information on strikes and union settlements patterns of coverage in a newspaper of record the authors investigate whether the new york times coverage of strikes and non strike wage settlements in large bargaining units changed during the 1980s a time when a transformation of industrial relations is said to have taken place although the total number of new york times articles on such events declined during the 1980s the authors find that when appropriate control variables are included in the analysis the apparent drop in coverage disappears important variables determining the extent of news coverage were occurrence of a strike strike duration number of workers involved occurrence of federal intervention key industry status that is whether the affected industry was among those industries identified as exceptionally important for wage setting and proximity to new york city they speculate that the reduced number of articles may simply reflect a decreased incidence of strikes

employment impacts of eu biofuels policy combining bottom up technology information and sectoral market simulations in an input output framework this paper analyses the employment consequences of policies aimed to support biofuels in the european union the promotion of biofuel use has been advocated as a means to promote the sustainable use of natural resources and to reduce greenhouse gas emissions originating from transport activities on the one hand and to reduce dependence on imported oil and thereby increase security of the european energy supply on the other hand the employment impacts of increasing biofuels shares are calculated by taking into account a set of elements comprising the demand for capital goods required to produce biofuels the additional demand for agricultural feedstock higher fuel prices or reduced household budget in the case of price subsidisation price effects ensuing from a hypothetical world oil price reduction linked to substitution in the eu market and price impacts on agro food commodities the calculations refer to scenarios for the year 2020 targets as set out by the recent renewable energy roadmap employment effects are assessed in an input output framework taking into account bottom up technology information to specify biofuels activities and linked to partial equilibrium models for the agricultural and energy sectors the simulations suggest that biofuels targets on the order of 10 15 could be achieved without adverse net employment effects

expectations exchange rates and monetary theory the case of german hyperinflation abstract this paper tests some of the structural coefficient restrictions on goods price equations and foreign exchange rate equations implied by the monetary theory of exchange rates the data are from the german hyperinflation 1922 1923 the results of the tests broadly support the monetary theory of exchange rates and they also support the hypothesis that the foreign exchange market was efficient during this period however the much higher residual volatility in foreign exchange prices is not explained by the monetary theory

demand elasticities for food products in brazil a two stage budgeting system the object of this article is to estimate demand elasticities for a basket of staple food important for providing the caloric needs of brazilian households these elasticities are useful in the measurement of the impact of structural reforms on poverty a two stage demand system was constructed based on data from household expenditure surveys pof produced by ibge the brazilian bureau of statistics in 1987 88 and 1995 96 we have used panel data to estimate the model and have calculated income own price and cross price elasticities for eight groups of goods and services and in the second stage for 11 sub groups of staple food products we estimated those elasticities for the whole sample of consumers and for two income groups

exchange rate and price dynamics under adaptive and rational expectations an empirical analysis abstract while the concept of rational expectations has become a central tenant of open economy macroeconomic modeling frankel and froot 1990a using survey data find that exchange rate expectations are either extrapolative or regressive we estimate structural and semi structural open economy macroeconomic models with static adaptive and rational expectations to empirically investigate these questions the two major results of the paper are first that the restrictions imposed by static expectations are overwhelmingly rejected in favor of either adaptive or rational expectations and second that it is not possible to choose empirically between rational and adaptive expectations jel f31

the revenue and welfare effects of fiscal harmonization for the uk the european community is currently considering proposals for harmonizing the structure of indirect taxes across the member states the proposals are part of a programme of action designed to facilitate a unified internal market within the community see commission of the european communities 1987 the intention of the internal market programme is that by the beginning of 1993 there should be no administrative or structural impediments to trade within the community so that producers will be able to take ml advantage of the potential economies of scale associated with a domestic market of 320 million people a major component of the gains from the completion of the internal market arises from abolishing border controls while border controls are not particularly expensive to administer for domestic governments they are thought to be a major d terrent to intra community trade because of the costs they impose on companies in additional delays and red tape associated with cross border

unions and strikes with asymmetric information strikes seem to be a pareto inefficient outcome of bargaining between a union and a firm however this paper shows that strikes can be the outcome of rational behavior by both agents if the firm has more information than the union concerning the state of nature the union can use strikes as a way of gaining information the paper uses an asymmetric information model where the firm has information about the state i e profitability that the union does not know the schedule of wage offers by the union then depends on the probability that a given state will occur

semiparametric estimation and consumer demand this paper considers the implementation of semiparametric methods in the empirical analysis of consumer demand the application is to the estimation of the engel curve relationship and uses the british family expenditure survey household composition is modelled using an extended partially linear framework this is shown to provide a useful method for pooling non parametric engel curves across households of different demographic composition c 1998 john wiley sons ltd

zero expenditures and the estimation of engel curves over the brief interview periods typical of budget surveys such as the u k family expenditure survey households recorded expenditures are liable to be misleading indicators of their underlying consumption most starkly a household may not be observed to purchase commodities that it nevertheless consumes this paper considers the implications of such measurement errors for the estimation of demand systems and derives a consistent estimator for the special case of linear engel curves

tricks with hicks the easi demand system we invent implicit marshallian demands which combine desirable features of hicksian and marshallian demands we propose and estimate the exact affine stone index easi implicit marshallian demand system like the almost ideal demand aid system easi budget shares are linear in parameters given real expenditures however unlike the aid easi demands can have any rank and its engel curves can have any shape over real expenditures easi error terms equal random utility parameters to account for unobserved preference heterogeneity easi demand functions can be estimated using gmm or three stage least squares and like aid an approximate easi model can be estimated by linear regression

a study of petrol consumption using spanish panel data methods are proposed for the estimation of equations for consumption categories subject to non participation and other types of censoring using an unbalanced panel data set on petrol expenditures from the spanish continuous family expenditure survey the use of panel data allows one to deal with two issues that pose econometric problems when dealing with individual budget data on one hand unobserved time invariant heterogeneity is controlled for on the other hand the problem of censoring in the dependent variable is addressed and the measurement error induced by infrequent purchases is corrected results suggest the use of probabilities of purchase estimated from the temporal pattern of expenditure records in order to carry out this correction the estimated demand system is subsequently used to simulate the effects of changes in the taxation of petrol

risk preference and the interindustry propensity to strike this paper presents a model of the determinants of a union s decision to strike the model states that assuming management is risk neutral workers tastes for risks will be one important determinant of the decision to strike a risk preference variable from the panel survey of income dynamics and an injury and illness rate for each of 89 manufacturing industries serve as measures of workers tastes for risk the model predicts that industries with high injury rates will experience a disproportionate share of strikes and that a greater share of weakly risk averse workers will be employed in strike prone industries than in strike free industries the author discovers strong support for the first prediction but not for the second

strike activity worker militancy and productivity change in manufacturing 1961 1981 the author hypothesizes a two way causality between intracontractual strikes and productivity change in u s manufacturing on the one hand strikes during the term of a contract which are thought to reflect more broadly practiced shop floor militancy slow the pace of productivity growth and on the other hand periods of rapid productivity growth provoke increased intracontractual strike activity among other forms of shop floor protest the model is tested with quarterly data from 1961 through 1981 modified two stage least squares estimates support the hypothesis of two way causality a specific finding is that shop floor confrontation played a significant role in the slump in manufacturing productivity that began in the mid 1960s but not in the more precipitous productivity slowdown of the post 1973 years

estimating the value and distributional effects of free state schooling the effects of free of charge state education on income distribution are often studied by allocating government education outlays to households assuming that these outlays equal the benefit which households attach to state schooling this paper proposes a demand analysis approach to estimating the true value of state education as perceived by consumers and uses the results to assess the inefficiency of public provision empirical analysis based on data from cyprus suggests that state schooling costs twice the amount households are willing to pay for the implications of this finding for the equality and anti poverty effects of state education are illustrated

expectations in the german hyperinflation reconsidered abstract data on forward foreign exchange rates during the german hyperinflation after world war i provide direct observations of expected changes in the spot rate although levels of these forward rates seem to be efficient predictors of the spot rate the predicted changes in the spot rate are biased downward substantially and do not meet the specific conditions of rationality indeed the bias in the forward rate predictions is similar to bias in adaptive expectations of the spot rate the behavior of the forward rate can be rationalized as a gradual market adaptation to a new regime of volatile and escalating inflation reasonably represented by adaptive expectations the strict definition of rational expectations needs to be broadened to allow for the difficulty of distinguishing between permanent and transitory shocks

carbon tax simulations using a household demand model abstract the main objective of this paper is to analyse consumer response and welfare effects due to changes in energy or environmental policy to achieve this objective we formulate and estimate an econometric model for non durable consumer demand in sweden that utilises micro and macro data in the simulations we consider two revenue neutral scenarios that both imply a doubling of the co2 tax one that returns the revenues in the form of a lower vat and one that subsidise public transport one conclusion from the simulations is that the co2 tax has regional distribution effects in the sense that household living in sparsely populated areas carry a larger share of the tax burden

strikes wages and private information private information models of strikes suggest that the strike is used as an information revealing device by the union in the presence of asymmetrical information a testable prediction of these models is that there is a negative relationship between strikes and the unpredicted component of the wage this paper finds evidence of such a relationship in a large sample of u s labor contracts the real wage falls by about 3 percent after a strike lasting one hundred days copyright 1989 by american economic association

the persistence of the peso problem when policy is noisy abstract the peso problem the market s belief that a discrete event may occur has frequently been blamed for the persistence of on average mistaken forecasts of macroeconomic variables this paper demonstrates how beliefs that a policy process may have switched can induce apparent ex post biased forecasts of exchange rates even after the switch has occurred furthermore during this peso problem period exchange rates may appear to contain a speculative bubble component since they will systematically deviate from the levels implied by observing fundamentals ex post and the conditional variance of exchange rates will exceed the variance implied by observing fundamentals

estimates of price elasticity of demand for urban freeway use with high frequency control variables the case of santiago chile estimates are presented of toll and fuel price elasticities of demand for urban freeway use in santiago chile high frequency toll and vehicle data were collected from four urban freeways for different route segments and times of day estimation was performed using log linear regression models whose explanatory variables were tolls fuel prices city traffic levels and sets of dichotomous variables to control for daily weekly and monthly seasonality city traffic is a high frequency control of the activity level of the city the elasticities to changes in tolls and fuel were all low in absolute value the toll elasticities were below 0 05 for two freeways and 0 16 for the third while for the fourth which had more alternative routes it was 0 47 the fuel price elasticities were also heterogeneous with values of approximately 0 45 for two freeways and 0 21 for the third whereas for the fourth which had the fewest alternatives it was 0 07

using survey data to test standard propositions regarding exchange rate expectations survey data provide a measure of exchange rate expectations superior to the forward rate in that no risk premium interferes we estimate extrapolative adaptive and regressive models of expectations static or random walk expectations and bandwagon expectations are rejected current appreciation generates the expectation of future depreciation because variables other than the contemporaneous spot rate receive weight in comparing expectations to the process governing the spot rate we find statistically significant bias no variable is as ubiquitous in international financial theory and yet as elusive empirically as investors expectations regarding exchange rates in the past expectations have been modeled in an ad hoc way often by using the forward exchange rate there is however a serious problem with using the forward discount as the measure of the expected change in the exchange rate in that the two may not be equal the gap that may separate the forward discount and expected depreciation is generally interpreted as a risk premium most of the large empirical literature testing the unbiasedness of the forward exchange rate for example has found it necessary either arbitrarily to assume away the existence of the risk premium if the aim

a life cycle consistent empirical model of family labour supply using cross section data this paper estimates a utility maximising model of the joint determination of male and female labour supplies using a sample of married couples from the u k family expenditure survey the emphasis is on the estimation of within period preferences that are consistent with intertemporal two stage budgeting under uncertainty however the approach we adopt provides an alternative method of estimating certain aspects of life cycle behaviour to the fixed effects constant approach of heckman and macurdy 1980 macurdy 1981 and browning deaton and irish 1985 moreover it relaxes some of the underlying restrictions that are implicit in these constant models under uncertainty

best nonparametric bounds on demand responses this paper uses revealed preference inequalities to provide the tightest possible best nonparametric bounds on predicted consumer responses to price changes using consumer level data over a finite set of relative price changes these responses are allowed to vary nonparametrically across the income distribution this is achieved by combining the theory of revealed preference with the semiparametric estimation of consumer expansion paths engel curves we label these expansion path based bounds on demand responses as e bounds deviations from revealed preference restrictions are measured by preference perturbations which are shown to usefully characterize taste change and to provide a stochastic environment within which violations of revealed preference inequalities can be assessed

how serious is the aggregation problem an empirical illustration heterogeneity in consumer behaviour may create problems with aggregation across consumers if so we may not be able to make correct inferences about behaviour based on aggregated data however using micro estimates to predict aggregate demand responses to policy changes may also create a bias if not aggregated properly this may sound like a catch 22 situation but it is not as it is possible to calculate both micro and aggregate demand responses based on microdata the size of the aggregation bias is an empirical question in this article we show how to calculate theoretically consistent aggregate demand responses we use both micro and macro data for norwegian household electricity consumption to illustrate the magnitude and direction of different aggregation biases we find considerable aggregation biases in particular when estimating with macro data

a model of speculative efficiency with news error components this paper proposes a theoritical model to assess of news on the spot forward exchange rate relationship and thereby predicts of the impact of news on the exchange rate two types of news are analysed rational expectations type innovations and announcement effects form newspapers by using historical data form a time period which includes the german hyperinflation of the early 1920s an estimate from of the model is derived which is substantially simpler than the version requried using contemporary data preliminary results support the main theoretical predictions but also cast some doubt on a literal interpretation of the exchange rate model plus rational expectations

welfare comparison under exact aggregation new econometric model of aggregate consumer behavior in the united states and to apply this model to the analysis of impacts of alternative economic policies on the welfare of individual consuming units the model incorporates time series data on quantities consumed prices the level and distribution of income and demographic characteristics of the population it also incorporates cross section data on the allocation of consumer expenditures for households with different demographic characteristics our econometric model is based on the theory of exact aggregation developed by lau 1977a c this theory makes it possible to dispense with the notion of a representative consumer in constructing models of aggregate consumer behavior one of the most remarkable implications of lau s theory of exact aggregation is that systems of demand functions for individuals with common demographic characteristics can be recovered uniquely from the system of aggregate demand functions using the individual demand functions we can analyze the impact of economic policy on consumer welfare

the contributions of angus deaton angus deaton was awarded the 2015 sveriges riksbank prize in economic sciences in memory of alfred nobel for his analysis of consumption poverty and welfare this article reviews his contributions to economics

simple tests of distributional effects on macroeconomic equations the presence of distributional effects in macroeconomic equations is shown to coincide with nonlinearity in micro behavioral relationships parameters estimated with aggregate data as in representative agent models contain distributional biases that are not measurable using aggregate data alone tests for distributional effects and other measures of the extent of aggregation problems are derived using distributional data observed over time significant distributional effects are noted for a model of annual aggregate u s commodity expenditure data a static model that accommodates individual heterogeneity is found to be statistically equivalent to a simply dynamic model that accommodates first order autocorrelation

how revealing is revealed preference this lecture address the following two key criticisms of the empirical application of revealed preference theory when the rp conditions do not reject they do not provide precise predictions and when they do reject they do not help characterize the nature of irrationality or the degree direction of changing tastes recent developments in the application of rp theory are shown to have rendered these criticisms unfounded a powerful test of rationality is available that also provides a natural characterization of changing tastes tight bounds on demand responses and on the welfare costs of relative price and tax changes are also available and are shown to work well in practice

changing beliefs and systematic rational forecast errors with evidence from foreign exchange this paper addresses a new interpretation to the appearance in the early 1980s of systematic errors in forecasting the dollar exchange rate following a change in the process of a fundamental variable market participants revise their beliefs about the process using bayes rule since the market does not immediately recognize the change forecast errors are on average wrong during a period when the market is rationally learning for conservative parameter values the learning behavior of the dollar exchange rate in the early 1980s appears consistent with about half of the dollar s underprediction implied by the forward market copyright 1989 by american economic association

consumption and habits evidence from panel data the purpose of this paper is to test for the presence of habit formation in consumption decisions using household panel data we use the test proposed by meghir and weber 1996 and estimate the within period marginal rate of substitution between commodities which is robust to the presence of liquidity constraints to that end we use a spanish panel data set in which households are observed up to eight consecutive quarters this temporal dimension is crucial since it allows us to take into account time invariant unobserved heterogeneity across households fixed effects and therefore to investigate if the relationship between current and past consumption reflects habits or heterogeneity our results confirm the importance of accounting for fixed effects when analyzing intertemporal consumption decisions allowing for time non separabilities once fixed effects are controlled for and a proper set of instruments is used the results yield supporting evidence of habit formation in the demand system of food at home transport and services

bargaining structure and strike activity in this paper the authors examine the nature of the relationship between bargaining structure and strike activity in particular they focus on the implications of the fact that the amount of information revealed by a union s actions depends on the bargaining environment in which it operates the authors demonstrate that a union representing workers of more than one firm will face a greater incentive to reject offers than an independent union this implies that a merger of two unions or the formation of bargaining coalitions will lead to a greater level of strike activity

the effects of male and female labor supply on commodity demands we examine the effects of male and female labor supply on household demands and present a simple and robust test for the separability of commodity demands from labor supply using data on individual households from six years of the uk fes we estimate a demand system for seven goods which includes hours and participation dummies as conditioning variables allowance is made for the possible endogeneity of these conditioning labor supply variables we find that separability is rejected furthermore we present evidence that ignoring the effects of labor supply leads to bias in the parameter estimates

elasticities of transport fuels at times of economic crisis an empirical analysis for spain abstract this paper provides an updated calculation of the price and income responsiveness of spanish consumers of transport fuels with an explicit exploration of the effects of the recent economic crisis we examine separate gasoline and diesel demand models using a set of estimators on a panel of 16 spanish regions over the period 1999 2015 the paper confirms the persistence of low own price elasticities both for diesel and gasoline in the short and long runs it also shows that the crisis of 2008 2013 slightly increased the price elasticity of demand for transport fuels with a higher effect on diesel than on gasoline by contrary the crisis slightly reduced the income elasticity of transport fuel demand given the intensity and length of the economic recession in spain the results of this paper may be useful to anticipate the effects of domestic public policies that impact transport fuel prices as well as to advance some of the potential consequences of crises elsewhere

bargaining theory inflation and cyclical strike activity in manufacturing this paper presents a theoretical and empirical analysis of cyclical movements in strike activity the first part of the paper develops a bargaining model that demonstrates the crucial role of limi

strikes and wages a test of an asymmetric information model this paper describes a simple model of labor disputes based on the hypothesis that unions use strikes to infer the profitability of the firm the model posits the existence of a negatively sloped resistance curve between wages and strike duration in addition it offer a series of predictions relating wage and strike outcomes to changes in the expected profitability of the firm and changes in the alternative opportunities of striking workers these implications are tested using data on wage outcomes strike probabilities and strike durations for a large sample of collective bargaining agreements

longitudinal analysis of strike activity this article presents an empirical study of strike activity in a panel of contract negotiations for some 250 firm and union pairs evidence is presented on two sources of variation in dispute rates changes in the characteristics of the collective bargaining agreement that affect subsequent strike outcomes and the effects of lagged strikes on the incidence and duration of subsequent disputes strike probabilities are significantly affected by the duration and expiration month of the previous agreement dispute rates are also increased by the occurrence of a short strike during the previous negotiations and reduced by the occurrence of a long strike

an investigation into the determinants of u s strike activity this paper outlines the steps involved in constructing a new panel dataset of u s contract negotiations and strike activity this data set has a much broader coverage of firms and unions than micro data sets analyzed to date key findings include the discovery that the variability and not the level of firm profitability affects the probability of a strike personal characteristics of the union workforce also emerge as key determinants of strike activity finally strikes are found to be more likely when the local labor market is tight but less likely when the industry labor market is tight copyright 1986 by american economic association

price and income elasticities of demand for passenger transport fuels in spain implications for public policies abstract the significant increase in passenger transport activity cars experienced by spain and its associated increase in energy consumption have several associated negative aspects including a greater dependence on foreign energy sources and higher ghg emissions therefore reducing the level of transport activity would bring important socioeconomic and environmental benefits the aim of this paper which focuses on energy consumption in the passenger transport is fourfold 1 to provide a diagnostic of energy consumption in the spanish passenger transport system and the related problems 2 to develop a model to calculate price and income elasticities of demand for transport fuel 3 to apply this model to the spanish passenger transport sector 4 to infer policy recommendations derived from the results of the diagnostic and the model it is claimed that in view of those low price elasticities and high income elasticities and if a reduction in the scale of transport activity is deemed socially desirable a combination of instruments is necessary fuel taxes play an important role within this combination apart from their long term effects the low price elasticity of demand for transport fuel would allow the collection of a significant amount of revenues which could eventually be earmarked to encourage reductions in private transport demand and modal shifts with other instruments

what do we learn about consumer demand patterns from micro data the aim of this paper is to assess the importance of using micro level data in the econometric analysis of consumer demand to do this we utilize a time series of repeated cross sections covering some 4 000 households in each of 15 years employing a number of different aggregation procedures we conclude that aggregate data alone are unlikely to produce reliable estimates of structural price and income coefficients however once certain aggregation factors as well as trend and seasonal components are included an aggregate model is not necessarily outperformed across all demand equations in terms of forecasting ability jel d12 c52 c31 the purpose of this paper is to develop a complete consumer demand system based on a time series of individual household data and to use it to measure the biases introduced into the study of consumer de mand behavior when aggregate data are used in place of the appropriate microeco nomic data we assess the suitability of ag gregate data through the impact on income and price elasticities and by evaluating the ability of both micro and aggregate based models to forecast aggregate consumer de mand the biases introduced by the use of aggregate data depend upon the way that household characteristics interact with in come and price effects and on departures of demand systems from linearity we explore the structure of microeconomic demand sys tems and the role of household characteris tics in the behavior of consumer demand both for the light this may shed on the pattern of future demands and for the im plications this behavior has for issues of aggregation consumer demand patterns typically found in micro data sets vary considerably across households with different household characteristics and with different levels of income we model this variability by making intercept and slope parameters in the budget share equations of our demand sys tem depend on household characteristics and by allowing for nonlinear total log expenditure terms in fact in theory consistent demand systems it is total ex penditure rather than disposable income that is allocated across goods we find that this general framework leads to a well specified data coherent demand system which is a quadratic extension of the popu lar almost ideal model of angus s deaton and john muellbauer 1980 the micro level estimates are shown to be sensitive to the treatment of endogeneity of total expen diture and to the specification of interaction terms with household characteristics in ad dition this specification is also shown to possess many attractive features for the evaluation of aggregate models

estimation of complete demand systems from household budget data the linear and quadratic expenditure systems in this paper we explore two issues in empirical demand analysis the estimation of complete systems of demand equations using household budget data section i and the incorporation of demographic characteristics into such systems section ii although there are numerous studies which use time series data to estimate complete demand systems and many which estimate engel curves from household budget data there are virtually none which combine budget data from different periods to estimate complete systems since each budget study corresponds to a single price situation one might conjecture that estimation of complete systems would not be possible unless budget studies were available from a large number of periods this is incorrect in section i we argue that interesting complete demand systems can be estimated from a small number of budget studies despite the limited price variability represented in such data to demonstrate this we use budget study data for two periods to estimate a pair of related demand systems the familiar linear expenditure system les and a quadratic expenditure system qes a generalization of les in which the demand equations are quadratic in total expenditure the inclusion of demographic variables in the analysis of household consumption patterns is desirable because there are likely to be systematic differences in the consumption behavior of households with different demographic characteristics but the effects of demographic characteristics have seldom been studied within the framework of complete demand systems in section ii we propose translating as a general method for incorporating demographic variables into complete systems of demand equations this method has not previously been discussed as a general technique for bringing demographic variables into demand systems although it has been employed in several studies to improve the estimates of the les and the qes presented in section i we reestimate these two systems using translating to incorporate family size

hyperinflation the exchange rate and endogenous money post world war i germany revisited abstract we re examine the interaction of domestic and external factors in the german hyperinflation by extending frenkel s monetary model of the exchange rate to incorporate 1 endogeneity of the money supply with respect to government debt expected inflation and money wages 2 the direct impact of exchange rate depreciation on the domestic price level and 3 endogenous wage determination four equation estimates support each extension of the monetary model it appears that government deficit finance the collapse of the exchange rate and the monetary transmission of the wage price spiral were all crucial contributors to the price explosion