are there environmental limits to cost benefit analysis this paper considers the problem areas found in applying cost benefit analysis cba to projects involving environmental costs or benefits this is particularly relevant given recent moves by the uk government to include environmental valuations in cba exercises and in other related appraisal activities following the publication of the pearce report the paper argues that a major problem lies in placing monetary values on non market goods the paper also addresses the problems of i differences between citizen and consumer values ii complexity of ecosystems iii irreversibility and uniqueness and iv intergenerational equity and discounting the extent to which cba is an institution open to capture is also discussed

information school choice and academic achievement evidence from two experiments we examine a natural experiment and a field experiment that provided direct information on school test scores to lower income families in a public school choice plan receiving information significantly increases the fraction of parents choosing higher performing schools parents with high scoring alternatives nearby were more likely to choose nonguaranteed schools with higher test scores using random variation from each experiment we find that attending a higher scoring school increases student test scores the results imply that school choice will most effectively increase academic achievement for disadvantaged students when parents have easy access to test score information and good options from which to choose

arbitrary values good causes and premature verdicts abstract this paper offers an alternative interpretation of the conclusions kahneman and knetsch propose based on two contingent valuation cvm surveys the evaluation argues that while framing is important to cvm estimates the design implementation and empirical findings reported from these surveys do not support their judgments moreover with the exception of temporal embedding conventional economic descriptions of individual behavior can explain the response patterns that they suggest are at variance with standard value theory

inconsistent preferences in environmental protection investment and the central government s optimal policy environmental protection plans cannot succeed without full cooperation among related units however inconsistent investment preferences toward environmental protection increase the damage to the environment this article employs the contract mechanism to analyse environmental protection effects when the central government directly subsidizes the local governments the results reveal that subsidies from the central government are not only unable to solve the problem of the inconsistent investment preferences among the central and local governments but also induce the free riding behaviour of local governments because of the free riding behaviour of the local governments there is no such equilibrium in which the central government prefers the sequential investment mode while the local governments prefer the simultaneous investment mode

preferences for environmental quality under uncertainty abstract although the expected effects of environmental policies and interventions are rarely known with certainty stated preference surveys rarely elicit preferences over uncertain environmental outcomes this article presents empirical results challenging the view that ignoring such uncertainty during preference elicitation is of no consequence so long as people only care about final environmental states we show that measured preferences for final environmental states water quality in this case depend on whether people choose between final states or between lotteries over final states in contrast to the typical finding for monetary lotteries we find significant under weighting of low probability events related to water quality

endogenous inequality in integrated labor markets with two sided search we consider a market with red and green workers where labels are payoff irrelevant workers may acquire skills skilled workers search for vacancies while firms search for workers a unique symmetric equilibrium exists in which color is irrelevant there are also asymmetric equilibria in which firms search only for green workers more green than red workers acquire skills skilled green workers receive higher wages and the unemployment rate is higher among skilled red workers discrimination between ex ante identical individuals arises in equilibrium and yet firms have perfect information about their workers and strictly prefer to hire minority workers

effects of free choice among public schools in this paper i investigate the impact of a programme in tel aviv israel that terminated an existing inter district busing integration programme and allowed students free choice among public schools the identification is based on difference in differences and regression discontinuity designs that yield various alternative comparison groups drawn from untreated tangent neighbourhoods and adjacent cities across identification methods and comparison groups the results consistently suggest that choice significantly reduces the drop out rate and increases the cognitive achievements of high school students it also improves behavioural outcomes such as teacher student relationships and students social acclimation and satisfaction at school and reduces the level of violence and classroom disruption

precision of dichotomous choice contingent valuation welfare measures some simulation results the purpose of this research is to examine the roles of individuals heterogeneous economic factors and model misspecification in dichotomous choice contingent valuation welfare measurement willingness to pay for an improvement of environmental quality is studied simulation results indicate that the precision of welfare estimates increases with individuals income levels and decreases with the price of the quality related good the dependence of the consumption of the quality related good on the environmental quality also affects the reliability of welfare estimates

monte carlo benchmarks for discrete response valuation methods this paper argues that the belief that discrete contingent valuation cv questions yield substantially larger estimates of the mean and the median willingness to pay wtp for nonmarket resources in comparison to open ended cv questions is unfounded monte carlo experiments estimate the factors influencing the performance of wtp estimates based on discrete response models most of the error arises from the specification errors common to the empirical models in the literature these experiments suggest models where wtp is dominated by nonuse or passive use values are likely to have smaller errors than where large use values influence these decisions

estimating recreation demand using the properties of the implied consumer surplus consumer surplus estimates are random variables while they are generally recognized as stochastic little attention was given to their properties prior to bockstael and strand s 1987 evaluation of conventional practices for using recreation demand models in benefit measurement their paper as well as all the research it stimulated adopted a similar strategy namely to judge the methods for estimating demand or random utility models based on the properties of their respective consumer surplus estimates this paper proposes a different strategy to define estimators based on the properties of their implied consumer surplus estimates this type of argument is not new and usually is associated with the rationale offered for bayesian estimators 2 however the motivation for the estimator proposed here can be based on minimizing the mean squared error of the consumer surplus estimates moreover it can be constructed from the statistics usually reported with ordinary least squares ols estimates

protection or expropriation politically connected independent directors in china abstract this paper empirically investigates politically connected independent directors among chinese listed firms using 7487 firm year observations from the shanghai stock exchange during the period of 2003 2012 we distinguish between privately controlled firms and state controlled firms we find that the value effect and incentives of appointing independent directors with political ties are shaped by a firm s ownership structure more exactly chinese listed privately controlled firms with a large fraction of politically connected independent directors tend to outperform their non connected counterparts due to the ease of access to external debt financing and more subsidies from the government however the appointment of politically connected independent directors also enlarges the magnitude of related party transactions with the controlling party in listed privately controlled firms in contrast having politicians as independent directors does not help to add value to listed state controlled firms especially firms controlled by the local government due to the expropriation of minority investors via more related party transactions and more severe over investment problems

labor market implications of weak ties 1 introductionmany of us have heard the phrase it s not what you know but who you know while this may not be strictly true approximately one half of workers in the united states do find employment through friends relatives and other social contacts granovetter 1995 further in a seminal paper granovetter 1973 argues that for the purpose of finding jobs it is acquaintances not close friends who are most important in helping individuals find employment he claims that friends whom one knows well are likely to be close in social space close friends know one s other close friends and tend to have social networks similar to each other thus any information held by a given close friend may be obtained from other close friends as well the job information of close friends is often redundant in contrast acquaintances tend to have less similar social networks and know different people from one s close friends granovetter argued that acquaintances also are more likely to have different information about available jobs which makes them valuable job contacts granovetter labeled acquaintances as weak ties as opposed to close friends who are known as strong ties in this article i am defining weak and strong ties as granovetter 1983 did weak ties are acquaintances and strong ties are close friends the important point of these definitions is the idea that on average acquaintances are less likely to know one s other friends than strong ties on average the social network of strong ties has more overlap than the social network of weak ties as i will explain in more detail below the lack of overlap of acquaintances implies that a social network with more weak ties will be larger will have more range than a social network with fewer weak ties since granovetter s article much work has been done by other scholars to validate the importance of weak ties in labor markets by answering two questions first researchers asked whether weak ties are a common source of finding employment these studies have been successful in demonstrating that weak ties are indeed an important source of finding employment for instance in granovetter 1973 of the people finding jobs through referral sources such as friends family and other personal contacts 27 8 use weak ties 16 7 use strong ties and the majority 55 6 use ties of moderate strength in between weak and strong others have replicated the finding that weak ties are a common means of finding employment 1 in summary this line of research has demonstrated that as granovetter claimed weak ties do play an important role in matching workers and jobs second because weak ties appear to be important in locating jobs researchers have asked if the use of weak ties as a job finding method increases income bridges and villemez 1986 marsden and hurlbert 1988 wegener 1991 the findings of these studies suggest that there is little evidence of a relationship between weak ties and income note that the hypothesized link between weak ties and income was not a part of granovetter s hypothesis as he makes clear in granovetter 1983 the present article can be seen as an extension to this second line of questioning in this article i use an example to show that previous methods used to measure the effect of weak ties on income will underestimate the effect if it exists i then provide a new method of estimating the effect of weak ties on income that directly considers the social network of individuals granovetter s idea that weak ties are more likely to provide novel information rests on the idea that weak ties are less likely to overlap than strong ties on average in other words weak ties know a smaller fraction of one s other friends compared with strong ties on average i use this idea to show that less overlap in friendships increases the range of an individual s social network

risk self protection and ex ante economic value abstract we develop three propositions about the ex ante value of reduced risk if there is a continuous outcome distribution and if self protection influences outcome probability and severity then 1 unobservable utility terms cannot be eliminated from the ex ante value expressions 2 knowledge of the convexity or the nonconvexity of dose response functions is insufficient to sign changes in these expressions and 3 self protection expenditures need not be a lower bound measure of these expressions therefore many restrictions applied in recent empirical work on the economic value of risk changes are not immediately transferable to settings where endogenous risks prevail

the demand for site specific recreational activities a characteristics approach abstract a model of constrained utility maximizing behavior is developed to explain how a representative individual allocates his ski days among alternative sites the physical characteristics of the ski areas and the individual s skiing ability are explicit arguments in the utility function the budget allocation is given along with the parametric costs to ski including travel costs entrance fees equipment costs and the opportunity cost of his time shares a site s share being the proportion of ski days that the individual spends at that site are derived and assumed multinomially distributed a stochastic specification which maintains the inherent properties of the shares maximum likelihood estimation confirms the basic hypothesis that costs ability and characteristics all are important determinants of the sites shares the model explains a large proportion of the skier s allocation of ski days a multinomial logit model of skier behavior is also developed and maximum likelihood estimates of its parameters are obtained examination of the summary statistics from my model and the logit model indicates that my model predicts the skier s choice of sites better than the logit model

welfare estimation using aggregate and individual observation models a comparison using monte carlo techniques due to the weak behavioral foundations of aggregate demand models zonal travel cost models have been largely abandoned in favor of models based on individual observations however sample selection difficulties in individual observation models often require the use of distribution sensitive limited dependent variables estimators in this paper i use monte carlo simulations to investigate whether the bias from aggregation is worse than possible bias from these narrowly specified estimators somewhat surprisingly the results indicate that zonal models often outperform the individual observation models especially when using an aggregate model that incorporates intrazonal variance of the explanatory variables

evaluating education programs that have lotteried admission and selective attrition we study the effectiveness of magnet programs in an urban district that ration excess demand by admission lotteries differential attrition arises since students who lose the lottery are more likely to pursue options outside the school district than students who win the lottery when students leave the district important outcome variables are often not observed the treatment effects are not point identified we exploit known quantiles of the outcome distribution to construct informative bounds on treatment effects we find that magnet programs improve behavioral outcomes but have no significant effect on achievement

the effect of school choice on participants evidence from randomized lotteries school choice has become an increasingly prominent strategy for enhancing academic achievement to evaluate the impact on participants we exploit randomized lotteries that determine high school admission in the chicago public schools compared to those students who lose lotteries students who win attend high schools that are better in a number of dimensions including peer achievement and attainment levels nonetheless we find little evidence that winning a lottery provides any systematic benefit across a wide variety of traditional academic measures lottery winners do however experience improvements on a subset of nontraditional outcome measures such as self reported disciplinary incidents and arrest rates

welfare effects of changes in environmental quality under individual uncertainty about use we adapt the theoretical state preference model to value nonmarket public goods under individual uncertainty about use illustrating with an assessment of willingness to pay to prevent acid rain lake damage in the northeast united states individual usage uncertainty is modelled via probabilities of participation in trout fishing changes in environmental quality are valued using a random utility model to explain yes no responses to a contingent valuation question we produce quantitative welfare measures individual fitted and simulated passiveand active use values individual expected consumer surplus option price option value and complete individual willingness topay loci

leveraging lotteries for school value added testing and estimation conventional value added models vams compare average test scores across schools after regression adjusting for students demographic characteristics and previous scores this article tests for vam bias using a procedure that asks whether vam estimates accurately predict the achievement consequences of random assignment to specific schools test results from admissions lotteries in boston suggest conventional vam estimates are biased a finding that motivates the development of a hierarchical model describing the joint distribution of school value added bias and lottery compliance we use this model to assess the substantive importance of bias in conventional vam estimates and to construct hybrid value added estimates that optimally combine ordinary least squares and lottery based estimates of vam parameters the hybrid estimation strategy provides a general recipe for combining nonexperimental and quasi experimental estimates while still biased hybrid school value added estimates have lower mean squared error than conventional vam estimates simulations calibrated to the boston data show that bias notwithstanding policy decisions based on conventional vams that control for lagged achievement are likely to generate substantial achievement gains hybrid estimates that incorporate lotteries yield further gains

measurement error in recreation demand models the joint estimation of participation site choice and site characteristics abstract in the demand for recreational fishing sites an important explanatory variable differentiating sites is the unobserved expected catch rate since the observed catch rate is subject to sampling variability using the average of a site s observed catch rates causes the parameter estimator on catch to be biased downward we develop and demonstrate a solution to this errors in variables problem when there are repeated measurements on the catch rate consistent and efficient estimates of both the demand parameters and the expected catch rates are obtained by simultaneously estimating them by maximum likelihood an empirical example demonstrates the importance of simultaneous estimation

does competition among public schools benefit students and taxpayers tiebout choice among districts is the most powerful market force in american public education naive estimates of its effects are biased by endogenous district formation i derive instruments from the natural boundaries in a metropolitan area my results suggest that metropolitan areas with greater tiebout choice have more productive public schools and less private schooling little of the effect of tiebout choice works through its effect on household sorting this finding may be explained by another finding students are equally segregated by school in metropolitan areas with greater and lesser degrees of tiebout choice among districts

job information networks neighborhood effects and inequality this paper explores the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends relatives and acquaintances during job search and its consequences for the job market it also addresses the role of network structure and size the resource endowments of contacts and nature of the links between contacts to explain differences in the effects of job information networks in doing so the paper also turns to the sociology literature on job information networks and provides an economic perspective on such sociological concepts as strong versus weak ties inbreeding distance from structural holes etc the paper distinguishes between models of exogenous job information networks that is where individuals obtain job related information through a given social structure and endogenous job information networks which are social networks that result from individuals uncoordinated actions the paper pays special attention to such issues as physical and social proximity and sharing of information and discusses them in the context of the recent social interactions and neighborhood effects literature finally the paper outlines a model that integrates job information networks where interactions occur in business cycle frequencies with the dynamics of human capital formation which include the joint effects of parental community and neighborhood human capital and are set in life cycle frequencies for the purpose of organizing suggestions for future research and examining earned income inequality

estimating social welfare using count data models an application to long run recreation demand under conditions of endogenous stratification and truncation this paper develops a negative binomial model of recreation demand that corrects for both truncation and endogenous stratification this approach recovers the demand associated with the general population not just the users of the site this model demonstrates the importance of the joint nature of the population s latent demand for trips and the consumer surplus associated with those trips the empirical results provide an estimate of the willingness to pay by washington state residents for hiking opportunities in the cascade mountain range these results are used to forecast total trips and willingness to pay over the next forty years copyright 1995 by mit press

with a little help from my friends quality of social networks job finding and job match quality this paper studies the effect of network quality on job finding and job match quality using longitudinal data and a direct measure of network quality which is based on the employment of friendship ties various identification strategies provide robust evidence that a higher number of employed contacts increases the job finding rate network quality also increases wages for high skilled workers forming networks with non familial contacts instead for low skilled workers more employed familial contacts lead to a negative but not significant effect on wages these findings reconcile previous mixed evidence of network effects on wages indicating heterogeneity by skill level and relationship type

the travel cost model for lake recreation a comparison of two methods for incorporating site quality and substitution effects this paper empirically illustrates how different assumptions regarding recreationists decision making behavior affect the predicted changes in recreational activity given a water quality improvement a multinomial logit model which reallocates visits away from other sites to the improved site predicts a smaller outward shift of the recreationist s demand curve than the more traditional travel cost model which does not assume any reallocation of visits among sites

what floats your boat preference revelation from lotteries over complex goods abstract we examine a type of lottery used to distribute some publicly held resource access rights the lottery provides participants with the opportunity to choose among a set of simple gambles over multi attribute goods participant choices result in an endogenous distribution of success rates over gambles that reflects tradeoffs between the relative desirability of the available goods and the probability of winning when lottery winnings are multi attribute goods lottery outcomes provide sufficient information to estimate hedonic prices marginal utility and marginal rates of substitution among attributes we develop a model for characterizing preferences from this information set we apply our model to idaho s four rivers whitewater recreation lottery which allows applicants to apply for one permit among a large set of alternative river day combinations that provide varying river and weather characteristics this lottery structure shows promise as a foundation for economic experiments for preference revelation

information asymmetry and equilibrium monitoring in education abstract we develop a theoretical and computational model of school choice and achievement that embeds information asymmetries in the provision of education because school effort is unobservable to households and policymakers schools have an incentive to under provide effort this moral hazard affects both public and private schools although public schools are subject to an additional distortion because of limited competition and fixed funding household monitoring of schools can mitigate moral hazard but some households may free ride on the monitoring of others using our calibrated model we simulate two policies aimed at raising achievement public monitoring of public schools and private school vouchers our results indicate that in large scale settings no single tool may suffice the reason is twofold a no tool raises achievement or welfare for all households and b since the extent of moral hazard is endogenous the application of each tool has unintended consequences that limit its own effectiveness results also indicate that setting the policy parameters for public schools at the levels preferred by the majority of households may mitigate the distortions nonetheless the current actual values of these parameters seem to match more closely the preferences of public schools than the preferences of parents

knowledge sharing and the dynamics of social capital abstract mutual aid often entails the sharing of knowledge we investigate how in turn knowledge sharing affects the long run dynamics of mutual aid in our economy agents with specific knowledge are held up by their principals inside communities agents aid each other by sharing their specific knowledge this process generates a new type of knowledge which exacerbates the specificity of the existing types and induces more agents to engage in mutual aid however since the knowledge generated is shared it progressively renders agents inside communities more flexible and thus less dependent on mutual aid we characterize conditions under which in the long run mutual aid spreads or is abandoned

valuing non marketed goods the case of elk permit lotteries abstract permit allocation methods offer a way of estimating the value of non marketed elk hunting applicants compete for elk hunting permits in colorado by acquiring preference points that have a monetary cost and by distributing themselves among hunts until their marginal values are equalized we infer the marginal value of permits from the opportunity costs incurred to acquire these permits and use a hedonic regression analysis to estimate the impact of various hunt characteristics on permit value

state enterprise relation local economic priority and corporate environmental responsibility this paper empirically investigates how the state enterprise relation and local government s economic priority affect corporate environmental responsibility in a sample of chinese polluting enterpr

informal hiring and income in the labor market this note explores the generalizability of the conventional belief that jobs found through weak social ties and through work related social ties provide higher incomes than jobs found through other means data are analyzed from a sample which is representative of a complete cross section of a large metropolitan labor market the results show that zero order relationships generalize in most instances to broadly defined populations however the effectiveness of weakly tied and work related informal contacts becomes greatly diminished when controls are added for measures of worker productivity characteristics

opaque financial reports r2 and crash risk abstract we investigate the relation between the transparency of financial statements and the distribution of stock returns using earnings management as a measure of opacity we find that opacity is associated with higher r2s indicating less revelation of firm specific information moreover opaque firms are more prone to stock price crashes consistent with the prediction of the jin and myers 2006 r2 around the world new theory and new tests journal of financial economics 79 257 292 model however these relations seem to have dissipated since the passage of the sarbanes oxley act suggesting that earnings management has decreased or that firms can hide less information in the new regulatory environment

private school vouchers and student achievement an evaluation of the milwaukee parental choice program in 1990 wisconsin began providing vouchers to a small number of low income students to attend nonsectarian private schools controlling for individual fixed effects i compare the test scores of students selected to attend a participating private school with those of unsuccessful applicants and other students from the milwaukee public schools i find that students in the milwaukee parental choice program had faster math score gains than but similar reading score gains to the comparison groups the results appear robust to data imputations and sample attrition although these deficiencies of the data should be kept in mind when interpreting the results

the impact of school choice on student outcomes an analysis of the chicago public schools we explore the impact of school choice on student outcomes in the context of open enrollment within the chicago public schools cps roughly half of the students opt out of their assigned high school to attend a different cps school and these students are much more likely than those who remain in their assigned schools to graduate to determine the source of this apparent benefit we compare outcomes across i similar students with differential access to schooling options and ii travelers and non travelers within the same school the results suggest that other than for students who select career academies the observed cross sectional benefits are likely spurious

firm location political geography and environmental information disclosure abstractas the subjective and objective factors that influence corporate behaviours political region and firm location are of great importance to environmental information disclosure eid with spatial and political geography as a research perspective this article makes a study by using the samples of manufacturing listed companies from 2009 to 2011 as a result we determine that regulatory distance and political geography had negative effects on eid while political geography weakens regulatory distance s function after considering an enterprise s administrative rank we determined that when the rank is higher regulatory distance has negative effects on eid when the rank is lower the effects are the opposite regarding political geography it always weakened the regulatory distance s function moreover the effects are significant only when the enterprises had low governmental regulation the study shows the effects that firm location and political geography have made on eid at the same time th

choice of ontario high schools and student sorting by ability to what extent can offering more choice in schooling lead to cream skimming or the sorting of students by ability i study whether increased choice leads to student sorting by ability into high schools in the greater toronto area on average 41 of students opt out of the high school to which they would normally be assigned based on their residence students are more likely to opt out in areas where accessibility to other schools is greatest due to population density and explicit open enrolment policies while students of higher ability are generally more likely to opt out an interaction term between school choice and ability is insignificant suggesting that increased choice does not have differential impacts by student ability findings are robust to changes in assumptions about instrument exogeneity

the mortality cost of political connections we study the relationship between the political connections of chinese firms and workplace fatalities in our preferred specification we find that the worker death rate for connected companies is two to three times that of unconnected firms depending on the sample employed a pattern that holds for within firm estimations the connections mortality relationship is attenuated in provinces where safety regulators promotion is contingent on meeting safety targets in the absence of fatalities connected firms receive fewer reports of major violations for safety compliance whereas in years of fatal accidents the rate of reported violations is identical moreover fatal accidents produce negative returns at connected companies and are associated with the subsequent departure of well connected executives these results provide suggestive evidence that connections enable firms to avoid potentially costly compliance measures rather than using connections to avoid regulatory response after accidents occur our findings emphasize the social costs of political connections and suggest that appropriate regulatory incentives may be useful in mitigating these costs

option prices for groundwater protection abstract this paper reports results from a contingent valuation study of households willingness to pay pay to prevent uncertain future nitrate contamination of a potable supply of groundwater the functional form of the corresponding logit model is derived from utility maximization theory probability of future demand change in the probability of future supply and an attitudinal score for interests in the well being of future generations are significant positive determinants of option prices several implications of these results for aquifer management policy are highlighted

designing random allocation mechanisms theory and applications randomization is commonplace in everyday resource allocation we generalize the theory of randomized assignment to accommodate multi unit allocations and various real world constraints such as group specific quotas controlled choice in school choice and house allocation and scheduling and curriculum constraints in course allocation we develop new mechanisms that are ex ante efficient and fair in these environments and that incorporate certain non additive substitutable preferences we also develop a utility guarantee technique that limits ex post unfairness in random allocations supplementing the ex ante fairness promoted by randomization this can be applied to multi unit assignment problems and certain two sided matching problems jel c78 d82

discussion of morey and waldman s measurement error in recreation demand models abstract morey and waldman have proposed a method for handling measurement error in site attributes such as catch rates in models of anglers choice of fishing sites we discuss the properties of this method and compare these properties with those of the standard estimation procedure we show that i both methods are biased and ii the standard procedure is consistent whenever morey and waldman s procedure is consistent as well as under more general conditions in particular morey and waldman s procedure is inconsistent if any site attributes are omitted from the model whereas the standard procedure is consistent in the presence of omitted site attributes as long as the impact of these attributes on the dependent variable is uncorrelated with included variables a condition shared by all regression models

what is a peer the role of network definitions in estimation of endogenous peer effects we employ a standard identification strategy from the peer effects literature to investigate the importance of network definitions in estimation of endogenous peer effects we use detailed information on friends in the national longitudinal study of adolescent health survey add health to construct two network definitions that are less ad hoc than the school grade cohorts commonly used in the educational peer effects literature we demonstrate that accurate definitions of the network seriously impact estimation of peer effects in particular we show that peer effects estimates on educational achievement smoking and drinking are substantially larger with our more detailed measures than with the school grade cohorts these results highlight the need to further understand how friendships form in order to fully understand implications for policy that alters the peer group mix at the classroom or cohort level

job contact networks abstract many workers hear about or obtain their jobs through friends and relatives the aim of this paper is twofold first we relate both individual and aggregate labor market outcomes to the network structure of personal contacts second we study strategic network formation to this purpose we develop a model specifying at the individual level both the decision to form contacts with other agents and the process by which information about jobs is obtained and transmitted we show that equilibrium networks always exist and that only moderate levels of network asymmetry can be sustained at equilibrium also we establish a general non monotonicity result on information flow and unemployment with respect to network size in symmetric networks

social network structure segregation and equality in a labor market with referral hiring abstract we examine the effects of social network structure on inequality in a model of referral hiring that focuses on groups rather than individuals more random social networks yield higher employment rates than less random ones if the population is integrated or job vacancy information flows are random however less random social networks allow for better containment of job information inside a group in a segregated population with non random job information flows resulting in higher employment rates we report on the robustness of these findings with respect to the size of minority and majority groups and the amount of social segregation

joint estimation of catch and other travel cost parameters some further thoughts abstract e r morey and d m waldman propose and use an estimator that jointly estimates catch rates and the parameter on those catch rates it is designed for situations where there is limited catch data for some of the sites in the choice set and takes advantage of the fact that trip patterns reflect variations in catch rates anglers do not like to fish at sites with few fish k train d mcfadden and r johnson note that this estimator is particularly sensitive to omitted variable bias and suggest an alternative estimator but their estimator effectively eliminates poor sites from the choice set

does the market value value added evidence from housing prices after a public release of school and teacher value added value added data are an increasingly common evaluation tool for schools and teachers many school districts have adopted these methods and released the results publicly in this paper we study the release of value added data in los angeles by the los angeles times newspaper to identify how measured value added is capitalized into housing prices this analysis is the first in the us school valuation literature to examine property value responses to a value added information shock which is of interest as this measure is less correlated with demographics than typical school quality measures unique to this setting as well is the release of both school and teacher level value added data which allows us to examine how property values respond to both types of information using a difference indifferences methodology surrounding the release we find that neither school nor teacher value added scores are capitalized into home prices our results suggest that despite the contentiousness following these data releases homeowners do not consider value added models as currently constructed to be a relevant school quality measure on the margin

comparing welfare estimates of environmental quality changes from recreation demand models abstract this paper presents a procedure for examining the reliability of welfare estimates resulting from the estimation of multiple site recreation demand models a simulation approach is suggested where a utility function is combined with observations on individual and site characteristics to generate simulated data sets welfare measures associated with an improvement in site quality are calculated recreation demand models are estimated using the simulated data sets estimated welfare measures resulting from the recreation demand models are then compared to the true welfare measures calculated from the simulated data the procedure is demonstrated using two commonly employed recreation demand models

a fourier analysis of the us dairy industry measurement of economies of scale and scope is particularly important for predicting growth and product diversification however estimates are useful only to the extent the underlying production technology is modelled accurately this study measures economies of scale and scope in the rapidly changing us dairy industry with a fourier flexible cost function which provides a global approximation of the unknown function we use the high quality national agricultural and resource management survey arms survey data we find economies of scale at most firm sizes and persistent economies of scope across firm sizes in this industry which is counter to estimates from two diewert flexible functional forms

lottery rationed public access under alternative tariff arrangements changes in quality quantity and expected utility abstract a recent phenomenon is the emergence of quotas restricting individual access to public resources as regulators commonly ration access opportunities by lottery this paper extends the traditional open access destination choice framework for non market demand and welfare analysis conceptual results for one and two part tariff lotteries indicate that individuals may sustain welfare losses from improvements in quality or increases in the quota if aggregate demand is sufficiently responsive relative to individual utility nested random expected utility models reums are estimated with a panel dataset of individual choices of lottery rationed harvest rights for wild game empirical results indicate that the types and timing of tariff payments affect participation choices over rationed and open access alternatives and the benefits derived from changes in the quality and quantity of the lottery rationed access opportunities

rational expectations in games a player i s actions in a game are determined by her beliefs about other players these depend on the game s real life context not only its formal description define a game situation as a game together with such beliefs call the beliefs and i s resulting expectation rational if there is common knowledge of rationality and a common prior in two person zero sum games i s only rational expectation is the game s value in an arbitrary game g we characterize i s rational expectations in terms of the correlated equilibria of the doubled game 2g in which each of i s strategies in g appears twice

do job networks disadvantage women evidence from a recruitment experiment in malawi using a eld experiment in malawi where men and women apply for future surveyor positions with a local rm we nd that highly skilled women are systematically disadvantaged through the use of referrals this happens both because most men recommend other men and because women refer fewer candidates who qualify for the position we document that segregated networks do not cause this behavior we develop a theoretical model of referral choice and exploit random variation in referral contract terms to nd that that both men s and women s biases result from social incentives rather than expectations of performance we also document that the screening potential of networks is maximized when men refer men this paper suggests that the use of social networks in hiring is an additional channel through which women are disadvantaged in the labor market

frictional unemployment on labor flow networks abstract we develop an alternative theory to the aggregate matching function in which workers search for jobs through a network of firms the labor flow network the lack of an edge between two companies indicates the impossibility of labor flows between them due to high frictions in equilibrium firms hiring behavior correlates through the network generating highly disaggregated local unemployment hence aggregation depends on the topology of the network in non trivial ways this theory provides new micro foundations for the beveridge curve wage dispersion and the employer size premium we apply our model to employer employee matched records and find that network topologies with pareto distributed connections cause disproportionately large changes on aggregate unemployment under high labor supply elasticity

developments in non expected utility theory the hunt for a descriptive theory of choice under risk this article reviews recent developments in the economic theory of individual decision making under risk since the 1950s it has been known that individual choices violate the standard model of expected utility in predictable ways considerable research effort has now been devoted to the project of developing a superior descriptive model following an overview of non expected utility theories which distinguishes between conventional and non conventional approaches the paper seeks to assess these alternative models in terms of empirical success using laboratory and field data and theoretical usefulness the closing sections reflect on some new directions emerging in this literature

allocation of goods by lottery i introduction many goods such as hunting permits oil drilling leases cellular telephone licenses and rights to fishing berths as well as some buds such as the military draft jury duty and who is to be thrown overboard on a sinking life raft are or have been allocated by lotteries in neo classical welfare economics the random distribution of property rights does not affect allocative efficiency as long as transferability is allowed and the transactions costs are non prohibitive lottery allocations however are generally not transferable thus lottery allocations are inefficient since the goods are not ultimately allocated to the users who value them the most a number of authors such as aubert 1959 fienberg 1971 eckhoff 1989 and elster 1989 36 122 have argued that lotteries are chosen as the allocative instrument because it represents a fair or just means of allocating the goods rawls 1971 374 and eckhoff 1989 have noted that where it is impractical to divide the goods equally among those who desire them a lottery serves to satisfy both the requirement that the process be fair and that the allocation problem be resolved relatively costlessly elster 1989 113 however notes that lotteries are not the only fair allocation mechanism for example he points out that in jewish ethics the problem of allocating an indivisible good such as life saving resources is resolved by denying it to everyone even economists would probably prefer a lottery to this resolution the fairness hypothesis has a rich history in the old testament lotteries are deemed a fair way of allocating goods such as the inheritance of land numbers 33 54 lotteries are also used to allocate bads in perhaps the most famous biblical example of use of lots jonah was chosen by lot to be sacrificed to appease god who had brought a storm that threatened to wreck the ship the story goes that the lot selected jonah because he was shirking his duties elsewhere and should not have even been on the vessel jonah 1 6 1 notice that fair here is taken to mean just given this theological foundation it is not surprising that the lottery has seen frequent use in legal history as well one of the most interesting cases occurred in swedish and finnish trials in the 17th and 18th centuries in cases where a man was murdered by a mob lotteries were used to allocate punishment since the law required an eye for an eye no more and no less eckhoff says that if it was impossible to ascertain which of them had dealt the mortal blow the courts determined that one of the responsible parties be sentenced to death and that the person be selected by lottery 1989 19 a similar use of lotteries occurs in military history to deal with cases of mass desertion in roman armies every tenth man was executed decimated and the remainder pardoned in more modern times the lottery has been used in u s law 2 first of course is the use of a lottery to decide who shall sit on a jury a connection between fairness and lotteries however has also appeared in the common law in an 1842 case u s v holmes which has been discussed by fienberg 1971 eckhoff 1989 and elster 1989 a ship sank in a heavy storm and the lone surviving life raft was in grave danger of sinking the crew threw overboard fourteen male passengers in an effort to save the rest when back in port after being rescued a crewman named holmes the only crew member who had not disappeared upon arrival to port was brought to trial for the deaths of the passengers the court ruled that the non essential members of the crew should have been thrown overboard before any passengers and if that was not sufficient then passengers should have been selected by lot which is the fairest mode elster 1989 65 the fact that a human life presumably a large cost was at stake ex post did not affect the decision 3 the environmental economics literature contains a number of references to the social preferences for and benefits of lottery allocations

valuing a fishing day an application of a systematic varying parameter model deciding how to allocate forage among animals is a fundamentally important process in range management the wisdom of these decisions can be enhanced by estimating the marginal value of forage needed by competing species we present a method for

corporate political strategy an examination of the relation between political expenditures environmental performance and environmental disclosure two fundamental business ethics issues that repeatedly surface in the academic literature relate to business s role in the development of public policy suarez s l 2000 does business learn the university of michigan press ann arbor mi roberts r w and d d bobek 2004 accounting organizations and society 29 5 6 565 590 and its role in responsibly managing the natural environment newton l 2005 business ethics and the natural environment blackwell publishing oxford when studied together researchers often examine if and how corporations influence environmental policy decisions drawing from literatures on corporate political activity corporate social and environmental performance and corporate environmental disclosure we develop and empirically examine two research questions concerning the relations between corporate political expenditures environmental performance and environmental disclosure the questions are 1 do corporations that are poorer environmental performers spend more on political activities than their better performing counterparts 2 is there an association between corporations spending on political activities and the extent of their financial report environmental disclosures we investigated these questions through analyses of data we gathered on a sample consisting of 119 u s environmentally sensitive firms for the 2001 2002 election cycle after controlling for firm size and specific industry effects our tests reveal a significant inverse relationship between firm environmental performance and political spending this is consistent with the notion that u s firms with relatively poorer environmental performance records engage more intensely in corporate political activities as part of their overall strategic management of their relationship with the state in addition a significant and positive association between the amount of political spending and the extent of environmental disclosure suggests that environmental disclosure and political spending are both proactive complementary tactics to strategically manage public policy pressure if corporations strategies are intentionally designed to unreasonably limit their environmental responsibilities or to misrepresent firm environmental performance then we argue that these activities reflect a significant lapse in ethical conduct

does greater school autonomy make a difference evidence from a randomized natural experiment in south korea abstract we exploit the unique features of high schools in seoul to study the effects of school autonomy on student outcomes under south korea s equalization policy both private and public schools in seoul admit students that are assigned randomly to them receive equal government funding charge identical fees and use similar curricula however private schools have greater flexibility in personnel decisions and their principals and teachers face stronger incentives to perform we find that private high schools have better student outcomes than public high schools our results suggest that autonomy in personnel decisions explains the positive student outcomes in private schools

risk preferences over simple and compound public lotteries abstract lottery choice experiments with monetary payoffs have a long tradition for eliciting risk preferences this note demonstrates how risk preferences over multi attribute public lotteries may be estimated consistent with experimental findings results from simple and compound lottery choice models indicate significant differences in the degree of risk aversion between male and female applicants

the effects of social networks on employment and inequality we develop a model where agents obtain information about job opportunities through an explicitly modeled network of social contacts we show that employment is positively correlated across time and agents moreover unemployment exhibits duration dependence the probability of obtaining a job decreases in the length of time that an agent has been unemployed finally we examine inequality between two groups if staying in the labor market is costly and one group starts with a worse employment status then that group s drop out rate will be higher and their employment prospects will be persistently below that of the other group

rationality and analysts forecast bias this paper proposes and tests a quadratic loos utility function for modeling corporate earnings forecasting where financial analysts trade off bias to improve management access and forecast accuracy optimal forecasts with minimum expected error are optimistically biased and exhibit predictable cross sectional variation related to analyst and company characteristics empirical evidence from individual analyst forecasts is consistent with the model s predictions these results suggest that positive and predictable bias may be a rational property of optimal earnings forecasts prior studies using classical notions of unbiasedness may have prematurely dismissed analysts forecasts as being irrational or inaccurate

interpreting the beveridge curve an agent based approach abstract we construct an agent based computational model of the labour market with heterogeneous workers and firms to study the behaviour of the beveridge curve along the business cycle in this framework search frictions arise because filling a vacancy is a costly activity that takes time whereas productivity mismatch comes from firms imperfect information about the value of the workers before the job interview takes place the model offers an interpretation for the outward movement exhibited by the u s beveridge curve since the last months of 2009 sectoral misallocation plays a role moreover when the speed of recovery from a recession is not uniform across sectors unemployed workers are less selective in their application strategy and firms must spend more time in choosing the best match unemployment remains high in spite of an increase in the number of vacancies

job search and network composition implications of the strength of weak ties hypothesis workers find jobs through personal contacts weak and strong ties and formal sources alternative formulations of the strength of weak ties hypothesis suggest 1 weak ties relay job offers more frequently than strong ties or 2 weak tie offers are drawn from a better distribution a formal model shows that both formulations imply a correlation between network composition and a job seeker s minimum acceptable wage however the use of a weak tie is never associated with higher expected wages under the firstformulation and is only sometimes associated with higher expected wages under the secondformulation these results suggest that researchers shouldfocus on job seekers network structures

institutional interest ownership type and environmental capital expenditures evidence from the most polluting chinese listed firms this study empirically examines whether firms environmental capital expenditures impact institutional investors investment decisions in the chinese market we particularly examine the impact of ownership type on the relationship of environmental capital expenditures and the behavior of different types of institutional investors by classifying institutional investors into two categories short term and long term investors in addition this study further investigates whether environmental capital expenditures related to ownership type increase firm value we find that long term institutional investors tend to invest in state owned firms soes making environmental capital expenditures results also indicate that with governmental backing and encouragement the market value of soes making more environmental capital expenditures is likely to increase however no similar results are found for non soes

disruption versus tiebout improvement the costs and benefits of switching schools most students change schools at some point in their academic careers but some change very frequently and some schools experience a great deal of turnover while many argue that mobility harms students economists tend to emphasize tiebout type moves to procure better school quality sq this paper disentangles the disruption effects of moves from changes in sq importantly it identifies the negative externality movers impose on other students student turnover is shown to entail a substantial cost for movers and non movers alike this cost appears to be larger for lower income and minority students who typically attend much higher turnover schools

a theoretical foundation for count data models the paper develops a theoretical foundation for using count data models in travel cost analysis two micro models are developed a restricted choice model and a repeated discrete choice model we show that both models lead to identical welfare measures

vouchers for private schooling in colombia evidence from a randomized natural experiment colombia used lotteries to distribute vouchers which partially covered the cost of private secondary school for students who maintained satisfactory academic progress three years after the lotteries winners were about 10 percentage points more likely to have finished 8th grade primarily because they were less likely to repeat grades and scored 0 2 standard deviations higher on achievement tests there is some evidence that winners worked less than losers and were less likely to marry or cohabit as teenagers benefits to participants likely exceeded the 24 per winner additional cost to the government of supplying vouchers instead of public school places

school quality and black white relative earnings a direct assessment the wage differential between black and white men fell from 40 percent in 1960 to 25 percent in 1980 it has been argued that this convergence reflects improvements in the relative quality of black schools to test this hypothesis we assembled data on pupil teacher ratios annual teacher pay and term length for black and white schools in the eighteen segregated states from 1915 to 1966 these data are linked to estimated returns to education for southern born men from different cohorts and states in 1960 1970 and 1980 improvements in the relative quality of black schools explain 20 percent of the narrowing of the black white earnings gap between 1960 and 1980

neighborhood effects on crime for female and male youth evidence from a randomized housing voucher experiment the moving to opportunity mto demonstration assigned housing vouchers via random lottery to public housing residents in five cities we use the exogenous variation in residential locations generated by mto to estimate neighborhood effects on youth crime and delinquency the offer to relocate to lower poverty areas reduces arrests among female youth for violent and property crimes relative to a control group for males the offer to relocate reduces arrests for violent crime at least in the short run but increases problem behaviors and property crime arrests the gender difference in treatment effects seems to reflect differences in how male and female youths from disadvantaged backgrounds adapt and respond to similar new neighborhood environments

a revealed preference approach to the measurement of congestion in travel cost models abstract travel cost models are regularly used to determine the value of recreational sites or particular site characteristics yet congestion a key site attribute is often excluded from such analyses one reason for this omission is that congestion is determined in equilibrium by the process of individuals sorting across sites and thus presents significant endogeneity problems this paper illustrates this source of endogeneity describes how previous research has dealt with it using stated preference techniques and describes an instrumental variables approach to address it in a revealed preference context we demonstrate that failing to address the endogeneity of congestion leads one to dramatically understate its costs we apply our technique to the valuation of a large recreational fishing site in wisconsin lake winnebago which if eliminated would induce significant re sorting of anglers amongst remaining sites ignoring congestion leads to an understatement of the lake s value by more than 50

the amenity value of woodland in great britain a comparison of economic estimates forests produce benefits over and above the revenue yielded from timber and other wood based products most important among these may be the recreational benefits for visitors which have been examined in several studies total benefits for residents are perhaps more accurately captured in property values since ceteris paribus the price of a house reflects willingness to pay to live near an environmental amenity such as a forest to gain access to it and also the amenity non use value of the forest in so far as it creates a pleasant landscape however the total non priced value of forestry is not the sum of hpm and itcm benefit estimates recreational benefits will typically be less and will be subsumed in the hpm estimates since the hedonic price is partly induced by the value of recreational access

heterogeneous beliefs in over the counter markets the behavior and stability of over the counter markets is of central concern to regulators little is known however about how the structure of these markets determine their properties in this paper we consider an over the counter market populated by boundedly rational heterogeneous traders in which the structure is represented by a network stability is found to decrease as the market becomes less well connected however the configuration of connections has a significant effect the presence of hubs such as those found in scale free networks increases stability and decreases volatility whilst small world short cut links have the opposite effect volatility in the fundamental value increases market volatility however volatility in the riskless asset returns has an ambiguous effect

market and non market mechanisms for the optimal allocation of scarce resources a number of identical objects is allocated to a set of privately informed agents agents have linear utility in money the designer wants to assign objects to agents that possess specific traits but the allocation can only be conditioned on the willingness to pay and on observable characteristics i solve for the optimal mechanism the choice between market or non market mechanisms depends on the statistical linkage between characteristics valued by the designer and willingness to pay

finishing high school and starting college do catholic schools make a difference in this paper we consider two measures of the relative effectiveness of public and catholic schools finishing high school and starting college these measures are potentially more important indicators of school quality than standardized test scores in light of the economic consequences of obtaining more education single equation estimates suggest that for the typical student attending a catholic high school raises the probability of finishing high school or entering a four year college by thirteen percentage points in bivariate probit models we find almost no evidence that our single equation estimates are subject to selection bias

rationed access and welfare case of public resource lotteries pressures on public lands and waterways are resulting increasingly in the rationing of public access by lottery upon accounting for the uncertainties of random rationing discrete choice models lend themselves to analyzing participation in public resource lotteries and estimating welfare changes key to valuing lotteryrationed rights is accounting for changes in access probabilities that result from policy changes the empirical application models the discrete choices of more than 18 000 participants in a new mexico lottery system for elk harvest rights welfare estimates are obtained from simulated policy changes that affect individually and jointly the access probability and indirect utility

blacks hispanics and white ethnic groups are blacks uniquely disadvantaged despite the impression that the federal statistical system has been starved for resources the record over the last decade or so judged by conventional deflation methods has been one of rough stability the quality of u s international data on commodity and service trade direct investment and export and import prices has improved but there has been a serious deterioration in data on portfolio capital flows stocks and income where improvements have taken place the main source has been computerization both inside and outside the federal statistical system the standard deflators for expenditures do not adequately take account of the decline in the cost of computing and therefore impart a downward bias to the estimates of input despite the gains in some areas serious deficiencies remain for the increasingly important international sector the improvements that have occurred have resulted mainly from congressional and outside pressures while successive administrations have shown little concern with the quality of the data they produce and presumably use for policy making this abstract was borrowed from another version of this item