Economics Commons^™

Group-Average Observables As Controls For Sorting On Unobservables When Estimating Group Treatment Effects: The Case Of School And Neighborhood Effects, Joseph G. Altonji, Richard K. Mansfield

Rick Mansfield

We consider the classic problem of estimating group treatment effects when individuals sort based on observed and unobserved characteristics. Using a standard choice model, we show that controlling for group averages of observed individual characteristics potentially absorbs all the across-group variation in unobservable individual characteristics. We use this insight to bound the treatment effect variance of school systems and associated neighborhoods for various outcomes. Across four datasets, our conservative estimates indicate that a 90th versus 10th percentile school system increases high school graduation and college enrollment probabilities by at least 0.047 and 0.11. Other applications include measurement of teacher value-added.

Production, Price, And Inventory Theory, George A. Hay

George A. Hay

This paper is an attempt to derive empirically testable hypotheses regarding the principal determinants of firms' decisions on production, price, and finished goods inventory. The general approach to the problem is that many of the same factors which affect the optimal value for one variable will also influence decisions on the other two, and that a "proper" model must take into account the interdependence of these variables and the simultaneous nature of the decisions involving them. This is in contrast to literature on the theory of inventories (see Paul Darling and Michael Lovell) in which the firm is assumed to …

A General Solution For Linear Decision Rules: An Optimal Dynamic Strategy Applicable Under Uncertainty, George A. Hay, Charles C. Holt

George A. Hay

Linear decision rules for controlling complex systems are often obtained by matrix inversion, but transform methods offer an alternative approach that yields insights into the structure of the decision problem of maximizing expected payoffs under constraints.

Convergence In Models With Bounded Expected Relative Hazard Rates, Carlos Oyarzun, Johannes Ruf

Carlos Oyarzun

We provide a general framework to study stochastic sequences related to an array of models in different literatures, including models of individual learning in economics, learning automata in computer sciences, social learning in marketing, and many others. In this setup, we study the asymptotic properties of a class of stochastic sequences that take values in [0,1] and satisfy a property that we call “bounded expected relative hazard rates.” We provide sufficient conditions for related sequences, which, compared to the original sequence, either move slowly or slow down over time, that yield con- vergence to one with high probability or almost …

Theories And Practices Of Islamic Finance And Exchange Laws: Poverty Of Interest, Ahmed E. Souaiaia

Ahmed E SOUAIAIA

Willingness To Overpay For Insurance And For Consumer Credit: Search And Risk Behavior Under Price Dispersion, Sergey V. Malakhov

Sergey Malakhov

Slutsky Equation And Negative Elasticity Of Labor Supply: Behavioral Bias Or Optimal Consumption-Leisure Choice?, Sergey V. Malakhov

Sergey Malakhov

Polluters’ Profits And Political Response: Direct Control Versus Taxes: Comment, Robert S. Main, Charles W. Baird

Robert S. Main

In a recent issue of this Review, James Buchanan and Gordon Tullock (B-T) presented a public choice analysis of the relative merits of direct controls and taxes in externality control. In Section IV of their paper, B-T consider the case of reciprocal external diseconomies of consumption. They ask whether "... persons in this sort of interaction, acting through the political processes of the community, will impose on themselves either a penalty tax or direct regulation" (p. 143). Their analysis is carried out within the context of a two-person model in which each person consumes the same quantity of a good …

Equazione Di Slutsky “Nelle Loro Mani”: Il Centenario “Sulla Teoria Del Bilancio Del Consumatore”, Sergey V. Malakhov

Sergey Malakhov

The paper presents the illustrative classroom application of the Slutsky equation to the consumption-leisure choice.

The Bedridden Queen Money!, John Samuel Cyrus Mr

John Samuel Cyrus Mr

During the past few decades, macro-economic activities had been rallied around glamorous industrial and technology oriented service sectors. Recent recession that began in 2008 is still continuing and the little improvement in 2009 was nothing but the fluctuation in the ICU monitor, which was connected to the bedridden queen Money. Many nations GDP growth rate has been continually falling and unemployment rates are continually rising. The American economy is in a complete mess, no remedies are found yet for European economic sovereign debt crisis, and the Asian economy fast fading due to India’s low GDP and the slide in Rupee; …

Intransitivity Shown By An Assignment Problem, Lester G. Telser

Lester G Telser

A Volatility-Based Theory Of Fiscal Union Desirability, Jaime Luque, Massimo Morelli, José Tavares

Jaime P. Luque

Wages, Local Amenities And The Rise Of The Multi-Skilled City, Jaime Luque

Jaime P. Luque

Economic Change And Evolutionary Perspectives., Mario Pianta

Mario Pianta

Economic studies with an evolutionary perspective have put the process of change at the centre of the analysis - replacing equilibrium views of economic activity – and have generally focused on the two mechanisms of variety generation – provided by innovation - and selection – provided by market processes, leading to a prevalence of microeconomic investigations. Recent developments in evolutionary biology have emphasised the equally important role of cooperation; cooperative economic behaviour is, in fact, as important as market competition for understanding macroeconomic processes, the role of institutions and public policies, opening up new directions for research. This interdisciplinary discussion …

Presentazione, Mario Pianta

Mario Pianta

The Mask Of Virtue: Theories Of Aretaic Legislation In A Public Choice Perspective, Donald J. Kochan

Donald J. Kochan

Time To Abandon Group Thinking In Economics, Sergio Da Silva

Sergio Da Silva

Group thinking is the notion that natural selection favors what is good for the group or the species, not for the individual. Most mainstream evolutionary biology rejects this idea and natural selection is viewed as working on the individual’s genes to promote their own survival and reproduction. Here I show through a couple of examples how group thinking also pervades economics. I argue that the reason for the mistake relies on the fact that economics fails to ground itself in the underlying knowledge provided by biology. Then I suggest how economics can aspire more than being applied logic and turn …