price response information and asymmetry of price dispersion abstractin this study we examine how differently gasoline prices in 25 regions of seoul korea respond to asymmetric information between retailers and consumers we estimate the region specific li

asymmetry in retail wholesale and shipping point pricing for fresh vegetables the linkage among retail wholesale and shipping point prices for a select group of fresh vegetables is measured using wolffram s asymmetry model procedures for dealing with discontinuous time series are shown and granger s causality test is used to show the direction of the price linkage wholesale prices are shown to lead both retail and shipping point prices asymmetry in the retail wholesale response indicates that wholesale price decreases are reflected at the retail more so than are wholesale price increases wholesale price decreases are more fully passed through to the shipping point relative to wholesale increases

rockets and feathers understanding asymmetric pricing prices rise like rockets but fall like feathers this stylized fact of most markets is con rmed by many empirical studies in this paper i develop a model with competitive rms and rational partially informed consumers where such asymmetric response to costs by rms emerges naturally in contrast to public opinion and past work collusion is not necessary to explain such result using a rich dataset of retail gasoline prices i nd the observed price dispersion pattern to be consistent with the model s prediction

cultures of illegality in the national hockey league 1 introductionthe economic model of crime demonstrates how an individual might decide to engage in illegal activity it demonstrates that such activity may be motivated by incentives associated with a person s human capital skills the availability of legitimate activity preferences for risk the potential sanction and the probability of detection but individualized as it may be illegal activity still takes place in a social context fundamentally a person who commits a crime has violated laws or other institutions formed by the larger social group by the same token society s collective experiences fears expectations and reactions in relation to crime may well influence the individual decision to commit crime given crime s social content can we disentangle the influence of social environment or culture from the individual factors that determine crime 1 this article addresses this question in the economic model of crime hypothetical agents consider the various benefits and costs of legal and illegal activity and then decide how much time to devote to either activity a more criminalized culture of illegality might enhance the potential benefit of crime through tacit or overt encouragement of crime and might reduce the potential cost of crime by relieving some of the stigma social cost associated with it 2 if individuals experience a more pronounced culture of illegality they might engage in more illegal activity on that basis in principle if we could remove them from that culture they would less likely engage in illegal activity but many factors complicate this possibility over time and over space societal crime rates appear to vary in the opposite direction as overall wealth whether measured in terms of legal wage opportunities or income level 3 therefore any hypothetical change in a person s culture of illegality would almost certainly imply a change in his wealth or his opportunity to engage in legal time allocation furthermore an individual who experiences a cultural change carries along a set of personal characteristics e g tastes for illegality or for risk that likely do not vary across cultures testing empirically for the influence of culture on individual level crime thus requires a sample of individuals who engage in both legal and illegal activity data on their personal incentives to engage in legal and illegal behavior including their wealth data on their cultures of illegality and some exogenous cultural change that affects some subset of them the data used in this study relating to players in the national hockey league nhl possess each of these features as illustrated by allen 2002 the nhl provides a useful setting for analyzing the economic model of crime especially when one follows the legal and illegal behavior of a sample of players over a period of time in a panel setting like citizens in society hockey players react to a number of factors interpretable as benefits or costs associated with committing illegal activity on ice rules violations which result in penalties for example a player s own history of involvement in illegality such as measured by his career penalty minutes likely indicates the manner by which he generally achieves success in the sport while deficiencies in his current team at penalty killing defending against goals while shorthanded likely act as costs and hence as deterrents because hockey players have team based objectives their behavior may be influenced by the values and expectations of a larger social group the team the league fans with respect to physically aggressive play in ice hockey the culture of illegality may even have a situational character in a given game the degree to which one player s illegality is accepted may emanate in part from the level of illegality or violence demonstrated by the opposing team in that game also because some players get traded from one team to another during the course of a season we can observe economic agents who experience exogenous change in the culture of illegality around them

crime rates and local labor market opportunities in the united states 1979 1997 the labor market prospects of young unskilled men fell dramatically in the 1980s and improved in the 1990s crime rates show a reverse pattern increasing during the 1980s and falling in the 1990s because young unskilled men commit most crime this paper seeks to establish a causal relationship between the two trends previous work on the relationship between labor markets and crime focused mainly on the relationship between the unemployment rate and crime and found inconclusive results in contrast this paper examines the impact of both wages and unemployment on crime and uses instrumental variables to establish causality we conclude that both wages and unemployment are significantly related to crime but that wages played a larger role in the crime trends over the last few decades these results are robust to the inclusion of deterrence variables controls for simultaneity and controlling for individual and family characteristics

search with learning understanding asymmetric price adjustments in many retail markets prices rise faster than they fall we develop a model of search with learning to explain this phenomenon of asymmetric price adjustments by extending our static game analysis to the dynamic setting we demonstrate that asymmetric price adjustments arise naturally when a positive cost shock occurs all the searchers immediately learn the true state the search intensity and hence the prices fully adjust in the next period when a negative cost shock occurs it takes longer for nonsearchers to learn the true state and the search intensity increases gradually leading to slow falling of prices

learning in an equilibrium search model this paper explores the role of learning in an equilibrium search model with asymmetric information firms with identical but privately observed marginal cost sell a homogeneous good to heterogeneously informed consumers a reservation price equilibrium exists if the uninformed consumers search cost is sufficiently large in this equilibrium the amount of price dispersion is inversely related to the realization of marginal cost also the average price level is less responsive to cost changes than when cost is observable finally uncertainty about firms marginal cost increases the expected price level copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

rockets and feathers the asymmetric speed of adjustment of uk retail gasoline prices to cost changes abstract the paper develops a quadratic quantity adjustment model to test the hypothesis put forward in the recent monopolies and mergers commission report that the speed of adjustment of uk retail gasoline prices to cost changes is more rapid when costs rise than when they fall and that the adjustment path is more concentrated around the mean value on the upswing using data from 1982 to 1989 evidence of faster and more concentrated responses to cost increases were found

what causes rockets and feathers an experimental investigation prices usually adjust much faster when costs increase than when costs decrease in spite of the many empirical studies confirming this rockets and feathers phenomenon for different industries the mechanism driving it is not well understood we use simple experimental markets with and without search frictions and either privately or publicly observed cost shocks to study how sensitive the rockets and feathers phenomenon is to changes in search costs and information conditions in contrast to standard theoretical predictions we observe price dispersion and spontaneous asymmetric price adjustments in all treatments neither search costs nor private information on cost shocks are indispensable for prices to adjust asymmetrically in the short term the initial asymmetry quickly disappears if the direction of the cost shocks are publicly known while it persists in both treatments with private information

asymmetric cost pass through empirical evidence on the role of market power search and menu costs abstract we estimate cost pass through rates based on data for store level retail prices and wholesale costs for up to 90 different brands of milk sold in 327 retail stores across germany the abundance of the data allows us to identify heterogeneity in pass through across retailers and relate it to underlying explanatory factors such as retailer market power measures of consumer search and menu costs results from a threshold error correction process clearly provide empirical support for the rockets and feathers phenomenon prices increase more quickly than they decrease in contrast to much of the existing literature which explains the rockets and feathers phenomenon as a result of retailers exercising market power we find the opposite result the degree of asymmetry in prices is negatively related to market power decreases with the lerner index our measure of cross product search costs does not account for observable differences in asymmetric cost pass through rates between products the rockets and feathers observation is better explained by product specific differences in menu costs mistake costs and costs associated with stock outs which can lead to a loss of consumer goodwill

market structure and the nature of price rigidity evidence from the market for consumer deposits panel data on consumer bank deposit interest rates reveal asymmetric impacts of market concentration on the dynamic adjustment of prices to shocks banks in concentrated markets are slower to raise interest rates on deposits in response to rising market interest rates but are faster to reduce them in response to declining market interest rates thus banks with market power skim off surplus on movements in both directions since deposit interest rates are inversely related to the price charged by banks for deposits the results suggest that downward price rigidity and upward price flexibility are a consequence of market concentration

search with learning and price adjustment dynamics we present a model of consumer search with learning in which cost shocks have different short and long range effects on prices in the short run consumers confuse general cost shocks common to all firms in the industry with firm specific shocks in the case of a general cost increase this promotes an excessive propensity to search restraining the amount by which prices increase in the short run conversely in the case of an idiosyncratic cost increase consumers search too little causing the prices of high cost firms to overshoot

retail price cycles and response asymmetry weekly retail gasoline prices in windsor ontario from 1989 to 1994 appear to respond faster to wholesale price increases than to decreases but exhibit a cyclic pattern inconsistent with a common explanation of response asymmetry i reconcile these observations through a model of price cycles prices on the downward portion of the cycle appear insensitive to costs compared with price increases supporting the theory that price decreases result from battles over market share this pattern resembles a faster response to cost increases than to decreases and the conclusion that asymmetry indicates a role for competition policy may be inappropriate jel classification l13 l71 cycles des prix de detail et reponse asymetrique les prix de detail hebdomadaires de la gazoline a windsor ont entre 1989 et 1994 semblent reagir plus vite aux accroissements qu aux chutes des prix de gros mais suivent un pattern cyclique qui ne semble pas consistant avec l explication traditionnelle en termes de reponse asymetrique l auteur reconcilie ces observations a l aide d un modele de cycle de prix les prix dans la portion descendante du cycle semblent insensibles aux variations de couts par comparaison avec les accroissements de prix ce qui supporte la theorie que les chutes de prix resultent de luttes pour les parts de marche le pattern ressemble a celui declenche par une reponse plus rapide aux augmentations qu aux chutes de couts et la conclusion qui voudrait qu on puisse attribuer le tout a l asymetrie des reponses et que donc une intervention de la politique de la concurrence s impose peut etre inappropriee

prices rise faster than they fall output prices tend to respond faster to input increases than to decreases this tendency is found in more than two of every three markets examined it is found as frequently in producer goods markets as in consumer goods markets in both kinds of markets the asymmetric response to cost shocks is substantial and durable on average the immediate response to a positive cost shock is at least twice the response to a negative shock and that difference is sustained for at least five to eight months unlike past studies which documented similar asymmetries in selected markets gasoline agricultural products etc this one uses large samples of diverse products 77 consumer and 165 producer goods accordingly the results suggest a gap in an essential part of economic theory as a start on filling this gap the study finds no asymmetry in the resonse of an individual decision maker a supermarket chain to its costs but it finds above average asymmetry where a cost shock is filtered through a fragmented w

retail gasoline price dynamics and local market power using monthly data from the 48 contiguous states except nevada for the 1988 2002 period it is shown that retail gasoline prices respond faster to wholesale price increases than to equivalent wholesale price decreases moreover markets with high average retail wholesale margins experience a slower adjustment and a more asymmetric response since gasoline is the only variable input average margins in a state likely reflect the degree of retail market power this suggests that sticky prices and response asymmetries in the gasoline market are at least partially a consequence of retail market power

spatial mismatch in the labor market and racial differences in neighborhood crime abstract results from estimating fixed effects models of neighborhood crime show that an important cause of higher crime in black neighborhoods is the poor job accessibility of black youth a key result is that access explains 21 of the difference in property crime between black and white neighborhoods

crime and social interactions the high variance of crime rates across time and space is one of the oldest puzzles in the social sciences this variance appears too high to be explained by changes in the exogenous costs and benefits of crime we present a model where social interactions create enough covariance across individuals to explain the high cross city variance of crime rates this model provides an index of social interactions which suggests that the amount of social interactions is highest in petty crimes moderate in more serious crimes and almost negligible in murder and rape

rational buyers search when prices increase abstract we develop a dynamic pricing model motivated by observed patterns in business to business and some business to customer transactions seller costs are perfectly correlated and evolve according to a markov process in every period each buyer observes for free the price set by their current supplier but not the other sellers prices or the sellers common cost level by paying a cost s the buyer becomes active and benefits from bertrand competition among sellers we show that there exists a semi separating equilibrium whereby sellers increase price immediately when costs increase and otherwise decrease price gradually moreover buyers become active when prices increase but not otherwise in sum we deliver a theory whereby buyers become active search if and only if their supplier increases price

search with learning from prices does increased inflationary uncertainty lead to higher markups aggregate cost uncertainty arising from real shocks or unanticipated inflation reduces the informativeness of prices by scrambling relative and aggregate variations but when agents can acquire additional information such increased noise may in fact lead them to become better informed and price competition will intensify we examine these issues in a model of search with learning where consumers search optimally from an unknown price distribution while firms price optimally given consumers search rules we show that the decisive factor in whether inflation variability increases or reduces the incentive to search and thereby market efficiency is the size of informational costs

equilibrium price distributions equilibrium price distributions for a homogeneous product consistent with individual incentives are investigated they arise in informationally imperfect markets in which the only primitive datum is the distribution of search costs it is shown that single multi and continuous price distributions are all viable long run phenomena depending on the nature of search costs a method for computing equilibrium price distributions is also provided jevons law of one price has long been an accepted dictum in economic theory in a classroom presentation it still serves sometimes implicitly as a major premise in many micro models of market interaction much of the descriptive theory as well as welfare analysis hinges on this assumption yet one s day to day experience reveals that price differentials are a viable phenomenon and that looking for lower prices may very well be a rewarding activity the prospects of eventually hitting a bargain and the resulting price reduction would more than compensate for the cost incurred during the search process moreover the existence of price dispersions appear to be an empirically stable phenomenon snapshots of markets for relatively homogeneous products reveal substantial and recurring price differentials stigler 1961 and pratt wise and zeckhauser 1979 for example report some evidence supporting this claim an important article by stigler 1961 focused economists attention on the crucial role played by the informational structure of markets it gave rise to the study of the

limited attention to search costs in the gasoline retail market evidence from a choice experiment on consumer willingness to search we conduct a choice experiment to investigate whether u s gasoline consumers exhibit limited attention to the costs of searching for lower prices when consumers search for prices as they drive the search cost is a function of the amount of gasoline consumed while driving and the time spent searching for prices we randomize the amount of information we provide the respondents to a survey about search costs in one of 3 ways time gasoline or both results indicate that cognitive costs cause inattention to time costs we also find that respondents overestimate the cost of the gasoline used while driving thus forgoing consumer surplus copyright 2013 oxford university press

oligopolistic pricing with sequential consumer search n identical stores compete by choosing prices for a homogeneous good with constant marginal costs consumers search sequentially with perfect recall for the lowest price one class of consumers called shoppers have zero search costs while all other consumers have a positive search cost c there is a unique symmetric nash equilibrium price distribution with the property that it changes smoothly from marginal cost pricing when all consumers are shoppers and or c 0 and monopoly pricing when no consumers are shoppers remarkably as the number of stores increases the nash equilibrium becomes more monopolistic copyright 1989 by american economic association

asymmetric price adjustments in us gasoline markets impacts of spatial dependence on the rockets and feathers hypothesis gasoline retail prices show sometimes wild asymmetric fluctuations over time we explore the impact of spatial dependence on gasoline retail price formation by using for the first time an asymmetr

austrian style gasoline price regulation how it may backfire in january 2011 a price regulation was established in the austrian gasoline market which prohibits firms from raising their prices more than once per day similar restrictions have been discussed in new york state and germany despite their intuitive appeal this article argues that austrian type policies may actually harm consumers in a two period duopoly model with consumer search i show that under the regulation firms will distort their prices intertemporally in such a way that their aggregate expected profit remains unchanged this implies that as some consumers find it optimal to delay their purchase due to expected price savings but find it inconvenient to do so a friction is introduced that decreases net consumer surplus in the market

when do consumers search this paper provides empirical evidence relating search to price movements we measure consumer search directly from traffic statistics for web sites that report gasoline prices we show empirically that consumers search more as prices rise than they do when prices fall asymmetric search patterns have consequences for price behavior our findings indicate that retail margins are squeezed by increased search in addition we show that there is more price dispersion when prices are falling than when prices are either stable or rising our results provide a search based explanation for the rockets and feathers phenomenon of asymmetric price adjustment

a model of recommended retail prices manufacturers frequently post nonbinding public price recommendations but neither the rationale for this practice nor its impact on prices is well understood i develop a model in which recommendations signal a manufacturer s production cost to searching consumers who then form beliefs about retail prices increasing search makes consumers reject offers for the manufacturer s and competitors products more often and i show that both consumers and the manufacturer prefer more search when the production cost is low and less search when it is high with incentives thus aligned manufacturer recommendations inform consumers via cheap talk and their removal harms both parties

price transmission and asymmetric adjustment in the u s beef sector the u s livestock sector has experienced numerous structural changes in recent years for example the meatpacking industry has experienced many mergers and acquisitions leading to significant increases in industry concentration in particular the four firm concentration ratio for steer and heifer slaughter a frequently cited statistic and an important indicator of industry concentration increased from 35 7 in 1980 to 79 8 in 1997 usda there have also been significant regional shifts in livestock production and changes in marketing practices with decreased use of public markets in many areas for some products traditional auction markets have been largely replaced by contract production and sales cattle inventories have also trended downward over the last two decades this has been accompanied by decreases in the number of producers and in some cases with significant increases in the scale of operations the vertical transmission of shocks among various levels of the market is an important characteristic describing the overall operation of the market of course price is the primary mechanism by which various levels of the market are linked the extent of adjustment and speed with which shocks are transmitted among producer wholesale and retail market prices is an important factor reflecting the actions of market participants at alternative market levels the nature speed and extent of adjustments to market shocks may also have important implications for marketing margins spreads and mark up pricing practices an extensive literature has examined mar

the efficiency of the scandinavian banking sector a wavelet quantile regression analysis in this article the scandinavian housing financing market is analysed in order to determine whether the interest rate price discovery processes of denmark norway and sweden are efficient based o

the role of information in retail gasoline price dispersion abstract collecting information on prices is a costly endeavor the cost depends on the relative ease with which those prices can be collected and in many retail gasoline markets there is a substantial divide in the ease of collecting information with regular grade gasoline on one side of the divide and midgrade and premium grade gasoline on the other regular grade prices are prominently displayed on large signboards in front of gasoline stations while the prices of higher octane grades except where required by law are rarely displayed in this article the effects of differential by grade price information on search and gasoline price dispersion are examined a rank reversal test is used to test whether the observed grade specific price dispersion is consistent with search or non search related causes and finding the former a series of tests are presented to test for the effect of price information and other leading hypotheses a significantly concave curvature in the price dispersion coefficients across the three grades supports a price information hypothesis detailed socioeconomic data on consumers spatially matched to the stations they are most likely to patronize shows that income is a secondary factor implications for policy are discussed

a simulation approach for analysis of short term security of natural gas supply in colombia abstract achieving security of gas supply implies diversifying gas sources while having enough supply transportation and storage capacity to meet demand peaks and supply interruptions devising a strategy for securing gas supply is not straightforward because gas supply depends on complex interactions of production demand and infrastructure and it is exposed to economic regulatory political environmental and technical risks to address this complexity we propose a simulation approach that replicates the structure of the gas supply chain including transportation constraints and demand fluctuations we build and calibrate a computer model for the colombian gas sector and run the model to assess the impact of expanding transportation capacity and increasing market flexibility on the security of supply our analysis focuses on the operation and planned and proposed expansions of the transportation infrastructure because adequate regulation and development of this infrastructure can contribute to increase the security of supply in the gas sector we find that proposed import facilities specifically lng import terminals at buenaventura increase system s security under the current market structure

market wages and youth crime to study the problem of widespread youth crime i analyze a timeallocation model in which consumers face parametric wages and diminishing marginal returns to crime the theory motivates an econometric model that i estimate using data from the national longitudinal survey of youth my estimates suggest that youth behavior is responsive to price incentives and that falling real wages may have been an important determinant of rising youth crime during the 1970s and 1980s moreover wage differentials explain a substantial component of both the racial differential in criminal participation and the age distribution of crime

price response asymmetric information and competition we compare predictions from a theoretical model based on the structure of the main outdoor retail market in jerusalem with the results of an empirical analysis of price response to changes in cost we find that firms without adjacent competition exhibit both upward and downward price rigidity an outcome we ascribe to asymmetric information between the consumer and the firm given that previous studies have focused on downward price rigidities of firms with market power our findings highlight the importance of accounting for transitory information asymmetries between the consumer and the firm when studying price rigidity

team effects on compensation an application to salary determination in the national hockey league leo h kahane studies of salary determination largely model pay as a function of the attributes of the individual and the workplace i e employer size job characteristics and so forth this article empirically investigates an additional factor that may influence individual pay specifically coworker productivity data from professional sports are used to evaluate this question because both salary and teammate performance measures are readily available we find that team attributes have both direct effects on an individual s pay and indirect effects through altering the rates at which individual player productive characteristics are valued jel j31 l83 i introduction when complementary exists between labor inputs individual productivity may be poorly measured by treating the individual worker separately from the character of the organization or team within which he works namely individual productivity may vary when working in different settings to the extent that coworkers offer different degrees of assistance 1 if such complementary between human capital inputs is present say a team dynamic it suggests the possible existence of both team and individual effects on productivity and hence compensation empirical analysis of team effects has been hindered by the lack of data on individuals and their coworkers including managers one source though that contains much of this requisite information is data on professional sports teams in this article we exploit this unique attribute of professional sports data in order to empirically assess the effect of complementarities between labor inputs on individual compensation specifically we use a team sport setting to situate the worker in an organizational environment where we can observe the impact of coworkers on individual productivity thereby allowing us to examine the separate effects of individual and team productivity on salary determination the general question asked is whether individual attributes are valued or rewarded differently in different work environments or in our specific case on different teams this study will investigate these questions by empirically assessing the effects of coworker productivity that is the effects of the qual ity productivity of teammates on individual compensation although a number of different highly team oriented sports would serve our purpose such as basketball this particular study uses data from professional hockey to investigate team effects on compensation 2 the remainder of the article is organized as follows section ii outlines the empirical framework used to analyze the posited team effects and discusses some of the theoretical issues relating to team effects on compensation section iii describes the data used in the analysis section iv reports the empirical results and section v reports our conclusions and directions for further work ii team and coworker effects as noted above the goal of this study is to evaluate empirically whether average coworker attributes 1 affect individual salaries 2 affect the rate at which individual attributes are valued by the firm and 3 are complementary inputs to the attributes of individual team members the question arises though as to why we might expect on theoretical grounds that individual players would earn any part of the team s contribution the classic model of alchian and demsetz 1972 suggests that the capitalist manager will reap the returns from any incremental team output as the primary function of the manager is to discover complementarities between inputs and enhance organizational output by optimally combining resources and to monitor effort so as to reduce shirking as a result the manager will capture all of the returns that are not specific to the inputs in which case we would not expect to observe team effects on individual compensation yet although a manager acting as the residual claimant is one solution to the problem of reducing shirking in the context of complementary inputs whose effort is difficult to monitor other models suggest that it may be desirable to compensate team members based on the value of team output in order to provide optimal incentives for effort for example see akerlof 1982

the effects of labor markets and income inequality on crime evidence from panel data we estimate a model of crime using panel data for the u s we focus on the role of labor markets income distribution and demographics on property crime we find strong evidence that favorable labor market conditions have a significant negative effect on property crime we further test this result using sector specific wages and find that crime is most elastic with respect to wages in sectors that use low skilled labor we also find that income inequality has no significant effect on crime and that the proportion of young males in the population has a significant positive effect on crime

estimating the economic model of crime with panel data previous attempts at estimating the economic model of crime with aggregate data relied heavily on cross section econometric techniques and therefore do not control for unobserved heterogeneity this is even true of studies that estimated simultaneous equations models using a new panel data set of north carolina counties the authors exploit both single and simultaneous equations panel data estimators to address two sources of endogeneity unobserved heterogeneity and conventional simultaneity their results suggest that both labor market and criminal justice strategies are important in deterring crime but that the effectiveness of law enforcement incentives has been greatly overstated copyright 1994 by mit press

retail price asymmetries in local gasoline markets the experience of the salt lake city retail gasoline market during the 1989 to 1993 period suggests that there was asymmetric adjustment wholesale and retail price data unique to the salt lake market are used to test for the existence of three types of price asymmetry during this period with respect to the magnitude of the pass through of wholesale price changes evidence of price asymmetry during periods of average weekly wholesale price changes is found however during market shocks the evidence points in the direction of retail price symmetry evidence of asymmetry with respect to the timing and pattern of the retail price response is found for periods of both average and market shock changes since gasoline is purchased by the consumer in local markets conclusions reached by studies of market pricing behaviour that rely on national data may not be relevant for local policy decisions this appears to be the case for the salt lake city market

estimations of the economic model of crime using aggregate and individual level data much has happened in the economics of crime since becker s 1 seminal paper of two decades ago the theory has been refined by among others ehrlich 10 11 12 block and lind 4 5 block and heinke 3 and schmidt and witte 30 attempts to test the model empirically began immediately the most cited including ehrlich 10 11 12 sjoquist 31 carr hill and stern 7 phillips and votey 26 witte 38 and myers 22 23 interest continues with recent work including layson 19 sandelin and skogh 29 ehrlich and brower 13 cover and thistle 9 viscusi 36 and tauchen witte and griesinger 33 there has been some controversy however concerning the type of data more suitable to the estimation of the economic model of crime most of the work has used aggregate data in which the unit of observation is a political jurisdiction but the use of aggregate data has been sharply criticized the alternative is individual data few attempts have been made to use individual data probably because an ideally constructed data set representative of a general population would be far too costly for most research budgets most of the studies that have been done have used data on releasees from prison or other criminal justice programs they are in effect recidivism studies based on the economic model of crime

why do increased arrest rates appear to reduce crime deterrence incapacitation or measurement error this paper attempts to discriminate between deterrence incapacitation and measurement error as explanations for the negative empirical relationship between arrest rates and crime measurement error cannot explain the observed patterns in the data incapacitation suggests that an increase in the arrest rate for one crime will reduces all crime rates deterrence predicts that an increase in the arrest rate for one crime will lead to a rise in other crimes as criminals substitute away from the first crime empirically deterrence appears to be the more important factor particularly for property crimes jel k42

do gasoline prices respond asymmetrically to crude oil price changes the authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices among the possible sources of this asymmetry are production inventory adjustment lags and market power of some sellers by analyzing price transmission at different points in the distribution chain the authors attempt to shed light on these theories spot prices for generic gasoline show asymmetry in responding to crude oil price changes which may reflect inventory adjustment effects asymmetry also appears in the response of retail prices to wholesale price changes possibly indicating short run market power among retailers