the impact of private and public feedback on worker performance evidence from the lab previous empirical studies have demonstrated the positive incentive effects of private performance feedback as well as public recognition on work performance in our laboratory experiments we directly compare these two feedback schemes moreover we compare their incentive effects across two real effort tasks that differ in regard to how interesting the subjects perceive working on them we find that both feedback schemes lead to performance increases compared to the tasks respective control treatments in particular subjects ability and a positive interim feedback enhance performance competitive preferences significantly affect performance only in the less enjoyable and challenging task jel c9 j3 m1

an empirical investigation of alternative approaches to estimating the equilibrium demand for housing two approaches to estimating the desired or equilibrium housing demand parameters have been utilized in recent literature one approach commonly referred to as the conventional model assumes that households continuously consume their temporal equilibrium housing services where a temporal equilibrium is defined with respect to the household s current economic and demographic characteristics based upon this assumption conventional demand studies have employed random samples which include a majority of households that have not recently moved see lee and kong 6 or carliner 2 a problem with this approach is its failure to recognize moving costs households must pay to alter their housing service consumption the existence of moving costs suggests that households may not respond rapidly to changes in their desired consumption of housing but instead remain in their dwelling unit until the cost incurred from consuming the non equilibrium level of services exceeds the cost of relocating if so demand samples employed in conventional studies may include a significant number of disequilibrium observations this causes two problems first there exist measurement errors in independent variables that have changed since the household was last in equilibrium second the true equilibrium effect of an independent variable may be incorrectly estimated due to its correlation with either the occurrence of disequilibrium or the length of the housing adjustment lag the second approach to estimating the equilibrium parameters attempts to minimize these problems by restricting the sample to households that have recently moved see hanushek and quigley 3 or aaron l

estimation of economies of scale in banking using a generalized functional form this paper addresses four issues that arise in the estimation of economies of scale in the commercial banking industry first a common assumption underlying many of the studies of economies of scale in banking is the assumption of a cobb douglas production function with exogenous input prices the use of a cobb douglas production function facilitates the estimation of the output elasticity of cost however there does not appear to be any other reason a priori for such an assumption this paper utilizes a box cox hereafter b c generalized functional form methodology to directly test the assumption of an underlying cobb douglas production function second if the assumption of a cobb douglas production function is inappropriate as a description of the production process of the financial firm estimates of the output elasticity may be biased the sensitivity of the estimates of this elasticity to the choice of functional form can also be examined through the use of a generalized functional form methodology third no general consensus has been reached regarding the appropriate definition of bank output thus a diversity of measures of bank output have been employed in previous estimates of economies of scale in banking the sensitivity of the estimated output elasticity of cost to the selection of several alternative measures of output is examined through the use of the generalized functional form methodology finally the b c estimates of the cost function for commercial banks can be used

status in markets this project tests for the effect of social status in a laboratory experimental market we consider a special box design market in which a vertical overlap in supply and demand ensure that there are multiple equilibrium prices we manipulate the relative social status of our subjects by awarding high status to a subset of the group based on one of two procedures in the first a subject s score on a trivia quiz determines his or her status in another subjects are assigned randomly to a higher status or lower status group in both treatments we find that average prices are higher in markets where higher status sellers face lowerstatus buyers and lower when buyers have higher status than sellers across all sessions the higher status side of the market captures a greater share of the surplus earning significantly more than their lower status counterparts

the social basis of interdependent preferences abstract most economists are sympathetic to the idea that concerns for relative position are an important aspect of many economic problems there has traditionally been a reluctance to include such concerns primarily because models that included them often allow such a broad range of behavior that there are few if any restrictions on equilibrium behavior and hence such models would have little or no predictive power in this paper we discuss how reduced form models may naturally give rise to utility functions that depend in part on relative standing there are several advantages of modelling concern for relative standing in reduced form utility functions even when there is no similar concern in the deep preferences it provides structure and constraints on the way that relative standing affects utility and further it can yield testable implications about the way that changes in the underlying environment affect the concern for relative standing we discuss the advantages and disadvantages of modelling social concerns in this way and provide examples that illustrate how concerns for relative standing can affect savings investment and labor choice decisions

a frontier approach to measuring the effect of market discrimination a housing illustration one area of particular interest to analysts and policymakers concerned with poverty and discrimination has been the housing market since world war ii housing has been a focus for antipoverty policies and therefore an area in which discrimination could not be tolerated however even though the civil rights act of 1968 expressly prohibits the offering of housing to nonwhites at terms that are different than those afforded whites it has been clearly demonstrated that discrimination continues to be a real problem in both the rental and owner occupied segments of the housing market 17 as james heilbrun points out in his summary of the 1977 survey of housing market practices conducted by the department of housing and urban development

length of residence discounts and rental housing demand theory and evidence the improved availability of crosssectional household level data over the past decade has led to substantive improvements in estimates of housing demand better techniques have been developed to measure permanent income and housing price to determine proper functional forms for demand equations and to consider the endogenous nature of the mobility move non move and or the tenure own rent decision this paper examines two rental housing market features which have been alluded to elsewhere but which have not received systematic attention first many analysts have estimated substantial length of residence discounts for example merrill 1977 lowery 1980 follain and malpezzi 1980 downs 1980 and marshall and guasch 1983 35778 these discounts are consistent with several explanations including turnover minimization by landlords screening of good tenants or sample truncation due to random error in the setting of rental prices irrespective of the source they imply that any crosssection sample of tenants will indicate rental prices that decrease all else equal with length of residence their pervasive nature suggests that they will be expected by consumers who will act accordingly in housing demand decisions this consumer optimization is the second feature of the analysis in what might be termed the equilibrium disequilibrium question the substantial search and moving costs that often accompany a housing purchase suggest that the random cross sectional

the income elasticity of demand for single family owner occupied housing an empirical reconciliation abstract past studies estimate the permanent income elasticity of demand for single family owner occupied housing to range from 0 14 to 1 5 a range much too broad to be of any use for solving policy questions data from the panel study of income dynamics are used herein to test the sensitivity of this income elasticity to several factors the results suggest that differences in sample population with respect to duration of housing tenure explain a large portion of the variation in the estimates of this elasticity the paper concludes that for short run applications the probable value of this elasticity is approximately 0 70 and for long run applications the probable value of this elasticity might best be taken as approximately 1 00

property taxation and the demand for housing an econometric analysis abstract there is disagreement among economists regarding the effect of a local increase in property taxation on the housing market in defining the price of housing services studies of the demand for housing have treated the property tax exclusively as an excise tax on housing consumption two recent theoretical developments suggest this is a misrepresentation of the tax one theory holds that the excise effects of property taxation may be shifted backward to the factors employed in the production of housing the other theory concludes that the property tax is not an excise but rather serves as an efficient price for local public services to investigate these hypotheses data from the annual housing survey were employed to estimate a housing demand model which included the net effective property tax rate among the set of independent variables in addition to revealing the property tax housing demand relationship the model provides more reliable estimates of income and price elasticities by eliminating specification errors found in previous studies results indicate that the property tax reduces the housing consumption of central city homeowners but does not distort the suburban housing market

moving costs and housing demand abstract several recent housing demand studies use samples of recent movers based on the presumption that only such households are on their demand curves we find contrary to this presumption that the absolute values of the residuals from a standard housing demand equation fall with duration in the present dwelling this shows that the correlation pattern between housing and the explanatory variables at the moving date does not correspond to the average pattern over a typical housing spell we interpret this as evidence of forward looking behavior and show how it may be handled in econometric work with cross section samples

occupational mobility and the distribution of occupational success among young men interpretation of the distribution of occupational success depends crucially on an understanding of the process of mobility if the holders of low paying jobs this year are just as likely as anyone else to hold good jobs next year then the lower tail of the earnings distribution is not a matter of great social concern further if the distribution of success is primarily determined by a random process the prospects for a significant reduction in the inequality of earnings are unfavorable on the other hand high mobility in the short run may conceal systematic stratification of the labor force it may be that the same individuals spend most of their time in the worst jobs if so luck and random events may play a small role in the distribution of well being inequality may be a major issue and the elimination of stratification may hold out the promise of an important reduction in inequality simple tabulation of distributions of success and of mobility among categories of success cannot answer the basic question of the role of stratification in this paper we develop a model and statistical method for studying mobility and relating it to characteristics upon which stratification may be based our study rests on annual interviews conducted from 1966 through 1969 with about 3 000 white males born between 1942 and 1952 1 we find that mobility is closely related to personal characteristics especially intelligence and education men with high iqs and extensive education are more likely to move to high paying jobs and are more likely to remain in them nevertheless random events dominate the distribution of occupational success in the short run our results strongly support the finding of christopher jencks and his collaborators that redistribution of the determinants of earnings would do almost nothing to reduce the observed inequality of annual earnings

efficient status seeking externalities and the evolution of status games abstract status seeking games are games in which an individual s utility is determined by his relative expenditure on status seeking activities rather than his absolute consumption there are a number of parallels between status seeking and rent seeking activities for example a tendency for pareto excessive private investment however many status seeking activities differ from rent seeking activities insofar as they generate significant benefits to individuals not actively involved in the game given an array of more or less productive status seeking games it is likely that relatively efficient status conferring mechanisms will tend to displace less efficient ones

tenure choice and expected mobility a synthesis abstract this study employs a joint logit probability model to estimate the effects of a vector of independent variables on the household s current tenure choice and expected mobility which are hypothesized to be simultaneously determined in the empirical analysis it was found that the coefficient on the endogenous variables tenure choice and expected mobility is the most highly significant of all the coefficients estimated in addition in previous analyses the age of the household head has always exhibited a highly significant positive effect on the probability of ownership however in this analysis it is demonstrated that this age variable was acting as a proxy for the expected mobility and wealth of the household

dynamic modeling of housing tenure choice abstract in this study a dynamic random effects simultaneous equation model is developed to model household tenure choice decision the novelty of the study lies in accounting for the dynamic aspects of housing tenure mode namely a move is prerequisite to a change in tenure mode and they are determined jointly expected mobility and tenure choice are interdependent decisions and tenure choice may be state dependent i e taste for ownership acquired or reinforced through the experience of being an owner in addition unobservable household heterogeneity is controlled by imposing a random effects specification the estimation is based on panel data from the psid using the method of maximum simulated likelihood

the impact of dwelling quality and neighbourhood quality on the estimation of the income elasticity of demand for rental housing in jeddah saudi arabia this study provides new evidence on the estimation of the income elasticity of demand for rental housing based on individual interviews with 405 households it looks specifically at the impact of both dwelling and neighbourhood quality aspects on the evaluation of this elasticity the study finds that the income elasticity of demand for rental housing in jeddah is 0 519 when the sample is restricted to include saudi households only the elasticity estimate is 0 465 these values are within the range of previous empirical estimates the results also indicate that for a range of various quality measures the income elasticity is estimated to be less than unity but our suggested quality aspects were found to exert sizeable differences on the magnitude of this elasticity for the full sample from 0 351 to 0 802 as well as for the saudi sample from 0 382 to 0 603 stratified income elasticity estimates for saudis were also found to be generally less than those for the whole sample

tenure choice and housing demand in japan abstract this paper reports the results of an empirical analysis of tenure choice and housing demand that makes use of household level data from japan the paper finds that the price and permanent income elasticities of demand for owneroccupied housing are approximately 0 8 and 1 4 respectively and that these estimates are highly robust the price elasticity estimate is comparable to those for other countries but the income elasticity estimate is much higher possibly because of the greater accuracy of the income variable it is also found that the tenure choice and housing demand decisions are apparently not made simultaneously

intra urban mobility migration and tenure choice this analysis develops a model in which for the first time households mobility decisions are separated into intra urban movements and migrations these two mobility decisions and the households tenure own rent choice are estimated as part of a multinomial logit framework and are found to be jointly determined the literature suggests that the intra urban mobility and migration decisions are motivated by quite different factors consequently by separating the two choices for the purpose of estimation each equation can be specified more correctly in addition variables which affect migration can be shown to have an impact on intra urban mobility and tenure choice which would otherwise be ignored copyright 1991 by mit press

housing demand and disequilibrium abstract researchers have recently begun relying heavily on samples of recent movers to estimate housing demand parameters estimates from mover equilibrium and disequilibrium samples are compared to determine whether significant differences exist the results suggest that income elasticities are not affected by the sample distinctions but demographic effects vary across the different subsamples

contests for ranks experimental evidence we use experiments to analyze multiple dimensions of the relationship between rank incentives and individual performance in our experiment i rank is defined as subjects relative position in their group based on their performance in a real effort task and ii subjects earnings are independent of their performance we find that any rank incentive improves mean performance than no rank incentive and this result is independent of the group size in the large group the mean performance increases strictly in all except at the highest rank incentive but in the small group the mean performance increases weakly in rank incentives finally the mean performance is significantly higher in the large than in the small group because of a higher prestige effect in additional treatments in which we do not reveal the identity of the statusprize winners we find that average performance is identical to that in the baseline treatment without any status prizes the last result signifies the important role that public revelation plays to enhance the strength of status the results are important for managerial practices

social network structure and status competition in status competition studies the utility of heterogeneous individuals typically depends on an economy wide average indicator of status in our model emulative and jealous agents are embedded in an exogenous network where agent specific reference group is determined by the direct link emanating from the agent similarly to ghiglino and goyal 2010 but in a somewhat different framework we show that individual consumption is proportional to the agent s outbound katz bonacich network centrality measure and equilibrium is generally inefficient more important the negative externality associated with each agent depends on her inbound centrality measure the conspicuousness index a tax based on this index combined with a uniform lump sum transfer attains efficiency

moving and improving strategies for attaining housing equilibrium the concept of equilibrium consumption is central to much housing market analysis yet analysts must contend with the likelihood that many housing consumers are not at an exact equilibrium level of

an analysis of the housing market in the netherlands housing research in the netherlands has long been dominated by demographic orientated research this was quite logical because of the distinctive demographic development of the netherlands relative to other west european countries the rate of increase in population in the period 1960 1981 was among the highest in western europe economic influences on housing consumption have therefore long been neglected in the 1980s a period with declining incomes and a government policy to increase rents suddenly economic influences came into the picture housing demand tends to diminish and the traditional housing shortage since the second world war seems to disappear rising rents can even lead to rising vacancy rates because demand diminishes and supply increases because of higher rates of return the reverse of the consequences of rent control this article presents a recent econometric analysis of the housing market in the netherlands and places the results in the context of the broad and sometimes confusing

status the distribution of wealth private and social attitudes to risk this paper supposes an individual cares about his her own wealth not only directly but also via the relative standing that this wealth induces the implications for risk taking are investigated in particular such a model provides a natural explanation of the concave convex concave utility described by friedman and savage however there are a number of key differences between the present model and any model based on own wealth alone for example an equilibrium wealth distribution here may have a middle class further the status interaction involves an externality and an equilibrium wealth distribution may be pareto inefficient but also about the implied relative standing in the distribution of wealth has a long but checkered history an early exponent of such ideas was of course veblen 1899 it is indeed a notion which most economists reject albeit usually without explicit comment a notable and articulate exception however is frank 1985 for example see also the references frank cites on pp 33 34 it is however a notion with substantial intuitive appeal and it seems useful to ascertain its consequences before coming to a final judgement as to its merits the present paper is concerned with deriving the consequences of such valuation of status for risk taking what seems to be the sharpest possible model is adopted here this assumes that what is essentially ordinal rank in the wealth distribution enters von neumann morgenstern utility as an argument in addi tion to wealth itself thus higher wealth increases utility not only directly but also indirectly via higher status in the interests of both simplicity and drama it is typically assumed here that all individuals have identical utility functions which are concave in wealth but convex in status section 2 discusses how the model provides a natural explanation of the fundamental phenomenon addressed by friedman and savage 1948 that individuals may simultaneously purchase insurance and participate in lotteries although each individual here has a utility function which is concave in wealth itself utility can nevertheless be convex in wealth over some range when the indirect effect via status is included this effect is enhanced by the convexity of utility in status but will follow in any case if increasing wealth entails moving up in status much more rapidly than losing wealth entails moving down it is shown

veblen effects in a theory of conspicuous consumption the authors examine conditions under which veblen effects arise from the desire to achieve social status by signaling wealth through conspicuous consumption while veblen effects cannot ordinarily arise when preferences satisfy a single crossing property they may emerge when this property fails in that case budget brands are priced at marginal cost while luxury brands though not intrinsically superior are sold at higher prices to consumers seeking to advertise wealth luxury brands earn strictly positive profits under conditions that would with standard formulations of preferences yield marginal cost pricing the authors explore factors that induce veblen effects and they investigate policy implications copyright 1996 by american economic association