Economics Commons^™

The Political Economy Of Subsidized Day Care, Ted Bergstrom, Soren Blomquist

Ted C Bergstrom

This paper presents a theoretical model of political support for public provision of day care. In an economy where there are high taxes on wage income, selfish taxpayers with no children in the day care system may favor substantial public subsidies to day care because such subsidies induce mothers to join the labor force and hence pay income tax. Our model makes explicit quantitative predictions of the relation between the distribution of wages, theincome tax rate, and the subsidy rate for day care that maximizes net tax revenue from parents of small children. Applying parameter values from Sweden and the …

Market Regulation And Multimarket Rivalry, Owen R. Phillips, Charles F. Mason

Charles F Mason

Multimarket contact between duopolists in an X and a Y market is modelled with a trigger strategy. We show that mildly restrictive price-cap regulation in the X market decreases Y market quantities; but restrictive caps in the X market have a positive impact on Y market outputs. Behavior in laboratory markets confirms these propositions. Regulation that lowers X market prices by a small amount results in a statistically significant reduction in Y outputs. When the regulated X market price is reduced to the Cournot/Nash level, Y market outputs rise to a point statistically indistinguishable from the unregulated quantities.

Nonsubstitution Theorems For A Small Trading Country, Ted Bergstrom

Ted C Bergstrom

In 1951, Paul Samuelson showed that a surprisingly rich class of economies the production possibility frontier is a linear and even with neoclassical substitution possibilities, as outputs adjust, firms continue to use inputs and outputs in the same proportions. This model is often thought to be of limited practical value since it assumes that there is only one non-produced factor, and no joint production. The single factor assumption rules out economies in which agriculture and mining are important and the lack of joint production leaves no good way to handle durable capital goods. In this paper, I extend the Samuelson …

Slope Versus Elasticity And The Burden Of Taxation, Philip E. Graves, Robert L. Sexton, Dwight R. Lee

Robert L Sexton

There is no abstract for this brief paper.

Garbage, Recycling, And Illicit Burning Or Dumping, Thomas C. Kinnaman

Thomas C. Kinnaman

No abstract provided.

Market Regulation And Multimarket Rivalry, Owen R. Phillips, Charles F. Mason

Owen R Phillips

Multimarket contact between duopolists in an X and a Y market is modelled with a trigger strategy. We show that mildly restrictive price-cap regulation in the X market decreases Y market quantities; but restrictive caps in the X market have a positive impact on Y market outputs. Behavior in laboratory markets confirms these propositions. Regulation that lowers X market prices by a small amount results in a statistically significant reduction in Y outputs. When the regulated X market price is reduced to the Cournot/Nash level, Y market outputs rise to a point statistically indistinguishable from the unregulated quantities.

Slope Versus Elasticity And The Burden Of Taxation, Philip E. Graves, Robert L. Sexton, Dwight R. Lee

Robert L Sexton

There is no abstract for this brief paper.

Testing For Absolute Purchaing Power Parity, Douglas G. Steigerwald, Collin Crownover, John Pippenger

Douglas G. Steigerwald

Purchasing power parity (PPP) is an equilibrium condition equating the nominal exchange rate between two countries with the relative price of an identical bundle of goods in each country. Previous time-series researchers use price indicies to study PPP, so they study relative PPP. We use new data that measures price levels, so we test absolute PPP. Price levels provide a test of absolute PPP because, unlike price indicies, do not contain a base period in which the nominal exchange rate equals the price ratio by construction. We find support for absolute PPP.

Language Orders, Richard Adelstein

Richard Adelstein

An examination of the alternatives of spontaneous order and central planning in the context of human language.

Teen Mothers And Their Educational Attainment: Some Evidence From The National Longitudinal Survey Of Youth, Michael C. Seeborg, Risa Kumazawa

Michael Seeborg

This study uses the National Longitudinal Survey of Youth to estimate the effects of teenage motherhood on the educational attainment of young women. The results of an OLS regression with interaction terms demonstrate that the effects of teenage motherhood on education depends on the socio-economic background of the mother. Estimations show that young women from economically advantaged backgrounds sacrifice more than one year of education as a result of teenage motherhood while those from disadvantaged backgrounds sacrifice little, if any, education. Statistically significant interactions are found between teenage motherhood and several background characteristics. (J13, J24)

Can Irreversibility Explain The Slow Diffusion Of Energy Saving Technologies? (With Kevin Hassett), Gilbert E. Metcalf

Gilbert E. Metcalf

A model was developed on the effects of irreversibility on home improvement behavior. It is also considered whether it may be helpful in shedding light on the slow diffusion of new energy technologies. This work has been criticized for being of little value in studying the high discount rates applied by consumers to home-improvement purchases. It is proven that the model can generate predicted hurdle rates as high as those estimated in the literature, and thus solve the energy paradox.

Specification Testing In Panel Data With Instrumental Variables, Gilbert E. Metcalf

Gilbert E. Metcalf

I show that specification tests for correlated fixed effects developed by Hausman and Taylor extend in an analogous way to panel data sets with endogenous regressors. Given panel data, different sets of instrumental variables can be used to construct the test. For a simple class of models, the test in many cases is asymptotically more efficient if an incomplete set of instruments is used. However, in small samples one may do better using the complete set of instruments. Monte Carlo results demonstrate the likely gains for different assumptions about the degree of between and within variance in the data.

Why Have Separate Environmental Taxes?, Don Fullerton

Don Fullerton

No abstract provided.

Un Modelo De Equilibrio General Dinámico Del Impuesto Al Activo, Rodrigo Garcia-Verdu

Rodrigo Garcia-Verdu

Technological Specialization And Economic Performance In Oecd Countries, Mario Pianta, Valentina Meliciani

Mario Pianta

The paper investigates the growing sectoral specialization in technological activities of OECD countries (measured using patent data) and its impact on countries' innovative and economic performance in the 1975-1990 period. Aggregate indicators of sectoral specialization are introduced, showing the extent to which countries concentrate their innovations in few fields, or spread them across several sectors. A general positive relationship is found between the degree of specialization in technology and higher rates of growth, while specialization in electronics-related fields is not associated to better economic or technological performances. The position of individual countries in these patterns is also examined, showing that …

Measuring Technological Change Through Patents And Innovation Surveys, Mario Pianta, Daniele Archibugi

Mario Pianta

This article provides an overview of recent research using innovation surveys and patent data as indicators of technological activity. The conceptual and methodological problems of 'measuring' technology are discussed, with a classification of the types of information which can be drawn from patent databases and from surveys of both innovations and the innovative efforts of firms. The findings and the methodological strengths and weaknesses of such studies are reviewed, considering first the evidence at the firm level, second the analysis of the industrial structure and finally the evidence at the country level and the process of globalization. The overview shows …

Purchasing Power Parity, Unit Roots And Dynamic Structure, Douglas G. Steigerwald

Douglas G. Steigerwald

Recent studies of puchasing power parity (PPP) account for the possible presence of unit roots in nominal exchange rates and relative price indicies by applying standard unit-root tests to real exchange rates, which are ratios of nominal exchange rates and relative price indicies. These studies occasionally find evidence of PPP but, as a whole, the evidence is not definitive. Standard unit-root tests impose a restrictive dynamic structure between nominal exchange rates and relative price indicies. I specify and estimate a generalized dynamic structure. I reject the dynamic restrictions implicit in standard unit-root tests of PPP, and find stronger evidence of …