section 337 and the protection of intellectual property in the united states the complainants and the impact under section 337 of the tariff act of 1930 a firm can challenge imports that infringe its u s intellectual property rights such as patents copyrights and trademarks based on publicly available information this paper examines the characteristics of firms that file complaints under section 337 and also evaluates how firms are affected by the outcomes we find a complaining firm compared with peer firms in the same industry is typically larger produces a more diverse range of products has invested more in intangibles and is no less profitable a finding of no violation significantly depresses the filing firm s profits compared to peers section 337 appears to protect innovators but its effectiveness in promoting more innovation cannot be demonstrated so clearly copyright 1996 by mit press

do r d tax credits work evidence from a panel of countries 1979 1997 this paper examines the impact of fiscal incentives on the level of r d investment an econometric model of r d investment is estimated using a new panel of data on tax changes and r d spending in nine oecd countries over a 19 year period 1979 1997 we find evidence that tax incentives are effective in increasing r d intensity this is true even after allowing for permanent country specific characteristics world macro shocks and other policy influences we estimate that a 10 fall in the cost of r d stimulates just over a 1 rise in the level of r d in the short run and just under a 10 rise in r d in the long run

public goods as characteristics of non market commodities in benefit cost analysis it is useful to model public goods as the quality of privately consumed nonmarketed goods this strategy is often pursued in valuing environmental amenities the theoretical foundations of this model have not been fully developed in this paper comparative statics results are derived for quality changes of nonmarket goods the results reveal some common misconceptions about welfare measurement of quality changes conditions are presented for a quality induced change in the marshallian consumer surplus of the nonmarket good to approximate the true compensated welfare measure the conditions are equally necessary for obtaining exact welfare measures copyright 1993 by royal economic society

partial identification of amenity demand functions this paper presents a new hedonic framework for reduced form estimation of the demand for spatially delineated nonmarket amenities we begin from a conventional model of market equilibrium where an amenity is conveyed to homeowners by virtue of their residential location choices different housing markets may have different hedonic price functions due to variation across markets in the joint distribution of preferences income regulations and technology in this setting taste based sorting within and across markets confounds point identification of reduced form descriptions for amenity demand curves however we demonstrate that basic knowledge of the sorting process is sufficient to construct instruments that identify bounds on demand curves bounds on demand curves can be translated into ranges of welfare measures for non marginal changes in amenities we find these ranges to be potentially informative in a demonstrative application to evaluating the benefits of improved lake water clarity in the northeast

accelerated depreciation and the efficacy of temporary fiscal policy implications for an inflationary economy abstract the effect on investment of temporary tax rate changes depends on the age profile of depreciation deductions if the depreciation allowance schedule is accelerated then temporary cuts in the corporate tax rate could reduce investment inflation causes the age profile of real depreciation deductions to become accelerated and thus could make temporary tax cuts have a contractionary effect on investment two currently proposed reforms are shown to exacerbate this effect under each of these proposals temporary tax cuts are likely to have opposite effects on investment in short lived and long lived capital thereby complicating the conduct of countercyclical fiscal policy

the perceived returns to education and the demand for schooling economists emphasize the link between market returns to education and investments in schooling though many studies estimate these returns with earnings data it is the perceived returns that affect schooling decisions and these perceptions may be inaccurate using survey data for eighth grade boys in the dominican republic we find that the perceived returns to secondary school are extremely low despite high measured returns students at randomly selected schools given information on the higher measured returns completed on average 0 20 0 35 more years of school over the next four years than those who were not

taxation and housing old questions new answers this paper sketches how the tax reforms of the 1980s affected the incentives and distortions associated with tax policy toward housing markets there are three principal conclusions 1 reductions in marginal tax rates particularly for high income households reduced the tax induced distortion in the user cost of owner occupied housing this lowered the deadweight losses associated with the favorable tax treatment of homeownership 2 the increase in the standard deduction in the tax reform act of 1986 tra86 removed several million middle income homeowners who previously itemized from the ranks of itemizers for these households tra86 raised the marginal cost of owner occupied housing these changes also exacerbated the regressive nature of the mortgage interest subsidy in 1988 more than half of the tax losses associated with mortgage interest deductions accrued to the 8 of taxpayers with the highest economic incomes 3 tra86 reduced incentives for rental housing investment contributing to the decline in new multifamily housing starts from 500 000 per year in 1985 to less than 150 000 in 1991 in the long run these policies will lead to higher rents this abstract was borrowed from another version of this item

social cost of environmental quality regulations a general equilibrium analysis the use of cost benefit analysis by federal regulatory agencies has expanded greatly in scope and sophistication unfortunately agencies continue to employ private cost rather than social cost to evaluate environmental quality regulations furthermore general equilibrium impacts and intertemporal effects of regulations are typically not included in the evaluation in this paper we estimate the social cost of environmental quality regulations mandated by the clean air and clean water acts we construct an econometric general equilibrium model of the united states to demonstrate that social cost estimates diverge sharply from private cost estimates we also demonstrate that general equilibrium impacts are significant and pervasive and that intertemporal effects of the regulations heretofore ignored are significant

generating skilled self employment in developing countries experimental evidence from uganda we study a government program in uganda designed to help the poor and unemployed become self employed artisans increase incomes and thus promote social stability young adults in uganda s conflict affected north were invited to form groups and submit grant proposals for vocational training and business start up funding was randomly assigned among screened and eligible groups treatment groups received unsupervised grants of 382 per member grant recipients invest some in skills training but most in tools and materials after four years half practice a skilled trade relative to the control group the program increases business assets by 57 work hours by 17 and earnings by 38 many also formalize their enterprises and hire labor we see no effect however on social cohesion antisocial behavior or protest effects are similar by gender but are qualitatively different for women because they begin poorer meaning the impact is larger relative to their starting point and because women s work and earnings stagnate without the program but take off with it the patterns we observe are consistent with credit constraints

a diagrammatic exposition of weak complementarity and the willig condition this article provides a graphical explanation for one of the most important restrictions to utility functions used in revealed preference approaches for measuring the demand for public goods and product quality weak complementarity it also describes how the willig condition is an important element along with weak complementarity in measuring hicksian consumer surplus for changes in public goods or quality using marshallian demand curves

how effective are fiscal incentives for r d a review of the evidence this paper surveys the econometric evidence on the effectiveness of fiscal incentives for r d we describe the effects of tax systems in oecd countries on the user cost of r d the current position changes over time and across different firms in different countries we describe and criticize the methodologies used to evaluate the effect of the tax system on

estimating the general equilibrium benefits of large changes in spatially delineated public goods the purpose of this article is to report a new approach for measuring the general equilibrium willingness to pay for large changes in spatially delineated public goods such as air quality we estimate the parameters of a locational equilibrium model and compute equilibria for alternative scenarios characterizing the availability of public goods within a system of communities welfare measures take into consideration the adjustments of households in equilibrium to nonmarginal changes in public goods the framework is used to analyze willingness to pay for reductions in ozone concentrations in southern california between 1990 and 1995

market incentives and pharmaceutical innovation i study the impact of the orphan drug act oda which established tax incentives for rare disease drug development i examine the flow of new clinical drug trials for a large set of rare diseases among more prevalent rare diseases the oda led to a significant and sustained increase in new trials the impact for less prevalent rare diseases was limited to an increase in the stock of drugs tax credits can stimulate rd yet because they leave revenue margins unaffected tax credits appear to have a more limited impact on private innovation in markets with smaller revenue potential

market structure and spells of employment and unemployment evidence from the construction sector in egypt summary this paper investigates the links between market structure and spells of employment and unemployment in the construction sector in egypt using an augmented job search framework two key features of the model are the reservation frontier which allows for a trade off between wages and expected duration of employment and the dependency of unemployment durations on expected employment durations and expected wages these as well as conjectures concerning the influence of demand side forces obtained from the expressions for the transition rates out of employment and unemployment are examined using weibull log logistic and generalized gamma parameterizations of the hazard rate the parametric assumptions are exploited to resolve problems associated with selectivity and use of generated regressors

environmental inequality and economic valuation i study how the economic value of a heterogeneously distributed environmental public good depends on how the endowment with this good and income are distributed i find that the effect of environmental inequality on the societal willingness to pay wtp for the environmental good is determined both by its substitutability and by the correlation of its provision with income specifically environmental inequality decreases societal wtp for substitutes but this effect is reversed if the environmental good is a complement or distributed strongly in favour of richer households moreover i show that richer households living in places where environmental good endowment is high increases decreases societal wtp if and only if the environmental good is a substitute for complement to consumption goods i propose novel adjustment factors for structural benefit transfer to control for differences in the spatial distribution of environmental goods using forest preservation in poland as an empirical example i find that societal wtp is up to 4 higher for equal access to forests and up to 8 higher for an equal distribution of both income and access to forests

adoption of green chemistry an analysis based on us patents abstract green chemistry patents are an indicator of environmental innovation and r d over 3200 green chemistry patents were granted in the us patent system between 1983 and 2001 with most assigned to the chemical sector the university and government sectors place greater emphasis on green chemistry than most industrial sectors worldwide the emphasis on green chemistry technology relative to chemical plastic rubber and polymer technologies has increased since 1988 the united states appears to have a competitive advantage in green chemistry the most rapid growth in the emphasis on us green chemistry patents coincides with revisions to major us environmental laws in the late 1980s and early 1990s however the ratio of green chemistry patents to patents in other areas of chemical sciences in heavily regulated industries are low suggesting that these industries did not necessarily embrace green chemistry as a means to reduce their regulatory burden

non price equilibria for non marketed goods abstract as part of the resources for the future frontiers of environmental economics collection of papers we consider the problem of general equilibrium feedback effects in non price space as they relate to non market valuation our overall objective is to examine the extent to which non price equilibria arising from both simple and complex sorting behavior can be empirically modeled and the resulting differences in partial and general equilibrium welfare measures quantified after motivating the problem in general we consider the specific context of congestion in recreation demand applications which we classify as the outcome of a simple sorting equilibrium using both econometric and computable general equilibrium cge models we examine the conceptual and computational challenges associated with this class of problems and present findings on promising solution avenues we demonstrate the relevance of accounting for congestion effects in recreation demand with an application to lake visits in iowa our econometric and cge results confirm that for some plausible counterfactual scenarios substantial differences exist between partial and general equilibrium welfare estimates we conclude the paper by describing tasks that are needed to move forward research in this area

the propensity to patent abstract this paper analyzes the relationship between 1974 rd among the exceptions the tendency was toward diminishing returns variables measuring overseas sales federal r d support diversification scope of invention use and invention type had only modest explanatory power there was no significant evidence of disproportionate patent accumulation in the more highly concentrated industries

interjurisdictional sorting and majority rule an empirical analysis the goal of this paper is to provide a comprehensive empirical analysis of majority rule and tiebout sorting within a system of local jurisdictions the idea behind the estimation procedure is to investigate whether observed levels of public expenditures satisfy necessary conditions implied by majority rule in a general equilibrium model of residential choice the estimator controls for observed and unobserved heterogeneity among households observed and unobserved characteristics of communities and the potential endogeneity of prices and expenditures as well as the self selection of households into communities of their choice we estimate the structural parameters of the model using data from the boston metropolitan area the empirical findings reject myopic voting models more sophisticated voting models based on utility taking provide a potential explanation of the main empirical regularities

on the choice of funtional form for hedonic price functions this study examines how errors in measuring marginal attribute pric es vary with the form of the hedonic price function in simulations consumers with known utility functions bid for houses with given attributes various forms of the hedonic function are estimated using equilibrium housing prices errors in estimating marginal attribute prices are calculated by comparing each consumer s equilibrium marginal bid vector with the gradient of the hedonic function when all attributes are observed linear and quadratic box cox forms produce lowest mean percentage errors however when some attributes are unobserved or are replaced by proxies linear and linear box cox functions perform best copyright 1988 by mit press

is child labor inefficient we build a model of child labor and study its implications for welfare we assume that there is a trade off between child labor and the accumulation of human capital even if parents are altruistic and child labor is socially inefficient it may arise in equilibrium because parents fail to fully internalize its negative effects this occurs when bequests are zero or when capital markets are imperfect we also study the effects of a simple ban on child labor and derive conditions under which it may be pareto improving in general equilibrium we show that the implications of child labor for fertility are ambiguous

decomposing the structural identification of non market values abstract this paper addresses the issue of transparency in structural modeling by investigating how the assumptions of a structural model contribute to its identification of non market values assumptions about the form of the utility function the depiction of preference heterogeneity and the definition for the choice set are shown to jointly identify a partition of preference space which explains observed behavior the borders of the partition reflect substitution patterns the regions in the partition set identify preferences assumptions about the distribution of preferences within each region point identify partial equilibrium welfare measures together these observations provide a framework for decomposing the structural identification of non market values the new framework allows analysts to explain how their modeling assumptions influence estimates for benefits and costs this addresses federal guidelines for quantifying uncertainty in the modeling assumptions which enter benefit cost analysis the framework is demonstrated by decomposing estimates of the mwtp for air quality

evaluating a dutch scheme for encouraging research development this paper contains an evaluation over the period 1984 1988 of an important instrument of dutch technology policy a generic subsidy on r d labor costs which especially favours small firms the evaluation is based on surveys among nearly 3000 subsidy using firms and on empirical analysis the surveys show that the subsidy effectively strengthened the r d activities of small firms in particular it can be concluded from the empirical analysis that the subsidy generated between 40 and 150 of additional r d spending given the large spill over effects of r d this probably means that the social benefits of the subsidy outweigh the costs the incubation period of subsidies like the dutch scheme require consistency and continuity of governmental r d policies in order to influence corporate strategies in particular those of small firms

is school the best route to skills returns to vocational school and vocational skills in egypt this paper tests the assumption that formal education is the best route to job skills the returns to formal vocational secondary schooling are compared to the returns to acquiring skills outside the education system such as undertaking an apprenticeship for male wage workers in egypt a unique longitudinal dataset with information on schooling and skills allows for causal inference about returns by comparing siblings for recent cohorts the estimated returns to formal vocational secondary education are the same as attaining no formal education however the returns to skills obtained outside of formal education are substantial

interjurisdictional housing prices in locational equilibrium abstract in this study we discuss how to construct interjurisdictional housing price indexes that are consistent with locational equilibrium theory in theoretical models housing is assumed to be homogeneous which provides problems in empirical analysis we provide conditions that allow us to treat heterogeneous housing as if it were homogeneous the same conditions that allow us to develop a quantity index for housing also imply that we can estimate interjurisdictional housing price indexes using hedonic price regressions locational equilibrium models impose a number of restrictions regarding the co movement of housing price indexes local public goods and mean income levels we propose to use these properties of locational equilibrium models to evaluate the different price index estimates we estimate a variety of price indexes using a unique panel data set of housing transactions in southern california our empirical results by and large support our approach

how property markets determine welfare outcomes an equilibrium sorting model analysis of local environmental interventions this paper examines the pivotal role played by property markets in determining the magnitude and distribution of welfare changes resulting from localised environmental change we address that issue using an equilibrium sorting model esm calibrated by way of example to the circumstances of a road infrastructure project in the english town of polegate previous esm research has tended to assume that all households rent property from a fixed property stock the narrative that arises from those models concerns environmental gentrification wherein access to environmentally improved locations is appropriated by the relatively wealthy through their ability to out compete the less wealthy in the rental property market our research shows that to be only part of a much more complex story we develop a model that extends the sophistication with which esms replicate property market dynamics allowing for households to choose whether to rent or purchase their home and introducing greater realism into housing supply responses to changing market conditions our research shows that property markets redistribute welfare gains across the population in complex ways in which tenure choice and housing supply constraints play central roles

a multisectoral general equilibrium model of schumpeterian growth and fluctuations abstract this paper builds a dynamic multisectoral general equilibrium model of schumpeterian growth and fluctuations based on the endogenous introduction of new products the set of technological opportunities determines the degree of product quality upgrading and consists of breakthroughs and improvements the latter exhibiting diminishing returns if the degree of diminishing returns to technological improvements is low then there is no steady state equilibrium but cycles of breakthroughs and improvements we analyze two symmetric stable patterns of innovation which generate endogenous cycles and growth there is a negative correlation between the duration of each cycle and the long run growth trend

valuing product attributes using single market data a comparison of hedonic and discrete choice approaches this paper compares via simulation the perfor mance of the multinomial logit and hedonic models in esti mating consumer preferences for product attributes we as cribe preferences over the attributes of houses to a population of consumers and by having them bid for a set of houses calculate equilibrium prices the resulting data are used to estimate the two models we find that the gradient of a linear box cox hedonic price function estimates marginal attribute bids at least as well as a linear logit model although the difference between the two is small when some variables are not observed or are replaced by proxies the logit model however outperforms the he donic model in valuing non marginal attribute changes this is true when the researcher knows the true form of consumers utility functions and when the utility function must be approx irnated

the effects of public sector hiring and compensation policies on the egyptian labor market this article examines the combined impact of the employment guarantee for graduates and public sector compensation policies on the egyptian labor market besides contributing to an unsustainable rate of growth in the government labor force these policies have encouraged queuing for government jobs contributed to high graduate unemployment rates and reduced the employment of graduates in the private sector despite substantial wage erosion in the public sector in recent years government wages when appropriately corrected for observed heterogeneity and sample selection are on a par with or higher than private sector wages especially for graduates when combined with the more desirable nonwage aspects of government jobs these compensation levels explain the attractiveness of public sector employment to graduates government pay scales are especially advantageous to female secondary school graduates who appear to face considerable discrimination in the private sector

where has all the education gone cross national data show no association between increases in human capital attributable to the rising educational attainment of the labor force and the rate of growth of output per worker this implies that the association of educational capital growth with conventional measures of total factor production is large strongly statistically significant and negative these are on average results derived from imposing a constant coefficient however the development impact of education varied widely across countries and has fallen short of expectations for three possible reasons first the institutional governance environment could have been sufficiently perverse that the accumulation of educational capital lowered economic growth second marginal returns to education could have fallen rapidly as the supply of educated labor expanded while demand remained stagnant third educational quality could have been so low that years of schooling created no human capital the extent and mix of these three phenomena vary from country to country in explaining the actual economic impact of education or the lack thereof

dynamic effects of permanent and temporary tax policies in a q model of investment abstract this paper incorporates the tax policy analysis of hall and jorgenson into a dynamic optimizing model with adjustment costs to develop a q model of investment this framework is particularly useful for analyzing the dynamic effects on investment of permanent and temporary changes in tax policy it is shown that contrary to the conventional intertemporal substitution argument a temporary investment tax credit need not be nore expansionary than a permanent investment tax credit the role of depreciation allowances in determining the dynamic response of investment to temporary changes in the tax rate is also investigated

formal and informal institutions in the labor market with applications to the construction sector in egypt abstract urban labor markets that are characterized by the absence or ineffectiveness of regulation by legal and bureaucratic institutions can nonetheless be subject to powerful institutional forces based on customary norms group cohesion kinship and social networks using insights derived from the new institutional economics this argument is illustrated with three examples from the construction labor market in egypt where formal and informal institutions performing similar functions are contrasted in each case the informal institution is found to be significantly more important in shaping labor market relations

subsidizing public inputs abstract if production cost savings associated with successful research and development are freely disseminated to other firms as soon as they are realized too few resources may be allocated to this activity subsidies to this activity a public input can lead to optimal input use the effectiveness of four alternative subsidy instruments in stimulating firms r d spending are examined two are incremental subsidies and two are level subsidies one of the incremental subsidies and one of the level subsidies crudely capture characteristics of incentive mechanisms used in many countries a laboratory implementation of these instruments confirms that incremental subsidies are inferior to level subsidies

the evolution of technologies and investment in innovation the proposition that old knowledge is an input in the production of new knowledge is itself old knowledge in a general sense we all know that current innovations derive partly from past innovations and will themselves influence future ones but within a technology is there a time dependent pattern to innovations more specifically do the characteristics of innovations change systematically when compared to those that precede or follow them and are returns to investment in innovation and the consequent level of such investment dependent in a consistent way on the location of innovative effort in the evolution of a technology our analysis is partly motivated by an unresolved controversy in the economic literature between what may be characterised as the kuznets and the schmookler views of technical change it may therefore be helpful to review briefly the content of this debate kuznets i 930 and burns i 934 and later salter i 960 among others saw technological opportunities as declining over the life cycle of a new product or industry each new technology is limited in the extent to which it can be developed and the most promising opportunities for development are exploited first both kuznets and burns explained the eventual decline in the growth in output of new industries by a decline in the rate of technical change as a given technology matures kuznets stressed the role of price reducing changes in production processes as a force generating growth in output a reduction in the rate of such change he argued leads to a decline in the negative rate of change of the relative price of a new product and a consequent decline in the rate of growth of its output a parallel argument can be made for quality enhancing product innovations which contribute to the growth in demand for a new product as opportunities for the most important quality improvements are exhausted the growth rate in demand declines and the industry gradually approaches obsolescence as newer technologies emerge at the macroeconomic level it follows that both the rate of change in productivity and the growth of the economy depend upon the combination of new versus old industries that account for aggregate output this view of the evolution of technologies has been sharply criticised by schmookler i966 given the cost required to produce an innovation the profitability it contributes increases with market size the larger the demand the greater is the revenue collected from a new product or alternatively the larger is the aggregate cost saving from a superior production process it follows ceteris paribus that a larger market leads to an increase in investment in inno

kinship ties social networks and segmented labor markets evidence from the construction sector in egypt abstract this paper tests for rationing of entry into craft occupations in the construction labor market in egypt and investigates whether entry is rationed according to regional origin and access to kinship and other social networks i use a modified version of roy s model of occupational choice which allows for the existence of costs of entry into craft occupations data from a 1988 survey of construction workers are used to estimate the model and test for rationing the results confirm the existence of rationing according to a worker s regional background but are inconclusive with respect to kinship ties and social networks

returns to capital in microenterprises evidence from a field experiment small and informal firms account for a large share of employment in developing countries the rapid expansion of microfinance services is based on the belief that these firms have productive investment opportunities and can enjoy high returns to capital if given the opportunity however measuring the return to capital is complicated by unobserved factors such as entrepreneurial ability and demand shocks which are likely to be correlated with capital stock the authors use a randomized experiment to overcome this problem and to measure the return to capital for the average microenterprise in their sample regardless of whether they apply for credit they accomplish this by providing cash and equipment grants to small firms in sri lanka and measuring the increase in profits arising from this exogenous positive shock to capital stock after controlling for possible spillover effects the authors find the average real return to capital to be 5 7 percent a month substantially higher than the market interest rate they then examine the heterogeneity of treatment effects to explore whether missing credit markets or missing insurance markets are the most likely cause of the high returns returns are found to vary with entrepreneurial ability and with measures of other sources of cash within the household but not to vary with risk aversion or uncertainty

induced innovation and energy prices this paper uses u s patent data from 1970 to 1994 to study the impact of energy prices on energy efficient innovations theories of technological change have focused both on demand side factors which spur innovative activity by increasing the value of new innovations and supply side factors such as scientific advancements that make new innovations possible data on demand side factors are easily obtained but data on supply side factors that influence innovation are not readily available this paper uses patent citations as a measure of the usefulness of the existing base of scientific knowledge citations to previous patents are used to construct productivity estimates which measure the usefulness of the existing stock of knowledge to inventors in a given energy field for any given year these estimates are then combined with data on demand side factors to estimate a model of induced innovation in energy technologies the results indicate that both energy prices and the supply of knowledge have strongly significant positive effects on innovation the paper concludes with a discussion of the implication of this work for environmental policy

measuring the environmental consequences of trade policy a nonmarket cge analysis the newly approved gatt trade agreement is likely to focus greater attention on the conflicts between the proliferation of diverse national policies toward environmental quality and the need to maintain competitiveness in world markets virtually all policy evaluations of this conflict have been limited by a significant misspecification in existing models none of the available computable general equilibrium cge models for international trading patterns consistently reflect the effects of environmental resources on consumers preferences the purpose of this paper is to report the first generation of a composite nonmarket and cge model nm cge for the european community the united states japan and a single region for the rest of the world the model incorporates the morbidity and mortality effects of particulates sulfur oxides and nitrogen oxides it uses existing nonmarket valuation estimates freeman with a specification for consumer preferences that allows changes in atmospheric emissions to diffuse in different amounts to

general equilibrium benefits for environmental improvements projected ozone reductions under epa s prospective analysis for the los angeles air basin abstract this research demonstrates how locational equilibrium models can be used for benefit measurement with the detail required to match epa s benefit analysis for the first prospective analysis using the projected changes in ozone concentrations for 2000 and 2010 together with the sieg et al int econ rev forthcoming estimates for household preferences for housing education and air quality this paper measures general equilibrium willingness to pay for the policy scenarios developed for the prospective study as they relate to households in the los angeles area benefits are evaluated taking account at the household level of initial air quality conditions relocation based on changes in ozone and price changes the framework generalizes the partial equilibrium general equilibrium comparisons available with conventional computable general equilibrium and property capitalization models estimated general equilibrium gains from the policy range from 33 to 2400 annually at a household level in 1990 dollars

the short run and long run benefits of environmental improvement abstract the social value of a nonmarginal improvement to amentities is not related to hedonic prices in a simple way furthermore hedonic price data do not completely reveal preferences in order to evaluate short run benefits of an improvement the rate of change of the hedonic price function must be normalized by a ratio of population densities to calculate long run benefits of the improvement one must calculate the responsiveness of population densities to the nonmarginal improvement a technique to do so is suggested

the relevance of standard estimates of rates of return to schooling for education policy a critical assessment abstract this paper examines the accuracy and usefulness of estimated rates of return to schooling based on the standard human capital model of becker and mincer regarding accuracy it investigates whether failure to account for differences in ability and school quality lead to significant biases estimates using ghanaian data confirm this possibility even when accurate estimated rates of return to additional years of schooling may have limited policy implications more useful for governments are rates of return to investments in school quality the paper uses data on cognitive skills to estimate rates of return to three types of school quality improvements

cost reducing r d in oligopoly abstract this paper provides a conjectural variations model to explore competition in cost reducing r d and the nature of the inter firm externalities it is shown that 1 r d investment in a market with price competition becomes optimal if firms expect that changes in their own r d investment are followed by the rival firms 2 the optimal r d subsidies are positive in collusive oligopolies but negative in competitive oligopolies 3 joint r d ventures in oligopoly could reduce total surplus by causing underinvestment and 4 promoting price competition reduces welfare if firms are not collusive in their r d decisions

do tax credits stimulate r d spending the effect of the r d tax credit in its first decade abstract this paper examines the impact of the u s federal r d tax credit between 1981 1991 using confidential irs data from corporate tax returns the empirical analysis makes two key advances on previous work first it implements a new instrumental variables iv strategy based on tax changes that directly addresses the simultaneity of r d spending and marginal credit rates second the analysis makes use of new restricted access irs corporate return data describing r d expenditures estimates imply that a10 reduction in the user cost of r d leads the average firm to increase its research intensity the ratio of r d spending to sales by 19 8 in the short run long run estimates imply that the average firm faces adjustment costs and increases spending over time though small and young firms show evidence of reversing initial increases analysis of the components of qualified research shows that wages and supplies account for the bulk of the increase in research spending elasticities of qualified and total research intensities from a smaller sample suggest firms respond to user cost changes largely by increasing their qualified spending meaning that the type of r d the federal credit deems qualified research is an important margin on which the credit affects firm behavior

some tests of the incentive effects of the research and experimentation tax credit abstract the effectiveness of the tax credit for research and experimentation r e expenditures is examined using a panel of firm data for the period 1975 through 1988 using a structural model the results generally indicate that the credit resulted in increased r e spending however the effect of the credit was substantially mitigated by the impacts of net operating loss carryovers and low growth opportunities results also indicate some degree of decreased r e spending as a result of debt restructuring activity tax policy implications are discussed

do the effects of r d tax credits vary across industries a meta regression analysis this paper presents a survey of the micro econometric literature on the effects of r d tax credits on firms innovation activities we focus on one specific aspect that has not received sufficient attention in previous research the sectoral dimension our meta regression analysis mra sets up a new database collecting a large number of firm level studies on the effects of r d tax credits and investigates the factors that may explain differences in the estimated effects that are reported in the literature the main result of the mra analysis is indeed that sectors matter specifically the additionality effect of r d tax credits is on average stronger for smes firms in the service sectors and firms in low tech sectors in countries with an incremental scheme the paper proposes a simple framework to investigate why the innovation and economic effects of r d tax credits vary across sectors and points out new directions and hypotheses for future research

estimating housing demand with an application to explaining racial segregation in cities we present a three stage nonparametric estimation procedure to recover willingness to pay for housing attributes in the first stage we estimate a nonparametric hedonic home price function in the second stage we recover each consumer s taste parameters for product characteristics using first order conditions for utility maximization finally in the third stage we estimate the distribution of household tastes as a function of household demographics as an application of our methods we compare alternative explanations for why blacks choose to live in center cities while whites suburbanize

latent tastes incomplete stratification and the plausibility of vertical sorting models this paper uses the 2011 phoenix area social survey to evaluate the plausibility of the assumptions made with pure characteristics sorting models to rationalize incomplete stratification of households across local communities by income the analysis with the new ecological paradigm a well recognized index of environmental attitudes confirms the correlations in equilibrium outcomes implied by these models as a result it provides the first empirical support for the role of differences in the tastes for public goods as one explanation that provides the rationale for the commonly observed sorting outcomes

estimating the impact of the r d tax credit on strategic groups in the pharmaceutical industry abstract the economic recovery and tax act of 1981 provided a 25 percent tax credit for increases in research and experimentation expenditures previous studies have shown considerable controversy about the effectiveness of various tax credits this study focuses on the response of the strategic groups in the pharmaceutical industry to the credit four strategic groups were formed using different levels of research intensity research sales and relative cash flow margin cash flow sales the change in research intensity following enactment of the tax credit was estimated the analysis found that the tax credit caused an increase in r d expenditures in addition the r d tax credit appears to have contributed to increased competitive r d spending among the firms in the pharmaceutical industry

tax incentives and r d spending a review of the evidence abstract since 1981 u s firms have been allowed to claim a tax credit for r d spending in excess of some base amount this paper assesses the evidence gathered to date about the effectiveness of the r d tax credit in the united states there is considerable evidence that the r d tax credit has had some effect on the behavior of american firms in the early 1980s but it is not as yet clear how much of the initial response of firms to the credit is due to increases in total r d as opposed to increases in r d that is qualified for the r d credit moreover different empirical approaches produce substantially different estimates of the size of the effect of the r d credit analyses based on time series data imply that the credit has had a substantial effect on r d spending however indirect evidence based on estimates of the price elasticity of demand for r d as well as studies based on more direct evidence from survey data and corporate tax returns imply that the effect of the credit has been rather modest there are several ways in which these divergent estimates of the size of firms responses can be reconciled however each suggested reconciliation points toward using the more modest estimates to gauge the effects of a permanently enacted incentive for r d these estimates imply that had the incremental 25 percent r d credit been made permanent it would have stimulated between 0 35 and 0 93 of additional company funded r d spending per each 1 of tax revenue forgone

human capital vs signalling explanations of wages increases wages by directly increasing the worker s productivity this learning explanation is usually associated with human capital theory however it seems unlikely that learning explains all the wage differences associated with schooling and work history better educated workers are not a random sample of workers they have lower propensities to quit or to be absent are less likely to smoke drink or use illicit drugs and are generally healthier it is unlikely that employers make full use of differences in propensities to quit or to be absent or sick when hiring workers these characteristics are often not directly observed and the americans with disabilities act precludes firms from using either poor health or the likelihood of future sickness as a hiring criterion unless it is directly related to job performance however if low levels of education are associated with these unfavorable employee characteristics and employers are allowed to take education into account when hiring workers we would expect employers to favor better educated workers as a means of reducing their costs of sickness and job turnover in turn students will take these hiring criteria into account when deciding how long to stay in school students will choose a length of schooling to signal their ability to employers and employers will demand a minimum level of schooling

fiscal incentives for research and development it is often argued that since the social return to r d exceeds the private return the government should provide incentives for r d expenditure this article considers the issue of the impact of such incentives on the fiscal position of the government using a simple comparative static model in particular it is argued that it is possible that the social return from r d might be sufficient to allow r d incentives to more than pay for themselves on the basis of the international evidence the model is calibrated to examine what values of the key parameters are required in order for this conclusion to hold

benefit transfer via preference calibration prudential algebra for policy this paper proposes a new approach to benefit transfer the method assumes a specific form for preferences and uses available benefit information to identify and calibrate the preference parameters to match the existing benefit estimates this approach assures economic consistency of the transfers benefit measures can never be inconsistent with household income the logic also offers a series of potentially observable predictions that can be used to gauge the plausibility of benefit transfers when multiple benefit estimates from different methods are available such as hedonic property value travel cost demand and contingent valuation the framework uses the definition of the benefit concept from each method in a single preference function to reconcile differences it provides a specific way to take account of baseline conditions and scope effects i e the size of the proposed change consistently in the transfer the method is illustrated using estimates for benefit measure changes in water quality from three studies travel cost demand hedonic property value and contingent valuation analysis q26

public r d policies and cost behavior of the us manufacturing industries abstract this paper estimates and evaluates the contribution of r d tax incentives and publicly financed r d investment policies in promoting the growth of output and privately funded r d investment in us manufacturing industries publicly financed r d induced cost savings but crowds out privately financed r d investment while the incremental r d tax credit and immediate deductibility provision of r d expenditures have a significant impact on privately financed r d investment the optimal mix of both instruments is an important element for sustaining a balanced growth in output and productivity in the manufacturing sector

hedonic prices and cost benefit analysis abstract hedonic prices have been used to evaluate the willingness to pay for attributes we reformulate the notion of hedonic price from a composite price on housing to a unit price on traded quantities in conformity with long run competitive equilibrium theory this formulation was suggested but not developed by rosen j polit econ 82 no 1 1974 34 35 by first characterizing an efficient allocation of consumers to space we show that hedonic unit prices can be understood as a bid rent function which supports the efficient allocation this is despite the fact that the lots over which consumers bid are themselves endogenous we show that unit hedonic prices reveal preferences in a manner different from composite hedonic expenditures

beggar thy neighbor the in state out of state and aggregate effects of r d tax credits abstract the proliferation of r d tax incentives among u s states in recent decades raises two questions i are these tax incentives effective in increasing in state r d ii how much of any increase is due to r d being drawn away from other states this paper answers i yes and ii nearly all the paper estimates an augmented r d factor demand model using state panel data from 1981 to 2004 i estimate that the long run elasticity of in state r d with respect to the in state user cost is about 2 5 while its elasticity with respect to out of state user costs is about 2 5 suggesting a zero sum game among states

specifying human capital a review of the measures of the stock of human capital used in empiricalgrowth research including adult literacy rates school enrollmentratios and average years of schooling of the working age population reveals that human capital is mostly poorly proxied the simple use ofthe most common proxy average years of schooling misspecifies therelationship between education and the stock of human capital based onhuman capital theory the specification of human capital is extended toallow for decreasing returns to education and for differences in thequality of a year of education the different specifications give riseto hugely differing measures of the stock of human capital acrosscountries and development accounting results show that misspecifiedhuman capital measures can lead to severe underestimation of thedevelopment effect of human capital

schooling and labor market consequences of school construction in indonesia evidence from an unusual policy experiment between 1973 and 1978 the indonesian government engaged in one of the largest school construction programs on record combining differences across regions in the number of schools constructed with differences across cohorts induced by the timing of the program suggests that each primary school constructed per 1 000 children led to an average increase of 0 12 to 0 19 years of education as well as a 1 5 to 2 7 percent increase in wages this implies estimates of economic returns to education ranging from 6 8 to 10 6 percent

exploring mortgage interest deduction reforms an equilibrium sorting model with endogenous tenure choice in most equilibrium sorting models esms of residential choice across neighborhoods the question of whether households rent or buy their home is either ignored or else tenure status is treated as exogenous of course tenure status is not exogenous and households tenure choices may have important public policy implications particularly since higher levels of homeownership have been shown to correlate strongly with various indicators of improved neighborhood quality indeed numerous policies including that of mortgage interest deduction mid have been implemented with the express purpose of promoting homeownership this paper presents an esm with simultaneous rental and purchase markets in which tenure choice is endogenized and neighborhood quality is partly determined by neighborhood composition the public policy relevance of the model is shown through a calibration exercise for boston massachusetts which explores the impacts of various reforms to the mid policy the simulations confirm some of the arguments made about reforming mid but also demonstrate how the complex patterns of behavioral change induced by policy reform can lead to unanticipated effects the results suggest that it may be possible to reform mid while maintaining the prevailing rates of homeownership and reducing the federal budget deficit

demand side vs supply side technology policies hidden treatment and new empirical evidence on the policy mix this paper provides new empirical evidence about the impact of various technological policies upon firms innovative behaviour we take into consideration the role of policies for innovative activities and we focus on their interaction while supply side policies such as r d subsidies and tax credits have been both extensively discussed in the literature and empirically investigated the analysis of innovative public procurement is a growing trend in the literature which still lacks robust empirical evidence in this paper we replicate the existing results on supply side policies surmise fresh empirical evidence on the outcome of innovative public procurement and address the issue of possible interaction among the various tools when controlling for the interaction with other policies supply side subsidies cease to be as effective as reported in previous studies and innovative public procurement seems to be more effective than other tools the preliminary evidence suggests that technology policies exert the highest impact when different policies interact

a new approach to computing hedonic equilibria and investigating the properties of locational sorting models abstract this paper outlines a new way to solve the traditional housing market assignment problem and uses it to investigate the properties of hedonic equilibria our approach to computing equilibria is based on rosen s 1974 bid function it has four desirable features i convergence implies a hedonic equilibrium ii convergence is guaranteed if a hedonic equilibrium exists iii it can solve for a new equilibrium following a shock to the market and iv if multiple equilibria exist it can identify them the algorithm is applied to micro data from san joaquin county california where the choice of a home provides access to public schools in particular school districts first we calibrate the algorithm to approximately reproduce actual housing prices in san joaquin county as a hedonic equilibrium then we introduce a policy that improves school quality in selected school districts we find that there are several possibilities for the new equilibrium for each of these potential equilibria we compare the marginal willingness to pay for school quality with the rate at which the improvement is capitalized into property values the resulting capitalization rates differ substantially from marginal willingness to pay

the international economics of intellectual property right protection a welfare theoretic trade policy analysis abstract this paper provides an analytical construct for examining the trade policy effects of greater intellectual property protection in technology importing countries it is shown that two types of conflict are likely to arise between net technology importers and exporters the first relates to the level of protection with importers preferring a low level and exporters a high one the second conflict hitherto unexplored relates to the manner of protection with importers likely to prefer discriminatory regimes favoring local r d creation whereas exporters would prefer nondiscriminatory protection in importing countries

spatial preference heterogeneity in forest recreation abstract in this study we analyze the preferences for recreational use of forests in lorraine northeastern france applying stated preference data our approach allows us to estimate individual specific preferences for recreational use of different forest types these estimates are used in a second stage of the analysis where we test whether preferences depend on access to recreation sites we find that there is significant preference heterogeneity with respect to most forest attributes the spatial analysis shows that preferences for forests with parking and picnic facilities are correlated with having access to such forests while for the other attributes considered dominant tree species trekking paths and presence of lake and rivers we find no correlation between stated preferences and accessibility this implies that the problem of endogenous distances in the travel cost method parsons 1991 may be present in the estimation of welfare economic values for parking and picnic facilities in the analyzed model the results underline the importance of considering spatial heterogeneity of preferences carrying out economic valuation of spatial delineated environmental goods and that the spatial variation in willingness to pay for such goods is not only explained by the users transport costs of accessing the sites

explicit and implicit tax effects of the r d tax credit this paper investigates the effects of the 1981 research and development r d tax credit first by examining the impact of the credit on the level of r d investment and second by estimating the magnitude of the implicit tax created by the credit the two effects are interrelated because an increase in the level of r d investment will increase the demand for r d inputs thus reducing the pretax rate of return from r d activity 1 i test the credit s investment effect using a time series r d spending model that includes both factors from the industrial organization literature to control for nontax effects and an r d credit usability variable to capture the incentive created by the credit previous research has produced mixed evidence on whether the credit had any positive

a discrete choice equilibrium approach to valuing large environmental changes abstract this study develops a discrete choice locational equilibrium model to evaluate the benefits of the air quality improvements that occurred in the los angeles area following the 1990 clean air act amendments caaa the discrete choice equilibrium approach accounts for the fact that air quality improvements brought about by the 1990 caaa will change housing choices and prices the study also provides new evidence for the distributional welfare impacts of the 1990 caaa in the los angeles area findings suggest that the air quality improvements that occurred in the los angeles area between 1990 and 2000 provided substantial general equilibrium benefits to households the analysis reveals noticeable differences between partial and general equilibrium welfare gains demonstrating that ignoring equilibrium effects will likely misrepresent the benefits of large environmental changes in addition we find that the equilibrium welfare impacts of the 1990 caaa in the los angeles area varied significantly across income groups