Economics Commons^™

Identity, John B. Davis

Economics Faculty Research and Publications

The concept of identity has begun to be employed only relatively recently in economics, and accordingly still lacks a standard meaning and established set of applications in the subject. However, in its most influential initial uses by Amartya Sen (1999) and George Akerlof and Rachel Kranton (2000) it has been developed largely in terms of the concept of social identity (though in quite different ways). Social identity as understood in social psychology (see Brown, 2000), where the concept was influentially developed by Erik Erikson in connection with his idea of an identity crisis (Erikson, 1950), concerns individuals’ ‘identification with’ social …

Interview Of John Davis By Jonathan Wight, Jonathan Wright, John B. Davis

Economics Faculty Research and Publications

John B. Davis is Professor of Economics, Marquette University, and Professor of Economics, University of Amsterdam, is author of Keynes’s Philosophical Development (Cambridge, 1994), The Theory of the Individual in Economics (Routledge, 2003), Individuals and Identity in Economics (Cambridge, 2011), and co-author with Marcel Boumans of Economic Methodology: Understanding Economics as a Science (Palgrave, 2010). He has been a visiting professor at the Sorbonne, Cambridge University, Erasmus University, and Duke University. He is a former editor of the Review of Social Economy, and is currently co-editor of the Journal of Economic Methodology and the Routledge book series Advances in …

The Impact Of Work-Limiting Disabilities On Earnings And Income Mobility, Nicholas A. Jolly

Economics Faculty Research and Publications

This article uses the 1968–2007 waves of the Panel Study of Income Dynamics (PSID) to examine how work-limiting disabilities influence the intragenerational earnings and income mobility of individuals. The results show that work-limiting disabilities increase the probability of downward mobility for several years after onset. Furthermore, the probability of being in the bottom portions of the distributions increases significantly, not only during the year of onset but also for at least 10 years afterwards. These results are more pronounced for those individuals suffering from a disability that is more chronic or severe in nature. Income from spousal earnings and government …

Intertemporal Valuation Of River Restoration, Andrew G. Meyer

Economics Faculty Research and Publications

Willingness to pay for an environmental improvement is a function of how long it takes to deliver the improvement. To measure the effect of time on benefits, I utilize a discrete choice experiment that includes an attribute for delay until the improvement occurs and simultaneously estimate discount rates and valuation parameters. I estimate the present value of immediate and delayed Minnesota River Basin improvements using discount rates directly estimated from the econometric model. Compared to an immediate river basin cleanup, Minnesota residents lose almost half of the benefits when cleanup is delayed by 5 years.

The Change In Sraffa's Philosophical Thinking, John B. Davis

Economics Faculty Research and Publications

The availability of Piero Sraffa's unpublished manuscripts and correspondence at Trinity College Library, Cambridge, has made it possible to begin to set out a more complete account of Sraffa's philosophical thinking than previously could be done with only his published materials and the few comments and suggestions made by others about his ideas, especially in connection with their possible impact on Ludwig Wittgenstein's later thinking. This makes a direct rather than indirect examination of Sraffa's philosophical thinking possible, and also shifts the focus from his relationship to Wittgenstein to his own thinking per se. I suggest that the previous …

International R&D Transfer And Technical Efficiency: Evidence From Panel Study Using Stochastic Frontier Analysis, Miao Wang, M. C. Sunny Wong

Economics Faculty Research and Publications

We study the effect of foreign research and development (R&D) transferred through imports and foreign direct investment (FDI) on domestic technical efficiency using stochastic frontier analysis. Unbalanced panel results from a 77-country sample over 1986–2007 show that FDI- and imports-transferred foreign R&D have a significant impact on domestic country’s technical efficiency. Furthermore, we observe a complementarity between FDI-transferred R&D and domestic human capital. In other words, the domestic country needs to obtain a threshold level of human capital to benefit from FDI-transferred R&D. Other macro conditions such as infrastructure, political stability, and urbanization also help to improve the technical efficiency …

Identity Problems (An Interview With John B. Davis), Thomas Wells, John B. Davis

Economics Faculty Research and Publications

In this interview, Professor Davis discusses the evolution of his career and research interests as a philosopher-economist and gives his perspective on a number of important issues in the field. He argues that historians and methodologists of economics should be engaged in the practice of economics, and that historians should be more open to philosophical analysis of the content of economic ideas. He suggests that the history of recent economics is a particularly fruitful and important area for research exactly because it is an open-ended story that is very relevant to understanding the underlying concerns and concepts of contemporary economics. …

Size Of Home, Home Ownership, And The Mortgage Interest Deduction, Andrew R. Hanson

Economics Faculty Research and Publications

This paper offers an empirical test of the effect of the mortgage interest deduction (MID) on both the extensive (own vs. rent) and intensive (size of home) housing purchase margins. Using state level differences in MID availability to identify, I examine this relationship using standard ordinary least squares, instrumental variables, regression discontinuity, and sample selection estimation techniques. I find the MID to be responsible for a 10.9–18.4% increase in the size of home purchased, but that no relationship exists between the MID and home ownership. These results imply an elasticity of home size with respect to changes in user cost …

The Geographical Dimension Of The Development Effects Of Natural Resources, Abdur Chowdhury, Fabrizio Carmignani

Economics Faculty Research and Publications

We study the contribution of natural resource intensity to long-term development along different dimensions: per-capita income, institutional quality, and education. We allow natural resources to affect these dimensions differently in different regions of the world. The evidence suggests that natural resources are generally a positive driver of development, but in Sub-Saharan Africa (SSA) their contribution is almost negligible, if not even negative. We explain these cross-regional differences with the fact that in SSA more than anywhere else large resource endowments are combined with a particularly bad disease environment. Some historical evidence and formal econometric results support this hypothesis.

Examining Megachurch Growth: Free Riding, Fit, And Faith, Joseph P. Daniels, Marc Von Der Ruhr

Economics Faculty Research and Publications

Purpose – Megachurches are thriving in religious markets at a time when Americans are asserting their ability as consumers of religious products to engage in religious switching. The apparent success of megachurches, which often provide a low cost and low commitment path by which religious refugees may join the church, seems to challenge Iannocconne's theory that high commitment churches will thrive while low commitment churches will atrophy. This paper aims to investigate this issue.

Design/methodology/approach – This paper employs a signaling model to illustrate the strategy and organizational forms megachurches employ to indicate a match between what the church produces …

Subsidizing Religious Participation Through Groups: A Model Of The “Megachurch” Strategy For Growth, Joseph P. Daniels, Marc Von Der Ruhr

Economics Faculty Research and Publications

Either despite or because of their non-traditional approach, megachurches have grown significantly in the United States since 1980. This paper models religious participation as an imperfect public good which, absent intervention, yields suboptimal participation by members from the church’s perspective. Megachurches address this problem in part by employing secular-based group activities to subsidize religious participation that then translates into an increase in the attendees’ religious investment. This strategy not only allows megachurches to attract and retain new members when many traditional churches are losing members but also results in higher levels of an individual’s religious capital. As a result, the …

(Wp 2012-01) Samuels On Methodological Pluralism In Economics, John B. Davis

Economics Working Papers

Warren Samuels was an influential proponent of methodological pluralism in economics. This short paper discusses his understanding of methodological pluralism, and argues that it is based on three distinct components: (1) his critique of the idea that theories have epistemic foundations and his 'matrix approach to meaningfulness,' (2) his belief that the absence of meta-principles for science combined with our human psychology create an existential dilemma for theorists and policy-makers, and (3) his understanding of relativism, social constructivism, and 'limited but affirmative' defense of nihilism against the charge of skepticism. The paper closes with a brief discussion of what Samuels' …

Warren J. Samuels (1933-2011), John B. Davis

Economics Faculty Research and Publications

This paper examines the research and career of the late Warren J. Samuels (1933-2011), an influential institutionalist economist in the Wisconsin John Commons tradition and well-known historian and methodologist of economics. It discusses four main positions Samuels developed and held regarding the history of economic thought as intellectual history, the theory of economic policy, methodological pluralism, and the invisible hand doctrine. Among the views considered are: his matrix approach to meaningfulness, his characterization of intellectual systems, his emphasis on the centrality of the social order, his theory of economic policy as a neglected subject, his discourse analysis of language, his …

The Ecological And Civil Mainsprings Of Property: An Experimental Economic History Of Whalers’ Rules Of Capture, Bart J. Wilson, Taylor Jaworski, Karl E. Schurter, Andrew Smyth

Economics Faculty Research and Publications

This article uses a laboratory experiment to probe the proposition that property emerges anarchically out of social custom. We test the hypothesis that whalers in the 18th and 19th centuries developed rules of conduct that minimized the sum of the transaction and production costs of capturing their prey, the primary implication being that different ecological conditions led to different rules of capture. Ceteris paribus, we find that simply imposing two different types of prey is insufficient to observe two different rules of capture. Another factor is essential, namely, as Samuel Pufendorf theorized over 300 years ago, that the members of …

Drive ‘Til You Qualify: Credit Quality And Household Location, Andrew R. Hanson, Kurt Schnier, Geoffrey K. Turnbull

Economics Faculty Research and Publications

A deeper understanding of the credit-sorting process is essential when considering the extent to which home foreclosures are driven by price contagion or an underlying spatial pattern of mortgage quality. Adapting household location theory, we find that credit constrained households follow “drive-'til-you-qualify” behavior leading to rising credit quality with distance from the CBD while unconstrained households exhibit declining credit quality. Individual level mortgage loan-to-income data for the 100 largest MSAs show credit constrained behavior either throughout the urban area or concentrated in the suburbs. Meta analysis of the credit sorting estimates identify MSA characteristics associated with each pattern.

Foreword To Microfoundations Reconsidered: The Relationship Of Micro And Macroeconomics In Historical Perspective, John B. Davis

Economics Faculty Research and Publications

No abstract provided.

Does The Stock Market's Equity Risk Premium Respond To Consumer Confidence Or Is It The Other Way Around?, Abdur Chowdhury, Barry K. Mendelson

Economics Faculty Research and Publications

The increase in the equity risk premium during the 2007- 2009 Great Recession and the aging of the baby boomers in the United States have led analysts and financial industry experts to believe that risk aversion among stock investors has moved to a more-permanently higher range. If so, stocks would cease being an attractive asset class to be investing in for the future. In the past few years private investors have by and large shunned equities, just when stocks have become attractively priced and offer long-term potential for superior above-historical-average returns. Our empirical findings show that the recent increase in …

(Wp 2011-10) Obituary: Warren J. Samuels (1933-2011), John B. Davis

Economics Working Papers

This paper examines the research and career of the late Warren J. Samuels (1933-2011), an influential institutionalist economist in the Wisconsin John Commons tradition and well-known historian and methodologist of economics. It discusses four main positions Samuels developed and held regarding the history of economic thought as intellectual history, the theory of economic policy, methodological pluralism, and the invisible hand doctrine. Among the views considered are: his matrix approach to meaningfulness, his characterization of intellectual systems, his emphasis on the centrality of the social order, his theory of economic policy as a neglected subject, his discourse analysis of language, his …

Introduction: The History Of Economics As A History Of Practice, Harro Maas, Tiago Mata, John B. Davis

Economics Faculty Research and Publications

No abstract provided.

Subtle Discrimination In The Rental Housing Market: Evidence From E-Mail Correspondence Of Landlords, Andrew R. Hanson, Zackary Hawley, Aryn Taylor

Economics Faculty Research and Publications

We find that landlords practice subtle discrimination in the rental housing market through the use of language associated with describing and viewing a unit, inviting further correspondence, making a formal greeting, and using polite language when replying to e-mail inquiries from a white name more often than to an African American name, they also send longer e-mails and respond quicker to white names.

Review Of Identity Economics By Akerlof And Kranton, John B. Davis

Economics Faculty Research and Publications

No abstract provided.

The Incidence Of The Mortgage Interest Deduction: Evidence From The Market For Home Purchase Loans, Andrew R. Hanson

Economics Faculty Research and Publications

This article examines the incidence of the largest housing-related subsidy in the federal budget, the home mortgage interest deduction (MID). The author uses the difference in interest rates for loans made around the MID limit to identify the incidence of the subsidy. Using data on individual mortgages originated in 2004, the author estimates that for every $1,000 borrowed without the MID, the interest rate on the entire loan decreases by between 3.3 and 4.4 percent. Results suggest that lenders capture between 9 and 17 percent of the subsidy created by the home MID through higher mortgage interest rates.

(Wp 2011-09) The Development Effects Of Natural Resources: A Geographical Dimension, Fabrizio Carmignani, Abdur Chowdhury

Economics Working Papers

Despite the recent growth resurgence, Sub-Saharan Africa (SSA) remains the poorest region in the world. At the same time, it is a region that heavily relies on natural resources. In this paper we investigate the extent to which the second fact helps explain the first one. The distinctive feature of our study is that we take a geographical perspective and allow the effect of natural resources to differ across regions of the world. Our findings suggest that (i) the effect of natural resource intensity on per-capita income is positive and significant in general, but almost negligible and possibly negative in …

(Wp 2011-08) Identity, John B. Davis

Economics Working Papers

This chapter introduces the economics and identity literature, and discusses the relationship between social identity and personal identity. It distinguishes categorical and relational types of social identities, and argues that the former are more readily associated with instrumentally rational behavior, while the latter, which involve close contact with others in roles and social positions, are more readily associated with behavior in which individuals unilaterally reciprocate the actions of others – what Bruni terms unilateral altruism, which involves a non-instrumental or deontological type of motivation. The chapter also distinguishes two views of personal identity as relational in nature, Bachrach's game-theoretic approach …

Winning In Ncaa Womens Soccer: Does The Gender Of The Coach Matter?, Brian Brush, Gregory Naples

Economics Faculty Research and Publications

While women’s intercollegiate soccer has grown rapidly over the past three decades, men still hold nearly two-thirds of all head coaching positions in NCAA Division I women’s soccer programs. This paper explores whether the gender of the head coach affects success in winning games. After considering various reasons why gender might matter, we undertake a multiple regression analysis using data from the 2001-2002 season to answer this question empirically. Controlling for other factors that would be expected to influence a team’s success, including the quality of the head coach, the level of institutional support and the tradition of the program, …

Predictive Duty Cycle Adaptation For Wireless Camera Networks, Paul J. Shin, Henry Medeiros, Johnny Park, Avinash Kak

Economics Faculty Research and Publications

Wireless sensor networks (WSN) typically employ dynamic duty cycle schemes to efficiently handle different patterns of communication traffic in the network. However, existing duty cycling approaches are not suitable for event-driven WSN, in particular, camera-based networks designed to track humans and objects. A characteristic feature of such networks is the spatially-correlated bursty traffic that occurs in the vicinity of potentially highly mobile objects. In this paper, we propose a concept of indirect sensing in the MAC layer of a wireless camera network and an active duty cycle adaptation scheme based on Kalman filter that continuously predicts and updates the location …

(Wp 2011-06) Do Stock Market Risk Premium Respond To Consumer Confidence?, Abdur Chowdhury

Economics Working Papers

During the 2007-9 Great Recession, the risk premium associated with U.S. stocks sharply increased and has since remained significantly higher compared to its range during the last 40 years. The increase in the equity risk premium has led many analysts to believe that risk aversion among stock investors has moved to a permanently higher range in recent years. Our empirical findings show that the recent increase in the equity risk premium primarily reflects a temporary collapse in consumer confidence. As long as the consumer confidence in the sustainability of economic recovery remains low, today's elevated risk premium would persist. Once …

(Wp 2011-07) Factoring Emerging Markets Into The Relationship Between Global Liquidity And Commodities, Steven Landgraf, Abdur Chowdhury

Economics Working Papers

What caused the mid-2000s world commodity price “bubble” and the recent commodity price growth during the economic recovery after the 2007-2009 recession? The classical “supply and demand” interpretation offered by some observers suggests that rapid global industrial growth over the past decade – the so-called “demand channel” – is the key driver of price growth. Others have argued that recent bouts of commodity price growth were directly related to central banks, especially the U.S. Federal Reserve, injecting too much money or “liquidity” into the financial system. They assert that high commodity prices are a result of excessively loose monetary policy. …

In High School And Pregnant: The Importance Of Educational And Fertility Expectations For Subsequent Outcomes, Olga Yakusheva

Economics Faculty Research and Publications

This study uses the High School and Beyond data (1980–1992) to examine the importance of educational and fertility expectations in explaining the achievement gap of adolescent mothers for over 5,500 young women from different socioeconomic backgrounds. Using a non-parametric local propensity score regression, the study finds that the economic disadvantage associated with having a child in high school is particularly large in poor socioeconomic environments; however, this disadvantage is a result of preexisting differences in the educational and fertility expectations and is not because of a diminished capacity of the socioeconomic environment to mediate the effect of an unplanned childbirth. …

(Wp 2011-05) 'Til Recession Do Us Part: Booms, Busts, And Divorce In The United States, Abdur Chowdhury

Economics Working Papers

A general hypothesis regarding the impact of permanent income levels and business cycle fluctuations on divorce rate at the state level in the United States is analyzed in the paper. Using data for 45 states over the 1978-2009 sample period, the paper shows that the higher the level of transitory income, the higher is the incidence of divorce. In other words, divorce is pro-cyclical. Why do divorce decrease during recession and increase during expansion? When an economy is in crisis and people’s incomes are low, the cost of divorce will prevent a couple from divorcing irrespective of the quality of …