the developmental effect of state alcohol prohibitions at the turn of the twentieth century john p lennon treasurer of the american federation of labor says that seventy percent of the drink bill of the united states is contributed by the american laboring man this means that liquor money is usually bread money meat money shoe money and money that ought to go for clothing american issue maryland edition june 12 1909 as cited in odegard 1928 i introduction work by economists provides considerable evidence consistent with the fetal origins hypothesis that various chronic health outcomes are prompted by an adverse in utero environment e g banerjee et al 2010 deschenes et al 2009 1 while the outcomes and conditions vary across studies the underlying findings emphasize the risks associated with negative exposures during this critical development period most studies in the fetal origins literature exploit the variation afforded by temporary adverse in utero shocks e g famines and focus on early life outcomes e g low birth weight however recent research in this area examines the effects in adulthood of positive in utero and childhood exposures for example hoynes schanzenbach and almond 2012 find that the beneficial effects of food stamp access in utero and during childhood persist into adulthood suggesting the potential for positive and sustained environmental changes during gestation and in early childhood to have long lasting impacts 2 results from bleakley 2007 suggest higher adult incomes among cohorts in the american south with more childhood exposure to hookworm eradication efforts 3 we contribute to this growing literature by exploiting the quasi randomization of alcohol consumption created by state level alcohol prohibition laws passed in the united states in the early part of the twentieth century we argue that such laws represented a positive shock to individuals who were in utero or who were young children around the times of the laws adoption using a large dataset of world war ii enlistees we examine the long term effects of these state prohibition laws on adult educational attainment obesity and height although we do not observe alcohol consumption and hence our results provide intent to treat estimates our design avoids the reporting problems associated with using more recent data on alcohol use we find small but statistically significant effects which do not appear to be the result of pre existing trends for two of the three outcome variables ii background reduced consumption of alcohol could lead to improved outcomes for those individuals in utero or in early childhood during this period through two channels first reduced alcohol consumption by the household members who likely consumed the most alcohol during this period namely men may have shifted resources to other members of the household namely women and children second reduced consumption by pregnant women themselves would reduce fetal exposure to alcohol we provide some historical evidence on the potential relevance of these mechanisms in the context of state level alcohol prohibitions a intrahousehold shift in resources to women and young children liquor traffic as the enemy of the home was a favorite theme of the anti saloon league and other temperance organizations of the time odegard 1928 42 4 the suggestive titles of pamphlets distributed by such organizations included better babies unborn children why babies die and boys worth more than taxes the obvious intention of such propaganda was to convey the message that the saloon culture and the alcohol consumption that came with it resulted in adverse outcomes for children and families that would be reversed under prohibition determining whether or not this reversal materialized is difficult given the lack of historical consumption data state level data on alcohol consumption are not available for this period however national data on consumption and other measures that are likely to be associated with consumption provide some evidence to suggest lower alcohol consumption in the period during which many states adopted alcohol prohibition laws

the price of beer this paper is an empirical exploration into factors which are responsible for differences in the inter state price of beer though primarily a statistical exercise the current work has implications for policy decisions in particular the role of taxes and regulatory constraints on the relationships between brewer wholesaler and retailer are highlighted using an as yet untapped data source regression analysis indicates that a substantial proportion of the variance in the inter state price of beer can be explained by demand pressure transportation costs and the price of substitutes as well as taxes and the presence of legally mandated exclusive territories governing the wholesale distribution of beer

the incidence of non linear price dependent consumption taxes abstract the present article generalizes economic literature on the incidence of consumption taxes to general schedules of consumption taxes dependent on price previous studies were limited to the cases of per unit and ad valorem taxes three main contributions are made methodologically the elasticity of the tax function is introduced as a new parameter so that the price elasticity of general consumption tax schedules in different models of imperfect competition might be dealt with in a tractable manner theoretically existing results on the difference between the incidence of ad valorem and per unit consumption taxes are generalized to non linear consumption taxes the larger the elasticity of the tax function the smaller the share of consumption tax borne by consumers from the perspective of applied public economics it is shown how the regulator may reduce prices in very uncompetitive markets by increasing the elasticity of the consumption tax on a targeted range of producer prices

alcohol prices consumption and traffic fatalities we examine the relationships among alcohol prices consumption and traffic fatalities using data across u s states from 1982 to 2000 some previous studies have found large negative associations between alcohol taxes and fatalities however commonly used price data suggest little or no connection between alcohol prices and fatalities these apparently conflicting findings may result from measurement error and or endogeneity in the price data which biases ordinary least squares estimators toward a finding of no price effects using alcohol taxes as instrumental variables fatali ties are found to be negatively related to prices in addition alcohol consumption is strongly posi tively related to fatalities however biases may still remain because taxes are not entirely suitable as instruments

violence related injury and the price of beer in england and wales this paper examines the influence of the real price of beer on violence related injuries across the economic regions in england and wales the data are monthly frequency of violent injury collected from a stratified sample of 58 national health service emergency departments 1995 2000 an econometric model based on economic socio demographic and environmental factors was estimated using panel techniques we show that the rate of violence related injury is negatively related to the real price beer as well as economic sporting and socio demographic factors the principal conclusion of the paper is that the regional distribution of the incidence of violent injury is related to the regional distribution of the price of beer the major policy conclusion is that increased alcohol prices would result in substantially fewer violent injuries and reduced demand on trauma services

analysis of contingent valuation data with multiple bids and response options allowing respondents to express uncertainty a comment abstract alberini et al j environ econom management 45 40 62 2003 propose using a random effects probit model to estimate the coefficient of correlation between responses from the same individual to different costs presented in multiple bounded discrete choice mbdc contingent valuation elicitation formats in an empirical application they report that the correlation coefficient from the random effects probit is close enough to zero to warrant treating the responses from the same individual as independent such a finding would call into question the viability of this elicitation method and past mbdc modeling efforts however our reestimation of the random effects probit using their data as well as two other mbdc datasets available to us suggests that the individual s wtp responses are driven by a single or at least highly correlated underlying wtp distribution our results imply models that assume perfect correlation between responses are more appropriate for modeling mbdc responses

state alcohol policies teen drinking and traffic fatalities this empirical study evaluates the policy responsiveness of teen drinking in models that can condition on the unobserved state specific attributes that may have biased conventional evaluations the results demonstrate that cross state heterogeneity can be important and that beer taxes have relatively small and statistically insignificant effects on teen drinking models of youth traffic fatalities also indicate that the conventional beer tax elasticities are not robust to additional controls for omitted variables the importance of these omitted variables is illustrated by a counterfactual which compares models of nighttime fatalities to those that occur in the daytime when the rate of alcohol involvement is substantially lower

estimation using contingent valuation data from a dichotomous choice with follow up questionnaire reply abstract our original article proposed that the two yes no willingness to pay wtp responses produced by this survey format should be viewed as a pair of jointly distributed correlated discrete random variables the comparison model the conventional approach to estimation using these types of data contained a programming error correction alters the results from the comparison model but our original claim that estimation by conventional methods can produce misleading inferences if ours is the appropriate specification still stands this is especially true if negative wtp is precluded when e wtp is calculated

understanding alcohol consumption across countries with unpublished data from the international comparison program that cover the consumption of three alcoholic beverages in over 150 countries we analyse drinking patterns around the world with an

alcohol control laws and the consumption of distilled spirits and beer this article tests the social marketing effectiveness of alcohol control laws designed to reduce the consumption of alcoholic beverages the study uses state level historical data to estimate the demand for distilled spirits and beer using economic sociodemographic and control law explanatory variables spirits and beer consumption are found to react differently to changes in economic sociodemographic and regulatory variables these differences suggest a consumer and product segment based approach to alcohol control laws or social marketing that emphasizes measures directed at youths for beer and at price for spirits

what mean impacts miss distributional effects of welfare reform experiments labor supply theory predicts systematic heterogeneity in the impact of recent welfare reforms on earnings transfers and income yet most welfare reform research focuses on mean impacts we investigate the importance of heterogeneity using random assignment data from connecticut s jobs first waiver which features key elements of post 1996 welfare programs estimated quantile treatment effects exhibit the substantial heterogeneity predicted by labor supply theory thus mean impacts miss a great deal looking separately at samples of dropouts and other women does not improve the performance of mean impacts we conclude that welfare reform s effects are likely both more varied and more extensive than has been recognized

do drinkers know when to say when an empirical analysis of drunk driving this paper presents empirical evidence that an individual s decision to drive while drunk is negatively affected by the expected full price of driving drunk the analysis usa a unique data set containing information on self reported drunk driving matched to state level drunk driving policies as well as to state excise taxes on beer these are hypothesized and found to affect drunk driving further we find interesting racial differences but surprisingly small differences by gender in the effect of socioeconomic and policy variables on drunk driving propensities

treatment of don t know responses in contingent valuation surveys a random valuation model abstract this paper provides a utility theoretic interpretation of don t know dk responses in contingent valuation surveys using a referendum elicitation procedure the random valuation model in this paper assumes that each respondent of a contingent valuation survey has an implicit valuation distribution rather than a single true value as traditionally assumed in his her mind if an offered referendum bid is not clearly different from the mean value of one s valuation distribution the respondent may give a dk answer to the cv referendum question based on this model a maximum likelihood procedure is proposed for estimating respondents willingness to pay for a nonmarket good with referendum contingent valuation data which include dk responses an empirical illustration of this estimation procedure is also provided

the complex attitudes to alcohol taxation alcoholic beverages are taxed at very different rates across the eu which implies extensive cross border shopping therefore there is an ongoing debate about harmonization of alcohol taxes among countries sweden with a tradition of high alcohol taxes due to public health arguments has the highest excise duties on spirits in the eu but because of this the occurrence and possible problems caused by cross border shopping are also extensive using a questionnaire survey i analyse the swedes attitudes to alcohol taxation and find that these two sides of the coin are important determinants many respondents want to decrease the alcohol tax while some even want to increase it those most positive to alcohol taxation are those who regard increased alcohol consumption as a worrying problem and those living in areas where many adults are treated for alcohol related diseases however the ordered probit analysis also shows that those who support the eu membership are more supportive of reduced taxation to

dead on arrival zero tolerance laws don t work why do college students drink so stupidly because drinking intelligently is against the law jack hitt new york times magazine october 1999 i introduction for two decades u s drunk driving legislation has become increasingly strict as the states responding to financial incentives provided by congress have reduced allowable blood alcohol content bac levels in 2005 the last state lowered its illegal per se bac limit for adults to 0 08 down from 0 10 during the 1990s even lower limits of 0 01 or 0 02 were instituted for drivers under 21 yr here termed youth as shown in figure 1 this legislation which adopts a zero tolerance policy toward underage drinking and driving is the subject of this paper previous work on zero tolerance laws has thoroughly examined their effects on a variety of drinking related behaviors but as yet their effects on traffic fatalities the most fundamental question of all have not received a full treatment existing u s fatality analyses have been limited either in scope comprising a small part of a larger empirical study or sophistication utilizing relatively crude statistical methods a full treatment is needed for two reasons the first is to thoroughly ground the analysis in economic theory which has not been done before on the surface a zero tolerance law would seem to be a simple powerful sure way to reduce drunk driving fatalities but economists used to thinking on the margin should suspect otherwise this legislation generates strong marginal disincentives against taking the first drink but much smaller marginal disincentives thereafter depending on the effect of bac on the probability of arrest etc these marginal incentives are not uniformly stronger than those imposed by higher bac limits as a result zero tolerance laws can have unintended or perverse effects of uncertain magnitude that counteract the purpose of the law ultimately zero tolerance legislation has ambiguous effects on fatalities and economic efficiency we demonstrate this in a simple model and derive new predictions that are testable and unambiguous figure 1 omitted our second objective is to provide comprehensive evidence of zero tolerance laws effects on traffic fatalities applying a variety of panel techniques to data from the fatality analysis reporting system fars of the national highway traffic safety administration nhtsa the limited scope of earlier studies leaves their results generally supportive of these laws efficacy potentially sensitive to specification or subject to omitted variables bias problems that have occurred elsewhere in the traffic safety literature in our analysis we pay particular attention to these issues which turn out to be fundamental using a variety of direct and indirect methods to control for unobservable factors and ascertain the robustness of our results this is complemented by a distributional analysis new to this literature that quantifies the intended and unintended consequences of zero tolerance legislation and tests the only robust hypotheses generated by theory these analyses indicate that the intended and unintended consequences of zero tolerance legislation are minimal zero tolerance laws have no material effect on fatalities because they have no material effect on driver behavior ii the theory of single bag thresholds a setup a simple model can illustrate the individual and population effects of a reduction in permissible bac levels of which zero tolerance laws are the most extreme example let c denote the amount of alcohol consumed and v sub n c denote the value of that consumption to the consumer the amount individual n is willing to pay for permission to purchase c units of alcohol at the market price and consume them any harmful internal effects of alcohol consumption are captured in v the expected harm to others resulting from drunk driving is denoted by d

dealing with uncertainty in public preferences for rural development policies a contingent valuation survey dominguez torreiro m and solino m dealing with uncertainty in public preferences for rural development policies a contingent valuation survey regional studies rural development programmes are currently envisaged as a means to foster the provision of a broad range of non commodity outputs emanating from multifunctional rural environments this paper presents a contingent valuation survey that analyses individuals perceptions of and willingness to pay for the implementation of a rural development programme in cantabria spain uncertainty in individuals preferences is explicitly acknowledged and introduced into the analytical framework for that purpose a comparison is made between the open ended and the multiple bounded uncertainty elicitation formats the expectation of a positive welfare change constitutes a sound argument in favour of regional rural development policies

tick size the compass rose and market nanostructure abstract economists have begun using methods borrowed from the physical sciences to search for non linearities in economic and financial data the so called phase portrait from chaos theory in which the values of a time series are plotted against their delayed values is one of the techniques employed for this purpose it has recently been shown however that when returns on traded assets are plotted in this manner in two or three dimensional space surprising patterns arise which seriously distort the conclusions that can be drawn about the underlying data these patterns which resemble a compass rose reflect the microstructure of the market or more specifically the finite size of the ticks by which prices can change in a market the present paper clarifies the reason for this phenomenon it is shown that within the microstructure there exists nanostructure that becomes visible only when the computations are performed without approximation high frequency data from a foreign exchange market are used to illustrate this phenomenon

a note on the wang and wang measure of the quality of the compass rose abstract h wang and c wang visibility of the compass rose in financial asset returns a quantitative study j bank financ 26 2002 1099 1111 derive a measure of the visibility of the radial patterns that appear in a plot of current and past returns which are more commonly known as the compass rose in theory this measure should be positively related to the tick volatility ratio in practice however we find that this relationship does not hold for higher tick volatility ratios that are common to stock market data thus the use of this measure is limited in real world applications we propose a correction factor that improves the behaviour of the quality measure over higher tick volatility ratios however further research is required to fully identify and correct the problem

can police deter drunk driving economic studies using aggregate data generally find that higher taxes are the most effective policy to reduce drunk driving while criminologists report strong evidence supporting law enforcement measures in policy evaluations this paper evaluates these differing perspectives using the aggregate data that is typically used in the economic literature ols and fixed effects models show that police can affect the probability of arrest for drunk driving and in combination with evidence from dui deterrence experiments this suggests that the failure of economic models to detect deterrence reflects the lack of systematic and sustained police efforts against dui

reducing binge drinking the effect of a ban on late night off premise alcohol sales on alcohol related hospital stays in germany abstract excessive alcohol consumption among young people is a major public health concern on march 1 2010 the german state of baden wurttemberg banned the sale of alcoholic beverages between 10 pm and 5 am at off premise outlets e g gas stations kiosks supermarkets we use rich monthly administrative data from a 70 random sample of all hospitalizations during the years 2007 2011 in germany in order to evaluate the short term impact of this policy on alcohol related hospitalizations applying difference in differences methods we find that the policy change reduces alcohol related hospitalizations among adolescents and young adults by about 7 there is also evidence of a decrease in the number of hospitalizations due to violent assault as a result of the ban

economic valuation of habitat defragmentation a study of the veluwe the netherlands abstract this paper offers an economic value assessment of a nature protection programme in the veluwe the netherlands this programme involves two defragmentation scenarios the first scenario connects the central part of the veluwe with river forelands in a north eastern direction i e the meadows of the ijssel river while the second scenario is focussed on defragmentation in a south western direction i e the meadows of the rhine river the valuation is based on a questionnaire that was administered during face to face interviews in the area and through the internet we employ a contingent valuation approach to assess the respondents willingness to pay for the realisation of the defragmentation scenarios it appears that the mean willingness to pay wtp for the two defragmentation scenarios is 162 2 lognormal distribution per respondent because the veluwe is considered a nature park of national importance we performed an aggregation of individual wtp estimates over dutch households with the resulting aggregate estimates we can compare the total costs and benefits of the two scenarios for habitat defragmentation in the veluwe in addition we test whether respondents value the two scenarios equally we also check whether the methods of data collection face to face interviews and internet questionnaires have distinct influences on the stated wtp responses

limit moves as censored observations of equilibrium futures price in garch processes we develop an algorithm for estimating generalized autoregressive conditional heteroscedasticity models for time series containing some censored observations motivation for the algorithm comes from those futures markets and some equity markets that have limits constraining the maximum allowable movement in price in a day when a limit is reached trading stops and the equilibrium price is not observed we maximize the likelihood function by replacing the unobservable squared error terms with their expected values we evaluate the algorithm performance by extensive simulation and apply it to treasury bill futures data from a period of high volatility and frequent limit moves

an explanation for the compass rose pattern abstract the compass rose pattern cannot be observed in daily returns in the spot foreign exchange forex market but is observable when intraday forex returns are used monte carlo simulations show that the pattern is visible only when the tick volatility ratio is above some threshold level a condition that is readily met with intraday returns

traffic accidents deaths and alcohol consumption the main goal of this article is to analyse the relationship existing among prices of alcoholic beverages alcohol consumption and traffic fatalities for the spanish autonomous communities during the time interval 1998 to 2002 among the main results we highlight a positive correlation between alcohol consumption and traffic mortality rate basically governments implement two kinds of policies to reduce the traffic mortality rate one is oriented to control the supply of alcohol by increasing alcohol taxes the other is oriented to preserve traffic security increasing the number of sanctions for traffic rule infraction we find evidence that both policies exert a positive influence in the reduction of traffic fatalities there is no empirical evidence to indicate that being a novice driver increases the tendency to be involved in a mortal traffic accident

an empirical analysis of alcohol addiction results from the monitoring the future panels in a panel of young adults we find that alcohol consumption is addictive in the sense that increases in past or future consumption cause current consumption to rise the positive and significant future consumption effect is consistent with the hypothesis of rational addiction the long run price elasticity is approximately 60 larger than the short run price elasticity and twice as large as the elasticity that ignores addiction thus a tax hike policy to curtail consumption or abuse may not have a favorable cost benefit ratio unless it is based on the long run price elasticity jel 110

economic conditions and alcohol problems this study investigates the relationship between macroeconomic conditions and two alcohol related outcomes liquor consumption and highway vehicle fatalities fixed effect models are estimated for the 48 contiguous states over the 1975 1988 time period alcohol consumption and traffic deaths vary procyclically with a major portion of the effect of economic downturns attributed to reductions in incomes rather than employment the intake of hard liquor is the most sensitive to the state of the macroeconomy there is no evidence however that fluctuations in economic conditions have a disproportionate impact on the drunk driving of young adults

implicit taxes collected by state liquor monopolies state monopolization or taxation aresupposedly justified because of negativeexternalities from alcohol consumption butrecent research questions the efficacy ofsuch policies suggesting that their actualgoals may be revenue generation consideration of this hypothesis isfacilitated by estimates of the implicittaxes charged in monopoly states whichgenerally are substantially higher thantaxes in non monopoly states evidencethat monopolization and high taxes do notaffect the level of externalities is alsoexplained by adjustments that rationalindividuals make to avoid the consequencesof such policies thus providing furthersupport for the revenue maximizationhypothesis

new estimates of the optimal tax on alcohol in this paper i use a new data set to estimate the optimal alcohol tax rate as a benchmark the empirical results imply that the optimal tax rate is over 100 percent of the net of tax price however alcohol taxation is a second best solution to the problems associated with alcohol abuse i conclude that the optimal alcohol tax rate would be much lower if punishment for drunk driving were more certain and severe government provision of information about the health consequences of heavy drinking would also remove part of the efficiency rationale for alcohol taxes

can beer taxes affect teen pregnancy evidence based on teen abortion rates and birth rates economists have investigated the effects of increased alcohol taxes on various alcohol related phenomena like traffic fatalities but to my knowledge this study is the first to investigate the effects of beer taxes on teen pregnancy outcomes namely abortion and birth rates the study employs statelevel data for 15 19 year old women for the years 1985 1988 1992 and 1996 the smallness of the panel imposes some constraints on the statistical methods used results indicate that higher beer taxes have statistically significant negative effects on teen abortion rates though the magnitudes of the effects are quite small effects on birthrates are statistically insignificant this suggests that increased beer taxes may help prevent some unwanted pregnancies that would typically be terminated via abortions rather than culminating in live births however the small magnitudes of the effects strongly caution against relying on increased beer taxes to noticeably reduce teen pregnancy rates

minimum wage effects throughout the wage distribution this paper provides evidence on a wide set of margins along which labor markets can adjust in response to increases in the minimum wage including wages hours employment and ultimately labor income not surprisingly the evidence indicates that low wage workers are most strongly affected while higher wage workers are little affected workers who initially earn near the minimum wage experience wage gains nevertheless their hours and employment decline and the combined effect of these changes on earned income suggests adverse consequences on net for low wage workers

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

combat exposure cigarette consumption and substance use this study estimates the relationship between combat exposure and several risky health behaviors cigarette consumption binge drinking and drug use we find that the u s active duty military personnel deployed to combat zones with enemy firefight are more likely to subsequently smoke cigarettes consume alcohol and use illicit drugs than their counterparts deployed to noncombat operations our results suggest that the mental health effects of combat can explain up to two thirds of the estimated association between combat exposure and risky health behaviors jel h56 i12

are alcohol tax hikes fully passed through to prices evidence from alaska on 1 october 2002 the state of alaska increased taxes on malt beverages from 0 35 per gallon to 1 07 per gallon increased taxes on wine from 0 85 per gallon to 2 50 per gallon and increased taxes on distilled spirits from 5 60 per gallon to 12 80 per gallon the net effect is that the tax on a standard serving rose from about 3 cents for beer 2 cents for wine and 4 cents for spirits to a uniform tax of 10 cents per standard serving of each type of alcohol beverage this paper uses primary data on alcoholic beverage prices in alaska to study a very basic question what was the impact of the tax hikes on prices an alcohol tax hike is often viewed as a public health policy tool to discourage excessive alcohol consumption and alcohol related problems such as drunk driving the impact of a tax hike on alcoholic beverage prices is a key link in the chain of the causality from the tax to public health economic theory and previous empirical studies mainly of taxes on goods other than alcoholic beverages do not provide very much guidance on what to expect following a tax hike it is an empirical question to answer the question i conducted telephone surveys just before and a year after the tax hike of on premise and off premise alcohol retail establishments across alaska

gas prices beer taxes and gdl programmes effects on auto fatalities among young adults in the us efforts to reduce teenage driving fatalities can be categorized as enhancing driving skills constraining driving behaviour and limiting the exposure of young drivers to the road this article uses state year specific fatality analysis reporting system fars data on the motor vehicle fatalities of young adults aged 15 24 to estimate the effects of gasoline prices beer taxes and the enactment of graduated drivers license gdl programmes over the 1985 2006 period results indicate that a 10 increase in gasoline prices reduce fatalities by 3 2 6 2 the largest percentage reductions occurred among 15 to 17 year old drivers 10 higher beer taxes were estimated to reduce motor vehicle fatalities among young drivers by approximately 1 3 in this case there was virtually no effect on 15 to 17 year old drivers finally the introduction of more restrictive gdl programmes those with a 6 month learner s permit phase and subsequent limits on early nighttime driving or on the number of passengers reduced

the effect of marital breakup on the income distribution of women with children having a female firstborn child significantly increases the probability that a woman s first marriage breaks up recent work has exploited this exogenous variation to measure the effect of divorce on economic outcomes and has concluded that divorce has little effect on women s mean household income however using a quantile treatment effect methodology abadie et al 2002 we find that divorce widens the income distribution it increases the probability that a woman has very low or very high household income it appears that some women successfully generate income through child support welfare combining households and increased labor supply after divorce while others are markedly unsuccessful thus although divorce has little effect on mean income it nonetheless increases poverty and inequality these findings imply that divorce has important welfare consequences

visibility of the compass rose in financial asset returns a quantitative study abstract the compass rose phenomenon is studied based on the random walk model of stock prices it is found that the structure is inherently present in any financial data having a finite precision but becomes visible only under some conditions a quantitative description of the pattern visibility condition is given providing a method for the interpretation of pattern appearance and a more comprehensive understanding of the compass rose phenomenon this is achieved by defining a measure of pattern quality the arguments and the proposed method are supported by numerical examples one such example is the presentation of patterns in portfolios with some specific weights

changes in the distribution of children s family income over the 1990 s while the 1990 s were a good decade for many u s families there has been an ongoing debate about how children particularly poor children have been faring child poverty rates did not fall substantially in the economic expansion of the 1980 s and rose to the very high rate of 23 percent in 1993 furthermore substantial changes in public assistance programs were implemented over this decade major legislative reform in 1996 increased work mandates on welfare recipient families and gave states much greater discretion to enforce these mandates and actually terminate assistance these changes could make at least some poor families worse off if they lost public assistance and were unable to find steady employment we propose to investigate changes in the entire distribution of children s family income over the 1990 s which allows us to observe the relative changes in income experienced among children in higherand lower income families we are particularly interested in two questions i how has the economic status of children changed at different points in the income distribution ii is there any evidence that welfare reform contributed to the observed changes some evidence on changes in child wellbeing over the 1990 s suggests good news child poverty rates fell to 16 percent by 2001 and poverty rates among black children hit a historical low of 30 percent in that year blank 2002 and jeffrey grogger et al 2002 provide a complete set of citations to the growing literature that looks at changes in income and consumption over the past decade at least some of this research indicates that not all low income families experienced economic gains in this paper we use data on children s household income from the march current population survey cps and average together information from 1992 1995 and 1997 2000 by averaging four years of data we have an adequate number of observations to observe income reliably at each centile 1 100 in the distribution we focus on these comparison years because they both bracket the economic expansion of the 1990 s and they bracket the 1996 legislative changes in welfare programs to account for differences in family size across families our focus is on the income to needs ratio defined as the income level of the child s family divided by the official poverty line for that family rather than on actual income levels we compare data from two samples one that includes all children and another that includes only children in families without both parents present this latter sample is largely composed of children in single parent families but also includes children who live with neither parent about 3 percent of all children in the mid 1990 s

split sample tests of no opinion responses in an attribute based choice model researchers using questionnaires to elicit preferences must decide whether to include response options that allow respondents to express no opinion using a split sample design we explore the implications of alternative answer formats including and not including no opinion responses in an attribute based choice experiment the results indicate that using multiple no opinion responses may enable researchers to differentiate between respondents who choose no opinion options due to satisficing and those expressing utility indifference existing literature suggests no opinion responses may be treated as no but our results show treating no opinion responses as no can yield substantially disparate preference estimates

public monopoly and economic efficiency evidence from the pennsylvania liquor control board s entry decisions we estimate a spatial model of liquor demand to analyze the impact of government controlled retailing on entry patterns in the absence of the pennsylvania liquor control board the state would have roughly 2 5 times the current number of stores higher consumer surplus and lower payments to liquor store employees with just over half the number of stores that would maximize welfare the government system is instead best rationalized as profit maximization with profit sharing government operation mitigates but does not eliminate free entry s bias against rural consumers we find only limited evidence of political influence on entry jel d42 d72 l11 l12 l43 l81

discrete choice under preference uncertainty an improved structural model for contingent valuation abstract this paper is concerned with discrete choice contingent value estimation in the presence of response errors we attempt to extend the theoretical frameworks developed by hanemann 1984 amer j agric econom 66 332 341 and cameron 1988 j environ econom management 15 355 379 by introducing preference uncertainty with individual respondents we assume that respondents have incomplete knowledge about their true valuation of a nonmarket resource and thus may give wrong yes no answers on whether or not to pay a given bid amount for the resource a post decisional confidence measure for each observed yes no answer is elicited for characterizing the degree of preference uncertainty with the help of this confidence measure we develop an improved structural model for deriving value estimates data from a forest environment valuation survey are used for the empirical estimations

garch estimation and discrete stock prices an application to low priced australian stocks the garch model is misspecified if applied to returns calculated from discrete prices we propose a modification of the above model for handling such cases we find large differences between the standard and the extended model estimates although the results sometimes are obscured by large standard errors

short run marginal medical costs from booze and butts evidence from the states this article uses a panel data set of u s states over the 1980 to 2007 period to estimate the demands for medical care cigarettes and beer the estimation process generates own price income and cross price elasticities for all three goods implied per capita beer and cigarette consumption elasticities of per capita health care expenditures suggested by our baseline estimates are 0 83 and 0 14 respectively these results are robust to a number of specification tests simulations suggest that yearly marginal medical costs amount to approximately 12 per bottle and 27 cents per cigarette in the short run in 2012 dollars these results are likely to be driven by the much larger corresponding increases in the consumption of binge drinkers and heavy smokers

the virtuous tax lifesaving and crime prevention effects of the 1991 federal alcohol tax increase the last time that federal excise taxes on alcoholic beverages were increased was 1991 the changes were larger than the typical state level changes that have been used to study price effects but the consequences have not been assessed due to the lack of a control group here we develop and implement a novel method for utilizing interstate heterogeneity to estimate the aggregate effects of a federal tax increase on rates of injury fatality and crime we provide evidence that the relative importance of alcohol in violence and injury rates is directly related to per capita consumption and build on that finding to generate estimates a conservative estimate is that the federal tax which increased alcohol prices by 6 initially reduced injury deaths by 4 5 6480 deaths in 1991 and had a still larger effect on violent crime

beer taxation and alcohol related traffic fatalities the majority of studies of alcohol related traffic fatalities find beer taxes to be an important policy variable this is surprising since beer taxes only have a small impact on consumption and heavy drinkers are the least responsive to prices this study shows that the tax relationship is not robust across data periods and that it reflects missing variable biases while lack of control for law enforcement efforts does not appear to bias tax coefficients failure to include determinants of alcohol consumption other than taxes and drinking age and or factors that simultaneously determine drinking behavior and political support for alcohol taxes apparently do

alternative panel estimates of alcohol demand taxation and the business cycle this paper uses a new technique of estimating dynamic heterogeneous panels developed by pesaran shin and smith 1999 on state level alcohol consumption as a function of income taxes and cyclical variables pooled mean group pmg estimators provide an alternative to extremes of pooling the data assuming slope homogeneity and estimating individual states assuming complete heterogeneity postsample tests indicate that a conventional fixed effects model outperforms both the pmg estimator and individual state estimators despite the heterogeneity of the sample current levels of taxation appear to have little effect on alcohol consumption and alcohol is found to be a procyclical good

robust structure without predictability the compass rose pattern of the stock market plotting daily stock returns against themselves with one day s lag reveals a striking pattern evenly spaced lines radiate from the origin the thickest lines point in the major directions of the compass this compass rose pattern appears in every stock it is caused by discreteness however counter examples demonstrate that the existence of exchange imposed tick sizes e g eighths is neither necessary nor sufficient for the compass rose the compass rose cannot be used to make abnormal profits it is structure without predictability among other consequences the compass rose may bias estimation of arch models and tests for chaos technical analysts attempt to identify recurring patterns in stock prices e g edwards and magee 1992 similarly chaos researchers embed time series of stock returns into multi dimensional spaces and attempt to identify lowdimensional attractors e g barnett and chen 1988 figure 1 the hope is that with structure comes predictability and abnormal profits in fact neither of these literatures has yet discovered indisputable structure we follow a procedure similar to a chaos researcher s we look at a simple scatter diagram of daily stock returns plotted against themselves with one day s lag we document a structural relationship the compass rose that is strikingly geometrical in contrast to the products of technical analysis and chaos theory the structure we find is indisputably present in every stock unfortunately the compass rose cannot be used for predictive purposes by market participants it is an artifact of market microstructure it follows that even a successful search for significant structure in stock market data need not enhance predictability nor lead to abnormal profits an equally important lesson is that microstructure effects can be spectacular in daily and even weekly data several areas for future research are given these include potential biases caused by the compass rose in the estimation of autoregressive conditional heteroskedasticity arch models and in a standard test for chaos

affordability of energy cost increases for korean companies due to market based climate policies a survey study by sector this paper estimates the affordability of energy cost increases for energy intensive companies due to the introduction of market based climate policies in korea data were collected from 62 respondents from iron steel cement and petrochemical industries over 90 of which are under control of the target management scheme an ongoing mandatory system limiting the greenhouse gases ghg emissions of large energy consuming entities the affordable energy cost increase was estimated using the multiple bounded discrete choice mbdc format results of which show that a mean energy cost increase of 2 6 is acceptable for all the entities sampled companies from the three sectors had similar affordability with an average acceptable energy cost increase of 2 5e2 8 the affordable policy induced energy cost in creases equate to carbon prices of 2500e4000 krw t co2 about 2 3e3 5 usd t co2 for the companies surveyed econometric analysis confirmed a strong correlation between energy price level and company ownership with cost affordability with a view to developing carbon tax policy and a domestic ghg emissions trading scheme in korea this research provides a basis from an industrial perspective for carbon pricing

the effect of cocaine prices on crime the relationship between cocaine prices and crime has critical implications for u s drug policy but is theoretically indeterminate because cocaine price changes affect crime through changes in both cocaine consumption and expenditures this paper investigates this relationship in annual data from 1981 95 on 29 large u s cities accounting for simultaneity by using two stage least squares with measures of wholesale supply factors and retail enforcement intensity as instruments for cocaine prices controlling for prices of other drugs deterrence socioeconomic factors and city and year specific effects a strong negative relationship exists between cocaine prices and six of seven fbi index crimes

consumer willingness to pay for genetically modified food in kenya genetically modified gm crops are popular in many regions of the world but their deployment in africa is hindered by safety concerns and regulatory issues although the continent is in dire need of boosting its food production although consumers acceptance of gm food has been analyzed in many continents no such studies have been conducted in africa therefore a survey of 604 consumers was conducted in nairobi kenya in 2003 to gauge consumers awareness of gm crops their willingness to pay wtp for gm food and the factors that influence their wtp consumers knowledge of gm crops was limited and only 38 of the 604 respondents were aware of gm crops people in higher education and income groups were more aware than others regardless people were generally appreciative of the technology and a large majority 68 would be willing to buy gm maize meal at the same price as their favorite brand consumers were however concerned about possible side effects especially on the environment and biodiversity wtp was estimated using a double bounded dichotomous choice model and the mean wtp was found to be 13 8 higher than the average price of non gm maize meal perceptions of health risk and ethical and equity concerns had a negative influence on the likelihood of purchasing gm maize meal whereas trust in government to ensure food quality had a positive influence on wtp people with at least some secondary education and those in the high income category were more likely to purchase gm maize meal at the same price the study concludes that because awareness is still low appropriate communications are needed to involve the consumer in the debate consumers acceptance in this study was high but the research needs to be expanded to rural areas where most consumers live and other survey methods need to be explored

the demand for alcohol the differential response to price although several studies indicate that drinking is responsive to price little work has focused on whether prices have a differential effect on light moderate or heavy drinking this study examines the price responsiveness of the demand for alcohol whether heavy drinkers are less sensitive to price than light or moderate drinkers the study uses data on alcohol consumption on the 1983 national health interview survey the results indicate that both light and heavy drinkers are much less price elastic than moderate drinkers further we cannot reject the hypothesis that the very heaviest drinkers have perfectly price inelastic demands