relaxing intertemporal separability a rational habits model of labor supply estimated from panel data this article relaxes the assumption of separability of preferences over time that although implausible is usually maintained in life cycle labor supply models an empirically tractable rational habits model is specified and estimated on the basis of a 10 year sample of men from the michigan panel of income dynamics the effect of past hours of work in determining current hours decisions is found to be very important and well determined having allowed for permanent individual differences and for time effects

employer matching and 401 k saving evidence from the health and retirement study abstract employer matching of employee 401 k contributions is often touted as a powerful incentive to save for retirement and is a key component in pension plan design in the united states using detailed administrative contribution earnings and pension plan data from the health and retirement study this analysis formulates a life cycle consistent econometric specification of 401 k saving and estimates the determinants of saving accounting for non linearities in the household budget set induced by matching the participation estimates indicate that an increase in the match rate by 25 cents per dollar of employee contribution raises 401 k participation by 5 percentage points the parametric and semi parametric estimates for saving indicate that an increase in the match rate by 25 cents per dollar of employee contribution raises 401 k saving by 365 in 1991 dollars overall the analysis reveals that the 401 k saving response to matching is quite inelastic and hence matching is a rather poor policy instrument with which to raise retirement saving

infrequent housing adjustment limited participation and monetary policy this paper asks why monetary contractions have strong effects on the housing market the paper presents a model with staggered housing adjustment in which monetary policy has real effects in the absence of any rigidity in producer pricing or wages limited participation in financial markets leads to a rise in the real mortgage rate following an increase in the nominal short rate since households must take on a mortgage to consume housing the rise in the real interest rate reduces the share of residential investment in output

a model of labor supply fixed costs and work schedules abstract to analyze labor supply allocations we propose a three dimensional labor supply framework that distinguishes between hours worked per day days worked per week and workweeks individuals make labor supply choices given heterogeneous schedule dependent fixed costs of work the three margins are not perfect substitutes leisure on days not worked in a workweek has the largest weight in preferences leisure on weeks off has the smallest weight we use the model to analyze heterogeneous response to changes in fixed costs schedule flexibility and restrictions on weekly hours fixed costs of work affect response to each policy and determine associated losses

tax reform and automatic stabilization an income tax provides implicit insurance by dampening the variability of disposable income and consumption using an empirical framework derived from the consumption insurance literature and data from the panel study of income dynamics we examine the effect of federal income tax reforms of the 1980 s on automatic stabilization of consumption overall erta and tra86 reduced consumption stability by about 50 percent recently increased eitc generosity restored or enhanced consumption insurance the welfare cost of moving to the post tra86 system is sizable for relatively risk averse households facing large income risk but is much more modest for the typical household jel h21

incentive effects of the u s welfare system a review the author would like to acknowledge support for prior work on this topic from the u s department of health and human services and helpful comments from three anonymous referees rebecca blank howard chernick john fitzgerald irwin garfinkel peter gottschalk edward gramlich david greenberg judith gueron james heckman v joseph hotz robert hutchens michael keane frank levy larry mead michael murray robert plotnick anuradha rangarajan philip robins howard rolston jeffrey smith and daniel weinberg all opinions and errors are those of the author alone

the effect of income taxation on labor supply in the united states the effect of income taxation on the labor supply of prime age married men and women in the united states is examined using econometric methods similar to those used in the influential work of jerry hausman male labor supply is found to be relatively invariant to the net wage and virtual income in all specifications estimated the estimated impact of taxation on the labor supply of married women depends critically on the method used to estimate the labor supply function estimated net wage and virtual income elasticities are considerably larger when data on nonparticipants are included than when the estimation is conducted conditional on hours being greater than zero

a time series analysis of representative agent models of consumption andleisure choice under uncertainty this paper investigates empirically a model of aggregate consumption and leisure decisions in which utility from goods and leisure is nontime separable the nonseparability of preferences accommodates intertemporal substitution or complementarity of leisure and thereby affects the comovements in aggregate compensation and hours worked these cross relations are examined empirically using postwar monthly u s data on quantities real wages and the real return on the one month treasury bill the estimated values of the parameters governing preferences differ significantly from the values assumed in several studies of real business models several possible explanations of these discrepancies are discussed

new evidence on labor supply employment versus hours elasticities by sex and marital status using the tri annual micro panel data of the survey of income and program participation we estimate fixed effects labor supply models separating the extensive and intensive margins the employment elasticity is 0 6 for single men versus 1 1 for married men the employment elasticity is 2 4 for single women versus 1 8 for married women the compensated hours worked elasticity is 0 4 for employed single and married men and 0 7 for employed single and married women the implied aggregate employment elasticity of 1 5 and hours per employee elasticity of 0 5 indicate employment fluctuations account for three fourths of wage induced variation in labor hours

assessing empirical approaches for analyzing taxes and labor supply recent surveys on the labor supply responses of men document a divergence in the estimates of substitution and income effects obtained using various estimation approaches generally studies accounting for nonlinear tax schedules in a static setting via a piecewise linear approach produce estimates that typically imply higher substitution and lower income responses than are suggested by empirical work applying other approaches this paper demonstrates that maximum likelihood estimation of a consumer choice problem with nonlinear budget sets implicitly relies on the satisfaction of inequality constraints that translate into behaviorally meaningful restrictions these constraints arise not as a consequence of economic theory but instead as a requirement to create a properly defined statistical model in the analysis of piecewise linear budget sets the implicit constraints required by maximum likelihood in estimation amount to imposition of slutsky conditions at all wage income combinations associated with kink points in the analysis of differentiable budget sets the tacit constraints invoked by maximum likelihood also involve inequality restrictions on slutsky terms the empirical work presented in this study supports the contention that these implicit constraints play a major role in explaining the discrepancies in estimates found in the literature on men s labor supply

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

bounds on elasticities with optimization frictions a synthesis of micro and macro evidence on labor supply how can price elasticities be identified when agents face optimization frictions such as adjustment costs or inattention i derive bounds on structural price elasticities that are a function of the observed effect of a price change on demand the size of the price change and the degree of frictions the degree of frictions is measured by the utility losses agents tolerate to deviate from the frictionless optimum the bounds imply that frictions affect intensive margin elasticities much more than extensive margin elasticities i apply these bounds to the literature on labor supply the utility costs of ignoring the tax changes used to identify intensive margin labor supply elasticities are typically less than 1 of earnings as a result small frictions can explain the differences between micro and macro elasticities extensive and intensive margin elasticities and other disparate findings pooling estimates from existing studies i estimate a hicksian labor supply elasticity of 0 33 on the intensive margin and 0 25 on the extensive margin after accounting for frictions

welfare analysis of tax reforms using household data abstract this paper discusses a methodology for calculating the distribution of gains and losses from a policy change using data for a large sample of households estimates are based on the equivalent income function which is money metric utility defined over observable variables this enables calculations to be standardised and a computer program to compute the statistics presented in the paper is available for a general demand system equivalent income is related to measures of deadweight loss and standard errors are computed for each of the welfare measures an application to u k data for 5 895 households is given which simulates a reform that involves eliminating housing subsidies

labor supply deadweight loss and tax reform act of 1986 a nonparametric evaluation using panel data abstract tax reform act of 1986 tra 1986 has provided an invaluable source of variation in tax rates to study the effects of tax reforms on labor supply in the us most existing studies exploiting variation generated by tra 1986 have used cross sectional variation in tax rates or assumed a linear labor supply function or have not couched their analysis in a nonlinear budget set framework this paper uses the drastic variation in the budget set induced by tra 1986 as a source of identification and combines two novel approaches to estimate behavioral effects of tax reforms i first use nonparametric estimation methods with nonlinear budget sets blomquist soren newey w 2002 nonparametric estimation with nonlinear budget sets econometrica 70 6 2455 2480 to estimate a labor supply function using waves of psid just before and after tra 1986 nonparametric method developed in hausman and newey hausman j whitney newey 1995 nonparametric measurement of exact consumer s surplus and deadweight loss econometrica 63 1145 76 is then applied to estimate the deadweight loss from tra 1986 the nonparametric estimate of the compensated wage elasticity is 0 22 i find that tra 1986 had a small but positive effect on labor supply of men of about 2 at the sample mean tra 1986 was associated with robust reduction in deadweight loss from the pre tra 1986 level and this reduction is positively correlated with income and wages

the labor supply response to mismeasured but predictable wage changes most panel data studies of intertemporal labor supply assume classical measurement error recent validation studies refute this assumption in this study i address nonclassical measurement error explicitly i use data on males from the panel study of income dynamics validation study to purge measurement error from the panel study of income dynamics i find a large amount of predictable wage variation in the data even after allowing for measurement error however there is almost no labor supply response to these predictable wage changes therefore failure to control for nonclassical measurement error cannot explain the low estimated labor supply elasticities in other papers

mitigating america s demographic dilemma by pre funding social security abstract financing social security benefits at current levels implies significant increases in payroll taxes within the next 20 years under current us demographic developments using a general equilibrium overlapping generations model with realistic patterns of fertility and lifespan extension this study shows that future generations would be harmed during the demographic transition due to rising payroll taxes which crowd out savings and slow real wage growth below the rate of technological progress a faster rate of technological progress would mitigate only some of the payroll tax increase and its economic consequences but could not overcome them addressing the financing problem by reducing social security benefits as needed or by raising the eligibility age for benefits imposes major welfare losses on current or near term retirees by contrast a pre funding of social security financed with consumption taxes more evenly spreads the welfare losses across generations and it helps future generations especially the poor by stimulating capital formation

democracy and the logic of political survival democracy is a central concept in political science scholars have linked it to patterns of war and peace alliance formation conflict escalation success in war political stability economic development and improvements in a wide array of social indicators these claims are subject to challenge but the existence of a substantial literature on each of them underlines the importance of the questions what however is the mechanism by which democracy generates these benefits is it a matter of norms behavior or institutions although democracy is a key concept there is no consensus regarding its theoretical underpinnings it is for these reasons that the appearance of the logic of political survival bueno de mesquita et al 2003 was hailed as a breakthrough the book provides a simple explanation for the effects of democratic institutions democratic leaders face different incentives than autocrats because democracies have different reselection institutions the selectorate theory holds that political power depends upon satisfying a winning coalition w of the relevant selectorate s as the size of the winning coalition increases leaders shift public policy from providing private benefits to supporters to providing public goods to the masses coalitions are most loyal when w is small relative to s a s the ratiow s increases defection becomes less risky and leaders must spend more to keep their coalitions satisfied

nonparametric estimation of the impact of taxes on female labor supply this paper proposes a simple extension of nonparametric estimation methods for nonlinear budget set models derived in blomquist and newey 2002 to censored dependent variables the nonparametric method is applied to estimate female labor supply elasticities using data on married women from the 1985 and 1989 waves of the panel study of income dynamics exploiting the substantial variation in budget sets caused by the tax reform act of 1986 as a source of identification the estimated wage elasticities from this new method are 0 56 overall and 0 27 on the intensive margin the income elasticity estimates are close to 0 67 overall and 0 13 on the intensive margin compared with the linear labor supply model the estimated elasticities are usually larger for the nonparametric specifications that account for nonlinear budget sets copyright 2010 john wiley sons ltd

a cohort analysis of the association between work hours and wages among men the results of some recent ingenious labor supply research may appear incompatible with the notion that uncompensated wage elasticities for men are small perhaps negative this paper argues there is no incompatibility the methodology in this recent research results in computing wage responses that come closer to measuring intertemporal wage elasticities than to uncompensated wage elasticities to demonstrate this i use pseudopanel data constructed from the march current population surveys from 1967 to 1998 to measure both intertemporal wage elasticities and uncompensated wage elasticities the latter appear sensitive to the particular specification of the hours equation

capture and ideology in the economic theory of politics the economic theory of regulation long ago put public interest theories of politics to rest these theories have correctly been viewed as normative wishings rather than explanations of real world phenomena they have been replaced by models of political behavior that are consistent with the rest of microeconomics anthony downs 1957 james buchanan and gordon tullock 1965 george stigler 1971 sam peltzman 1976 recently however debate has arisen over whether some version of a public interest theory of regulation will have to be readmitted to our thinking about actions and results in the political arena what is at issue is the empirical importance of the altruistic publicly interested goals of rational actors in determining legislative and regulatory outcomes james kau and paul rubin 1979 kalt 1981 peltzman 1982 this study assesses the nature and significance of publicly interested objectives in a particular instance of economic policymaking u s senate voting on coal strip mining regulations the existence of such objectives is of course no contradiction of the economic view of human behavior kenneth arrow 1972 gary becker 1974 and may well be rooted in genetic biological history becker 1976 jack hirshleifer 1978 generally however individuals altruistic publicly interested goals have been given little attention this reflects the judgment that such goals are so empirically unimportant as to allow the use of occam s razor in positive models or well founded apprehensions that these goals are unusually difficult to identify measure and analyze notwithstanding the latter problem we find that approaches which confine themselves to a view of political actors as narrowly egocentric maximizers explain and predict legislative outcomes poorly the tracking and dissecting of the determinants of voting on coal strip mining policy suggest that the economic theory of politics has been prematurely closed to a broader conception of political behavior

the effect of inventory record inaccuracy in information exchange supply chains abstract the goal of this paper is to quantify the impact of inventory record inaccuracy on the dynamics of collaborative supply chains both in terms of operational performance i e order and inventory stability and customer service level to do so we model an information exchange supply chain under shrinkage errors in the inventory item recording activity of their nodes present the mathematical formulation of such supply chain model and conduct a numerical simulation assuming different levels of errors results clearly show that inventory record inaccuracy strongly compromises supply chain stability particularly when moving upwards in the supply chain important managerial insights can be extracted from this analysis such as the role of benefit sharing strategies in order to guarantee the advantage of investments in connectivity technologies

production smoothing in the linear quadratic inventory model contrary to popular belief the linear quadratic inventory model does not imply that in response to demand shocks output is always less variable than sales when demand shocks are not anticipated and without this assumption it is hard to see why firms should hold inventories in the first place it is shown that output can be more variable than sales even when the only shocks are demand shocks and the inventory target is not a rising function of sales the variance of output will typically exceed that of sales when the firm s marginal cost curve is fairly flat copyright 1994 by royal economic society

the taxation of superstars how are optimal taxes affected by the presence of superstar phenomena at the top of the earnings distribution to answer this question we extend the mirrlees model to incorporate an assignment problem in the labor market that generates superstar effects perhaps surprisingly rather than providing a rationale for higher taxes we show that superstar effects provide a force for lower marginal taxes conditional on the observed distribution of earnings superstar effects make the earnings schedule convex which increases the responsiveness of individual earnings to tax changes we show that various common elasticity measures are not sufficient statistics and must be adjusted upwards in optimal tax formulas finally we study a comparative static that does not keep the observed earnings distribution fixed when superstar technologies are introduced inequality increases but we obtain a neutrality result finding tax rates at the top unaltered

a life cycle consistent empirical model of family labour supply using cross section data this paper estimates a utility maximising model of the joint determination of male and female labour supplies using a sample of married couples from the u k family expenditure survey the emphasis is on the estimation of within period preferences that are consistent with intertemporal two stage budgeting under uncertainty however the approach we adopt provides an alternative method of estimating certain aspects of life cycle behaviour to the fixed effects constant approach of heckman and macurdy 1980 macurdy 1981 and browning deaton and irish 1985 moreover it relaxes some of the underlying restrictions that are implicit in these constant models under uncertainty

does the choice of consumption measure matter an application to the permanent income hypothesis abstract food consumption in the panel study of income dynamics is used as a proxy for total consumption in many applications in economics including tests of the permanent income hypothesis tests of separability between consumption and leisure and tests of intergenerational altruism food however explains only a small fraction of the variation in total consumption i propose a measure of composite consumption based on predicted wealth and compare it both to food consumption and to skinner s 1987 measure of predicted consumption in a test of the permanent income hypothesis using a log linear intertemporal consumption function i find that food does not reject the permanent income hypothesis but both skinner s predicted consumption and the composite measure proposed here to reject the hypothesis

workers should want to pay more for social security i introduction although economic theory cannot resolve all the controversies concerning social security simple supply and demand analysis can helpfully change the terms of the debate concerned with how the social security tax is divided between employers and workers defenders of the existing system typically argue that workers pay only half the tax 6 2 because as required by law the other half is paid by employers opponents of the existing system typically argue that workers pay all of the social security tax because their compensation is reduced by employers to offset their portion of the tax for example former house majority leader dick armey 2005 states that social security alone takes 12 4 percent of workers incomes that s more than most workers pay in income taxes in a reply to armey marilyn scheiner 2005 states that armey should have said that social security alone takes 6 2 percent of workers income the employer matches the employee s contribution for a total of 12 4 percent going into the social security coffers 1 the first thing economic analysis tells us about this debate is that both sides are wrong on the facts barring unlikely conditions the second and more interesting insight is that each side of the debate is making a claim that supports the position of the other side any student in an economic principles course should know that the distribution of a payroll tax burden depends on the relative elasticities of the labor demand and supply curves if the labor supply curve is very inelastic relative to the labor demand curve then most of the burden of a payroll tax will fall on the workers on the other hand if the labor demand curve is very inelastic relative to the labor supply curve most of the burden will fall on the employer so the debate over who bears most of the cost of the social security tax has to consider the relative elasticities of labor supply and demand what the social security legislation states about the distribution of the tax burden is completely irrelevant 2 this may seem to suggest that the opponents supporters of social security should argue that labor supply is less more elastic than labor demand because this implies that less most of the tax burden is borne by the employer but why should the desirability of social security depend on the distribution of the tax burden supposedly there are benefits from social security so its desirability should depend on how those benefits compare to the tax and how the net benefits are distributed even though labor supply and demand elasticities are relevant to the distribution of gains or losses from social security we shall see that the desirability of social security as measured by its net value and its benefits to workers is completely independent of those elasticities once we take into consideration the benefits of social security we find that when advocates and opponents argue over the incidence of the tax they have their arguments completely backward the strongest argument in favor of social security is that workers are paying more than its cost on the other hand the strongest argument against social security is that the burden of financing it falls mostly on employers if employers are paying most of the cost of social security then for the sake of workers it should be scrapped immediately ii social security and shifts in the labor supply and demand curves our argument is based on straightforward implications of labor supply and demand curves shifts in response to the costs and benefits of social security 3 we begin in figure 1 with labor supply curve s and labor demand curve d assumed relevant without before social security the vertical axis represents the monetary wage and the horizontal axis represents the quantity of labor the equilibrium wage and labor quantity are given by w sub b and l sub b respectively

identifying the elasticity of taxable income we use matched panels from the current population survey along with a grouping instrumental variables estimator to provide new estimates of the elasticity of taxable income our identification strategy exploits the fact that federal and state tax reforms over the past three decades have differentially affected cohorts across states and over time we find that the elasticity is in the range of 0 4 0 55 the implication of our new estimates for tax policy is that the revenue maximising tax rate is nearly 30 percentage points lower than that obtained when we use the typical identification strategy in the literature

the effects of progressive taxation on labor supply when hours and wages are jointly determined this paper extends a standard intertemporal labor supply model to account for progressive taxation as well as the joint determination of hourly wages and hours worked we show that these two factors can have implications for both estimating labor supply elasticities as well as for using these elasticities in tax analysis failure to account for wage hours ties and progressive taxation may cause the hours response to marginal tax rate changes to be understated by 5 to 30 percent for men

retesting selectorate theory separating the effects of w from other elements of democracy kevin clarke and randall stone 2008 offer a methodological critique of some of our tests of the selectorate theory in the logic of political survival bueno de mesquita et al 2003 we accept their critique of residualization for control variables in those tests but reject the contention that the size of the winning coalition does not predict the provision of public goods and private benefits we present new tests that control for elements of democracy other than w and that do not use residualization these new tests show that selectorate theory is strongly and robustly supported our measure of the size of the winning coalition is in the theoretically predicted direction and is statistically significant for 28 out of 31 different public goods and private benefits aspects of democracy not contained in the selectorate theory explain less of the variance than does the theory s core factor namely winning coalition size for 25 of the 31 public goods and private benefits

the effect of wealth on individual and household labor supply evidence from swedish lotteries abstract we study the effect of wealth on labor supply using the randomized assignment of monetary prizes in a large sample of swedish lottery players winning a lottery prize modestly reduces earnings with the reduction being immediate persistent and quite similar by age education and sex a calibrated dynamic model implies lifetime marginal propensities to earn out of unearned income from 0 17 at age 20 to 0 04 at age 60 and labor supply elasticities in the lower range of previously reported estimates the earnings response is stronger for winners than their spouses which is inconsistent with unitary household labor supply models jel d14 j22 j31

labor supply and taxes a survey i survey the male and female labor supply literatures focusing on implications for effects of wages and taxes for males i describe and contrast results from three basic types of model static models especially those that account for nonlinear taxes life cycle models with savings and life cycle models with both savings and human capital for women more important distinctions are whether models include fixed costs of work and whether they treat demographics like fertility and marriage and human capital as exogenous or endogenous the literature is characterized by considerable controversy over the responsiveness of labor supply to changes in wages and taxes at least for males it is fair to say that most economists believe labor supply elasticities are small but a sizeable minority of studies that i examine obtain large values hence there is no clear consensus on this point in fact a simple average of hicks elasticities across all the studies i examine is 0 30 several simulation studies have shown that such a value is large enough to generate large welfare costs of income taxation for males i conclude that two factors drive many of the differences in results across studies one factor is use of direct vs ratio wage measures with studies that use the former tending to find larger elasticties another factor is the failure of most studies to account for human capital returns to work experience i argue that this may lead to downward bias in elasticity estimates in a model that includes human capital i show how even modest elasticities as conventionally measured can be consistent with large welfare costs of taxation

penalized quantile regression with semiparametric correlated effects an application with heterogeneous preferences this paper proposes new 1 penalized quantile regression estimators for panel data which explicitly allows for individual heterogeneity associated with covariates we conduct monte carlo simulations to assess the small sample performance of the new estimators and provide comparisons of new and existing penalized estimators in terms of quadratic loss we apply the techniques to two empirical studies first the new method is applied to the estimation of labor supply elasticities and we find evidence that positive substitution effects dominate negative wealth effects at the middle of the conditional distribution of hours the overall effect tends to be larger at the lower tail which suggests that changes in taxes have different effects across the response distribution second we estimate consumer preferences for nutrients from a demand model using a large scanner dataset of household food purchases we show that preferences for nutrients vary across the conditional distribution of expenditure and across genders and emphasize the importance of fully capturing consumer heterogeneity in demand modeling both applications highlight the importance of estimating individual heterogeneity when designing economic policy

the bullwhip effect progress trends and directions the bullwhip effect refers to the phenomenon where order variability increases as the orders move upstream in the supply chain this paper provides a review of the bullwhip literature which adopts empirical experimental and analytical methodologies early econometric evidence of bullwhip is highlighted findings from empirical and experimental research are compared with analytical and simulation results assumptions and approximations for modelling the bullwhip effect in terms of demand forecast delay replenishment policy and coordination strategy are considered we identify recent research trends and future research directions concerned with supply chain structure product type price competition and sustainability

information distortion in a supply chain the bullwhip effect commentary consider a series of companies in a supply chain each of whom orders from its immediate upstream member in this setting inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions this paper claims that the information transferred in the form of orders tends to be distorted and can misguide upstream members in their inventory and production decisions in particular the variance of orders may be larger than that of sales and distortion tends to increase as one moves upstream a phenomenon termed bullwhip effect this paper analyzes four sources of the bullwhip effect demand signal processing rationing game order batching and price variations actions that can be taken to mitigate the detrimental impact of this distortion are also discussed

distortionary taxation and labor supply this paper examines empirically the effects of distortionary taxation on labor supply using a general equilibrium framework the long term relations predicted by the model are derived and tested using data from canada united states germany and japan in all these countries labor tax changes are found to be persistent and to have played an important role in the observed downward trend in hours worked

capacity restrictions and supply chain performance modelling and analysing load dependent lead times abstract several studies have reported that capacitated supply chains may benefit from an improved dynamic performance as compared to unconstrained ones this occurs as a consequence of the capacity limit acting as a production smoothing filter in this research the relationship between capacity restrictions and the operational performance of supply chains is investigated from a novel perspective i e we assume that the influence of capacity constraints on lead times depends on the supply chain s responsiveness under these circumstances the experiments show that there is a negative effect of capacity constraints on supply chain performance both in terms of process efficiency internal and customer satisfaction external nonetheless the magnitude of this impact greatly depends on the responsiveness of the firm market conditions and adopted policies for inventory management more specifically the combination of tight capacity restrictions and low responsiveness significantly contributes to decrease supply chain performance which may be very damaging for the dynamic behavior of the system in this sense efficient capacity planning proves to be essential to prevent the supply chain from entering into a vicious circle

intertemporal preferences and labor supply in this paper the authors examine whether nonseparable preference structures ar e important in characterizing life cycle labor supply using longitud inal data on prime age males from the panel study of income dynamics they estimate a model of life cycle leisure and consumption under un certainty in which intertemporal preferences are allowed to be nonsep arable in leisure the model tests several alternative specifications considered in the literature they investigate the robustness of the ir findings to certain forms of population heterogeneity and types of model misspecification across alternative specifications the autho rs find that the standard assumption of intertemporally separable pre ferences for leisure is not consistent with the data copyright 1988 by the econometric society

the perils of unearned foreign income aid remittances and government survival given their political incentives governments in more autocratic polities can strategically channel unearned government and household income in the form of foreign aid and remittances to finance patronage which extends their tenure in political office i substantiate this claim with duration models of government turnover for a sample of 97 countries between 1975 and 2004 unearned foreign income received in more autocratic countries reduces the likelihood of government turnover regime collapse and outbreaks of major political discontent to allay potential concerns with endogeneity i harness a natural experiment of oil price driven aid and remittance flows to poor non oil producing muslim autocracies the instrumental variables results confirm the baseline finding that authoritarian governments can harness unearned foreign income to prolong their rule finally i provide evidence of the underlying causal mechanisms that governments in autocracies use aid and remittances inflows to reduce their expenditures on welfare goods to fund patronage

the elasticity of intertemporal substitution new evidence from 401 k participation abstract using health and retirement study data and a structural econometric model we exploit variation in employer matching rates in 401 k plans to generate new estimates of the eis 0 74 in our richest specification with a 95 confidence interval of 0 37 1 21

intertemporal substitution in labor supply evidence from micro data the sensitivity of the supply of labor to intertemporal variation in the wage is an important issue in macroeconomics the analysis of social security and pensions and the study of life cycle patterns of work this paper explores two approaches to the measurement of intertemporal substitution that have appeared in the literature the first approach is to use consumption to control for wealth and unobserved expectations about future wages in the labor supply equation the second approach is to estimate a first difference equation for hours in which labor supply from the previous period serves as a control for wealth and wage expectations the results indicate that intertemporal substitution elasticity for married men is positive but small

political regimes and income inequality abstract we construct a theoretically motivated model of income inequality through a pooled regression on an international panel we demonstrate that political regime whether extractive redistributive or reinvestment oriented correlates with within country income inequality

comparing labor supply elasticities in europe and the united states new results we suggest the first large scale international comparison of labor supply elasticities for 17 european countries and the united states using a harmonized empirical approach we find that own wage elasticities are relatively small and more uniform across countries than previously considered nonetheless such differences do exist and are found not to arise from different tax benefit systems wage hour levels or demographic compositions across countries suggesting genuine differences in work preferences across countries furthermore three other findings are consistent across countries the extensive margin dominates the intensive margin for singles this leads to larger responses in low income groups and income elasticities are extremely small

demand evolution in stochastic inventory systems riskiness increase abstract this paper characterizes demand evolution in the steady state under common inventory policies in a single location stochastic inventory system our results show that downstream demand nonstrictly second degree stochastically dominates upstream orders and the bullwhip effect occurs we provide the link between demand evolution and utility theory for stochastic inventory systems our model is general in that ultimate customer demand follows an arbitrary stationary distribution and the facility may arbitrarily select policy parameters

an empirically simulated investigation of the impact of demand forecasting on the bullwhip effect evidence from u s auto industry this study empirically examines the impacts of three major aspects of demand forecasting on the magnitude of the bullwhip effect three research questions are addressed to investigate the association between 1 forecast accuracy 2 aggregate forecasting and 3 responsive forecasting and the bullwhip effect using forecasted demand generated from popular time series forecasting models and real life demand data the study investigates the relationship between the forecasted results and the consequential bullwhip effect the findings show that the forecasting methods used lead to the variation of the bullwhip effect moreover the lead time reduction and the stable demand forecast are beneficial to reduce the bullwhip effect however our empirical results differ from previous findings in two ways i improving forecast accuracy does not necessarily reduce the bullwhip effect and ii aggregate forecasting does not always reduce the bullwhip effect

the ideological component of senate voting different principles or different principals evidence exists on both sides of the question of whether or not legislator specific ideologically driven shirking of constituent interest occurs in this paper we use a well known model of such shirking by senators as our point of departure and add measures of inter state constituent interests the role of campaign contributions and hence the importance of whether or not senators are up for reelection we find some evidence that the model provides a stronger explanation for senators up for reelection than for those who are not and that campaign contributions help determine voting decisions by these legislators finally accounting for inter state constituent interests shirking is not a significant variable in the voting decisions of senators facing reelection thus it appears that the reelection interests of some senators have been mistaken for ideologically driven shirking

estimating life cycle labor supply tax effects we present an econometrically tractable life cycle labor supply model for panel data including intertemporally progressive taxes on uncertai wage and nonwge incomes our two stage fixedeffects generalized method of moments approach first extimates intretemporal and then intertemporal preferences specification testing domonstrates the value of incorporating joint progressive taxation of labor and nonlabor incomes results for prime age men emphasize the roles played by hourly wage endogeneity worker specific effects the measure of the rate of pay and intemporal budget constaint nonseparability simulations indicate that recent tax reform while not self financing stimulated made labor supplied by about 3 percent and reduced deadweight loss about 16 percent

comments on information distortion in a supply chain the bullwhip effect in this commentary we trace back how we pursued research on the bullwhip effect which resulted in the article published in management science we reflect on the evolution of this concept the impact that our work has had on industry the way our work has been used in the teaching of supply chain management and the key directions of research that have taken place since then

quantifying the bullwhip effect using two echelon data a cross industry empirical investigation the bullwhip effect denotes the phenomenon whereby demand variability is amplified from a downstream site buyer to an upstream site supplier in the supply chain this paper contributes to the literature that empirically investigates the bullwhip effect by providing new evidence regarding its prevalence and magnitude in contrast to previous work we use a two echelon approach which allows us to observe variations at both the upstream and the downstream sites by drawing on a financial accounting standard regarding information disclosure about major customers we are able to link 5494 buyers and suppliers in the u s between 1976 and 2009 we merge this information with quarterly financial accounting data to form a sample of 14 933 buyer supplier dyad observations we correct for sample selection bias using propensity score matching and estimate the average bullwhip effect in our sample to be 1 90 i e 90 demand variability amplification between echelons a significant bullwhip effect is observed across industries mining manufacturing wholesale and retail and is supported by several robustness checks we investigate and discuss how these results can be generalized beyond our sample

on the identification of frisch labor supplies abstract this paper determines which structural components of the intertemporal decision process can be recovered from labor supply estimates obtained using heckman and macurdy s approach

the effect of income taxation on consumption and labor supply we estimate the incentive effects of income taxation in a life cycle model of consumption and labor supply without intratemporal strong separability we find that consumption and hours worked are direct complements in utility both increase with a compensated increase in the net wage the compensated net wage elasticity is about 0 3 nearly double estimates for u s men from a linear labor supply specification estimated intertemporal elasticities indicate significant intertemporal smoothing of utility the estimated marginal welfare cost of government revenue is 6 20 which is about half the estimated welfare cost when additivity between consumption and leisure is incorrectly imposed

mitigating the bullwhip effect by ordering policies and forecasting methods abstract the bullwhip effect in which order variability increases as one moves up the supply chain has been observed in a range of industries modeled by several authors and various remedies suggested this paper provides a simulation of the effect of improved forecasting methods and finds that holt s and brown s methods substantially mitigate the bullwhip effect across a range of performance metrics the end result is to identify ordering policies that perform particularly well in combination with these forecasting methods and indicate how they can be implemented in practice

labour supply in a two period model the effect of a nonlinear progressive income tax earlier studies of labour supply in a life cycle context have typically either neglected taxes completely or represented the income tax by a linear function the present paper studies how the qualitative conclusions of a traditional life cycle model of labour supply are changed when a nonlinear tax is introduced into the model it is shown that the comparative statics results and the characterization of the consumption and labour supply paths depend critically on whether capital and labour income are taxed jointly or separately and on the progressivity nonlinearity of the income tax few of the results valid for a linear income tax carry over to the nonlinear case

the role of food stamps in consumption stabilization although the food stamp program is the largest universal entitlement program in the social safety net little is known about its stabilizing role in household income and consumption using data from the panel study of income dynamics spanning 1980 99 we estimate the volatility of income with and without food stamps coupled with a variance decomposition of consumption among families at high ex ante risk of food stamp participation food stamps reduced income volatility by about 12 percent and food consumption volatility by about 14 percent there was however a marked decline in consumption smoothing benefits of the program in the early 1990s relative to the 1980s

conflicting interests in environmental policy making this paper focuses on possible conflicts of interests between the political aims of reduced emissions from energy consumption redistribution of welfare and efficient policy making we use the results from a les estimation to calculate the consumption reductions compensating variations and excess tax burdens of three different tax schemes one linear and two non linear unless the tax scheme is optimally designed to correct for externalities there is a conflict of interests between the aims of reduced consumption and efficient policy making when ranking different tax schemes there is a conflict between the aims of redistributing welfare and reduced consumption if we are concerned with the well being of individual households but not if we are concerned only with the mean household in different parts of the income distribution

labour supply the roles of human capital and the extensive margin we specify and estimate a life cycle labour supply model that expands on earlier work by simultaneously including human capital accumulation saving and bequests an active extensive margin a realistic specification of the progressive tax structure and the social security system and an accounting for private pensions and health expenditures by incorporating all these features we develop new insights into how taxes affect life cycle labour supply for instance we find that labour supply elasticities vary in important ways with age education and the tax structure itself we also show how human capital affects elasticities differently on the intensive versus extensive margins

a holistic network model for supply chain analysis abstract supply chain researchers are experiencing a conceptual and analytical paradox they are asked to move beyond dyadic analyses and investigate larger network effects with only a limited analytical toolkit this research proposes the use of bilinear mixed modeling to holistically analyze supply chain phenomena through this approach researchers are able to account for multiple supply chain relationships higher order dependencies among member firms and simultaneously evaluate covariates from buyer and seller perspectives the model is validated through the lens of a pervasive supply chain problem commonly referred to as the bullwhip effect a sample of firms from the us apparel industry in 2004 is analyzed and then the findings are confirmed using data from 2005 in addition to validating the model through the presence of the bullwhip effect the bilinear model illuminates variables such as advertising price deals inventory turnover and inventory backlogs that exacerbate or diminish inventory differences between firms in a supply chain the results extend research on supply networks and supply efficiency to a more holistic level and show that higher order dependencies are important drivers of supply chain phenomena

corrigendum on a life cycle model of female labour supply in the empirical work in our article on the intertemporal substitution of leisure time for married women heckman and macurdy 1980 we inadvertently constrained the estimated intertemporal substitution elasticity to be too high since this parameter plays a prominent role in discussions of equilibrium models of the business cycle and since our empirical work has been cited in discussions on this topic e g hall 1980 we would like to present a corrected set of empirical results for our model the period t utility function adopted in this note is in the notation of our original paper equation 15