marriage market divorce legislation and household labor supply this paper provides a theoretical framework for analyzing the impact of the marriage market and divorce legislation on household labor supply in our approach the sex ratio in the marriage market and the rules governing divorce are examples of distribution factors these factors are defined as variables that affect the household members bargaining position but not preferences or the joint budget set we extend the collective labor supply model developed by chiappori to allow for distribution factors we show that our model imposes new restrictions on the labor supply functions and eases the identification of individual preferences and the intrahousehold decision process the model is estimated using psid data for the year 1988 our results do not reject the restrictions imposed by the model also the sex ratio and divorce laws deemed favorable to women are found to affect labor supply behavior and the decision process in the directions predicted by the theory and to have sizable effects

industry classifications and return comovement a company s industry affiliation is commonly used to construct homogeneous stock groupings for portfolio risk management relative valuation and peer group comparisons a variety of industry classification systems have been adopted however creating disagreements as to companies industry assignments this analysis of the global industry classification system gics and fama french system indicates that common movement in returns and operating performance resulting from industry effects is stronger for stocks of large companies than for those of small companies also increasingly fine levels of disaggregation improve discrimination up to six digit gics codes after which the benefits tail off stock groupings based on industry exhibit stronger out of sample homogeneity than groups formed from statistical cluster analysis

policy analysis in matching markets abstract price and quantity interventions intended to affect assignments are common in many labor and education markets e g financial aid quotas this article discusses an empirical framework based on the theory of stable matching that is suitable for policy analysis while accounting for the presence of equilibrium sorting it then compares financial incentives and supply interventions for encouraging the training of family medicine residents in rural america due to equilibrium effects the primary effect of financial incentives is to increase the quality not numbers of residents in rural programs while quantity regulations directly affect numbers without adversely affecting quality

the marriage squeeze interpretation of dowry inflation a comment in a recent paper rao 1993 advanced a marriage squeeze explanation to the secular rise in real dowries so called dowry inflation witnessed in india arguing that the relevant ages with respect to marriage are 10 19 for women and 20 29 for men rao found that the ratio of women to men in those age groups had increased over time moreover this sex ratio was found to have a positive and significant impact on dowry when one controls for differences in traits of brides and grooms the empirical results presented here suggest that rao s findings are not robust using the same data i fail to replicate his main result that is that the sex ratio women 10 19 men 20 29 has a positive impact on dowries moreover rao s specification regressing dowries on differences in spouses traits bride s minus groom s imposes the restriction that attributes influence dowries in a symmetrical fashion ignoring compelling evidence against that assumption i find that regressing dowry on individual traits instead of differences improves the model fit considerably

the role of intangible assets in explaining the investment profit puzzle starting around the early 2000s and especially after the 2008 crisis the rate of capital accumulation for us nonfinancial corporations has slowed down despite relatively high profitability indicating a weakening of the link between profitability and investment while the literature mostly focuses on financialisation and globalisation as the reasons behind this slowdown i suggest adding another layer to these explanations and argue that in conjunction with financialisation and globalisation we need to pay attention to the increased use of intangible assets by nonfinancial corporations in the last two decades intangibles such as brand names trademarks patents and copyrights play a role in the widening of the profit investment gap as the use of these assets enables firms to increase market power and profitability without necessarily generating a corresponding increase in fixed capital investment after discussing the ways nonfinancial corporations use intangible assets i look at large corporations in the usa and find the following i the ratio of intangible assets to the capital stock increased in general this increase is highest for firms in high technology healthcare nondurables and telecommunications ii industries with higher intangible asset ratios have lower investment to profit ratios iii industries with higher intangible asset ratios have higher markups and profitability iv the composition of the nonfinancial corporate sector has changed and the weight of high technology and healthcare firms has increased but this increase did not correspond to an equal increase in their investment share the decline in the investment share of durables nondurables and machinery is matched by an increase in the investment share of location specific industries with low intangible asset use most notably firms in energy extraction in general these firms have steadier markups and higher investment to profit ratios v yet intangible intensive industries profitability has increased faster than their share of investment or total assets all in all these findings are in line with the suggestion that the increased use of intangible assets enables firms to have high profitability without a corresponding increase in investment

what s my line a comparison of industry classification schemes for capital market research this study compares four broadly available industry classification schemes in a variety of applications common to capital market research standard industrial classification sic codes have been available since 1939 but are being replaced by north american industry classification system naics codes the global industry classifications standard gics sm system jointly developed by standard poor s and morgan stanley capital international msci is popular among financial practitioners whereas the fama and french 1997 algorithm is used primarily by academics our results show that gics classifications are significantly better at explaining stock return comovements as well as cross sectional variations in valuation multiples forecasted and realized growth rates research and development expenditures and various key financial ratios the gics advantage is consistent from year to year and is most pronounced among large firms the other three methods differ little from each other in most applications

marketplaces markets and market design marketplaces are often small parts of large markets and both markets and marketplaces come in many varieties market design seeks to understand what marketplaces must accomplish to enable different kinds of markets marketplaces can have varying degrees of success and there can be marketplace failures i ll discuss labor markets like the market for new economists and also markets for new lawyers and doctors that have suffered from the unraveling of appointment dates to well before employment begins markets work best if they enjoy social support but some markets are repugnant in the sense that some people think they should be banned even though others want to participate in them laws banning such markets often contribute to the design of illegal black markets and this raises new issues for market designers i ll briefly discuss markets and black markets for narcotics marijuana sex and surrogacy and the design of markets for kidney transplants in the face of widespread laws against and broader repugnance for compensating organ donors i conclude with open questions and engineering challenges

the rising price of husbands a hedonic analysis of dowry increases in rural india dowries in south asia have steadily risen over the last 40 years and now often amount to over 50 percent of a household s assets this paper attempts to investigate the reasons behind this increase it adapts rosen s implicit market model to the indian marriage market and tests predictions from the model with data from six villages in south central india and from the indian census it is found that a marriage squeeze caused by population growth resulting in larger younger cohorts and hence a surplus of women in the marriage market has played a significant role in the rise in dowries

large matching markets as two sided demand systems this paper studies two sided matching markets with non transferable utility when the number of market participants grows large we consider a model in which each agent has a random preference ordering over individual potential matching partners and agents types are only partially observed by the econometrician we show that in a large market the inclusive value is a sufficient statistic for an agent s endogenous choice set with respect to the probability of being matched to a spouse of a given observable type furthermore while the number of pairwise stable matchings for a typical realization of random utilities grows at a fast rate as the number of market participants increases the inclusive values resulting from any stable matching converge to a unique deterministic limit we can therefore characterize the limiting distribution of the matching market as the unique solution to a fixed point condition on the inclusive values finally we analyze identification and estimation of payoff parameters from the asymptotic distribution of observable characteristics at the level of pairs resulting from a stable matching

applied welfare economics with discrete choice models economists have been paying increasing attention to the study of situations in which consumers face a discrete rather than a continuous set of choices such models are potentially very important in evaluating the impact of government programs upon consumer welfare but very little has been said in general regarding the tools of applied welfare economics indiscrete choice situations this paper shows how the conventional methods of applied welfare economics can be modified to handle such cases it focuses on the computation of the excess burden of taxation and the evaluation of quality change the results are applied to stochastic utility models including the popular cases of probit and logit analysis throughout the emphasis is on providing rigorous guidelines for carrying out applied work this abstract was borrowed from another version of this item

motivations to remit evidence from botswana in this article a theory of motivations to send remittances is described and tested with data from botswana altruism is one of the motivations tested and found to be an insufficient explanation for remittances among migrants in botswana a refinement of the model stipulates a modified altruism or enlightened self interest in this model the relationship between the migrant and family is tempered by an implicit understanding of mutual benefit the household strategy may be to encourage some members to migrate as a means of spreading risk and sharing gains the household strategy is similar to an insurance policy where migration is to places where market potential is high the risks incurred might be high the example is given of migration during a drought in botswana migrant remittances were greater in households with more cattle or households with more to lose drought alone was not statistically related to remittances increases in remittances were related to increased levels of education it is suggested that repayment was the motive for parents investment in migrants education migrants gains are identified as the potential for an inheritance the security of channeling investments through a trusted family member and security in having a home to return to it is pointed out that the altruism and family remittances from urban migration were strategies that bridged the simple dynamic of either urban development or rural development impacting on family welfare it is suggested that household models of economy adopt some measure to express the relationship of household wealth to remittances from urban migrants

a field study on matching with network externalities we study the effects of network externalities within a protocol for matching faculty to offices in a new building using web and survey data on faculty s attributes and choices we identify the different layers of the social network institutional affiliation coauthorships and friendships we quantify the effects of network externalities on choices and outcomes disentangle the layers of the networks and quantify their relative influence finally we assess the protocol used from a welfare perspective our study suggests the importance and feasibility of accounting for network externalities in assignment problems and evaluates techniques that can be employed to this end jel c78 c93 d62 d85 z13

common ownership market power and innovation abstract i examine the effects of overlapping ownership on market power when there are external effects across firms this is done in an oligopoly model with cost reducing innovation with technological spillovers where firms have an overlapping ownership structure based largely on lopez and vives 2019 the model allows for cournot competition with homogeneous product and for bertrand with differentiated products as well as for strategic effects of r d investment it derives positive testable implications and normative results to inform policy

a comparison of industry classification schemes a large sample study in a large sample setting we compare four broadly available industry classification schemes in their effectiveness to group stocks with similar operating characteristics we demonstrate the advantage of the global industry classification scheme to be consistent across different application schemes common to capital market research and across different groups of firms

who marries whom and why this paper proposes and estimates a static transferable utility model of the marriage market the model generates a nonparametric marriage matching function with spillover effects it rationalizes the standard interpretation of marriage rate regressions and points out its limitations the model was used to estimate u s marital behavior in 1971 72 and 1981 82 the marriage matching function estimates show that the gains to marriage for young adults fell substantially over the decade unlike contradictory marriage rate regression results the marriage matching function estimates showed that the legalization of abortion had a significant quantitative impact on the fall in the gains to marriage for young men and women

on the efficiency of intra industry information transfers the dilution of the overreaction anomaly abstract we revisit the stock market anomaly documented by thomas and zhang 2008 and show that the apparent mispricing of information transfers has decayed over time as the us markets experienced rapid improvements in the efficiency of the underlying price formation processes utilizing recent advancements in market microstructure research to estimate firm specific proxies for market efficiency we demonstrate that the existence of the overreaction anomaly where stock prices of late announcers in response to the earnings reported by early announcers in the same industry are negatively related to subsequent price responses of late announcers to their own earnings reports is specific to an earlier sample period and results from the inefficient incorporation of information into prices largely attributable to an environment with high barriers to arbitrage our results indicate that the pricing efficiency of intra industry information transfers has increased in the recent years of increased liquidity and markedly higher trading activity

a direct test of the efficient marriage market hypothesis this paper takes gary becker s theory of marriage seriously in his seminal paper becker 1973 proposes an invisible hand theorem for the marriage market he argues that the competition for spouse leads men and women to be matched in such a way that maximizes the sum total of marital output applications of the economic approach to marriage are now commonplace becker et al 1977 study the effect of imperfect information on divorce benham 1974 scully 1979 and wong 1986 estimate the effect of wife s education on husband s earnings grossbard shechtman 1993 and rao 1993 focus on the effect of sex ratio on implicit or explicit bride prices or dowries the literature however has virtually ignored becker s hypothesis that marriage markets maximize total marital output i e that marriage markets are efficient mistakes are no doubt made in marriage decisions the marriage market is not a text book example of perfect competition because of elaborate social norms substantial search costs and room for bargaining and opportunistic behavior nevertheless we intend to push becker s efficient marriage market model at face value and directly confront it with data the hypothesis that the marriage market maximizes marital output provides a framework that allows estimating a model of spouse selection which recovers some of the parameters of the production function for marital output using the estimated parameters we can use programming techniques to find the optimal male female pairing that maximizes the sum of marital output the degree to which the actual pairing of husbands and wives corresponds to the optimal pairing provides a goodness of fit test of the efficient marriage market hypothesis our method is applied to census data in hong kong a model of spouse selection and other matching models differs from a discrete choice model e g mcfadden 1984 in two important ways first the choice of a spouse is mutual not only does each man choose a woman that yields him the highest net utility but each woman also picks a man that gives her the highest net utility second in a discrete choice model several individuals can choose the same alternative in marriage markets this is prohibited under monogamy thus new methods have to be developed to analyze choice in marriage markets although marital output and the shadow price of husbands and wives are not observable the theory of optimal matching allows us to write down the likelihood function for the observed choice of marital partners it turns out that this model of spouse selection reduces to a version of the tobit model under the assumption that error terms are independently and identically normal in multinomial logit models the interpretation of parameters is cumbersome especially when the number of alternatives is large in our model of spouse selection the estimated parameters are directly related to the production function of marital output the signs of these parameters can be used to address the issue of positive versus negative assortative mating the model can also be used to test marginal product pricing in the marriage market with the estimated production function from the model of spouse selection we can impute the marital output for all possible male female pairs using these imputed output figures the optimal pairing between men and women that maximizes the sum of marital output can be found using an algorithm that solves the assignment problem the degree to which this optimal pairing corresponds to the observed pairing then provides a natural way of assessing marriage market efficiency given the limited range of information contained in the census we find that our model of spouse selection fits the observed choices better than other models such as one based on ranking method following varian s 1990 proposal for goodness of fit tests for optimizing models we derive a measure of efficiency which is based on the distance between total imputed marital output under observed matching and that under optimal matching

motives for private transfers over the life cycle an analytical framework and evidence for peru abstract this paper tests for the motives for private income transfers we consider two motives altruism and exchange the question of private transfer motives is important because such motivation can influence the effects of public income transfers on the distribution of income using a household survey for peru we find that transfer amounts received increase with recipient pre transfer income which contradicts a key prediction of the strong form of the altruism hypothesis but is consistent with exchange we also find that capital market imperfections are likely to be an important cause of private transfers and that social security benefits crowd out the incidence of private transfers

an analysis of out of wedlock childbearing in the united states this paper relates the erosion of the custom of shotgun marriage to the legalization of abortion and the increased availability of contraception to unmarried women in the united states the decline in shotgun marriage accounts for a significant fraction of the increase in out of wedlock first births several models illustrate the analogy between women who do not adopt either birth control or abortion and the hand loom weavers both victims of changing technology mechanisms causing female immiseration are modeled and historically described this technology shock hypothesis is an alternative to welfare and job shortage theories of the feminization of poverty excerpt

full insurance in the presence of aggregate uncertainty this paper tests implications of full consumption insurance the object is to determine how much mileage can be obtained from a model with complete markets with such features as private information or liquidity constraints omitted the implication exploited is that individual consumption responds to aggregate risk but not to idiosyncratic risk the test involves regressing the change in household consumption onto the change in aggregate consumption and other right hand side variables such as the change in household income and change in employment status all variables other than the change in aggregate consumption are predicted to be insignificant in explaining the change in household consumption with observations on consumption and income for 10 695 households from the consumer expenditure survey the results are mixed the results for one specification exponential utility are mostly consistent with full consumption insurance the results for the other specification power utility are not

using weather variability to estimate the response of savings to transitory income in thailand this paper measures the extent to which farmers are able to use savings and dissavings to smooth consumption in response to unexpected shocks to income time series information on regional rainfall is used to construct estimates of transitory income due to rainfall shocks the relationship between these measures of transitory income and savings indicates that farm households save a significantly higher fraction of transitory income than nontransitory income jel d91 016 the incomes of farm households in developing countries are notorious for being both low and uncertain policies that increase the incomes of farmers may well be different

aggregation in matching markets this article develops aggregate relations for a matching market of heterogeneous suppliers and demanders under particular assumptions about the distribution of preferences and the matching game asymptotic aggregate relations for the number of realized matches of different types in the presence of flexible contracts such as a price are derived simulation experiments demonstrate that the model also provides excellent predictions in small populations the potential for applications within demographic labor market and welfare analyses is discussed

an intra and inter industry evaluation of three classification schemes common in capital market research we compare the standard industry classification sic the north american industry classification system naics and the global industry classification standard gics schemes in their effectiveness to group stocks with similar operating characteristics we are the first to analyse and compare individual functional category levels within and across each industry classification and test whether the three industry classifications show significant improvement in homogeneity with finer industry partitions across a wide range of research applications our results suggest that the gics system offers advantages over the other two systems in grouping firms across all its levels of industry categories and across different application schemes common to capital market research however the sic and naics offer additional advantages across their finest industry partitions our study has important implications for users of industry classifications in various financial and economic analyses research settings and regul

personality traits and the marriage market which and how many attributes are relevant for the sorting of agents in a matching market this paper addresses these questions by constructing indices of mutual attractiveness that aggregate information about agents attributes the first k indices for agents on each side of the market provide the best approximation of the matching surplus by a k dimensional model the methodology is applied on a unique dutch household survey containing information about education height body mass index health attitude toward risk and personality traits of spouses

structural estimation of marriage models a structural approach is used to examine who matches with whom a two sided matching model that allows for marital sorting in response to marriage market flexibility and agents preferences is utilized estimation is based on imbedding the numerical solution of a matching model within a maximum likelihood procedure results indicate that wage is more desirable than education in predicting marriageability for white men education is more desirable for black men the marriage market for white men is more flexible both marriage market flexibility and the chance of being classified correctly using agents wage and education decrease with age for white men

improving the numerical performance of static and dynamic aggregate discrete choice random coefficients demand estimation the widely used estimator of berry levinsohn and pakes 1995 p roduces estimates of consumer preferences from a discrete choice demand model with random coefficients market level demand shocks and endogenous prices we derive numerical theory results characterizing the properties of the nested fixed point algorithm used to evaluate the objective function of blp s estimator we discuss problems with typical implementations including cases that can lead to incorrect parameter estimates as a solution we recast estimation as a mathematical program with equilibrium constraints which can be faster and which avoids the numerical issues associated with nested inner loops the advantages are even more pronounced for forward looking demand models where the bellman equation must also be solved repeatedly several monte carlo and real data experiments support our numerical concerns about the nested fixed point approach and the advantages of constrained optimization for static blp the constrained optimization approach can be as much as ten to forty times faster for large dimensional problems with many markets

two sex demographic models classical stable population theory the standard model of population age structure and growth is ill suited to addressing many issues that concern economists and demographers because it is a one sex theory this paper investigates the existence uniqueness and dynamic stability of equilibrium in the birth matrix mating rule bmmr model a new model of age structure and growth for two sex monogamously mating populations the paper shows by means of examples that the bmmr model can have multiple nontrivial equilibria and establishes sufficient conditions for uniqueness it generalizes a theorem of w brian arthur to nonlinear systems and uses it to establish sufficient conditions for local dynamic stability

on the state of the union an overlapping generations model of marriage and divorce is constructed to analyze family structure and intergenerational mobility agents differ by sex marital status and human capital single agents meet in a marriage market and decide whether to accept or reject proposals to wed married couples must decide whether to separate or not parents invest in their children depending on their wherewithal a simulated version of the theoretical prototype can generate an equilibrium with a significant number of female headed families and a high degree of persistence in income across generations to illustrate the model s mechanics the effects of two antipoverty policies namely child support and welfare are investigated

rationalizability learning and equilibrium in games with strategic complementarities we study a rich class of noncooperative games that includes models of oligopoly competition macroeconomic coordination failures arms races bank runs technology adoption and diffusion r d competition pretrial bargaining coordination in teams and many others for all these games the sets of pure strategy nash equilibria correlated equilibria and rationalizable strategies have identical bounds also for a class of models of dynamic adaptive choice behavior that encompasses both best response dynamics and bayesian learning the players choices lie eventually within the same bounds these bounds are shown to vary monotonically with certain exogenous parameters we study the class of noncooperative supermodular games introduced by topkis 1979 and further analyzed by vives 1985 1989 who also pointed out the importance of these games in industrial economics supermodular games are games in which each player s strategy set is partially ordered the marginal returns to increasing one s strategy rise with increases in the competitors strategies so that the game exhibits strategic complementarity 2 and if a player s strategies are multidimensional marginal returns to any one com ponent of the player s strategy rise with increases in the other components this class turns out to encompass many of the most important economic applications of noncooperative game theory in macroeconomics diamond s 1982 search model and bryant s 1983 1984 rational expectations models can be represented as supermodular games in each of these models more activity by some members of the economy raises the returns to increased levels of activity by others in oligopoly theory some models of bertrand oligopoly with differentiated products qualify as supermodu lar games in these games when a firm s competitors raise their prices the marginal profitability of the firm s own price increase rises a similar structure is present in games of new technology adoption such as those of dybvig and spatt 1983 farrell and saloner 1986 and katz and shapiro 1986 when more users hook into a communication system or more manufacturers adopt an interface standard the marginal return to others of doing the same often rises similarly in some specifications of the bank runs model introduced by diamond and dybvig 1983 when more depositors withdraw their funds from a bank it is more worthwhile for other depositors to do the same in the warrant exercise

separate spheres bargaining and the marriage market this paper introduces the separate spheres bargaining model a new model of distribution within marriage it differs from divorce threat bargaining models e g manser brown mcelroy horney in that the threat point is not divorce but a noncooperative equilibrium within marriage this noncooperative equilibrium reflects traditional gender roles the predictions of our model thus differ from those of divorce threat bargaining models in the separate spheres model cash transfer payments to the mother and payments to the father can but need not imply different equilibrium distributions in existing marriages in the long run the distributional effects of transfer policies may be substantially altered by changes in the marriage market equilibrium

demand analysis using strategic reports an application to a school choice mechanism several school districts use assignment systems that give students an incentive to misrepresent their preferences we find evidence consistent with strategic behavior in cambridge such strategizing can complicate preference analysis this paper develops empirical methods for studying random utility models in a new and large class of school choice mechanisms we show that preferences are non parametrically identified under either sufficient variation in choice environments or a preference shifter we then develop a tractable estimation procedure and apply it to cambridge estimates suggest that while 82 of students are assigned to their stated first choice only 72 are assigned to their true first choice because students avoid ranking competitive schools assuming that students behave optimally the immediate acceptance mechanism is preferred by the average student to the deferred acceptance mechanism by an equivalent of 0 08 miles the estimated difference is smaller if beliefs are biased and reversed if students report truthfully

consumption smoothing migration and marriage evidence from rural india a significant proportion of migration in low income countries particularly in rural areas is composed of moves by women for the purpose of marriage we seek to explain these mobility patterns by examining marital arrangements among indian households in particular we hypothesize that the marriage of daughters to locationally distant dispersed yet kinship related households is a manifestation of implicit interhousehold contractual arrangements aimed at mitigating income risks and facilitating consumption smoothing in an environment characterized by information costs and spatially covariant risks analysis of longitudinal south indian village data lends support to the hypothesis marriage cum migration contributes significantly to a reduction in the variability of household food consumption farm households afflicted with more variable profits tend to engage in longer distance marriage cum migration the hypothesized and observed marriage cum migration patterns are in dissonance with standard models of marriage or migration that are concerned primarily with search costs and static income gains

an empirical model of the medical match abstract this paper develops a framework for estimating preferences in a many to one matching market using only observed matches i use pairwise stability and a vertical preference restriction on one side to identify preferences on both sides of the market counterfactual simulations are used to analyze the antitrust allegation that the centralized medical residency match is responsible for salary depression due to residents willingness to pay for desirable programs and capacity constraints salaries in any competitive equilibrium would remain on average at least 23 000 below the marginal product of labor therefore the match is not the likely cause of low salaries jel c78 i11 j31 j44 k21 l44

are remittances insurance a basic theoretical result is that if there is a pareto efficient allocation of risk across individual entities in this case individual household members in a risk sharing arrangement individual consumption should not be affected by idiosyncratic income shocks data and sample construction the empirical analysis uses data from linked household surveys conducted by the philippine national statistics office covering a nationally representative household sample the labor force survey the survey on overseas filipinos the family income and expenditure survey and the annual poverty indicators survey the variables included in the vector of controls wh are a set of household characteristics in the first period january june 1997 an indicator for urban location five indicators for the household head s highest level of education completed elementary some high school high school some college and college or more less than elementary omitted six indicators for head s occupation professional cl