Social and Behavioral Sciences Commons^™

The Ethics Behind Efficiency, Jonathan B. Wight

Economics Faculty Publications

The normative elements underlying efficiency are more complex than generally portrayed, and rely upon ethical frameworks that are generally absent from classroom discussions. Most textbooks, for example, ignore the ethical differences between Pareto efficiency (based on voluntary win-win outcomes) and the modern Kaldor-Hicks efficiency used in public policy assessments (in which winners gain more than losers lose). For the latter to be ethically palatable, society must have in place basic institutions of justice, transparency, and accountability. Normative economics thus requires a pluralist approach that includes considerations of virtue and duty, closer to Adam Smith’s Enlightenment conceptions. This surprising finding should …

Goods-Time Elasticity Of Substitution In Health Production, Juan Du, Takeshi Yagihashi

Economics Faculty Publications

We examine how inputs for health production, in particular, medical care and health-enhancing time, are combined to improve health. The estimated elasticity of substitution from a constant elasticity of substitution production function is significantly less than one for the working-age population, rejecting the unit elasticity of substitution used in previous studies.

Economic Costs And Benefits Of A Community-Based Lymphedema Management Program For Lymphatic Filariasis In Odisha State, India, Eileen Stillwaggon, Larry Sawers, Jonathan Rout, David Addiss, Leanne Fox

Economics Faculty Publications

Lymphatic filariasis afflicts 68 million people in 73 countries, including 17 million persons living with chronic lymphedema. The Global Program to Eliminate Lymphatic Filariasis aims to stop new infections and to provide care for persons already affected, but morbidity management programs have been initiated in only 24 endemic countries. We examine the economic costs and benefits of alleviating chronic lymphedema and its effects through a simple limb-care program. For Khurda District, Odisha State, India, we estimated lifetime medical costs and earnings losses due to chronic lymphedema and acute dermatolymphangioadenitis (ADLA) with and without a community-based limb-care program. The program would …

What Americans Should Demand From Trump And Clinton On Economic Policy, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

No, Broadband And Garbage Collection Aren’T Public Goods. Here’S Why They Might Require Regulation Anyway, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

An Evaluation Of Constitutional Constraints On Capital Taxation, Begoña Domínguez, Zhigang Feng

Economics Faculty Publications

This paper investigates the desirability of constitutional constraints on capital taxation in an environment without government debt and where benevolent governments have limited commitment. In our setup, governments can choose proportional capital and labor income taxes subject to the constitutional constraint but cannot commit to the actual path of taxes. First, we explore a form of constitutional constraint: a constant cap on capital tax rates. In our quantitative exercise, we show that a three per cent cap on capital taxes provides the highest welfare at the worst sustainable equilibrium. However, such cap decreases welfare at the best sustainable equilibrium (both …

Anchoring In Financial Decision-Making: Evidence From The Field, Michael Jetter, Jay K. Walker

Economics Faculty Publications

This paper analyzes 12,596 wagering decisions of 6,064 contestants in the US game show Jeopardy!, focusing on the anchoring phenomenon in financial decision-making. We find that contestants anchor heavily on the initial dollar value of a clue in their wagering decision, even though there exists no rational reason to do so. More than half of all wagers occur within $500 of the initial dollar value, although the maximum possible wagering value averages $5,914. This anchoring phenomenon remains statistically significant on the one percent level, even after controlling for scores, clue category, time trends, and player-fixed effects.When exploiting within-player variation …

Land Acquisition, Labor Allocation, And Income Growth Of Farm Households, Qingjiang Ju, Jinlan Ni, Debing Ni, Yu Wu

Economics Faculty Publications

This article investigates how land acquisition during urbanization affects labor allocation decisions of farm households in China. We develop an agricultural household model by including land acquisition to examine its impacts on nonfarm labor participation and income. Two data sets (self-designed household surveys at Xingwen County in 2012 and the China Household Finance Survey (CHFS) data covering 29 provinces in 2013) are adopted for empirical analysis. The results find that land reduction has significantly positive effects on the probability and the share of family nonfarm labor allocation from both data sets. We also find that land acquisition increases the household …

Understanding The Remittance Gender Gap Among Hispanics In The U.S.: Gendered Norms And Role Of Expectations, Yongjin Park, María Amparo Cruz-Saco, Mónika López-Anuarbe

Economics Faculty Publications

Using the 2006 Latino National Survey (LNS), this study analyzes the existence of a gender gap in favor of men in the monetary remittance behavior of Hispanics residing in the United States. Findings indicate that cultural gender norms and expectations in the country of origin play a key role. The study shows that women migrants are less likely to remit than men and, when they do, they transfer smaller amounts. The remittance gender gap is not universal among subgroups, since it is only observable among Hispanics who came to the US to improve their economic situation, plan to return to …

Ageing And Long-Term Care Planning Perceptions Of Hispanics In The Usa: Evidence From A Case Study In New London, Connecticut, María Amparo Cruz-Saco, Mónika López-Anuarbe

Economics Faculty Publications

This paper explores the ageing attitudes and long-term care planning behavior of adult Hispanics in New London, Connecticut, a town with 30 thousand inhabitants that is rapidly ageing. We conducted six focus groups and had 37 participants share their ageing perceptions and long-term care needs. Our main findings suggest that informal care arrangements are vulnerable and unsustainable especially since women have historically and disproportionately provided most family eldercare even at their own personal and financial expense. Though male participants expected their female relatives to care for them when they age and need personal assistance, female participants did not necessarily expect …

What Is ‘Brexit’ And Why Should Minnesotans Care?, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

Giving Away The Store: How The Zero Price Constraint Results In Fewer Add-On Features, Ben O. Smith

Economics Faculty Publications

This paper discusses an issue impacting intellectual property products with nearly zero marginal cost: the zero price constraint. As established in the literature, aftermarkets result in a subsidization of the primary market, sometimes resulting in prices below marginal cost. While aftermarket add-ons are now common in intellectual property products such as software, the firms usually can't charge a primary market price below zero. This paper shows that with the zero price constraint in effect, firms give more of the overall product away for free and pricing in the aftermarket is determined by the number of competitors in the primary market; …

An Economist’S Argument Against Calling A Special Session, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

Why You Shouldn’T Feel Too Grateful To Delta For Hiring People To Help With The Tsa Security-Line Crunch, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

Labor Market Returns To The Ged Using Regression Discontinuity Analysis, Christopher Jepsen, Peter Mueser, Kenneth R. Troske

Economics Faculty Publications

We evaluate returns to General Educational Development (GED) certification for high school dropouts using state administrative data. We apply a fuzzy regression discontinuity method to account for test takers retaking the test. For women we find that GED certification has no statistically significant effect on either employment or earnings. For men we find a significant increase in earnings in the second year after taking the test but no impact in subsequent years. GED certification increases postsecondary school enrollment by 4–8 percentage points. Our results differ from regression discontinuity approaches that fail to account for test retaking.

The Disaggregation Of Value-Added Test Scores To Assess Learning Outcomes In Economics Courses, William B. Walstad, Jamie Wagner

Economics Faculty Publications

This study disaggregates posttest, pretest, and value-added or difference scores in economics into four types of economic learning: positive, retained, negative, and zero. The types are derived from patterns of student responses to individual items on a multiple-choice test. The micro and macro data from the Test of Understanding in College Economics (TUCE) are used to show how aggregate scores can be reinterpreted based on their learning components. The regression analysis shows the relative contribution from learning components to aggregate scores. A value-added or difference score has a potential problem because it is a mixture of positive and negative learning. …

Structural Breaks In Volatility: The Case Of Chinese Stock Returns, Jinlan Ni, Mark E. Wohar, Beichen Wang

Economics Faculty Publications

This article tests for periodic breaks in the unconditional variance of stock return data on two Chinese stock return market indexes. Using the modified ICSS algorithm, we observe three breaks in the Shanghai Stock Exchange composite index and Shenzhen Stock Exchange composite index series. We document the policy changes related to the Chinese stock market and explain that the Chinese stock market is largely influenced by government policy.

Differential Recessionary Impacts On U.S. Research Relative To Comprehensive University Efficiencies And Productivities: 2004-2014 Panel Data Estimates, G. Thomas Sav

Economics Faculty Publications

Using data envelopment analysis and Malmquist index decompositions this paper focuses on the impacts of the Great Recession on the efficiency and productivity changes of U.S. publicly funded prestigious research universities in comparison to their lower level comprehensive university counterparts. Do elite research relative to comprehensive universities have more political clout and resources to better ward off the financial impacts and production demands of the? Results, based on ten academic years from 2004-05 through 2013-14, are somewhat mixed, but indicate that research universities have a technological edge that acts as the primary advantage driver to total productivity gains over their …

Bazinganomics: Economics Of The Big Bang Theory, James Tierney, G. Dirk Mateer, Ben O. Smith, Jadrian Wooten, Wayne Geerling

Economics Faculty Publications

url:http://www.bazinganomics.com

The website is designed to provide instructors with clips, explanations, and lesson plans related to economics concepts from TV’s 2nd most watched broadcast show of the 2014-2015 season, CBS’s The Big Bang Theory. The site contains approximately 100 clips. As the show continues to air (currently signed through the 2016-2017 season) the authors plan to increase the number of clips and lesson plans.

Are American Universities Mismanaged?: Tenure Vs Non-Tenure Faculty Employment Decisions, G. Thomas Sav

Economics Faculty Publications

This paper empirically tests the extent to which public universities in the United States are potentially mismanaged. The focus rests with university managerial employment decisions regarding the continuing substitution of less costly non-tenure track teaching faculty for tenured and tenure track faculty and the extent to which those decisions affect student graduation success. Panel data covering ten academic years, 2004-05 through 2013-14 are employed using ordinary least squares and stochastic frontier analysis specifications. The latter provides tests of the inefficiency effects of managerial employment decisions and academic year estimates of technical efficiency. In both cases, the results provide statistically strong …

Recession And Post-Recession Efficiency And Productivity Changes In United States Public Universities: The Good, Bad, And Ugly, G. Thomas Sav

Economics Faculty Publications

This paper employs data envelopment analysis to investigate the extent to which publicly owned, operated, and managed universities in the United States have undergone efficiency and productivity changes in response to the financial crisis that induced the Great Recession and how post-recessionary conditions have altered those changes. The paper revisits an earlier study of like kind that used panel data covering the 2005-2008 academic years but could not, obviously, capture the dynamic changes of the 2007-2009 recession or the lingering post-recessionary financial and enrollment effects imposed on public universities. The present paper offers many improvements over that previous study by …

Could Tariffs Be Pro-Cyclical?, James Lake, Maia K. Linask

Economics Faculty Publications

Conventional wisdom says that tariffs are counter-cyclical. We analyze the relationship between business cycles and applied MFN tariffs using a disaggregated product-level panel dataset covering 72 countries between 2000 and 2011. Strikingly, and counter to conventional wisdom, we find that tariffs are pro-cyclical. Further investigation reveals that this pro-cyclicality is driven by the tariff setting behavior of developing countries; tariffs are acyclical in developed countries. We present evidence that pro-cyclical market power drives the pro-cyclicality of tariffs in developing countries, providing further evidence of the importance of terms of trade motivations in explaining trade policy.

Domestic Political Competition And Pro-Cyclical Import Protection, James Lake, Maia K. Linask

Economics Faculty Publications

Governments, especially in developing countries, routinely practice binding overhang (i.e. setting applied tariffs below binding WTO commitments) and frequently move applied tariffs for given products up and down over the business cycle. Moreover, applied tariffs are pro-cyclical in developing countries. We explain this phenomenon using a dynamic theory of lobbying between domestic interest groups. Applied tariffs are pro-cyclical when high-tariff interests (e.g. import-competing industries) capture the government: these groups concede lower tariffs to low-tariff interest groups (e.g. exporting firms or firms using imported intermediate inputs) during recessions because recessions lower the opportunity cost of lobbying and thereby generate a stronger …

Gender In Jeopardy!: The Role Of Opponent Gender In High-Stakes Competition, Michael Jetter, Jay K. Walker

Economics Faculty Publications

Using 4,279 episodes of the popular US game show Jeopardy!, we analyze whether the opponents' gender is able to explain the gender gap in competitive behavior. Our findings indicate that gender differences disappear when women compete against men. This result is surprising, but emerges with remarkable consistency for the probability to (i) respond, (ii) respond correctly, and (iii) respond correctly in high-stakes situations. Even risk preferences in wagering decisions, where gender differences are especially pronounced, do not differ across gender once a woman competes against males. Using a fixed-effects framework, and therefore exploiting within-player …

Silence Is Golden: Railroad Noise Pollution And Property Values, Jay K. Walker

Economics Faculty Publications

This paper uses a unique dataset containing property values and manually collected noise measurements in Memphis, Tennessee to estimate the impact of train noise pollution on commercial and residential property values. Results show that a residential property exposed to 65 decibels or greater of railroad noise results in a 14 to 18 percent decrease in property value. Once a 65 decibel measure is included, there is no additional impact on price of distance to the closest railroad crossing. For commercial property, neither crossing proximity nor noise level significantly affect property value. The results provide evidence of a negative externality that …

The Big Economic Development Project Question: Is It New Revenue Or A Spending Transfer?, Paul Harris, Ronald Berkebile, Julia Martin, Larry Filer

Economics Faculty Publications

Most local governments pursue some degree of economic development activity to strengthen their economy by adding jobs and generating tax revenue. Witness the growth in tax increment financing, property tax abatements, tax credits, and exemptions for economic development. These state and local incentives totaled more than $80 billion in 2012. Economic development projects can represent a significant boon for a local economy. Estimating how much money they might generate, however, is not as easy as it initially seems, and jurisdictions can receive far less net new revenue than developers predict. Most consumers have finite incomes, which limits their discretionary spending. …

Maritime Economics In A Post-Expansion Panama Canal Era, Grace W. Y. Wang, Wayne Talley, Mary R. Brooks

Economics Faculty Publications

(First paragraph) The 2016 opening of an expanded Panama Canal will allow for Post-Panamax containerships up to 12 500 twenty-foot equivalent unit (TEU) in size to transit the Panama Canal. In response, some US East Coast container ports are having their channels and berths dredged deeper—to allow Post-Panamax containerships from Asia (transiting the expanded canal) to call at their ports. What are the implications for the US West Coast ports? Will there be a cargo shift from West Coast to East Coast ports? These topics as well as the impacts of other changes in global shipping lanes (e.g., the Suez …

A Dynamic Model Of The Choice Of Technology In Economic Development, Haiwen Zhou, Ruhai Zhou

Economics Faculty Publications

In this overlapping-generations model, there is unemployment in the manufacturing sector. Manufacturing firms engage in oligopolistic competition and choose technologies to maximize profits. With capital as a fixed cost of production, increasing returns in the manufacturing sector exist. In the unique steady state, first, when individuals become more patient, the savings rate increases while the level of an individual’s income decreases. Second, an increase in population or percentage of income spent on manufactured goods does not change steady-state technology while the level of an individual’s income decreases. Third, an increase in the wage rate leads manufacturing firms to choose more …