Economics Commons^™

Do Citizens Know Whether Their State Has Decriminalized Marijuana? Assessing The Perceptual Component Of Deterrence Theory, Robert Maccoun, Rosalie Pacula, Jamie Chriqui, Katherine Harris, Peter Reuter

Robert MacCoun

Deterrence theory proposes that legal compliance is influenced by the anticipated risk of legal sanctions. This implies that changes in law will produce corresponding changes in behavior, but the marijuana decriminalization literature finds only fragmentary support for this prediction. But few studies have directly assessed the accuracy of citizens’ perceptions of legal sanctions. The heterogeneity in state statutory penalties for marijuana possession across the United States provides an opportunity to examine this issue. Using national survey data, we find that the percentages who believe they could be jailed for marijuana possession are quite similar in both states that have removed …

Selection Bias In College Admissions Test Scores, Jesse Rothstein, Melissa Clark, Diane Schanzenbach

Diane Whitmore Schanzenbach

Data from college admissions tests can provide a valuable measure of student achievement, but the non-representativeness of test-takers is an important concern. We examine selectivity bias in both state-level and school-level SAT and ACT averages. The degree of selectivity may differ importantly across and within schools, and across and within states. To identify within-state selectivity, we use a control function approach that conditions on scores from a representative test. Estimates indicate strong selectivity of test-takers in "ACT states," where most college- bound students take the ACT, and much less selectivity in SAT states. To identify within- and between-school selectivity, we …

Prediction Markets To Forecast Electricity Demand, Peter Cramton, Luciano De Castro

Luciano I. de Castro

Forecasting electricity demand for future years is an essential step in resource planning. A common approach is for the system operator to predict future demand from the estimates of individual distribution companies. However, the predictions thus obtained may be of poor quality, since the reporting incentives are unclear. We propose a prediction market as a form of forecasting future demand for electricity. We describe how to implement a simple prediction market for continuous variables, using only contracts based on binary variables. We also discuss specific issues concerning the implementation of such a market.

Earning Their Way Out Of Poverty (Outline And Sample Chapter), Gary Fields

Gary S Fields

[Excerpt] According to the latest figures, today an estimated 3.1 billion people still live in absolute poverty, essentially all of them in the low- and middle-income countries of Asia, Latin America, and Africa and none of them in what are traditionally called the “developed economies” of North America (excluding Mexico), Western Europe, and selected parts of Asia and Oceania. This book is about how the poor live and work and what actions the world community could take to improve poor people’s earning opportunities as a central component of a multifaceted program aimed at ending the scourge of absolute economic misery.

A Brief Review Of The Literature On Earnings Mobility In Developing Countries, Gary Fields

Gary S Fields

[Excerpt] The literature on income and earnings mobility falls into three categories:

1. Macro mobility studies address the entire economy. They ask the question, how much income mobility and/or earnings mobility is there in the economy?
2. A second group of studies, micro mobility studies, examines patterns of income and earnings change over time for different individuals or groups. They ask the questions, which individuals or households experience movements of what magnitudes, and what are the correlates and determinants of these movements?
3. Within the micro mobility studies are a number of studies that look specifically at poverty dynamics …

Strong Firms Lobby, Weak Firms Bribe: A Survey-Based Analysis Of The Demand For Influence And Corruption, Sven Feldmann

Sven Feldmann

We use survey responses by firms to examine the firm-level determinants and effects of political influence, their perception of corruption and prevalence of bribe paying. We find that: (a) measures of political influence and corruption/bribes are uncorrelated at the firm level; (b) firms that are larger, older, exporting, government-owned, are widely held and/or have fewer competitors have more political influence, perceive corruption to be less of a problem and pay bribes less often; (c) influence increases sales and government subsidies and in general makes the firm have a more positive view on the government. In sum, we show that strong …

Consumption Responses To In-Kind Transfers: Evidence From The Introduction Of The Food Stamp Program, Hilary Hoynes, Diane Schanzenbach

Diane Whitmore Schanzenbach

Economists have strong theoretical predictions about how in-kind transfers, such as providing vouchers for food, impact consumption. Despite the prominence of the theory, there is little empirical work on responses to in-kind transfers, and most existing work fails to support the canonical theoretical model. We employ difference-indifference methods to estimate the impact of program introduction on food spending. Consistent with predictions, we find that food stamps reduce out-of-pocket food spending and increase overall food expenditures. We also find that households are inframarginal and respond similarly to one dollar in cash income and one dollar in food stamps.

The Displacement Effect Of Public Pensions On The Accumulation Of Financial Assets, Michael Hurd, Pierre-Carl Michaud, Susann Rohwedder

Susann Rohwedder

The generosity of public pensions may depress private savings and provide incentives to retire early. While there is plenty of evidence supporting the latter effect, there remains considerable controversy as whether or not public pensions crowd out private savings. This paper uses international micro-datasets collected over recent years to investigate whether public pensions displace private savings. The identification strategy relies on differences in the progressivity or non-linearity of pension formulas across countries. We also make use of large heterogeneity in earnings across education group and country. The evidence we present is consistent with previous studies using cross sectional and time-series …

Competition Law And The International Transport Sectors, Sock Yong Phang

PHANG Sock Yong

No abstract provided.

Varroa In The Aloha State, Tammy Horn

Tammy Horn

The Hawaiian word for fate is hopena, and since the early 1900s, it’s been a matter of hopena that Varroa mites would eventually come to the Islands. The inevitability increased in 2001 when APHIS/USDA forced Hawai’i to allow transshipments of queens and package bees from New Zealand to Canada to pass through its ports. Since Varroa arrived on Oahu in 2006 and on the Big Island in 2008, many agencies have been working together to create appropriate infrastructure to address the latest arrival. According to Hawai’i Department of Agriculture (HDOA) branch chief Neil Reimer, 'Before Varroa showed up in Hawai’i, …

Economies Of Scale And Trade Policy: The Median Voter Model Revisited, Daron Djerdjian

Daron Djerdjian

Why do some political economy models perform so poorly in predicting actual trade policy? Do scale economies provide the missing puzzle to our understanding of the anti-trade bias? By integrating economies of scale in production, this paper theoretically reinstates the median voter model as in Mayer [Mayer, W. (1984). Endogenous tariff formation. The American Economic Review, 74, 970–985] as a suitable political economy model in predicting trade policy. The modified model generates the scope for the anti-trade bias and predicts that sometimes economic, rather than political, considerations may lead to restrictive trade.

Ideacheck: Bcg Report On The Innovation Imperative In Manufacturing, Kwanghui Lim

Kwanghui Lim

In March, the Boston Consulting Group published a report on "The Innovation Imperative in Manufacturing". The report assesses the level of competitiveness of US firms, both across different states of the US as well as in comparison to other countries. Here is my IdeaCHECK on the report: http://cite.org.au/store/viewitem.asp?idProduct=573.

Reaching For The Stars: Who Pays For Talent In Innovative Industries?, Fredrik Andersson, Matthew Freedman, John Haltiwanger, Julia Lane, Kathryn Shaw

Matthew Freedman

Time Use And Food Consumption, Marianne Bertrand, Diane Schanzenbach

Diane Whitmore Schanzenbach

No abstract provided.

A Guide To Multisector Labor Market Models, Gary Fields

Gary S Fields

[Excerpt] This is a paper on labor markets. Why are labor markets important to economic development? Many individuals and institutions, including the World Bank and the regional development banks, seek “a world free of poverty.” Broadly speaking, those who are poor are poor because 1) they earn little from the work they do, 2) the societies in which they live are too poor to provide them with substantial goods and services by virtue of their citizenship or residency, and 3) the poor are not permitted to move to richer countries. Thus, anti-poverty efforts can be focused on 1) helping people …

Lessons Learned From A State-Funded Workplace Literacy Program, Kevin Hollenbeck, Bridget Timmeney

Kevin Hollenbeck

No abstract provided.

The Power Of A Promise: Education And Economic Renewal In Kalamazoo, Michelle Miller-Adams

Michelle Miller-Adams

In the first comprehensive account of the Kalamazoo Promise, Michelle Miller-Adams addresses both the potential and challenges inherent in place-based universal scholarship programs and explains why this unprecedented experiment in education-based economic renewal is being emulated by scores of cities and towns around the nation.

Do School Lunches Contribute To Childhood Obesity?, Diane Schanzenbach

Diane Whitmore Schanzenbach

This paper assesses whether school lunches contribute to childhood obesity. I employ two methods to isolate the causal impact of school lunches on obesity. First, using panel data, I find that children who consume school lunches are more likely to be obese than those who brown bag their lunches even though they enter kindergarten with the same obesity rates. Second, I leverage the sharp discontinuity in eligibility for reduced-price lunch to compare children just above and just below the eligibility cutoff. Students are more likely to be obese, and weigh more if they are income-eligible for reduced price school lunches.

The Graphic Novel As A Choice Of Weapons, Tammy Horn

Tammy Horn

In the late 1930s, the photographer Gordon Parks arrived in Washington, DC, to work with Roy Stryker, director of the Farm Security Administration. Parks' first assignment was to tour the nation's capital, a city still governed by Jim Crow laws. Stryker locked Parks' camera in a closed and then bade the young black man adieu, with the expectation Parks would not return for a week.

Central Bank Reaction Functions During The Interwar Gold Standard: A View From The Periphery, Kirsten Wandschneider

Kirsten Wandschneider

The years between the two World Wars were ones of economic turmoil and crisis. The inter-war gold standard, created as an attempt to rebuild the pre-1914 gold standard, lasted a mere six years from 1925–1931 and failed to generate economic growth and prosperity. Many scholars have attempted to explain the fragility of the inter-war gold standard, focusing on different aspects of the regime, such as structural problems within the system, gold imbalances, the lack of an international hegemonic power, persistent deflation, and the changing social and political structures in the inter-war years. One particular area of focus with regard to …

Estimated State And Local Fiscal Effects Of The Nurse Family Partnership Program, Timothy Bartik

Timothy J. Bartik

This short paper estimates the state and local fiscal benefits of the Nurse Family Partnership (NFP) program. NFP provides nurse home visiting services to low-income first-time mothers. In addition to social benefits, NFP provides state and local fiscal benefits by reducing costs of social services, welfare, and crime, and increasing tax receipts due to increased earnings of mothers and former child participants when they grow up. Based on previous studies, this paper estimates that the present value, in 2007 dollars, of these state and local fiscal benefits is a little over $15,000 per NFP case.

Trade Liberalization And Unemployment: Evidence From Indian States, Rana Hasan, Devashish Mitra, Priya Ranjan

Priya Ranjan

A widely held view among the public is that trade liberalization increases unemployment. In this paper we use state-level data on unemployment rates and trade protection from India to examine what the data say. We find little evidence to support the view that unemployment rises with trade liberalization. On the contrary, there is evidence that unemployment, especially urban unemployment, declines with trade liberalization in states with more flexible labor markets. Urban unemployment also declines with liberalization in states with a large employment share in net exporter industries. We additionally find a positive impact of trade liberalization on urban wages. These …

Capitalized Amenity Value Of Urban Wetlands: A Hedonic Property Price Approach To Urban Wetlands In Perth, Sorada Tapsuwan, Gordon Ingram, Michael Burton, Donna Brennan

Sorada Tapsuwan

Up to 60 per cent of potable water supplied to Perth, Western Australia, is extracted from the groundwater system that lies below the northern part of the metropolitan area. Many of the urban wetlands are groundwater-dependent and excessive groundwater extraction and climate change have resulted in a decline in water levels in the wetlands. In order to inform decisions on conserving existing urban wetlands, it is beneficial to be able to estimate the economic value of the urban wetlands. Applying the Hedonic Property Price approach to value urban wetlands, we found that distance to the nearest wetland and the number …

The Impact Of A Phased Retirement Program: A Case Study, Marta Lachowska

Marta Lachowska

No abstract provided.

Anemia In Low-Income Countries Is Unlikely To Be Addressed By Economic Development Without Additional Programs, Sebastian Linnemayr, Harold Alderman

Sebastian Linnemayr

Although governments may decline to invest in iron fortification or supplementation influenced by the view that income growth will address the problem, the data do not support this view. Looking at the rates of anemia among children and adult women across 40 Demographic and Health Surveys from 32 countries, this study found that although anemia rates do decrease as income increases, the decrease is modest. Indeed, overall anemia rates decline roughly a quarter as fast as income increases and at only half the speed at which rates of underweight decline.

How Do The Effects Of Local Growth On Employment Rates Vary With Initial Labor Market Conditions?, Timothy Bartik

Timothy J. Bartik

This paper examines how the effects of increased employment growth on a metropolitan area's employment to population ratio varies with the initial tightness of the metropolitan area's labor market. This examination is relevant to evaluating the benefits of local economic development policies in different metropolitan areas. Much of the benefits of such policies are in higher employment rates. The empirical estimates suggest that the effectiveness of employment growth in increasing the employment to population ratio is lower in metropolitan areas with "tight" labor markets. In addition, some estimates suggest that growth has the greatest long-run effects on the employment to …

Older Workers Access To Employer-Sponsored Retiree Health Insurance, 2000-2006, Alice Zawacki, Christine Eibner, Elaine Zimmerman

Christine Eibner

No abstract provided.

Has Globalization Increased Australian Inequality?, Noel Gaston, Gulasekaran Rajaguru

Gulasekaran Rajaguru

No abstract provided.

The Outlook For U.S. – China Textile And Apparel Trade In 2009: From The Trade Policy Perspective, Sheng Lu

Sheng Lu

Despite the low ebb in trade volume, the year 2009 could be a golden opportunity for the textile and apparel industry both in the United States and China to reform and change. The U.S. textile industry at present urgently needs to figure out some new business models and explore more overseas markets to meet the challenges of lessening domestic demand. On the other hand, the task for the Chinese is to further reduce reliance on exports while absorbing the production capacity of the industry by stimulating more domestic consumption. With the economic interests between the U.S. and Chinese textile and …

Medicare Savings Programs: Analyzing Options For Expanding Eligibility, Baoping Shang, Stephen Zuckerman, Timothy Waidmann

Baoping Shang

The Medicare Savings Programs (MSPs) are designed to provide financial assistance to Medicare beneficiaries who do not qualify for full Medicaid coverage. This paper considers changes in eligibility that would better align MSP program rules with those related to receiving low-income subsidies for the Medicare Part D drug benefit. These changes would make more people eligible for the MSPs and could encourage greater participation; similar changes were incorporated in recently passed legislation. Our analysis, based on 2006 data from the Health and Retirement Study, shows there is a trade-off between making larger numbers of beneficiaries eligible by eliminating resource requirements …