efficient mechanisms for bilateral trading we consider bargaining problems between one buyer and one seller for a single object the seller s valuation and the buyer s valuation for the object are assumed to be independent random variables and each individual s valuation is unknown to the other we characterize the set of allocation mechanisms that are bayesian incentive compatible and individually rational and show the general impossibility of ex post efficient mechanisms without outside subsidies for a wide class of problems we show how to compute mechanisms that maximize expected total gains from trade and mechanisms that can maximize a broker s expected profit journal of economic literature classification number 026

exchange rate pass through in two period duopoly abstract this paper analyzes the issue of exchange rate pass through in a two period model of duopolistic competition with differentiated products and constant marginal costs conditions on import demand elasticities for normal and perverse pass through respectively are derived for the case of perfect and imperfect capital mobility in an example with linear demand it is additionally shown that temporary exchange rate fluctuations cause current as well as future price changes which do not necessarily point in the same direction this model reproduces features of the macroeconomic j curve at a microeconomic level

walrasian equilibrium with gross substitutes in this paper we study the problem of efficient production and allocation of indivisible objects among a set of consumers we assume that the agents preferences depend on the bundle of objects and the quantity of money they consume furthermore we assume that preferences are quasilinear in money and that agents have a large endowment of money with indivisibilities it is well known that many familiar properties of the utility functions fail to ensure existence in their striking analysis of the matching problem kelso and crawford 5 introduce the gross substitutes gs condition which ensures the non emptiness of the core we propose two new conditions and show that with quasilinearity they are equivalent article id jeth 1999 2531 available online at http www idealibrary com on

are church and state substitutes evidence from the 1996 welfare reform abstract churches provide community services similar to those provided by the government but there has been no convincing analysis of the extent to which church activity can substitute for government activity to address this important issue this paper uses a new panel data set of presbyterian church usa congregations to regress both church member donations and a church s community spending on a number of variables including government welfare expenditures a provision of the 1996 welfare law that decreased the availability and use of welfare services by non citizens serves as an instrument to identify the causal effect of government spending on church activity the results show that church activities substitute for government activities extrapolating the findings to all denominations the estimated crowd out effect lies between 20 and 38 cents on the dollar the results are subjected to a number of robustness tests

dairy tariff quota liberalization contrasting bilateral and most favored nation reform options we develop a highly disaggregated tariff line source differentiated partial equilibrium model of u s specialty cheese imports to investigate alternative reform options for tariffrate quotas a mixed complementarity framework is used to represent bilateral and multilateral tariff quota administration methods within the u s dairy industry the impact of liberalizing u s specialty cheese imports via bilateral and multilateral tariffrate quota expansions out of quota tariff cuts and simultaneous liberalization scenarios is evaluated we find that the path of liberalization is quite different depending on the reform approach undertaken the results have important policy implications in the agricultural negotiations

the supply of charity services by nonprofit hospitals motives and market structure this article studies provision of charity care by private nonprofit hospitals we demonstrate that in the absence of large positive income effects on charity care supply convex preferences for the nonprofit hospital imply crowding out by other private or government hospitals extending our model to include impure altruism rivalry provides a possible explanation for the previously reported empirical result that both crowding out and income effects on indigent care supply are often weak or insignificant empirical analysis of data for hospitals in maryland provides evidence of rivalry on the supply of charity care

demand for charity donations in private non profit markets the case of the u k abstract this paper presents estimates of the demand for donations for u k charities in 1985 these estimates make demand depend upon price fund raising expenditure a quality index and alternative revenue sources the price elasticity of donations found here shows for the most part an elastic response and is consistent with previous studies using u s data our empirical results suggest that non profits in the u k unlike their counterparts in the u s are net revenue maximisers we discovered no significant evidence that public donations crowded out private donations in our sample of 300 charities

the product variety case for protection abstract the paper shows the existence of a case for protection in a small open economy in which there is preference diversity and potential product differentation with scale economies the optimal tariff gives partial protection only is a first best solution and must be sustained the welfare loss that is corrected by the tariff is that due to a sub optimal degree of product variety arising from market failure linked to economies of scale

replacement of agricultural price supports by area payments in the european union and the effects on pesticide use this article determines the contribution of recent european union agricultural policy reforms on the use of pesticides our theoretical model extends the multioutput generalization of the lichtenberg zilberman damage control technology model developed by chambers and lichtenberg our empirical analysis uses farm level data for a sample of french farms results suggest that price effects on the use of pesticides are always more elastic than area payment effects this indicates that policy reforms consisting of a reduction in price supports in favor of area payments may reduce application of crop protection inputs such policy changes which represent a certain degree of decoupling took place under the 1992 common agricultural policy reforms

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

on the effects of asymmetric and endogenous taxation in experimental public goods games abstract in our experimental public goods game subjects face exogenously or endogenously determined asymmetric minimum contributions endogeneity does not affect overall contributions if asymmetric contribution levels are approved of endogenously the disadvantaged subjects contribute significantly less than in case of exogenous determination

why do people give testing pure and impure altruism abstract researchers measure crowd out around one level of charity output to identify whether giving is motivated by altruism and or warm glow however crowd out depends on output implying first that the power to reject pure altruism varies and second that a single measurement of incomplete crowd out can be rationalized by many different preferences by instead measuring crowd out at different output levels we allow both for identification and for a novel and direct test of impure altruism using a new experimental design we present the first empirical evidence that consistent with impure altruism crowd out decreases with output jel d64 l31

school finance reform and voluntary fiscal federalism california has transferred the financing of its public schools from localities to the state in response many families have supplemented the tax revenue of their local public schools with voluntary contributions this paper analyzes that phenomenon we propose a model of partial cooperation among parents in making voluntary contributions to their public schools under reasonable conditions the model predicts that contributions per pupil should decline with school size we estimate this relationship using data on contributions to california schools our estimates reveal that contributions per pupil do decline with size however the rate of decline is surprisingly slow 2002 elsevier b v all rights reserved

faith based charity and crowd out during the great depression abstract interest in religious organizations as providers of social services has increased dramatically in recent years churches in the u s were a crucial provider of social services through the early part of the twentieth century but their role shrank dramatically with the expansion in government spending under the new deal in this paper we investigate the extent to which the new deal crowded out church charitable spending in the 1930s we do so using a new nationwide data set of charitable spending for six large christian denominations matched to data on local new deal spending we instrument for new deal spending using measures of the political strength of a state s congressional delegation and confirm our findings using a different instrument based on institutional constraints on state relief spending with both instruments we find that higher government spending leads to lower church charitable activity crowd out was small as a share of total new deal spending 3 but large as a share of church spending our estimates suggest that benevolent church spending fell by 30 in response to the new deal and that government relief spending can explain virtually all of the decline in charitable church activity observed between 1933 and 1939

the economic cost of the cap revisited this paper reports estimates of the domestic economic cost of the common agricultural policy cap from computable general equilibrium simulations which incorporate imperfect competition in the non primary sectors as well as explicit modelling of agricultural protection imperfect competition is characterised to include hierarchical preferences addressing the notion of varietal diversity as an important decision variable in consumer behaviour results indicate that repeal of the cap would reduce varietal diversity in food processing in the eu causing utility losses however these would be countered by positive varietal effects in other sectors and by strong allocative effects the net cost of the cap to the eu is estimated at 0 2 of gross domestic product gdp for an individual member state the cost can be considerably larger as with the uk where the estimate is above 0 5 of gdp

negative externalities and welfare improving preference changes when the over consumption of open access resources and congestible public goods generate negative externalities and social welfare losses many individuals and environmental advocacy organizations offer as an alternative nongovernmental solution the adoption of new ecology sustaining preferences this paper shows that exogenously inducing a change in preferences and the adoption of new externality internalizing preferences which increase an individual s marginal rate of substitution between a private good and a good whose consumption imposes external costs on others not only reduces the aggregate output of the negative externality but also produces an economic state that is socially superior to the initial state because it is based on both the initial and new preferences the social superiority welfare criterion makes possible meaningful welfare comparisons of economic states generated by preference changes a computational general equilibrium model is then used to simulate preference changes and to calculate the resulting allocative and welfare effects the computer simulations reveal that important factors in the attainment of a socially superior state include i the particular characteristics of an individual s negative externality reaction function ii the magnitude of the preference change and iii the number of individuals changing preferences

macroeconomic consequences of farm support policies agricultural protectionism is a basic factor underlying the u s trade deficit third world debt and global underemployment yet despite the seriousness of the problem and attention given to it by many researchers little progress has been made in formulating and implementing policies to deal with it the scholars and experts here assembled present for the first time a quantification and analysis of the impact upon the world economy of reduction or elimination of agricultural protectionism they question why give the magnitude of the problem inferior policies endure despite the weight of evidence that they have failed the answer they derive is that there is no general understanding of the true cost of the failure and therefore it is necessary to initiate reform from outside agricultural circles

financial reporting quality and price competition among nonprofit firms donors increasingly rely on financial information reported by internal revenue service irs form 990 to allocate donations among nonprofit firms however competition among nonprofits creates an incentive for managers to under report management and fund raising expenditures to make their firms appear relatively efficient increasingly researchers suspect that information provided in the form 990 may not accurately portray the true financial condition of nonprofit firms inaccurate price information weakens the ability of donors to promote efficiency and discipline excess among nonprofit managers this article examines the reaction of donors to variation in form 990 reporting quality we find that donors reward nonprofit firms for investments in more accurate financial reporting additionally higher quality financial information sharpens the ability of donor markets to discipline nonprofit firms by increasing price sensitivity the primary implication of this study is that regulatory improvements in rep

properties of the combinatorial clock auction the combinatorial clock auction has become popular for large scale spectrum awards and other uses replacing more traditional ascending or clock auctions we describe some surprising properties of the auction including a wide range of ex post equilibria with demand expansion demand reduction and predation our results obtain in a standard homogeneous good setting where bidders have well behaved linear demand curves and suggest some practical difficulties with dynamic implementations of the vickrey auction

does the government crowd out private donations new evidence from a sample of non profit firms abstract during the 1980s government grants to non profit organizations declined dramatically and the price of private donations increased given there are different costs associated with government grants and private donations to non profits it is important to study the relationship between these two sources and determine whether government grants crowd out private donations i take a fresh look at the issue of crowd out and improve upon the literature by exploiting a panel data set that links private donations to non profit firms with the government grants they received i study 430 non profit shelter human services and other similar types of organizations that were in operation between 1982 and 1992 i find private donations to these non profits effectively do not change with changes in government grants after controlling for firm heterogeneity and political and economic factors under an ols specification in a 2sls specification after controlling for possible endogeneity of the government grants the estimated crowd out is significantly different from zero and one dollar on average the estimated crowd out is 50 cents

how giving affects giving a long term analysis of donations social preferences theories suggest that at least some people show altruistic behaviour however this philanthropic behaviour ranges from pure altruistic preferences to reluctant altruists the fa

the chicago fire of 1871 a bottom up approach to disaster relief can bottom up relief efforts lead to recovery after disasters conventional wisdom and contemporary public policy suggest that major crises require centralized authority to provide disaster relief goods using a novel set of comprehensive donation and expenditure data collected from archival records this paper examines a bottom up relief effort following one of the most devastating natural disasters of the nineteenth century the chicago fire of 1871 findings show that while there was no central government relief agency present individuals businesses corporate entities and municipal governments were able to finance the relief effort though donations the chicago relief and aid society a voluntary association of agents with a stake in relief outcomes leveraged organizational assets and constitutional rules to administer aid

reform of the european union s common agricultural policy how to reach gatt compatibility abstract this paper studies the reform of the european union s common agricultural policy cap it examines three questions 1 1 do current reforms meet the targets specified in the uruguay round agreement 2 2 what additional reforms are needed to make cap gatt compatible and 3 3 does cap reform alleviate the eu s budgetary problem to investigate these issues we use a six region 13 sector computable general equilibrium model with explicitly modeled policies we find that cap reform worsens the eu s budgetary situation and does not meet the gatt targets we quantify support price reductions and quota increases needed to reach the targets

crowd out and diversity abstract research has shown that altruism is lower in diverse communities can this phenomenon be counteracted by government intervention to answer this question this paper introduces diversity to the canonical model of warm glow giving diversity may have two effects on incentives it may attenuate individuals altruistic preferences for public goods and it may cool off the warm glow that individuals get from voluntarism either of these effects leads to diverse communities having lower levels of public goods consistent with prior research however these effects have opposite implications for the efficacy of government intervention i then empirically investigate whether government intervention is more effective in diverse communities for identification i exploit the supreme court mandated 1991 expansion of the ssi program using a new dataset of united methodist churches from 1984 to 2000 the results show that the expansion of ssi crowded out charitable spending by churches the crowd out estimate for the average church is reasonably large but this masks significant differences in crowd out between communities crowd out occurred almost entirely in relatively homogeneous communities there is only modest evidence of crowd out in racially diverse communities thus diverse communities while having the lowest levels of altruism are in this instance the most amenable to government intervention

a binary conflict ascending price bicap mechanism for the decentralized allocation of the right to use railroad tracks the questions posed for study are motivated by controversies over how sweden might change from a centralized system of railroad management to a decentralized system the central rail administration banverket will retain ownership and maintenance responsibility of the tracks but will sell access to the tracks to private firms the questions are about the mechanism that might accomplish this task parties to the controversy have claimed that the technical aspects of networks will as a matter of principle preclude the operation of any decentralized method this paper explores the properties of a mechanism developed as a challenge to that claim the mechanism is examined in the context of a testbed experimental environment that contains many potential problem causing elements in the tests performed the mechanism operated to efficiently allocate access to the network and it did so for behavioral reasons that are understandable in terms of theory the paper closes with suggestions for further study of environments that might present additional challenges to a mechanism

does external funding of academic research crowd out institutional support abstract nonprofit organizations receive revenues from a variety of sources the amount of support provided by each source is often dependent on the level supplied by the other s empirical evidence regarding crowding out among alternative sources of revenue in nonprofit organizations is mixed but most studies find that an increase in funding from one of the sources tends to decrease contributions from the other s this paper investigates the relationship between internal and external funding of academic research i find evidence that there is not crowding out in this case instead additional funding from each of these sources enhances the amount provided by the other over time this is consistent with the hypothesis that external sponsors wish to allocate funding to those universities that do the highest quality research and that funding from either source provides information about quality the results of this study also imply that a one time change in funding from one source has a multiplier effect on subsequent levels of both sources the potential for feedback effects is usually ignored in studies of this type meaning that the total impact of funding changes may often be understated this suggests that relatively small decreases in academic research funding can have a larger than anticipated effect that may persist for many years the presence of feedback effects also indicates that existing models of nonprofit behavior which are primarily static need to be modified to incorporate a dynamic structure

pses and the mix of measures to support farm incomes summary and conclusions in summary the mix of support provided to agriculture does matter when pses are to be cut across the board reductions in individual components of pses will have different implications for output exports land values and employment in different countries these differences can be systematically related to the type of instruments used to support agriculture for example cutting subsidies on an input such as fertilizer can result in greater long run reductions in output exports and employment in agriculture than would cuts in output subsidies of equal magnitude these differences may make it attractive for countries engaging in partial liberalization to change the mix of subsidies even as they reduce their aggregate pse in so doing they may be able to lessen or even eliminate some of the deleterious effects of reduced farm support for example the united states could maintain the demand for farm labour while cutting its aggregate pse in half by shifting the mix of farm support towards selected input subsidies by contrast there appears to be little incentive for substituting export subsidies for output subsidies under the pure pse approach proposed by professor tangermann et al this is because such a switch would have to be accompanied by further reductions in budgetary outlays in order to avoid exceeding the pse target agreed in negotiations

not for profit entrepreneurs abstract entrepreneurs who start new firms may choose not for profit status as a means of committing to soft incentives such incentives protect donors volunteers consumers and employees from ex post expropriation of profits by the entrepreneur we derive conditions under which completely self interested entrepreneurs opt for not for profit status despite the fact that this status limits their ability to enjoy the profits of their enterprises we also show that even in the absence of tax advantages unrestricted donations would flow to non profits rather than for profit firms because donations have more significant influence on the decisions of the non profits

voluntary contributions and local public goods in a federation abstract this paper considers nonneutral effects of government spending in a federation of multiple jurisdictions both government spending and private donations finance local public goods redistributive programs that provide transfers for the poor in the standard model government spending has no effect on the public goods as donors reduce their donations one for one in response to an increase in government spending in a federation donors of a jurisdiction donate through federal charities to help the poor in the jurisdiction and the poor in other jurisdictions as well jurisdictions are thus linked through donations such linkage influences donors behavior beyond the traditional crowding out effect as a result government spending has nonneutral effects on the level of public goods

global models applied to agricultural and trade policies a review and assessment the continuing process of global integration bears implications for farmers and related supplying and processing industries in all parts of the world but also for the rest of the world economy an assessment of agricultural and trade policy impacts is bound to be complex and is often supported by quantitative modeling analysis this article provides an assessment of the present state of applied modelling in the area of trade and agricultural policies we provide in this paper a comparative assessment of alternative modelling approaches considering a total of 16 partial equilibrium and general equilibrium models the assessment includes theoretical modelling foundations datasets employed and institutional aspects such as model maintenance and dissemination of results a typology of models is provided by structuring the assessment along a clear set of evaluation criteria

ascending prices and package bidding further experimental analysis abstract we explore the performance of multi round price guided combinatorial auctions for a previously untested class of value profiles in which synergies arise from shared fixed costs we find that in many cases a simulator that bids straightforwardly does well in predicting auction performance but exceptions arise because human bidders sometimes rely on cues besides prices to guide their package selection and because they sometimes bid aggressively on items for which they have no value in order to increase payments by bidders seeking complementary packages in our experiments this latter behavior not only raises prices but can also improve efficiency by mitigating the threshold problem comparisons between a combinatorial clock auction cca and a simultaneous ascending auction saa are reported

the effect of false name bids in combinatorial auctions new fraud in internet auctions we examine the effect of false name bids on combinatorial auction protocols false name bids are bids submitted by a single bidder using multiple identifiers such as multiple e mail addresses the obtained results are summarized as follows 1 the vickrey clarke groves vcg mechanism which is strategy proof and pareto efficient when there exists no false name bid is not falsename proof 2 there exists no false name proof combinatorial auction protocol that satisfies pareto efficiency 3 one sufficient condition where the vcg mechanism is false name proof is identified i e the concavity of a surplus function over bidders

tariff protection elimination and common agricultural policy reform implications of changes in methods of import demand modelling the study proposes a way for accommodating the traditional armington assumption to capture the possibility for a country to import imperfect substitutes as well as perfect substitutes for domestically produced goods when this possibility is incorporated into a modelling framework then a common agricultural policy elimination scenario including the setting to zero of import tariffs would have starker implications than many studies suggest to illustrate this point a computable general equilibrium cge model of the french economy is used highlighting agricultural and food sectors the study analyses the consequences for the french economy of a complete liberalization scenario in the european sector of cereals

efficiency of alternative policies for the ec s common agricultural policy the common agricultural policy cap of the european community ec is facing a crisis from budgetary and political pressures this study analyzes the relative efficiency of four policy options discussed at the recent emergency summit in brussels including a price reduction coresponsibility levies production controls and a two price plan these are assessed in terms of their efficiency in achieving producer welfare a two price plan is superior to a production quota only at lower producer income goals a price reduction policy is more efficacious than a coresponsibility levy but both are shown to be inferior to either quotas or a two price plan

mandatory minimum contributions heterogeneous endowments and voluntary public good provision abstract in a public good experiment with heterogeneous endowments we investigate if and how the contribution level as well as the previously observed fair share rule of equal contributions relative to one s endowment hofmeyr et al 2007 keser et al 2014 are influenced by minimum contribution requirements we consider three different schedules fixmin requiring the same absolute contributions relmin requiring the same relative contributions and progmin requiring minimum contributions that progressively increase with the endowment we find that minimum contributions exert norm giving character and may lead to an increase in average group contributions this is especially true for the progressive schedule on the individual level this schedule leads to higher relative contributions by the wealthier players and thus violates the fair share norm on the group level it leads to the highest contribution level and the lowest inequality in total profits as measured by the gini index

the package assignment model we study assignment problems where individuals trade packages consisting of several rather than single objects although buyers reservations values are non additive efficient assignments can be formulated as a linear programming problem in which the pricing functions expressing duality may be non linear in the objects constituting the packages the interconnections among the linear programming formulation walrasian equilibrium and the core are established in the single seller auction version a necessary and sufficient condition is given for the vickrey payoff point to be implementable by a pricing equilibrium journal of economic literature classification numbers c62 d44 d51

challenges in quantitative economic analysis in support of multilateral trade negotiations abstract a wide range of economic analysis of agricultural trade liberalization was performed prior to and during the uruguay round of trade negotiations views differ as to the effectiveness of this research although most would agree that it became less relevant as the negotiations progressed this paper reviews the contributions of economists to the trade liberalization debate with an emphasis on the quantitative assessment of multilateral agricultural trade liberalization with a new round of agricultural trade negotiations scheduled to begin in 1999 it is crucial that the quantitative work required to support these negotiations begin in the near future the authors conclude that the uruguay round outcome provides numerous challenges and opportunities in analyzing the traditional agenda of agricultural trade liberalization in addition new issues will be added to the agenda of the next round of negotiations these include trade and the environment competition policy and intellectual property rights it is important that economists begin to develop a research agenda that can address these issues and become activists in addressing these topics in public forums

non monotonic group size effect in repeated provision of public goods abstract this paper analyzes the effect of a change in group size on incentives to contribute in repeated provision of pure public goods we develop a model in which group members interact repeatedly and might be temporarily unable to contribute to public goods production during some periods we show that an increase in the group size generates two opposite effects the standard free riding effect that suppresses cooperation and the novel large scale effect that enhances cooperation our results indicate that the former effect dominates in relatively large groups while the latter dominates in relatively small groups we therefore provide a rationale for a non monotonic group size effect that may explain previous empirical and experimental findings

altruistic voting and campaign contributions abstract an altruistic citizen votes yes in a referendum if the perceived benifit of the project exceeds its perceived cost the altruist gets information about benifits and costs from contributions to the pro and con campaigns in the nash equilibrium of a campaign contribution game with two beneficiaries altruists vote on the side with the largest contribution and altruistic voting guarantees efficient choices if there are many agents however altruistic voters do not always make efficient choices a disclosure law that provides information about the number of beneficiaries increases the efficiency of the referendum process

an accurate measurement of the crowd out effect income effect and price effect for charitable contributions in the past empirical research on charitable contributions has focused on two issues estimating the income and price elasticities of contributions and estimating the extent to which government funding crowded out private contributions the two fundamental problems in all these studies are the differences in the underlying conceptual models and the use of imperfect data for empirical analysis this paper addresses both of these problems

media coverage and charitable giving after the 2004 tsunami author affiliation philip h brown department of economics colby college 5246 mayflower hill waterville me 04901 usa e mail phbrown colby edu corresponding author jessica h minty analysis group inc 111 huntington avenue 10th floor boston ma 02199 usa e mail jminty analysisgroup com acknowledgment we are grateful to claudio agostini michael donihue martin farnham rebecca graninger daniel hamermesh melanie siben tom tietenberg andreas waldkirch seminar participants at colby college and two anonymous referees for numerous helpful comments and suggestions we would also like to acknowledge reuters alertnet and chuck lakin for their assistance in identifying data sources and care usa catholic relief services mercy corps surfaid international and four other relief agencies for providing data for the purpose of this research finally philip h brown would like to thank the international food policy research institute for sabbatical support during the preparation of this manuscript 1 introductionrelief workers have long believed in the causal relationship between media coverage of humanitarian crises and charitable giving to relief agencies for example private donations to relief agencies during the early stages of the 1994 rwandan genocide were sufficient to support approximately one million displaced rwandans but after the tribulations of o j simpson and tanya harding eclipsed rwanda in the media funding for relief activities began to decline the perception among many aid workers in the camps for rwandan refugees including one of the authors was that the media had turned its back on the crisis with potentially dire consequences 1while anecdotal evidence abounds few studies have systematically assessed the relationship between media coverage and the behavior of private donors and those that do suffer from important analytical shortcomings for example an analysis undertaken by the institute for philanthropy finds that 14 of 15 surveyed british philanthropists believe that the media has the power to encourage private giving with 11 of the 15 being inspired to make charitable donations themselves breeze 2005 similarly olsen carstenson and hoyen 2003 find a high correlation between the total number of relevant articles in western newspapers and the total amount of humanitarian assistance allocated to victims of the flooding in mozambique in 2000 and the cyclone in eastern india in 1999 unfortunately neither sample is large enough to make generalizations nor is there any attempt to quantify the magnitude of the causal relationship in part the difficulty in quantifying the relationship stems from disentangling the effect of new developments in stories covered in the media from the pure effect of media coverage returning to the rwanda case the former is tantamount to asking what is the combined effect of 10 000 additional deaths and a five minute news story on donations to u s charities while the latter is equivalent to asking given that 10 000 people were killed what is the effect of increasing the news story from five minutes to six in this paper we use the december 26 2004 tsunami as a case study to quantify the causal effect of media coverage on donations to charity specifically we consider the effects of reporting on three nightly network news broadcasts and articles in two prominent newspapers on private donations to seven u s relief agencies to eliminate the time lag between when news reports are seen or read and when donations are received by relief agencies we focus exclusively on donations made via the internet we also control for donor fatigue tax incentives and weekends to better isolate the effect of media coverage finally to alleviate simultaneity concerns and omitted variable bias including new developments in the tsunami story itself we use announcements of casualties among u

charity donations in the uk new evidence based on panel data abstract this paper presents a set of panel data estimates for 159 of the most prominent uk charities for the period 1983 1990 in evaluating alternative specifications we settle on a fixed effects estimation social welfare charities are shown to fund raise short of the point at which net revenues are maximized whereas health and overseas charities are found to net revenue maximize religious charities maximize total revenues estimates of price and fund raising elasticities are presented for charities overall and for four cohorts for alternative income sources no evidence of crowding out is found

the effects of trade liberalisation abstract the liberalisation of agricultural trade has been an important component of the uruguay round of multilateral trade negotiations under the gatt a considerable amount of research effort has been expended on estimating the costs of agricultural protectionism most of this activity has been based on a partial equilibrium framework with conventional quantification of the distributive benefits and costs to be expected from liberalisation attempts at general equilibrium analysis have been fewer but provide evidence of the economy wide gains from the removal of protection whilst these analyses have had a powerful influence on the nature of the political discussions on agricultural trade policy they have not helped define the details of politically acceptable alternatives to current agricultural supports the reasons are the technical economic data and statistical problems which restrict the interpretation of results to broad generalisations and the failure of analyses to focus on the most important political concerns indicating these concerns may help define the focus of future research but it is doubted if conventional economic analysis has very much more to offer

the robustness of kingma s crowd out estimate evidence from new data on contributions to public radio we revisit kingma s kingma 1989 journal of political economy 97 1197 1207 widely cited study of charitable contributions to public radio kingma s estimate of partial but statistically significant crowd out remains a benchmark in the literature because he was able to match household level contributions data with station level data on revenue including revenue from government grants to the best of our knowledge no comparable data have become available until now we replicate kingma s estimates with the original data and then apply the same methodology to very similar data from 1996 kingma s estimates are not robust to the use of the newer data

government growth and private contributions to charity we exploit the time series properties of charitable giving to provide additional insights into the relationship between charitable contributions and government spending cointegration tests reveal a significant long run relationship between several categories of charitable giving and government spending granger causality tests provide evidence on the short run giving and spending relationship evidence suggests that charitable contributions to education respond quite differently to state and local government education expenditures versus federal government expenditures we argue that the government spending and charitable giving relationship depends on the source of government revenue how this revenue is used and the rational ignorance of private donors

voluntary donations and public expenditures in a federal system proponents of the new federalism argue that nonprofit organizations and local governments will fully offset federal social service expenditure cutbacks the author analyzes this proposition as a competitive game in which donations are motivated by private and public good considerations the author characterizes the response of political economic equilibrium to exogenous changes in federal expenditures when local voters are cognizant of donor reactions partial replacement is the most likely outcome though others are possible copyright 1987 by american economic association

private donations government grants commercial activities and fundraising cointegration and causality for ngos in international development cooperation ngos could help scale up foreign aid efforts by mobilizing private donations however fundraising activities do not necessarily result in higher donations and substitution effects between different sources of revenue may diminish the overall pool of ngos resources this paper examines the determinants of private donations to us based ngos engaged in international development cooperation we employ panel cointegration and causality techniques to analyze the interactions between private donations government grants commercial revenues and fundraising expenditures according to our results a marginal dollar spent on fundraising yields almost five dollars in new donations in the long run government grants crowd in private donations in the long run whereas commercial revenues crowd out donations in the long run moreover our panel vector error correction model reveals complex short run dynamics

religiosity and state welfare abstract the catholic sex abuse scandals reduced both membership and religiosity in the catholic church because government spending on welfare may substitute for the religious provision of social services we consider whether this plausibly exogenous decline in religiosity affected several measures of the public taste toward government and spending on welfare between 1990 and 2008 in places where there were more scandals individuals state a preference for less government provision of social services in contrast a higher level of abuse is also associated with an increase in voting for democratic candidates for president state legislatures and the us house of representatives and an increase in per capita government welfare spending although this increase is insufficient to replace the decrease in catholic provided charity

multi battle contests an experimental study this study examines behavior of subjects in simultaneous and sequential multi battle contests in simultaneous contests subjects make positive bids in each battle 80 of the time and bids fall within the predicted boundaries however 35 of the time subjects make positive bids in only two instead of all three battles and they significantly overuse moderately high bids in sequential contests theory predicts sizable bids in the first battle and no bids in the subsequent battles contrary to this prediction subjects significantly underbid in the first battle and overbid in subsequent battles consequently instead of always ending in the second battle contest proceeds to the third battle 38 of the time finally in both simultaneous and sequential settings subjects make higher aggregate bids than predicted resulting in negative expected payoffs

new developments in applied general equilibrium analysis 1 introduction john piggott 2 hidden challenges in recent applied general equilibrium exercises john whalley 3 the measurement of waste and welfare in applied general equilibrium models erwin diewert 4 sensitivity analysis for linearized computable general equilibrium models adrian pagan and john shannon 5 the european economic community general equilibrium computations and the economic implications of membership john spencer 6 economic interdependence in the pacific basin a general equilibrium approach glenn harrison and larry kimbell 7 regional impacts of tariffs in canada preliminary results from a small dimensional numerical general equilibrium model richard jones john whalley and randall wigle 8 agricultural protection and market insulation policies applications of a dynamic multisectoral model tony chisholm and rodney tyers 9 a general equilibrium model of taxation that uses micro unit data with an application to the impact of instituting a flat rate income tax joel slemrod 10 consumption taxes foresight and welfare a computable general equilibrium analysis charles ballard and larry goulder 11 special purpose versions of a general purpose multisectoral model tax issues and the australian wine industry tony meagher brian parmenter russel rimmer and ken clements 12 general equilibrium analysis of economic policy dale jorgenson and daniel slesnick 13 the welfare cost of interest rate ceilings in developing countries a general equilibrium approach hasan imam 14 general equilibrium with price rigidities trien nguyen 15 short run macroeconomic closure in applied general equilibrium modelling experience from orani and agenda for further research russel cooper keith mclaren and alan powell 16 new developments in the application of general equilibrium models to economic history john james

efficient redistribution through commodity markets efficiency in redistribution is measured in terms of deadweight loss generated per dollar of economic surplus transferred between consumers and producers of a commodity by means of market intervention the implications of supply and demand elasticities for efficiency in redistribution are examined with special attention to the comparison of production control and deficiency payment programs the results may be used to aid in the evaluation of commodity programs and as a basis for consideration of the hypothesis that observed policies are efficient given the political power of interest groups

judging agricultural policies a survey this survey provides a structured picture of 40 years of literature which uses welfare economic tools to judge agricultural policy challenges and developments of normative agricultural policy analysis are discussed in an easily accessible graphical framework it is shown how the literature has gone from examining a very small discrete set of simple policies to a much broader often continuous set of policies that combine policy instruments simultaneously the importance of the pareto criterion used to explore the limits of how government can affect welfare is revealed moreover given the importance of the objective of income redistribution in agricultural policy agricultural economists have often departed from the purely efficiency oriented tradition in economics it is shown that they have tried to incorporate equity considerations by either adding these criteria as constraints to the social welfare function or directly incorporating these criteria in the functional form of the social welfare function

an experimental test of warm glow giving abstract this paper reports the results of an experimental test of the warm glow hypothesis a participant is presented with the opportunity to contribute from her own endowment to a charity of choice the experiment is designed so that a pure altruist has no incentive to donate the amount the designated charity will receive is preset any contribution by the participant crowds out dollar for dollar giving by the proctor we find that participants on average donated 20 of their endowments and that approximately 57 of the participants made a donation

the flypaper effect and other anomalies abstract i develop a model in which income both in its own right and as a proxy for other socioeconomic characteristics is an input in the production function for local public services the most obvious example is education though there are other applications as well the comparative statics results from this model yield the following results 1 the observed flypaper effect the tendency for local government to spend a higher fraction of unrestricted grants than income of residents may be due at least in part to the fact that own income but not grants is a substitute for purchased inputs in the technology hence the propensity to spend on purchased inputs out of own income is lower than out of grants 2 the income elasticity of demand for public sector output may be higher than the observed income elasticity of demand for purchased inputs 3 equalization of educational opportunity via wealth neutrality as suggested by feldstein requires major changes in education finance once we recognice the distinction between purchased inputs and output

matching with contracts we develop a model of matching with contracts which incorporates as special cases the college admissions problem the kelso crawford labor market matching model and ascending package auctions we introduce a new law of aggregate demand for the case of discrete heterogeneous workers and show that when workers are substitutes this law is satisfied by profit maximizing firms when workers are substitutes and the law is satisfied truthful reporting is a dominant strategy for workers in a worker offering auction matching algorithm we also parameterize a large class of preferences satisfying the two conditions

financing public goods public goods can be financed by direct taxation or a subsidy to private spending this paper examines the relative efficiency and distributional consequences of the two methods efficiency is shown to depend on the price elasticity of private spending and the trade off between public and private spending when this trade off is dollar for dollar however a subsidy is always more efficient than direct taxation the gains from a subsidy are larger for a mixed good than for a pure public good looking a t distributional effects the author shows when richer taxpayers may prefer a tax credit to deductibility even though they face lower prices with deductibility and also shows when richer taxpayers prefer direct taxation to either type of subsidy copyright 1987 by university of chicago press

competitive equilibrium in an exchange economy with indivisibilities abstract we analyze an exchange economy in which i all commodities except money are indivisible ii agents preferences can be described by a reservation value for each bundle of indivisible objects and iii all agents are price takers we obtain a necessary and sufficient condition under which market clearing prices exist implications for market mechanisms are discussed journal of economic literatureclassification numbers d51 c78

impure altruism in dictators giving abstract we design an experiment to test whether incomplete crowding out in dictator games can be rationalized by the impurely altruistic preferences by giving the recipients an endowment of varying levels we create an environment in which crowding out may occur we find that the behavior of 66 of the dictators can be rationalized by the impurely altruistic utility function

do public grants to american theatres crowd out private donations this paper examines the relationship between public support and private donations by disaggregating the crowding effect into two components one determined by level of public support and one determined by changes in public support levels the analysis of a panel of american non profit theatres shows that the crowding effect induced by the level of public support takes an inverted u shape at low levels public support crowds in private donations while at higher levels it displaces them the change in total public support in the past year produces a constant crowding in effect on the level of private donations the paper finally illustrates how federal and state support have a crowding in effect at all levels while local support has a similar impact to total public support

social preferences and private provision of public goods a double critical mass model we set up an evolutionary game theoretic model aimed at addressing the issue of local public good provision via direct commitment of voluntary forces private donors and nonprofit providers only two classes of agents are assumed to strategically interact within a double critical mass model and we investigate the critical factors affecting the dynamic outcomes of such interaction further we explore the conditions under which what we term evolutionary crowding out in occurs depending on agents degree of opportunism social comparison and positive selective incentives such as subsidies given by the government to virtuous citizens or nonprofits only

the exposure problem and market design markets have an exposure problem when getting to the optimal allocation requires a sequence of transactions which if started but not completed leaves at least one trader with losses we use laboratory experiments to evaluate the effect of the exposure problem on alternative market mechanisms the continuous double auction performs poorly efficiency is only 20 when exposure is high and 55 when it is low a package market effectively eliminates the exposure problem in low and high exposure treatments efficiency is 82 and 89 respectively building on stability notions from matching theory we introduce the concept of mechanism stability a model of trade that combines mechanism stability with noisy best responses and imperfect foresight explains the difference in market performance finally decentralized bargaining with contingent contracts performs well with perfect information and communication but not in the more realistic case when traders preferences are privately known

on the economics of philanthropy friedman says that he accepts this argument as justifying governmental action to alleviate poverty economists will be familiar with this kind of argument someone takes as a premise that a particular activity is the subject of altruistic concern by individuals he shows that if matters are left to unco ordinated private philanthropy a free rider problem will arise and then he claims that this problem can be solved by some kind of intervention by government this strategy has been used to justify many kinds of intervention including compulsory transfers of income through the tax system hochman and rodgers i969 public policy to stimulate saving and investment marglin i963 sen i967 and the subsidisation or public provision of health care arrow i963 lindsay i969 culyer i976 this whole line of argument rests on a particular theory of private philanthropy which in turn relies on three principal assumptions first there is the publicness assumption the charitable activity in question say the relief of poverty or the provision of health care is a common argument in many individuals utility functions and so is a public good in the theoretical sense samuelson i954 in some cases of private philanthropy it is indisputable that the charitable activity is a public good from which donors derive utility consider for example the case of yachtsmen contributing to the royal national lifeboat institution or potential cancer victims contributing to the cancer research campaign in other cases the assumption takes on a rather different character rich britons contribute towards famine relief in cambodia childless old age pensioners contribute towards the care of handicapped children in such cases one would have to be extremely cynical to believe that the charitable activity furthers the self interest of the donor in any significant way but one might suggest that for purely altruistic reasons the donor derives utility from knowing that less fortunate people are being made better off such an effect will be called an altruistic externality friedman along with all of the other writers quoted in the first paragraph of this paper relies on altruistic externalities to justify the publicness assumption the second assumption is that of utility maximisation each individual s decisions concerning his philanthropic

public goods hidden income and tax evasion some nonstandard results from the warm glow model abstract a large literature explores crowd out in situations where public goods are jointly provided work in this area typically depicts a tax system where individuals take taxes as given but in some settings such as those in developing economies efforts to evade or avoid taxes may be widespread using the canonical warm glow model this paper considers joint public good provision in a setting where individuals can evade taxes by hiding their income the model s implications change significantly in this setting with hidden income stronger warm glow will lead to greater crowd out not less using research on crowd out and inter family transfers i present suggestive evidence that the model s results may help to reconcile divergent estimates of crowd out in the literature

reconsidering agri environmental policy permitted by the uruguay round agreement agri environmental policies are increasingly being used to redress the balance between jointly produced agricultural and environmental outputs and are permitted by the uruguay round ur agreement with the general provision that they not distort trade in this paper we argue that any market consequences of efficient welfare enhancing agri environmental policies should not be considered trade distorting to consider them so is inconsistent with economic efficiency and with ecological integrity social cost benefit analysis cba is a more appropriate test and guide of trade consistency for agri environmental policies and using trade effects as the test may not enhance social welfare moreover specific provisions in the ur agreement restricting payments under agri environmental policies to opportunity costs are not warranted on economic efficiency grounds and consign the environment to a status subsidiary to agricultural output

shapley value based pricing for auctions and exchanges abstract this paper explores how the shapley value can be used as the basis of a payment rule for auctions and exchanges the standard shapley value is modified so that losing bidders do not make or receive any payments the new rule called the balanced winner contribution bwc rule satisfies a variation of myerson s balanced contribution property the payment rule is fair in the sense that with respect to reported values the members of every pair of traders make equal contributions to each other s share of the gains from trade bwc payments can be used in single item auctions and more complex auctions and exchanges with multiple items and package bidding a series of examples is presented to illustrate how the bwc rule works and how the payments compare to those based on competitive prices the core and the vickrey clarke groves mechanism

the effects of grants in aid on state and local expenditures abstract this paper develops econometric methods to estimate the effect of the piecewise linear budget constraints created by grant formulas in which the subsidy rate is not constant over expenditures e g closed end grants the methods are applied to the afdc program the results show that because of the kinked nature of the grant formula 1 the present federal formula actually increases cross state inequality in afdc benefits 2 several subsidy rates in the formula actually reduce benefits and 3 the so called flypaper effect disappears

collective choice and voluntary provision of public goods some public goods are provided entirely with private contributions others with a mixture of public and private funding and still others are entirely publicly funded in order to study this variation a model of dual provision is developed that endogenizes public and private funding households vote over an income tax that finances public supply of the good and on whether to permit private contributions while permitting private contributions may lead to a reduction in total provision a majority always favors permitting private contributions results are developed for small and large economies and the relevance of nonexcludability and noncongestion are investigated

package auctions and exchanges we report recent advances concerning the package allocation problem in which traders seek to buy or sell combinations of goods the problems are most difficult when some goods are not substitutes in that case competitive equilibrium typically fail to exist but the core is non empty and comprises the competitive solutions also in that case the vickrey auction fails to select core allocations and yield revenues that are less than competitive the ausubel milgrom auction generally selects core allocations and when goods are substitutes prescribes the vickrey allocation we also evaluate the problems and promise of mechanisms for the package exchange problem

a signaling explanation for charity this article examines a novel but plausible motive for charitable giving charitable donations which are observable can signal wealth or income the signaling equilibrium of charitable donations has attractive properties donations increase proportionally with population size governmental funding for public goods affects private charity only through an income effect crowding out need not be complete income redistribution is generically nonneutral increasing the spread between the poorest and richest person in a community tends to increase private donations our theory are based on the assumption that people are willing to make charitable donations even if they will not increase provision of the public good the data on charitable giving support the hypothesis that donors donate at least partly for signaling purposes rather than only to aid the recipient or to obtain satisfactions unrelated to status though charitable organizations usually report donations within categories thus not allowing perfect revelation for analytical tractability we shall consider an equilibrium with perfect revelation and a continuum of types as characterized in george j mailath 1987 and norman j ireland 1994

free trade old and new challenges the paper analyses the old and new challenges to the theory and policy of free trade the old challenges have sought to undermine the case for free trade by citing one or another type of market imperfection thus the postwar period has seen two such challenges factor market imperfections were analysed in the 1950s to 197os product market imperfections in the i980s the new challenges are twofold one comes from the demands for fair trade as a precondition for free trade the other from the concern that free trade while efficient immiserises the unskilled in the richer countries having given a harry johnson lecture four years ago in london i was startled to be invited to give yet another one today but then i recalled his unmatched productivity his articles continued to be published even after his death the pipelines in several journals being full of them it is only appropriate then that he be honoured many times over also in these days of preoccupation with increasing returns to scale such a proliferation of lectures in the memory of a great economist is doubly fitting since harry johnson was in the english tradition of taking his theory from the real world s problems and then taking it back to talk penetratingly about them i thought it appropriate to address the earlier johnson lecture to the threats posed currently to the multilateral trading system by increasing resort

global models of trade in agriculture and related environmental modelling a review and assessment the continuing process of global integration bears implications for farmers and related supplying and processing industries in all parts of the world but also for the rest of the world economy an assessment of agricultural and trade policy impacts is bound to be complex and is often supported by quantitative modeling analysis this article provides an assessment of the present state of applied modelling in the area of trade and agricultural policies we provide in this paper a comparative assessment of alternative modelling approaches considering a total of 16 partial equilibrium and general equilibrium models the assessment includes theoretical modelling foundations datasets employed and institutional aspects such as model maintenance and dissemination of results a typology of models is provided by structuring the assessment along a clear set of evaluation criteria

equilibria and indivisibilities gross substitutes and complements this paper examines an exchange economy with heterogeneous indivisible objects that can be substitutable or complementary we show that a competitive equilibrium exists in such economies provided that all the objects can be partitioned into two groups and from the viewpoint of each agent objects in the same group are substitutes and objects across the two groups are complements this condition generalizes the well known kelso crawford gross substitutes condition and is called gross substitutes and complements we also provide practical and typical examples from which substitutes and complements are both jointly observed

removal of farm subsidies in a regional economy a computable general equilibrium analysis the purpose of this article is to analyse the importance of farm subsidies for the extremadura economy to this end a computable general equilibrium model for this region is presented with which we analyse the economic effects caused by a simulated removal of these subsidies different scenarios involving the labour market rigidities and tax compensation are considered model parameters are determined by the procedure known as calibration using a social accounting matrix constructed for this economy the results clearly show the negative effects that this elimination would produce on the main micro and macroeconomic variables

pareto optimal redistribution and private charity abstract when private charity exists and is motivated by utility interdependence a non pareto optimal outcome the free rider problem typically arises nevertheless incremental fiscal redistribution cannot achieve a paretian welfare improvement so long as private charity continues at positive levels donors respond to incremental fiscal redistribution by reducing their voluntary contributions by exactly a dollar for every dollar transferred in this way no net transfer is achieved unless incremental fiscal redistribution is pursued to the point where private contributions have been driven to zero alternatively a net transfer may be achieved by fiscal measures which affect donors marginal incentives to donate

a critical assessment of supply demand models of agricultural trade we offer a critical assessment of static deterministic reduced form supply demand sd models of agricultural trade a commonly used and well documented model has significant limitations no explicit treatment of factor mobility between farm and nonfarm sectors nonzero profits in some sectors no substitutability among feedstuffs in livestock sectors violation of the law of one price small marketing margins for some commodities and incomplete coverage of the agricultural sector such limitations have significant impacts on the magnitude and direction of projected world price and welfare changes we believe agricultural policy analysis should first focus on the remediation of these limitations before proceeding to more complex issues like dynamics and uncertainty

government free riding in the public provision of higher education panel data estimates of possible crowding out this article employs panel data on more than 1000 us public colleges and universities to investigate the effect of private giving on state government funding government free riding is at question and is found to be active in that private donations partially displace state government funding at the rate of 83 cents on the dollar that compares to the 45 cents political substitution of the 1960s but is much diminished from the 1 07 of the 1980s those are aggregate comparisons for all public institutions a disaggregated approach in this article additionally reveals that doctoral granting research universities are somewhat lesser victims of crowd out in experiencing a 71 cents cut at master level colleges and universities and associate 2 year degree granting colleges crowding out is estimated to be on the order 87 cents and 1 10 respectively relative to the academic year 2000 to 2001 publicly controlled colleges and universities are found to experience significant reductions in state appropriated fu