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A rather large body of recent literature has explored the implications of various conjectural variations in spatial pricing models. Very different conclusions have been reached as to which conjecture is appropriate for spatial modeling.... more
A rather large body of recent literature has explored the implications of various conjectural variations in spatial pricing models. Very different conclusions have been reached as to which conjecture is appropriate for spatial modeling. The purpose of this paper is to add to this debate through application to a spatial model of two sets of arguments which stress that entrepreneurs learn.
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A jobseeker's attitudes towards risk and his perception of the risk inherent in the labor market he is searching have been shown to have a theoretical effect on his expected duration of search, when he is assumed to be searching for... more
A jobseeker's attitudes towards risk and his perception of the risk inherent in the labor market he is searching have been shown to have a theoretical effect on his expected duration of search, when he is assumed to be searching for jobs in an optimal fashion.' However, no empirical research has adequately tested for these predicted effects.2 This article presents estimates of a reduced-form equation derived from the job search theory3 and tests the following two hypotheses: (1) as the standard deviation of the distribution of potential wage offers increases, an individual's expected duration of unemployment will increase, ceteris pariblis; (2) an individual who is more risk averse than another will have a shorter expected duration of unemployment, ceteris paribbls. The empirical results presented here tend to support both of these hypotheses. Both Kohn and Shavell (1974) and Pissarides (1974) prove, within models of optimal job search, that the more risk averse a job seeker, the lower he will set his minimum acceptable, or reservation, wage. The reservation wage is set to equate the marginal cost of an additional period of search with the expected marginal return from search; any job offer exceeding this wage is accepted and unemployment terminates.4 Determinants of the individual's reservation wage include costs of search, his risk preferences, and his view of the distribution of possible wage offers facing him. As an individual lowers his minimum acceptable wage he will shorten his expected spell of unemployment, given that the distribution of wage offers from which he draws is unchanged. Hence, the more risk averse jobseeker, by lowering his reservation wage, will have to search a shorter period of time, on average, to find an offer acceptable to him. The effect of wage dispersion on duration of unemployment (allowing for adjustment in the reservation wage) cannot be predicted in general from models of job search, despite the belief expressed (from Stigler (1962, p. 236) to Hall (1975, p. 324)) that this effect should be positive. However, when a rectangular wage offer distribution is posited, the intuitively appealing hypothesis (1) can be obtained from a static model of job search (for example, McCall's model (1970)). While the regression specification used in this study to test the two implications presented above was developed in the context of the job search theory, alternative theories could produce these results; hence, the empirical work discussed here is not seen as a test of the search theory.5 Instead, a negative relationship between risk aversion and duration of unemployment could reflect a tendency for individuals to choose occupations and industries with patterns of employment suiting their risk preferences. And a positive association between dispersion in potential wages and duration may
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Game theory suggests that the ability to sustain collusive equilibria in duopoly markets depends on sufficiently low rates of time preference. This proposition has never been subjected to experimental test, possibly because of the... more
Game theory suggests that the ability to sustain collusive equilibria in duopoly markets depends on sufficiently low rates of time preference. This proposition has never been subjected to experimental test, possibly because of the difficulty of inducing collusive behavior in experimental ...
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... 3. As noted by Earle & Estrin, 1998; Konings, 1997. View all notes. . Feinberg & Meurs (200514. Feinberg, Robert M and Meurs, Mieke. 2005. Exchange Rate Effects on Domestic Prices in Bulgaria and Poland:... more
... 3. As noted by Earle & Estrin, 1998; Konings, 1997. View all notes. . Feinberg & Meurs (200514. Feinberg, Robert M and Meurs, Mieke. 2005. Exchange Rate Effects on Domestic Prices in Bulgaria and Poland: Progress in Making Markets?. ...
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... 2-82-1, The Pennsylvania State University, Department of Economics (1982). Gelfand and Spiller, Dec. 1982. Matthew Gelfand and Pablo T. Spiller , Testing oligopolistic interactions among multiproduct firms. , University of... more
... 2-82-1, The Pennsylvania State University, Department of Economics (1982). Gelfand and Spiller, Dec. 1982. Matthew Gelfand and Pablo T. Spiller , Testing oligopolistic interactions among multiproduct firms. , University of Pennsylvania (Dec. 1982) unpublished . Scott, 1979. ...
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... Figure 1. Payoff matrix from Feinberg and Husted (1993). ... Therefore, to judge the robustness of results based on the earlier experiments at American University, another session was conducted at the University of Limerick (in... more
... Figure 1. Payoff matrix from Feinberg and Husted (1993). ... Therefore, to judge the robustness of results based on the earlier experiments at American University, another session was conducted at the University of Limerick (in Ireland), with a smaller number of participants (six ...
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In recent years, the role of multimarket contact (MMC) among firms in influencing market performance has been studied for a relatively small group of industries – with banking and airlines most often examined, though the cement and... more
In recent years, the role of multimarket contact (MMC) among firms in influencing market performance has been studied for a relatively small group of industries – with banking and airlines most often examined, though the cement and telecommunications industries have been studied as well. This paper investigates this issue for the local movie theater industry in the U.S., one not previously studied in this regard. In small U.S. metropolitan areas, there is considerable variation in the nature of MMC among theater chains (large and small), which allows us to examine whether MMC among firms has an impact on movie pricing in these smaller markets. Data on movie pricing, market structure, and income and population characteristics are obtained for 118 multi-screen first-run movie theaters in 79 small metropolitan areas – those with under 250,000 people – which are not part of larger “consolidated” metropolitan areas. Analysis provides evidence supportive of MMC effects but suggestive of i...
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... that statutory provisions and case-specific factors were what Commerce and the ITC would examine, so that macroeconomic indicators would have little ... to use a but-for (or economic causality) approach, the dominant approach since... more
... that statutory provisions and case-specific factors were what Commerce and the ITC would examine, so that macroeconomic indicators would have little ... to use a but-for (or economic causality) approach, the dominant approach since has focused on industry trends, and both ...
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Antidumping policy was for many years an instrument employed almost exclusively by a small number of developed economies. Over the past 15 years, however, the use of this instrument of trade policy has spread to developing economies, and... more
Antidumping policy was for many years an instrument employed almost exclusively by a small number of developed economies. Over the past 15 years, however, the use of this instrument of trade policy has spread to developing economies, and the overwhelming share of antidumping cases now involve developing countries either as petitioner or as target of these cases. This paper describes these trends in some detail and discusses some implications. A focus of the paper is the absence of discussion in the development economics literature on the topic despite the increasingly important role played by antidumping policy.
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While the concept has been around for years, recently the policy notion of a “guaranteed basic income” (GBI)—or universal basic income—has had a resurgence of interest. In addition to rationales that relate to fairness and response to... more
While the concept has been around for years, recently the policy notion of a “guaranteed basic income” (GBI)—or universal basic income—has had a resurgence of interest. In addition to rationales that relate to fairness and response to structural employment shifts due to automation and globalization, another motivation that is sometimes put forward for these plans is to encourage risk-taking by providing a safety net: There would be greater entrepreneurial activity if an unsuccessful entrepreneur had the GBI to fall back on. In this paper we investigate a rare long-standing example similar to a GBI in the US: the Alaska Permanent Fund Dividend program. This was not put forth as a GBI, and the annual amount is too small to allow an individual to rely fully on these funds; but for a moderate-to-large family the APF can replace a large share of a poverty-level income. Receipt of the APF also does not preclude a family from receiving other safety net benefits—food stamps, unemployment compensation—which suggests that the downside risk for a potential entrepreneur may be lower than in other US states. We initially examine trends in small-firm births in Alaska over time from the Census Bureau’s Business Dynamics Statistics 1977–2014—before and after the institution of the APF program (the first payment was in 1982)—relative to other US states to investigate a possible impact on entrepreneurship; the results suggest a positive effect—which appears to dissipate over time. We then turn to micro data from the Current Population Survey to examine changes in self-employment behavior in Alaska, with somewhat similar findings.
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ABSTRACT Although crime rates have long been thought to influence residential housing prices, no previous study has measured the effect of crime rates on rates of default on residential mortgages. Using a standard model of default in... more
ABSTRACT Although crime rates have long been thought to influence residential housing prices, no previous study has measured the effect of crime rates on rates of default on residential mortgages. Using a standard model of default in which crime rates can affect both the value of property and the liquidity of mortgageholders this paper empirically measures the effect of state--level crime on the frequency of residential mortgage default. Specifically, regression analysis, based on FBI data on both violent and property crime rates, is used to analyze default rates over a pooled sample of residential mortgages for all U.S. states and the District of Columbia during a 14--year period (1981-94).It is found that crime, possibly acting as a proxy for more general socioeconomic neighborhood deterioration, significantly affects the rate of mortgage default. This effect, somewhat surprisingly, is most important for conventional mortgage loans. Violent crime has a more delayed impact than does property crime in increasing defaults. Other factors which are found to strongly influence default are state--level personal income growth and state unemployment rates. These results support the assertion that the economic costs of crime are more pervasive and subtle than often discussed.
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ABSTRACT This paper is the first to quantify the effect of crime rates on rates of default of residential mortgages. Based on a model of default in which crime rates can affect the liquidity of mortgageholders as well as their default... more
ABSTRACT This paper is the first to quantify the effect of crime rates on rates of default of residential mortgages. Based on a model of default in which crime rates can affect the liquidity of mortgageholders as well as their default option through property values, regression analysis is used to analyse default rates over a pooled sample of residential mortgages for all US states during 1981-94. This study finds that crime, possibly acting as a proxy for more general economic conditions, significantly affects both the rate and timing of mortgage default. Copyright 2002 by Taylor and Francis Group
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One peculiar source of nonlabor income that has not been extensively studied for its effect on labor supply is the Alaska Permanent Fund (APF) dividend. This is somewhat surprising given the recent policy focus on Guaranteed Basic Income... more
One peculiar source of nonlabor income that has not been extensively studied for its effect on labor supply is the Alaska Permanent Fund (APF) dividend. This is somewhat surprising given the recent policy focus on Guaranteed Basic Income programs. An annual lump-sum payment, the Permanent Fund Dividend (PFD) is available to almost all Alaska residents, is clearly exogenous with respect to work effort, and – while relatively predictable – varies over time and across households (since it increases linearly with family size). This paper estimates the nonlabor income elasticity of labor supply using exogenous variation from the Alaskan PFD and data from the American Community Survey (ACS). The analysis finds that men have elasticities between −0.15 and −0.10, depending on the specification. Single women have elasticities between −0.14 and −0.09, while married women have somewhat larger elasticities between −0.18 and −0.11.
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This paper examines the effect of labour strategies and management types on firm performance in Chinese enterprises. We use two large panel surveys on Chinese enterprises, spanning almost two decades of transition. Our findings suggest... more
This paper examines the effect of labour strategies and management types on firm performance in Chinese enterprises. We use two large panel surveys on Chinese enterprises, spanning almost two decades of transition. Our findings suggest that, as commonly thought, there are significant differences across ownership types in China in the degree to which flexible labour market strategies are utilized; and
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ABSTRACT This paper explores the relationship between inner-city crime patterns and suburban income growth, analysing data on 318 US counties for selected metropolitan statistical areas of 32 states within the United States from 1982 to... more
ABSTRACT This paper explores the relationship between inner-city crime patterns and suburban income growth, analysing data on 318 US counties for selected metropolitan statistical areas of 32 states within the United States from 1982 to 1997. The findings suggest that violent crime does seem to have a negative impact on close-in suburbs, with a less negative impact farther away from the central city (becoming positive at some point). While results are not as robust as we had hoped they are consistent with flight to further-out suburbs rather than migration to different metropolitan areas in response to urban crime.
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This note reports on an empirical exercise designed to examine the connection between a student's decision on test-taking time and resulting test scores. Based on a small sample of microeconomics principles students observed over... more
This note reports on an empirical exercise designed to examine the connection between a student's decision on test-taking time and resulting test scores. Based on a small sample of microeconomics principles students observed over several tests, evidence is found supporting a positive impact of added time.
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ABSTRACT The economic liberalization which has occurred in Central and Eastern Europe (CEE) over the past 15 years generally has involved establishing domestic markets and privatizing state-owned firms, both with the intention of... more
ABSTRACT The economic liberalization which has occurred in Central and Eastern Europe (CEE) over the past 15 years generally has involved establishing domestic markets and privatizing state-owned firms, both with the intention of integrating the CEE economies into the global economy and allowing the benefits of competition to be realized. We explore how well this has been accomplished in two countries, Poland and Bulgaria, and the domestic conditions that contribute to its accomplishment. The sensitivity of domestic markets to international shocks, as reflected in exchange rate effects on domestic prices, may be viewed as an indicator of how integrated a country's markets are into the global economy, and a proxy for competition in those markets. In explaining variation in exchange-rate pass-through, we examine the impact of market structure, economic liberalization and infrastructure as factors contributing to the development of competitive markets. We find that although integration into global markets can significantly increase market competitiveness, domestic factors also play a significant role.
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Theoretical models and intuition suggest that the amount of non- traditional protection against imports obtained through administrative procedures such as antidumping enforcement will increase as more traditional forms such as tariffs and... more
Theoretical models and intuition suggest that the amount of non- traditional protection against imports obtained through administrative procedures such as antidumping enforcement will increase as more traditional forms such as tariffs and quotas are lowered under multilateral trade agreements. This paper is the first empirical study of the role of tariff liberalization in the spread of antidumping. Through both correlations