sibling correlation in birth weight is estimated to be 0.5. Sibling correlations in test scores during childhood are as high as 0.6. Sibling correlations in adult men’s wages are also around 0.5. Decompositions provide suggestive evidence on which pathways may account for the gradients in health and SES by family background. For example, sibling correlations in cognitive skills and non-cognitive skills during childhood are lower controlling for family income. Similarly, parent education levels can account for a sizable portion of the correlation in adult health status among brothers.

Description: We analyze Bertrand duopoly competition in markets with network effects and consumer switching costs. Depending on the ratio of switching costs to network effects, our model generates four different market patterns: monopolization and market sharing, which can be either preserved or reversed. A critical mass effect where one firm becomes the monopolist for sure only occurs for intermediate values of the ratio, whereas for large switching costs market sharing is the unique equilibrium. For large network effects, both monopoly and market sharing equilibria exist. Our welfare analysis reveals a conflict between maximization of consumer surplus and social welfare when network effects are large. We also analyze firms’ incentives for compatibility and incentives to increase switching costs and examine how market outcomes are affected by market expansion and cost asymmetries. Finally, in a dynamic extension of our model, we show how competition depends on agents’ discount factors.