unobserved heterogeneity in stochastic cost frontier models this paper applies a number of stochastic cost frontier models to a panel data set and compares their ability to distinguish unobserved heterogeneity from inefficiency variation among firms the main focus is on greene s 2005 panel data model that incorporates firm specific effects in a stochastic frontier framework in cases where the unobserved heterogeneity is correlated with explanatory variables while the random effects estimators can be biased the fixed effects model may overestimate inefficiency in line with mundlak a simple method is proposed to include such correlations in random effects specification the sample includes 36 swiss nursing homes operating from 1993 to 2001 the results suggest that the proposed specification can avoid the inconsistency problem while keeping the inefficiency estimates unaffected

crime rates and local labor market opportunities in the united states 1979 1997 the labor market prospects of young unskilled men fell dramatically in the 1980s and improved in the 1990s crime rates show a reverse pattern increasing during the 1980s and falling in the 1990s because young unskilled men commit most crime this paper seeks to establish a causal relationship between the two trends previous work on the relationship between labor markets and crime focused mainly on the relationship between the unemployment rate and crime and found inconclusive results in contrast this paper examines the impact of both wages and unemployment on crime and uses instrumental variables to establish causality we conclude that both wages and unemployment are significantly related to crime but that wages played a larger role in the crime trends over the last few decades these results are robust to the inclusion of deterrence variables controls for simultaneity and controlling for individual and family characteristics

identifying the impacts of rail transit stations on residential property values abstract prior studies that have empirically investigated the impact of rail station proximity on property values have not fully investigated the factors that may account for this relationship stations may raise the value of nearby properties by reducing commuting costs or by attracting retail activity to the neighborhood possibly countering these positive effects are negative externalities emitted by stations and the access to neighborhoods that stations provide to criminals this paper sorts out these effects by presenting the results from estimating a hedonic price model and auxiliary models for neighborhood crime and retail activity results show that all four effects play a role in defining the relationship between property values and rail stations but the relative importance of these effects varies with distance from downtown and the median income of the neighborhood

the costs of urban property crime this paper estimates the impact of recorded domestic property crime on property prices in the london area crimes in the criminal damage category have a significant negative impact on prices a one tenth standard deviation decrease in the local density of criminal damage adds 1 to the price of an average inner london property burglaries have no measurable impact on prices even after allowing for the potential dependence of burglary rates on unobserved property characteristics one explanation we offer here is that vandalism graffiti and other forms of criminal damage motivate fear of crime in the community and may be taken as signals or symptoms of community instability and neighbourhood deterioration in general

male unemployment and crime in england and wales this paper employs county level data to investigate the relationship between crime and male adult and youth unemployment in britain our results indicate that there is a systematic positive relationship between most crime and male unemployment regardless of age

firm size and efficiency in the german mechanical engineering industry research usually finds a positive size efficiency relationship but few studies focus on sectors dominated by small and medium sized firms smes this paper fills this gap by analyzing this relationship in the german mechanical engineering industry sector which is both successful and increasingly dominated by smes the analysis using a large and representative dataset finds that small and large firms are on average the most efficient ones while medium sized firms have on average the greatest inefficiencies thus the size efficiency relationship is u shaped rather than monotonically increasing additionally the analysis finds that companies with active owner s are significantly more efficient and that capital firms are less efficient than firms with personally liable owners being located in either east or west germany has no effect

unemployment and crime is there a connection a panel of swedish counties over the years 1988 1999 is used to study the effects of unemployment on property crime rates the period under study is characterized by turbulence in the labor market the variation in unemployment rates was unprecedented in the latter part of the century hence the data provide a unique opportunity to examine unemployment effects according to the theory of economics of crime increased unemployment rates lead to higher property crime rates a fixed effects model is estimated to investigate this hypothesis the model includes time and county specific effects and a number of economic and socio demographic variables to control for unobservables and covariates the results show that unemployment had a positive and significant effect on some property crimes burglary car theft and bike theft

measuring the impact of crime on house prices this paper uses data on over 2800 house sales in jacksonville fl to estimate the impact of crime on house prices a gis programme is used to develop neighbourhood characteristics that are unique t

is there a compensating wage differential for high crime levels first evidence from europe abstract this paper investigates whether high regional crime levels lead to a compensating wage differential paid by firms in the respective region using data from german social security records official police statistics and official statistics for 2003 2006 i consider both violent and non violent crimes and use three way error components estimators to control for individual and regional heterogeneity the findings suggest that wages are practically unrelated to changes in crime rates this result is robust over a wide range of subgroups there is however some evidence that crime rates influence land prices

vertical integration and efficiency an application to the italian machine tool industry this paper analyzes the relationship between firm efficiency and vertical integration in the italian machine tool mt industry the link may really be the result of a two way causality the effect may run from productive efficiency to the type of vertical organization i e vertical integration or outsourcing as a self selection mechanism or an effect from the organizational mode to the firm s performance may also be at work this relationship is empirically investigated in a novel panel dataset comprising about 500 italian mt builders implementing two equations and instrumental variables for the two directions of causality the evidence clearly indicates the self selection mechanism of the most efficient firms in vertically integrated structures while an effect from the organizational mode to the firm s efficiency is not supported

technical efficiency in the italian performing arts companies this paper evaluates the determinants of firms technical efficiency in the italian performing arts pa sector by estimating a stochastic production frontier for an unbalanced panel of 107 firms over the period 2005 2012 the panel data setting allows us to control for both unobserved and observed heterogeneity of pa firms reaching several interesting and robust findings firstly it finds that the italian pa firms are scale inefficient as they generally operate in either an increasing or decreasing returns to scale landscape this result is reinforced by the fact that the smaller firms 10 49 employees are the most technically efficient firm size class secondly this research proves that the efficiency score is on average 66 demonstrating that pa firms output could be substantially increased without the use of new inputs thirdly it confirms that the quality matters and competences increase the efficiency in the sector finally the environmental factors especially the quality of institutions have a strong impact on technical efficiency of pa firms supporting that regional differences also exist in this sector

new estimates of quality of life in urban areas implicit markets capture compensation for intraurban and interregional differe nces in amenities and yield differences in housing prices and wages these pecuniary differences become preference based weights in a qual ity of life index hedonic equations are estimated using microdata fr om the 1980 census and assembled county based amenity data on climati c environmental and urban conditions ranking of 253 urban counties reveals substantial variation within as well as among the 185 urba n areas the quality of life differences across counties within one s msa is almost one half of the difference between the top and bottom ranked counties in the nation copyright 1988 by american economic association

identifying the effect of unemployment on crime abstract in this paper we analyze the relationship between unemployment and crime using u s state data we estimate the effect of unemployment on the rates of seven felony offenses we control extensively for state level demographic and economic factors and estimate specifications that include state specific time trends state effects and year effects in addition we use prime defense contracts and a state specific measure of exposure to oil shocks as instruments for unemployment rates we find significantly positive effects of unemployment on property crime rates that are stable across model specifications our estimates suggest that a substantial portion of the decline in property crime rates during the 1990s is attributable to the decline in the unemployment rate the evidence for violent crime is considerably weaker however a closer analysis of the violent crime of rape yields some evidence that the employment prospects of males are weakly related to state rape rates

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

wages rents and amenities differences among workers and regions what explains persistent regional earnings differences this paper argues that regional differences in amenities can account for the wage differences in contrast cost of living variations do not account for wage differences but actually exacerbate them this conclusion results from a model in which variations in rents and wages are equalizing differences for amenity differences empirical results are consistent with the model

estimates of the impact of crime risk on property values from megan s laws abstract we estimate the willingness to pay for reductions in crime risk using the location and move in dates of sex offenders we find significant effects of sex offenders locations that are geographically localized house prices within 0 1 miles of a sex offender fall by 4 percent on average we then use this finding to estimate the costs to victims of sexual offenses and find costs of over 1 million per victim far greater than previous estimates however we cannot reject the alternative hypotheses that individuals overestimate risks posed by offenders or that living near an offender poses significant costs exclusive of crime risk jel k42 r23 r31

the link between crime risk and property prices in england and wales evidence from street level data this paper uses street level data on property sales and crime rates for england and wales to investigate compensating differentials for crime risk my identification strategy relies on the use of non parametric regional time trends on various levels of spatial aggregation as well as various fixed effects for streets and wider areas to control for unobserved amenities and regional economic conditions the data comes from transaction data collected by the land registry and recently published crime maps for the whole of the uk my estimates which are robust to a range of sensible specification changes suggest that each case of anti social behaviour per ten population in the same street leads to an approximately 0 6 0 8 drop in property prices while a corresponding increase in violent crime decreases prices by roughly 0 6 1 6 and a corresponding increase in non violent crime by about 0 2 0 4 the majority of estimates are at the upper end of these intervals estimates for robbery burglary and vehicle c

frontier estimation and firm specific inefficiency measures in the presence of heteroscedasticity the purpose of this article is to illustrate a straightforward and useful method for addressing the problem of heteroscedasticity in the estimation of frontiers a heteroscedastic cost frontier model is developed and estimated using bank cost data similar to that used by ferrier and lovell our results show dramatic changes in the estimated cost frontier and in the inefficiency measures when accounting for heteroscedasticity in the estimation process we find that the rankings of firms by their inefficiency measures is affected markedly by the correction for heteroscedasticity but not by alternative distributional assumptions about the one sided error term

compensating differences and interregional wage differentials interregional differences in average wages and earnings have been observed particularly in the north and south of the united states ever since the mid 1800s that observation has motivated several empirical attempts to determine the source of those differentials measured both in nominal and real terms and to explain why they have been maintained over time the general conclusion reached by the overwhelming majority of these studies is that the labor market has not eliminated these wage differentials even in the face of substantial interregional migration this result has at least two alternative interpretations first it would appear to contradict the theory of compensating differences as applied to the labor market thaler and rosen 1975 which stresses that under the assumptions of perfect information free geographic and intersectoral labor mobility and homogeneous consumer tastes the nominal wage rates of workers who have similar human capital characteristics live and work in similar environments and experience similar living costs are driven to equality second this result may only reflect an aggregation error in other words there may be several types of labor that are each paid different equilibrium wage rates and comprise different percentages of the workforce in each region even if the real wage paid to each class of workers is interregionally invariant a situation that instead would support the theory of compensating differences failure to distinguish accurately between labor types could produce the illusion of a wage differential this paper considers the two alternative interpretations given above as to why interregional wage differentials might exist hedonic real wage equations are estimated for four regions of the united states using observations on individual household heads drawn from the 1976 panel study in income dynamics psid this sample is of interest because the 1976 psid data contain unusually detailed measures of education work experience and occupation as well as information on workplace and job characteristics thus a more complete specification of the wage equation is permitted and the possibility of aggregation error is reduced particularly in comparison with other interregional wage differential studies several of these studies for example have been based on aggregate data from the census of manufactures fuchs and perlman 1960 gallaway 1963 scully 1969 and coelho and ghali 1971 which provide no direct measurements on the human capital of workers the remainder of the discussion is organized into three sections section ii specifies the wage equation and describes the psid data section iii then reports empirical results which are consistent with the findings based on aggregate data of bellante 1979 and coelho and ghali 1971 in that they support the theory of compensating differences more specifically for full time workers the rewards to attributes relevant in determining real wages apparently are interregionally invariant however because this result conflicts with most previous research on interregional wage differentials based on aggregate data and virtually all such research based on microdata welch 1966 hanoch 1967 hanushek 1973 1981 hirsch 1978 and sahling and smith 1983 a number of empirical comparisons are made between the present study and the approaches taken by other investigators conclusions and implications are drawn out in section iv

estimation of a doubly heteroscedastic stochastic frontier cost function this article extends the results obtained by caudill ford and cropper in estimating and testing stochastic frontier cost functions in the presence of heteroscedastic inefficiency using cross section data it suggests the estimation of the model under the assumption of heteroscedasticity in both random terms this avoids any possible misspecification bias and the use of incorrect tests the same data as used by caudill et al supports the new specification moreover we find that firm specific inefficiency measures are extremely sensitive to the proposed correction for heteroscedasticity

the measurement and sources of technical inefficiency in the indonesian weaving industry production function models are estimated with a time series of cross section data on indonesian weaving establishments the sources of technical inefficiency are investigated three firm attributes are identified as being potentially related to firm efhciency tbey are firm ownership age and size the importance of these attributes as sources of inefficiency in the indonesian weaving industry is investigated and the implications of the find ings discussed

crime and the timing of work abstract two striking facts describe work timing in the united states a lower propensity to work evenings and nights in large metropolitan areas and a secular decline in such work since 1973 one explanation is higher and possibly increasing crime in large areas i link current population survey data on work timing to fbi crime reports neither fact is explained by changes in nor inter area differences in crime rates but higher homicide rates do reduce such work this reduction implicitly costs the economy between 4 and 10 billion this negative externality illustrates a larger class of previously unmeasured costs of social pathologies

the effect of changes in firm diversification on union wage settlements for 15 major u s industrial firms a well known argument is that conglomerate firms may exploit their ability to cross subsidize price wars for the purpose of engaging in predatory pricing a similar argument advanced by organized labor is that conglomerate firms can often outlast unions during strikes because they can cross subsidize strike costs indefinitely 1 15 17 this cross subsidizing of strike costs labor argues greatly reduces the effectiveness of striking as a bargaining weapon resulting in lower wage settlements for the union another fear articulated by organized labor is that conglomerates can simply eliminate divisions with troublesome unions since this threat is perceived by most unions as credible it may further increase the bargaining power of the firm 19 while the opportunity to cross subsidize strike costs or to eliminate troublesome divisions clearly exists for many conglomerates there is no empirical evidence that they engage in these activities or that they enjoy lower wage settlements 12 15 this paper tests the proposition that diversification efforts by the firm can lead to lower wage settlements unlike earlier studies that examine the effect of a firm s conglomerate nature on wage levels this paper examines how recent changes in the firm s level of diversification may affect wage settlements the remainder of the paper is outlined as follows in section i several key aspects of organized labor s argument are discussed and a formal testable hypothesis is proposed section ii proposes a simple empirical test of the hypothesis section iii discusses the data and the construction of key variables section iv reports and interprets the results of the regressions section v concludes the paper