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Decentralization Without Democracy, Katrina Kosec, Tewodaj Mogues 2017 International Food Policy Research Institute

Decentralization Without Democracy, Katrina Kosec, Tewodaj Mogues

Katrina Kosec

Decentralization has been predominantly studied in democracies. We present a theory of decentralization's effects on public goods provision under autocracy yielding novel predictions. Decentralization improves productive services that  directly raise citizen's incomes (which are taxed), but not social services that increase incomes less but contribute to other dimensions of well-being. The center incentivizes local policymakers by sharing tax revenue. However, social services do not deteriorate; productive services improvements are instead financed with efficiency improvements from having more knowledgeable policymakers making decisions. We test the model in Ethiopia, exploiting a natural experiment in which government implemented fiscal and administrative ...


Endogenous Formation Of Security Exchanges, 2017 Selected Works

Endogenous Formation Of Security Exchanges

Jaime Luque

We use club theory for the first time to provide a model of Securities Exchange (SX) formation. We think of a SX as a local public good that allows its traders to diversify risk by trading their securities with other SX members. In our two-stage equilibrium setting, traders evaluate SXs depending on their risk-sharing possibilities, and, given these evaluations, choose the SX they want to join. Security prices can differ among SXs and traders may value SX memberships differently. We establish continuity properties in both stages and show that equilibrium exists for a generic set of economies.


Experimental Economics, Elizabeth Hoffman 2017 Iowa State University

Experimental Economics, Elizabeth Hoffman

Elizabeth Hoffman

"Experimental economics" is a general term for the experimental laboratory approach to studying economic institutions. Most applied economists study economic institutions by observing the way in which they operate in the naturally occurring environment and by measuring such economic variables as the prices of good sand services, the quantities of goods and services that are bought and sold, the wages that are paid to workers, and the quantities of inputs and outputs in the production of goods and services.


The Epa's Air Quality Index, And Public Transportation Usage In The Chicago Metro Region, Nicholas R. Rosenberg 2017 Colby College

The Epa's Air Quality Index, And Public Transportation Usage In The Chicago Metro Region, Nicholas R. Rosenberg

Journal of Environmental and Resource Economics at Colby

This paper assesses whether air quality influences public transportation ridership in the city of Chicago. Urban air pollution is a serious health risk, and a priority of urban municipalities. Public transportation is an attractive option for governments attempting to curb urban air emissions. I use data from the Chicago Transit Authority (CTA) and the EPA’s Air Quality Index (AQI) to explore the relationship between a day’s air quality and CTA ridership. I employ three different model specifications, rail, bus and total ridership, to test whether high AQI values (poor air quality) result in increased public transportation ridership in ...


The Rule Of Reason, Herbert J. Hovenkamp 2017 University of Pennsylvania Law School

The Rule Of Reason, Herbert J. Hovenkamp

Faculty Scholarship

Antitrust’s rule of reason was born out of a thirty year (1897-1927) division among Supreme Court Justices about the proper way to assess multi-firm restraints on competition. By the late 1920s the basic contours of the rule for restraints among competitors was roughly established. Antitrust policy toward vertical restraints remained much more unstable, however, largely because their effects were so poorly understood.

This article provides a litigation field guide for antitrust claims under the rule of reason – or more precisely, for situations when application of the rule of reason is likely. At the time pleadings are drafted and even ...


Impact On Merchant Refiners And Blenders From Changing The Rfs Point Of Obligation, Bruce A. Babcock, Gabriel E. Lade, Sébastien Pouliot 2017 Iowa State University

Impact On Merchant Refiners And Blenders From Changing The Rfs Point Of Obligation, Bruce A. Babcock, Gabriel E. Lade, Sébastien Pouliot

Sebastien Pouliot

The Environmental Protection Agency has proposed to deny a request to move the point of obligation under the Renewable Fuel Standard (RFS) from oil refiners to fuel blenders. Supporters of the request argue that those refiners who do not have the fuel blending capabilities of large, integrated oil companies are in danger of going out of business due to their need to buy RINs (Renewable Identification Numbers) to show compliance with the RFS. We demonstrate that this claim is false and that moving the point of obligation would have no impact on refiner profits. The key point that is neglected ...


Rationality Of Choices In Subsidized Crop Insurance Markets, Xiaodong Du, Hongli Feng, David A. Hennessy 2017 University of Wisconsin–Madison

Rationality Of Choices In Subsidized Crop Insurance Markets, Xiaodong Du, Hongli Feng, David A. Hennessy

Hongli Feng

The U.S. crop insurance market has several features that set it apart from other insurance markets. These include:(a) explicit government subsidies with an average premium subsidy rate of about 60% in recent years; and (b) the legislative requirement that premium rates be set at actuarially fair levels, where the federal government sets rates and pays all costs related to insurance policy sales and services. Bearing these features in mind, we examine to what extent farmers’ crop insurance choices conform to economic theory. A standard expected utility maximization framework is set up to analyze tradeoffs between higher risk protection ...


Native Grassland Conversion: The Roles Of Risk Intervention And Switching Costs, Ruiqing Miao, David A. Hennessy, Hongli Feng 2017 Iowa State University

Native Grassland Conversion: The Roles Of Risk Intervention And Switching Costs, Ruiqing Miao, David A. Hennessy, Hongli Feng

Hongli Feng

We develop a real option model of the irreversible native grassland conversion decision. Upon plowing, native grassland can be followed by either a permanent cropping system or a system in which land is put under cropping (respectively, grazing) whenever crop prices are high (respectively, low). Switching costs are incurred upon alternating between cropping and grazing. The effects of risk intervention in the form of crop insurance subsidies are studied, as are the effects of cropping innovations that reduce switching costs. We calibrate the model by using cropping return data for South Central North Dakota from 1989 to 2012. Simulations show ...


Optimal Design Of Permit Markets With An Ex Ante Pollution Target, Sergey S. Rabotyagov, Hongli Feng, Catherine L. Kling 2017 Iowa State University

Optimal Design Of Permit Markets With An Ex Ante Pollution Target, Sergey S. Rabotyagov, Hongli Feng, Catherine L. Kling

Hongli Feng

In this paper, we examine the design of permit trading programs when the objective is to minimize the cost of achieving an ex ante pollution target, that is, one that is defined in expectation rather than an ex post deterministic value. We consider two potential sources of uncertainty, the presence of either of which can make our model appropriate: incomplete information on abatement costs and uncertain delivery coefficients. In such a setting, we find three distinct features that depart from the well-established results on permit trading: (1) the regulator’s information on firms’ abatement costs can matter; (2) the optimal ...


Production And Abatement Distortions Under Noisy Green Taxes, Hongli Feng, David A. Hennessy 2017 Iowa State University

Production And Abatement Distortions Under Noisy Green Taxes, Hongli Feng, David A. Hennessy

Hongli Feng

Pigouvian taxes are typically imposed in situations where there is imperfect knowledge on the extent of damage caused by a producing firm. A regulator imposing imperfectly informed Pigouvian taxes may cause the firms that should (should not) produce to shut down (produce). In this paper we use a Bayesian information framework to identify optimal signal-conditioned taxes in the presence of such losses. The tax system involves reducing (increasing) taxes on firms identified as causing high (low) damage. Unfortunately, when an abatement decision has to be made, the tax system that minimizes production distortions also dampens the incentive to abate. In ...


Can Social Norms Motivate Employee Conservation Efforts?, Joel Morton, Peter F. Orazem, Tanya Rosenblatt, Carolyn Cutrona, Zlatan Krizan, James M. McCormick, Sarah M. Nusser 2017 Iowa State University

Can Social Norms Motivate Employee Conservation Efforts?, Joel Morton, Peter F. Orazem, Tanya Rosenblatt, Carolyn Cutrona, Zlatan Krizan, James M. Mccormick, Sarah M. Nusser

James McCormick

A randomized experiment is used to test whether employees will take actions to lower short- and long-run electricity use when their actions are unobservable and only the firm can benefit. Results suggest that social norms act as a coordinating device supporting worker conservation efforts. Electricity use fell 5.2% on average in buildings that were provided information on their own energy use compared to that in a paired building. The energy reductions have persisted over three years. Feedback on own past usage and provision of promotional information induced smaller andstatistically insignificant reductions in electricity use.


Impact On Merchant Refiners And Blenders From Changing The Rfs Point Of Obligation, Bruce A. Babcock, Gabriel E. Lade, Sébastien Pouliot 2017 Iowa State University

Impact On Merchant Refiners And Blenders From Changing The Rfs Point Of Obligation, Bruce A. Babcock, Gabriel E. Lade, Sébastien Pouliot

Gabriel Lade

The Environmental Protection Agency has proposed to deny a request to move the point of obligation under the Renewable Fuel Standard (RFS) from oil refiners to fuel blenders. Supporters of the request argue that those refiners who do not have the fuel blending capabilities of large, integrated oil companies are in danger of going out of business due to their need to buy RINs (Renewable Identification Numbers) to show compliance with the RFS. We demonstrate that this claim is false and that moving the point of obligation would have no impact on refiner profits. The key point that is neglected ...


Crop Residues: The Rest Of The Story, Douglas L. Karlen, Rattan Lal, Ronald F. Follett, John M. Kimble, Jerry L. Hatfield, John A. Miranowski, Cynthia A. Cambardella, Andrew Manale, Robert P. Anex, Charles W. Rice 2017 United States Department of Agriculture

Crop Residues: The Rest Of The Story, Douglas L. Karlen, Rattan Lal, Ronald F. Follett, John M. Kimble, Jerry L. Hatfield, John A. Miranowski, Cynthia A. Cambardella, Andrew Manale, Robert P. Anex, Charles W. Rice

Douglas L Karlen

Synopsis In the February 15, 2009 issue of ES&T Strand and Benford argued that oceanic deposition of agricultural crop residues was a viable option for net carbon sequestration (43 [4], 1000−1007). In reviewing the calculations and bringing their experience to bear, Karlen et al. argue in this Viewpoint that crop residue oceanic permanent sequestration (CROPS) as envisioned by Strand and Benford will not work. They further propose alternative possibilities in agricultural methods to achieve a net decrease of CO2 emissions.


Economic Evaluation Of Coastal Land Loss In Louisiana, Stephen R. Barnes, Craig Bond, Nicholas Burger, Kate Anania, Aaron Strong, Sarah Weilant, Stephanie Virgets 2017 Louisiana State University

Economic Evaluation Of Coastal Land Loss In Louisiana, Stephen R. Barnes, Craig Bond, Nicholas Burger, Kate Anania, Aaron Strong, Sarah Weilant, Stephanie Virgets

Journal of Ocean and Coastal Economics

Louisiana has lost approximately 1,880 square miles of land over the past eighty years. Projections suggest that in a future without action, the next fifty years could result in the loss of 1,750 additional square miles of land area. As land loss continues, a large portion of the natural and man-made capital stocks of coastal Louisiana will be at greater risk of damage, either from land loss or from the associated increase in storm damage. We estimate the replacement cost of capital stock directly at risk from land loss ranges from approximately $2.1 billion to $3.5 ...


Avian Influenza Economic Impacts In Iowa, David Swenson 2017 Iowa State University

Avian Influenza Economic Impacts In Iowa, David Swenson

David Swenson

The avian influenza (AI) outbreak in Iowa has resulted in the loss of as much as a third of the state’s current egg producing capacity along with smaller, but still significant, losses among some turkey and pullet producers. As with any disaster, there will be losses to those operations, to the suppliers to those operations, and, ultimately, to the regions of the state where those operations are located. This analysis assumes a 34 percent reduction in poultry sector output for one full year.


Economic Impacts Of Wind Energy Development In Iowa: Four Scenarios, David Swenson 2017 Iowa State University

Economic Impacts Of Wind Energy Development In Iowa: Four Scenarios, David Swenson

David Swenson

The deployment of additional wind energy capacity in Iowa will yield discernible short-term and longer-term economic impacts for Iowa. The short-term and temporary economic gains are from the annual purchases and deliveries of Iowa-supplied wind energy generating equipment like blades, towers, nacelles and other critical components, and all construction-related activity associated with erecting and making operational wind energy arrays The long-term and permanent gains to the Iowa economy are driven by the on-going increments to statewide productivity associated with the operation and maintenance of the built wind energy systems, and the incremental increase in lease payments made to landowners for ...


Economic Profile Of Fabricated Metals Manufacturing In Iowa, Liesl Eathington, David Swenson 2017 Iowa State University

Economic Profile Of Fabricated Metals Manufacturing In Iowa, Liesl Eathington, David Swenson

David Swenson

The fabricated metals industry in Iowa is a major durable goods industry which produced $1.68 billion in GDP in 2013 and accounted for 5 percent of manufacturing GDP. The sector employed 20,611 persons, or around 9.5 percent of the state's manufacturing workforce. This technical study profiles the industry's structural and economic characteristics. This study was done for the Center for Industrial Research and Service (CIRAS) at Iowa State University.


Tax Increment Financing Growth In Iowa, Dave Swenson, Liesl Eathington 2017 Iowa State University

Tax Increment Financing Growth In Iowa, Dave Swenson, Liesl Eathington

David Swenson

Tax increment financing (TIF) is a mechanism authorized by Iowa law allowing local governments, primarily cities, to capture the taxes collected on property valuation growth in a specified district. The incremental taxes are intended to be used for one or more of the following: bond payments on borrowing required to prepare the district for development; rebates on taxes to developers meeting specific, albeit locally determined, criteria; direct spending by the local government to develop an area; or outright tax refunds to qualifying developments. The use of TIF authority among Iowa’s cities is extremely popular. In fiscal 1991, there were ...


The Economic Impact Of Iowa’S Major Industries In 2014, David Swenson 2017 Iowa State University

The Economic Impact Of Iowa’S Major Industries In 2014, David Swenson

David Swenson

This report compares and contrasts two methods of discerning industrial importance: (1) evaluating industrial information as conventionally reported by government agencies, and (2) using input-output techniques to allocate all indirect economic activity into industries producing for final demand. The advantage of the final demand apportioning procedure is that it allows for a determination of total job linkages to Iowa's key industries like agriculture, ag-related manufacturing, all other manufacturing, and to banking and finance.


The Economic Value Of Iowa’S Public Universities, David Swenson 2017 Iowa State University

The Economic Value Of Iowa’S Public Universities, David Swenson

David Swenson

This analysis measures the economic value of Iowa’s public universities – The University of Iowa, Iowa State University, and the University of Northern Iowa. There are two dimensions evaluated: the overall worth of operating the universities as educational and service institutions and the value of student spending in their respective area economies. This analysis incorporates a number of best practices for measuring the worth of universities to regional economies.


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