return policies market outcomes and consumer welfare the effect of return policies on market outcomes is studied in a model where consumers differ in their valuations of time product reliability is identified with defect rates producers first choose reliability levels and then compete in prices for given defect rates allowing returns makes products closer substitutes enhancing competition and reducing prices being closer substitutes makes higher reliability less worthwhile which reduces reliability while the decrease in reliability reduces consumer welfare the decrease in prices raises it the latter dominates so that aggregate consumer welfare increases with return policy l effet des politiques de remboursement sur les resultats du marche est examine dans le cadre d un modele ou les consommateurs ont des evaluations differentes de la valeur de leur temps la fiabilite des produits est mesuree par leur taux de defectuosite les producteurs choisissent d abord des niveaux de fiabilite et ensuite se concurrencent par les prix pour des niveaux de defectuosite donnes permettre de retourner le produit rend les produits davantage des substituts accroit la concurrence et reduit les prix une plus grande substituabilite rend la fiabilite moins importante et donc reduit la fiabilite alors que la chute de la fiabilite reduit le bien etre du consommateur la chute des prix l accroit ce second effet domine ce qui fait que le bien etre agrege du consommateur s accroit quand il y a politique de remboursement

the highs and lows of the minimum wage effect a time series cross section study of the canadian law we examine the effects of minimum wage legislation in canada over the period 1975 93 for teenagers we find that a 10 increase in the minimum wage is associated with roughly a 2 5 decrease in employment we also find that this result is driven by low frequency variation in the data at high frequencies the elasticity is positive and insignificant the difference in the elasticity across the bandwidth has implications for the interpretation of employment dynamics as a result of minimum wage policy and experimental design in minimum wage studies it also provides a simple reconciliation of the new minimum wage research which reports very small negative or positive elasticities

effects of the minimum wage on the employment status of youths an update the large decline in the relative value of the minimum wage during the 1980s makes that period a valuable one for identifying the impact of variation in the minimum wage on youth employment this study produces the robust finding that when the experience of the 1980s is included a 10 percent increase in the minimum wage is estimated to reduce teen employment by less than 1 percent the lower end of the range of previous estimates because this small employment effect is offset by a labor force withdrawal effect the study finds no discernible effect on measured unemployment the study also finds no apparent effect of the minimum wage on the employment of young adults aged 20 24

monopoly provision of product quality and warranties an exploration in the theory of multi dimensional screening we address the monopoly problem of designing and pricing a product line of goods distinguished by different quality and warranty levels consumers vary in their evaluations of these attributes so that the problem is one of screening it is sufficiently complex that the local approach commonly used does not work instead we use new techniques for dealing with incentive constraints between nonadjacent consumer types these techniques allow us to characterize optimal allocations that may not be monotonic in particular although the more eager types of buyer do pay higher prices and yield the monopoly higher profit they may receive lower quality or lower warranty coverage we find preference restrictions that restore monotonicity concave risk tolerance implies that warranty coverage increases in type and constant absolute risk aversion implies that quality increases in type

customer return policies for experience goods this paper studies the economic rationale for customer return policies by focusing on the experience goods aspect of many products return policies allow consumers to defer their purchasing decisions until after they gain some experience with goods in so doing they insure consumers against ex post loss which allows a monopoly seller to charge more than otherwise it is shown that the seller adopts the return policy when consumers are highly risk averse or retail costs are high consumers are strictly better off under the return policy but there is too little adoption of the policy in equilibrium copyright 1996 by blackwell publishing ltd

putting up or shutting up on the individual level relationship between taxpaying and political interest in a developmental context abstracthistorical research mainly focused on early modern europe has suggested a positive link between taxation and democracy this study approaches the connection in a present day developmental context by looking at differences between taxpayers and non taxpaying citizens in terms of political interest a precondition for accountability demands using survey data from sub saharan africa a multilevel analysis shows that taxpaying increases political interest the causal direction of this finding is confirmed through an instrumental variable analysis the results support the existence of the mechanisms underlying the theory of taxation working as a generator of political engagement and democracy

public economics and history a review of fiscal regimes and the political economy of premodern states edited by andrew monson and walter scheidel fiscal regimes and the political economy of premodern states greatly expands our knowledge of the history of premodern fiscal systems and raises important questions about the political economy of premodern states answering those questions can help explain how states developed the capacity to tax why tax levels and government spending patterns varied greatly in the past even though per capita incomes were similar how government debt and representative institutions arose and last but not least why some premodern states expanded and others collapsed but firm answers to those questions will have to combine the history outlined in fiscal regimes and the political economy of premodern states with systematic data and formal models of political economy

time series evidence of the effect of the minimum wage on youth employment and unemployment our updated estimates indicate that a 10 percent increase in the federal minimum wage or the coverage rate would reduce teenage 16 19 employment by about 1 percent which is at the lower end of the range of estimates from previous studies because of substantial labor force withdrawal the unemployment effects are practically zero these minimum wage effects differ very little by sex and there is no strong evidence that the effects vary by race the study also finds a significant albeit small unemployment impact for young adults 20 24 and examines the consequences of numerous alternative statistical and mathematical specifications of the estimating model

are the effects of minimum wage increases always small a reanalysis of sabia burkhauser and hansen in a 2012 article sabia burkhauser and hansen reported very large negative effects of the 2004 to 2006 increase in the new york state minimum wage on the employment of young less educated workers hoffman reexamines their estimates using data from the full current population survey cps rather than the smaller cps morg files they used and finds no evidence of a negative employment impact the full cps which is the source of u s official labor market statistics is certainly the more appropriate and reliable data source furthermore when hoffman repeats the analysis using three states and the district of columbia which also had a substantial increase in the state minimum wage in the same time period he finds evidence of a small positive employment effect together the two findings are consistent with other more recent research that reports very weak or zero employment effects of the minimum wage

labour market institutions and employment in france the purpose of this paper is to use individual data to study how the minimum wage and the welfare system combine to affect employment in france using the 1997 labour force survey we decompose non employment of married women into three components voluntary classical due to the minimum wage and other a residual category we find that the minimum wage explains close to 15 of non employment for these women and that the disincentive effects of some welfare policy measures may be large our approach also allows us to evaluate various labour and welfare policy experiments in their effects on participation and employment copyright 2002 john wiley sons ltd

returns policy new model introduction and consumer welfare abstract this paper investigates how economic outcomes differ for new model introduction between two extreme contracts outright sales contract and returns policy contract with full credit under the outright sales contract we show that the retailer s incentive to introduce a new model can lead to a reduction of consumer welfare when the retailer is moderately risk averse the primary conclusion from this study is that the returns policy contract resolves this conflict between firms and consumers and that the supply chain introduces the new model only when consumer surplus from the new model is higher than that from the old model

minimum wage laws are they overrated l minimum has been fixed in nominal terms at about 55 percent of the current average wage rising wages in the rest of the economy gradually erode the real minimum wage and eventually the process is repeated sometimes the increase in the nominal minimum is accompanied by a permanent reduction in those businesses exempted from the law proposals for a lower minimum wage for young workers or to index the minimum wage to the average wage have been debated but not adopted the minimum wage was last increased to 3 35 in 1981 since then average hourly wages have risen by 25 percent eliminating any momentum for a lower minimum wage for youth but reviving proposals for another increase in the nominal minimum economists are fascinated by the minimum wage because we have strong theoretical predictions about the direction of the effect of the minimum wage on employment and fairly widely accepted methods to estimate the size of that impact it probably didn t hurt that the earliest and later estimates lined up well with the predictions but that is not the only reason for our fascination with the topic depending on whether we include those who say they earn less than the minimum wage minimum wage workers account for 6 to 12 percent of those employed gilroy 1981 p 157 and less than 5 percent of wage and salary income the minimum wage gives economists a relatively rare opportunity to study the impact of an exogenous increase in the price of labor and thus a chance to refine our thinking

determinants of the amount and type of corruption in state fiscal bureaucracies an analysis of late imperial china a principal agent model of relations between rulers and state officials is used to derive several propositions concerning the amount and type of corruption in state bureaucracies the model is appl

federal minimum wage laws and the employment of minority youth numerous studies have emerged over the past decade dealing with the employment effects of minimum wage legislation for example see jacob mincer and edward gramlich these studies uniformly show that some amount of disemployment results from the imposition of a minimum wage above a wage that would prevail in the absence of such legislation though there is considerable dispute concerning the magnitude of the effect in addition most if not all of the recent studies indicate a greater employment sensitivity to changes in the minimum wage on the part of teenagers nonwhites and the low skilled generally than is true for other groups job losses due to higher minimum wages may contribute to high unemployment rates among youth in general and minority youth in particular this paper presents no direct evidence on the impact of the minimum wage on teenage unemployment its results do suggest however that previous studies of the impact of the minimum wage on employment loss were probably biased towards overstatement of the effect of the minimum wage in the case of nonwhite teenagers the results presented here indicate that over the period 1954 to 1979 cyclical factors affected nonwhite teenage employment to a far greater extent than did changes in the minimum wage

defects in disneyland quality control as a two part tariff this paper shows that firms endowed with monopoly power can utilize an optional service contract form of guarantee as an instrument for effecting a surplus extracting two part tariff the monopolist finds it optimal to produce guarantee and replace defective units even if a zero defect rate could be achieved at no additional production cost it is also shown that the price per unit is greater than the effective marginal cost it may even be higher than the pure monopoly price moreover the monopolist is unable to extract all of the consumers surplus thus that optional service contract policy can provide an effective yet defensible form of price discrimination as an alternative to possible illegal tie ins quantity discounts and simple two part tariffs a guarantee is a risk sharing insurance contract tailored to the risky or uncertain flow of consumption services from a commodity see heal 1976 guarantees provide for full or partial replacement repair or refund for expected and unexpected short falls in service indeed appelbaum and scheffman 1978 have provided an example in which the refund exceeds the purchase price the guarantee may come into force in a variety of circumstances ranging from specifically named contingencies to general promises of satisfaction guaranteed or your money back guarantees may be offered as a mandatory tie in with purchase or may be optional we refer to the latter as service contracts they may be priced on a per unit basis or offered at a fixed fee invariant of number of units purchased

greed and contingency state fiscal crises and imperial failure in early modern europe1 why do states lose the capacity to finance the expansionist military policies economic development strategies or domestic spending initiatives they once supported the path dependent models offered by fiscal military rational choice and geopolitical theorists are evaluated in comparison with an elite conflict model of contingent historical change the latter model is found to be better able to explain territorial and fiscal stagnation and decline as well as imperial expansion in the cases of early modern spain france the netherlands and britain

warranties durability and maintenance two sided moral hazard in a continuous time model double moral hazard in continuous time generates the familiar warranty pattern with full coverage for an initial block of time the more complete the warranty the better the producer s durability incentives and the worse the consumer s maintenance incentives using continuous time highlights the need for some warranty bound to avoid reaching the first best as an unreasonable limit early in the paper an exogenous bound is used while later the bound arises endogenously from the possibility of abuse and repair a quadratic example shows that the warranty s duration depends on the relative severity of the two moral hazard problems

the minimum wage and teenage employment a reanalysis with attention to serial correlation and seasonality we examine the effects of minimum wage legislation in canada over the period 1975 93 for teenagers we find that a 10 increase in the minimum wage is associated with roughly a 2 5 decrease in employment we also find that this result is driven by low

product warranties and double moral hazard this article explores a model of warranties in which moral hazard problems play a key role the goal is to understand the important characteristics of warranties including their provision of incomplete insurance and the relationship between product quality and coverage we analyze a model in which buyers and sellers take actions that affect a product s performance since these actions are not cooperatively determined an incentives problem arises we characterize the optimal warranty contract and undertake comparative statics to determine the predicted correlation of warranty coverage and product quality

warranties as signals under consumer moral hazard this article examines the use of prices and warranties as signals of product quality to consumers who choose how to maintain their purchases the seller s incentives are strongly affected by the interaction of quality and maintenance in determining product reliability two different assumptions about this interaction are made a separating equilibrium in which high quality is signalled with a low warranty and low price is shown to be possible in both cases

internal wars taxation and state building this article addresses the question of whether and how internal wars can lead to state building i offer a new conceptual framework for understanding the varied effects of internal conflict on stat

implications for minimum wage policies of an s shaped labor supply curve abstract a model of family labor supply provides a rationale for raising minimum wages when the labor supply response is negative at low wages under those circumstances the labor market can be caught in a malthusian poverty trap of excess supply unemployment overextended workdays child labor and falling wages raising minimum wages may therefore help resorb this excess supply and stabilize the labor market setting a virtuous cycle in motion in a two sector context such a policy would increase wages in both the covered and uncovered sectors evidence from a study of costa rica in particular is consistent with those conclusions

minimum wage legislation in a dual labor market the paper studies the equilibrium effects of minimum wage legislation in an economy with coexisting primary and secondary labor markets owing to difficulties in monitoring relative wages and the threat of job loss play a functional role in eliciting effort from primary sector workers minimum wage laws hence affect the primary wage and employment level even if the law only binds in the secondary labor market furthermore interaction between the two sectors can also alter the secondary outcome relative to the standard analysis and has implications for participation decisions and for the level of unemployment

regional effects of the minimum wage on teenage employment previous research on the minimum wage using national level data concludes that the minimum wage has a small effect on the employment of teenagers this paper provides new evidence that there is substantial regional variation in the effect of the minimum wage and in some regions it has a decidedly larger impact on teenage employment than previously measured estimates from a panel data set of the us states suggest that the minimum wage may cause almost a 7 reduction in teenage employment in some regions this results is robust to different econometric specifications and holds whether a relative or real specification of the estimating equation is used

revolution and state structure the bureaucratization of tax administration in early modern england and france1 this article explores the relationship between revolution and the bureaucratization of tax administration in early modern england and france revolution produces bureaucratization only when the monitoring capacity of states is developed enough to make bureaucratic organization more efficient than alternatives such as tax farming and collection by local notables as monitoring capacity varies across types of taxes and levels of administration states also bureaucratize at different paces and are differentially affected by revolution this explains why the revolutions in england and france had greater effects on indirect taxes than on direct taxes and at top levels of tax administration compared to lower levels thus revolution is neither a necessary nor a sufficient condition for bureaucratization but it contributes to the process by sweeping away impediments to reform

time series minimum wage studies a meta analysis time series minimum wage studies a meta analysis author s david card and alan b krueger reviewed work s source the american economic review vol 85 no 2 papers and proceedings of the hundredth and seventh annual meeting of the american economic association washington dc january 6 8 1995 may 1995 pp 238 243 published by american economic association stable url http www jstor org stable 2117925 accessed 04 11 2011 15 46

paying for war and building states the coalitional politics of debt servicing and tax institutions many scholars believe that intense warfare propelled state formation in early modern europe because rulers built tax institutions to pay for wars scholars likewise cite milder geopolitical pressures to explain the lackluster state building in the developing world the authors analyze episodes of ferocious warfare in and beyond europe and find that despite similar fiscal strains not all governments built strong tax institutions to service wartime debt when net creditors in a country s credit market were part of the ruling political coalition they pressed governments to diversify taxes and strengthen fiscal institutions to ensure debt service but when net debtors held political sway governments were indifferent to debt servicing and fiscal invigoration coalitional politics can help to explain why mounting debt service obligations led to fiscal institution building in some cases but not others the analysis highlights how the private economic interests of ruling coalition members can affect state building

criminal behaviour and youth in the labour market the case of the pernicious minimum wage this paper empirically tests the relationship between variations in uniform crime reports ucr index crime rates for teenagers 16 19 years of age with changes in the real minimum wage adjusted for industry coverage in the united states for the period 1960 1987 the analysis reveals that there exists a positive relationship between changes in the real minimum wage and teenage criminal homicide forcible rape and motor vehicle theft crime rates these findings are consistent with the empirical evidence concerning the impacts of the minimum wage on youth labour market opportunities and also with the theoretical ad empirical evidence regarding the incidence of criminal activity made as an occupational choice decision formulated under risk and uncertainty however the results indicate no impact of the minimum wage on the other teenage ucr index crime rates as found by hashimoto 1987 the evidence also suggests that variations in real criminal justice expenditures per capita reduce teenage propety crime ra