what you don t see can t hurt you an economic analysis of morality laws this paper provides an efficiency explanation for regulation of sex drugs and gambling we propose that these morality laws can be explained by considering some activities to impose a negative externality when the activity is observed efficiency requires discretion by the individual who engages in such activities when discretion is difficult to regulate directly the activities can instead be proscribed thereby giving individuals incentive to hide their actions from others we find conditions for the first best levels of consumption and hiding to be implementable since some level of activity is efficient the optimal sanctions are not maximal ce memoire propose une explication en termes d efficacite des regulations sur les industries du sexe de la drogue et du jeu organise on suggere que ces lois de moralite peuvent etre expliquees quand on considere que certaines activites imposent une externalite negative quand l activite est observee l efficacite reclame donc une certaine discretion de la part de l individu qui s engage dans de telles activites quand cette discretion est difficile a reglementer directement les activites peuvent etre prohibees et de ce fait on donne aux individus une incitation a cacher leurs activites aux autres on etablit que des conditions de premier ordre sur les niveaux de consommation et de camouflage peuvent etre mises en application puisque qu un certain niveau d activite est efficace les peines optimales ne sont pas maximales

a search theoretic model of the retail market for illicit drugs a search theoretic model of the retail market for illegal drugs is developed trade occurs in bilateral potentially long lived matches between sellers and buyers buyers incur search costs when experimenting with a new seller moral hazard is present because buyers learn purity only after a trade is made this model is consistent with some new stylized facts about the drugs market and it is informative for policy design the effectiveness of different enforcement strategies is evaluated including some novel ones that leverage the moral hazard present in the market copyright oxford university press

habits costly investment and current account dynamics abstract we analyze the current account dynamics for a small country model with habit forming consumers and costly investment the model has several empirical and policy implications i it is consistent with stylized facts regarding the effects of productivity shocks and increases in fiscal spending and regarding the savings investment co movement ii the long run effect of a temporary shock on net foreign assets is often opposite to that of a permanent shock iii under strong habit persistence the welfare dynamics are sluggish so that a beneficial tax financed fiscal policy may have a harmful hangover effect on welfare

uniqueness of market equilibrium on a network a peak load pricing approach abstract in this paper we establish conditions under which uniqueness of market equilibrium is obtained in a setup where prior to trading of electricity transmission capacities between different market regions are fixed in our setup firms facing fluctuating demand decide on the size and location of production facilities they make production decisions constrained by the invested capacities taking into account that market prices partially reflect scarce transmission capacities between the different market zones for this type of peak load pricing model on a network we state general conditions for existence and uniqueness of the market equilibrium and provide a characterization of equilibrium investment and production the presented analysis covers the cases of perfect competition and monopoly the case of strategic firms is approximated by a conjectural variations approach our result is a prerequisite for analyzing regulatory policy options with computational multilevel equilibrium models since uniqueness of the equilibrium at lower levels is of key importance when solving these models thus our paper contributes to an evolving strand of literature that analyzes regulatory policy based on computational multilevel equilibrium models and aims at taking into account individual objectives of various agents among them not only generators and customers but also e g the regulator deciding on network expansion

demand for home modifications a household production function approach coping with activity limitations that occur in old age is an important issue in the context of increasing life expectancy and the still inevitable onset of chronic conditions in old age elderly households can be viewed as coping with activity limitations by producing functionality with the use of direct inputs that include home modifications a model of the household production of functionality is developed within the general framework of household production function models of health hypotheses generated from this model are tested using a logit model for data from the survey of asset and health dynamics among the oldest old ahead the main findings of the empirical analysis are that the demand for home modifications is fairly income inelastic home modifications and personal care are substitutes to some degree the demand for home modifications increases with years of schooling and that particular health conditions and the use of other assistive devices are important determinants of the demand for

what price drug use the contribution of economics to an evidence based drugs policy abstract this paper presents a review of the recent economics literature in the area of illicit drug use particular attention is paid to the economics of addiction and the rational addiction model the welfare economics framework for analysing the social costs of drug use and the attempts that have been made by economists to evaluate recent or proposed policy interventions a dominant theme in this review is the problem of poor data availability this is particularly true when it comes to implementing the rational addiction model but it is also apparent in the literature on estimating the costs of illicit drug use to society as a whole one of the main conclusions of this review is that until recently public policy has not been particularly influenced by research carried out by economists it is not clear whether this is because economists have had to grapple with inadequate data and hence their conclusions are couched in uncertainty or whether it is because drugs researchers have assumed a very limited role for economists in their analysis

prohibition and the supply of brazilian mahogany we use a unique data set to investigate the economic consequences of banning the harvest and trade of brazilian mahogany because we find strong evidence that mahogany is smuggled out of brazil as other tropical species through formal export mechanisms we are able to construct a time series of quantities and implicit export prices covering both the periods before and after prohibition our finding suggests that a trade ban increases supply and makes the illegal good more affordable our analysis can offer important insights into other illegal markets such as those for narcotics and products manufactured from endangered animal species

do residential customers respond to hourly prices evidence from a dynamic pricing experiment this paper uses the results of a dynamic pricing experiment for households in the district of columbia to determine whether the reduction in demand associated with an hourly price signal is economically different from the demand reduction associated with an equivalent price signal that is four times longer in duration for both regular and all electric customers the percentage demand reduction associated with a given percentage increase in the hourly price is approximately equal to the percentage demand reduction associated with the same percentage price increase of a much longer duration

agency relationships in family firms theory and evidence does owner management necessarily eliminate the agency costs of ownership drawing on agency literature and on the economic theory of the household we argue that private ownership and owner management expose privately held owner managed firms to agency threats ignored by jensen s and meckling s 1976 agency model private ownership and owner management not only reduce the effectiveness of external control mechanisms they also expose firms to a self control problem created by incentives that cause owners to take actions which harm themselves as well as those around them jensen 1994 p 43 thus shareholders have incentive to invest resources in curbing both managerialand owner opportunism we extend this thesis to the domain of the family firm after developing hypotheses which describe how family dynamics and specifically altruism exacerbate agency problems experienced by these privately held owner managed firms we use data obtained from a large scale survey of family businesses to field test our hypotheses and find evidence which suggests support for our proposed theory finally we discuss the implications of our theory for research on family and other types of privately held owner managed firms

drugs policy what should we do about cannabis public policy has failed to prevent large scale consumption of cannabis in most developed countries so what if anything should we do to change the policy environment cannabis consumption is unambiguously harmful in several ways but this does not automatically justify the prohibitionist policy dictated by the international drugs conventions this paper sets out the arguments for policy intervention in the cannabis market and reviews the directions of policy change that have been called for we argue that existing theoretical insights and empirical evidence give little compelling reason to prefer prohibition to the alternative of legalization of cannabis with harms controlled by regulation and taxation given this conclusion and the much wider prevalence of cannabis than of harder drugs a reasonable way forward is to remove cannabis production and consumption but not trade from the current prohibitionist un drug control treaties to allow countries to adopt their own policies thus generating new evidence on the potential impacts of a wider range of policy stephen pudney

alcohol consumption during prohibition we estimate the consumption of alcohol during prohibition using mortality mental health and crime statistics we find that alcohol consumption fell sharply at the beginning of prohibition to approximately 30 percent of its pre prohibition level during the next several years however alcohol consumption increased sharply to about 60 70 percent of its pre prohibition level the level of consumption was virtually the same immediately after prohibition as during the latter part of prohibition although consumption increased to approximately its pre prohibition level during the subsequent decade this abstract was borrowed from another version of this item

marijuana on main street estimating demand in markets with limited access abstract marijuana is the most common illicit drug with vocal advocates for legalization among other things legalization would increase access and remove the stigma of illegality our model disentangles the role of access from preferences and shows that selection into access is not random we find that traditional demand estimates are biased resulting in incorrect policy conclusions if marijuana were legalized those under 30 would see modest increases in use of 28 percent while on average use would increase by 48 percent to 19 4 percent tax policies are effective at curbing use where australia could raise au 1 billion and the united states us 12 billion jel d12 h25 k14 k42

international narcotics trade foreign aid and enforcement i introduction it is widely accepted that the problems that a country may face as a direct result of narcotics related activities are numerous 1 moreover drug production and trade are intimately tied to other serious international concerns notably the financing of insurgencies and terrorist activities shughart 2006 keefer loayza and soares 2008 intriligator 2010 piazza 2011 a prime example is the involvement of the taliban in afghanistan in the production and trafficking of heroin see blanchard 2009 clemens 2013a 2013b similar issues are observed in colombia and mexico hence the indirect costs of narcotics related activities are also substantial nonetheless the enforcement of prohibitions on the production consumption and movement of narcotics remains among the most controversial issues in international relations not least because the global response has met with somewhat limited success 2 even taking the objective of reducing global consumption of narcotics as given it is unclear which of the available policy tools are likely to be the most effective at meeting the objective the consumption and distribution in narcotics importing countries can be targeted directly although the history of the past one and a half centuries indicates that it is very difficult alternatively and more realistically the supply side can be targeted law enforcement authorities in narcotics exporting countries can be used to eradicate production facilities and to interdict trafficking and alternative production activities can be encouraged by providing technical assistance or by direct subsidization in all cases involving the supply side however it must be recognized that the global production of narcotics is concentrated in developing economies many of these countries lack the enforcement resources to engage effectively against well funded producers and well armed traffickers and their supporting terrorist and rebel groups therefore foreign aid to finance law enforcement activities is essential 3 alternative development policies may also be supported through foreign technical assistance or by directing foreign aid toward alternative production subsidies the effects of these policies on narcotics exporting economies have not however been adequately addressed in the literature our work adds a new dimension to the existing literature on the economics of narcotics 4 we construct a theoretical model that explores the effects of foreign financing of anti narcotics enforcement activities in narcotics producing exporting countries along with other potential policy interventions while previous literature has taken a partial equilibrium approach to analyzing related issues our work differs substantially in adopting general equilibrium methods as martin and symansky 2006 note opium production in afghanistan for example accounted for approximately 27 of economic activity in 2005 2006 given this fact substantial general equilibrium effects must be present and deserve full exploration we focus attention on the consequences of the multitude of severe distortions that narcotics production and enforcement introduce to factor markets we envisage an economy where workers engage in both licit and illicit activities are paid a premium for the risk of incarceration or seizure of their marginal product involved in the latter and a nonproductive law enforcement sector uses real resources to combat illicit activity our work draws on a number of strands of economic theory including tied aid factor market distortions dual economies illicit markets and law enforcement a number of important new results emerge from our analysis foreign aid will increase enforcement activity and will generally lower narcotics production the more market power the narcotics producing country has the less effective foreign aid will be however in fact aid intended for anti narcotics enforcement may effectively be siphoned into the wages of narcotics workers

a dynamic model of landlord reinvestment behavior abstract in this paper we develop a dynamic model of a landlord s decision to invest in the maintenance and rehabilitation of housing the model incorporates the intertemporal nature of the problem uncertainty the role of future expectations the extreme durability of housing and the notion of adjustment costs this model is an application of t j sargent s macroeconomic theory academic press orlando 1987 infinite horizon model of investment under uncertainty to housing reinvestment intertemporality and convex adjustment costs in the model lead to the result of a reinvestment path being optimal rather than a single time reinvestment effort even if depreciation did not occur periodically two versions of the model are developed 1 under perfect competition and 2 under non perfect competition both models are solved analytically and yield explicit solutions the solutions show the relationship between the optimal path of reinvestment and current and expected future rental prices expenditures of the landlord related to the level of housing services such as property taxes cost of maintenance and the adjustment cost factor the model suggests that the objective of good quality housing is better served by a smooth path of reinvestment rather than aby a sporadic path that involves bulky adjustments this paper discusses situations in the context of the model in which deterioration upgrading maintaining at a constant quality demolition and abandonment of housing may be optimal the contributions of this paper are the incorporation of intertemporality adjustment costs endogeneity of the life of a dwelling extreme durability of housing and uncertainty in a model of landlord reinvestment behavior that yields explicit solutions to the optimal path of maintenance

taxation or regulation looking for a good anti smoking policy abstract this paper investigates the relative ability of two anti smoking policies taxes and regulation in inducing reductions in cigarette consumption and in providing incentives to stop smoking or not to start to our results based on canadian data show that cigarette demand responds to taxes elasticity of 0 28 but not to regulation while the converse is true for the proportion of smokers in the population

economic liberalization and violent crime abstracti study the effect of economic liberalization on violent crime the particular emphasis is on the case of india where in the years following 1991 there was a virtual dismantling of controls on entry and production in registered manufacturing this was accompanied by a significant reduction in impediments to foreign trade and access to foreign exchange economic controls create an incentive for illegal trade and a frequent by product of illegal trade is violent crime consequently violent crimes such as murders would be expected to decline following market based reforms analysis of aggregate all india data as well as data at the state level suggests that economic reforms did indeed lead to a reduction in violent crime i extend the analysis to a panel of countries and find strong evidence that greater trade openness is negatively related to violent crime

the production of functionality by the elderly a household production function approach this paper extends becker s model of the household production function of human capital to the production of elderly functionality in this model elderly functionality is produced with the direct inputs of assistive devices personal assistance and nutritional intake education endowment variables like genetic endowment and sex and health conditions like stroke determine the production function environment data from the survey of asset and health dynamics among the oldest old ahead are used to estimate a production function of bathing functionality using a two stage estimation procedure in the first stage input demands for the endogenous functionality inputs are estimated recognizing health heterogeneity the results suggest that reverses in functionality caused by age and health conditions can be partially compensated for by the use of assistive devices like grab bars and bathing equipment secure nutritional intake and moderate alcohol consumption however non inputs like chronic healt

does drug illegality beget violence evidence from the crack cocaine wave in sao paulo mimicking the so called great american crime decline violent crime in the state of sao paulo dropped sharply in the 2000s after rising steadily throughout the 1980s and 1990s this paper evaluates the role of crack cocaine in explaining the aggregate dynamics in violence four facts are established first the aggregate data show a tight comovement between the prevalence of crack cocaine and homicides second using city level apprehension and possession data i find a strong elasticity of violent crime with respect to crack cocaine after controlling for year fixed effects city effects and many time varying covariates i use the estimated elasticity to compute the contribution of crack cocaine to aggregate violence crack explains 30 percent of time series variation in the data third only drug trafficking not drug possession has an impact on homicides finally i find no impact on property crimes a weaker impact on attempted murder and interestingly a weak negative impact on aggravated assault the theory suggests that both facts only trafficking matters and crack affects only homicides not property crime can be rationalized only if drug induced crime is driven by systemic violence induced by illegality itself these results are important for policy because they suggest that violence will not follow the legalization of both the possession and trade of powdered cocaine or crack cocaine

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

addiction and cue triggered decision processes we propose a model of addiction based on three premises 1 use among addicts is frequently a mistake 2 experience sensitizes an individual to environmental cues that trigger mistaken usage 3 addicts understand and manage their susceptibilities we argue that these premises find support in evidence from psychology neuroscience and clinical practice the model is tractable and generates a plausible mapping between behavior and the characteristics of the user substance and environment it accounts for a number of important patterns associated with addiction gives rise to a clear welfare standard and has novel implications for policy

price knowledge in household demand for utility services a household s decision to acquire price knowledge is endogenous in the demand for utility services and may affect elasticities and consumption levels a simultaneous equation model with endogenous switching is developed to evaluate the effects of price knowledge and other sources of heterogeneity results indicate informed households were more responsive to average and marginal price signals informed households also use less water but this is due to heterogeneity rather than price knowledge controlling for heterogeneity price knowledge actually increases monthly water usage the implications of accounting for differences in price knowledge in utility demand modeling and demand management policy are discussed

rational exuberance at the mall addiction to carrying a credit card balance the becker murphy model of rational addiction is tested with new zealand credit card debt data the results clearly favour the rational addiction model over the myopic backward looking model the estimated short run and long run price elasticities are 0 58 and 2 32 respectively and the estimated rate of time preference is 6 7 per quarter

prohibition and the market for illegal drugs over the past 25 years in the united states enforcement of drug prohibition has expanded dramatically over the same period however the trends in drug production and consumption have been essentially flat and the real purityadjusted prices of both cocaine and heroin have more than halved this combination of facts raises questions about the effectiveness of prohibition enforcement and it constitutes a puzzle that is interesting to explain in this paper the authors document these facts and explore possible explanations they do not claim to provide a complete answer but shed light on which explanations are likely to be important

the economic case against drug prohibition this paper discusses the costs and benefits of drug prohibition it offers a detailed outline of the economic consequences of drug prohibition and a systematic analysis of the relevant empirical evidence the bottom line is that a relatively free market in drugs is likely to be vastly superior to the current policy of prohibition

investment incentives for flexible demand options under different market designs abstract this paper analyzes investment incentives for flexible manufacturing facilities under different market designs we propose a multi stage equilibrium model incorporating endogenous determination of generation capacity investment network expansion and redispatch based on the model introduced by grimm et al 2016 including flexibilization of industrial electricity consumption the model allows to investigate incentives for flexibilization and the impact of flexible industrial electricity consumers on the system an application to the german electricity market reveals that flexible industrial electricity consumption can be profitable for firms if the share of flexible electricity consumers is high price fluctuations are mitigated which lowers the individual cost savings from demand flexibility comparing different market designs positive impacts of flexible electricity demand on the system are observed in both the system optimum and the market equilibrium in scenarios with flexible industrial electricity consumption welfare is considerably higher than in those without this is due to lower electricity costs of industrial consumers but more importantly due to less investment in conventional power generation as well as a reduced transmission network expansion however a comparison of nodal and uniform pricing underlines the importance of regional price signals with respect to an efficient allocation of flexible industrial demand

paradoxical effects of drug policy in a model with imperfect competition and switching costs this paper presents a stylized model of the market for hard drugs we assume that there is imperfect competition that the demand side is dominated by addicts and that the presence of switching costs leads to consumer loyalty drug policies affect the values of the parameters of the model including the degree of consumer loyalty and the static price elasticity of demand taking into account these effects it is shown that tough policies may lead to an increase in the marketing activities by suppliers and cause a long run increase in the number of addicts and total consumption

motives for private transfers over the life cycle an analytical framework and evidence for peru abstract this paper tests for the motives for private income transfers we consider two motives altruism and exchange the question of private transfer motives is important because such motivation can influence the effects of public income transfers on the distribution of income using a household survey for peru we find that transfer amounts received increase with recipient pre transfer income which contradicts a key prediction of the strong form of the altruism hypothesis but is consistent with exchange we also find that capital market imperfections are likely to be an important cause of private transfers and that social security benefits crowd out the incidence of private transfers

entrepreneurial police and drug enforcement policy the hypothesis that drug enforcement is relatively high in local jurisdictions where state laws dictate that police retain seized assets is tested in the context of a reduced form equation of the supply and demand for drug enforcement the results are robust across model specifications some of which directly control for the level of drug use legislation permitting police to keep seized assets raises drug arrests as a portion of total arrests by about 20 percent and drug arrest rates by about 18 percent police bureaucrats apparently desire discretionary budget increases and they have considerable discretion in determining resource allocation

illicit drug use and labour market achievement evidence from the uk this study using data from the british crime survey bcs examines the effect of drug use on occupational achievement it starts by attempting to overcome the identification problem that results from the limited set of drug use questions presented in the bcs taking this into account and allowing for the endogeneity of drug use in equations for unemployment and labour market outcomes that a mild positive association with soft drugs and occupational achievement is observed that diminishes with age this relationship holds for males but not for females in contrast it is also found that past use of hard drugs significantly increases the likelihood of current unemployment although it appears to be unrelated to occupational success conditional on achieving employment

is property crime caused by drug use or by drug enforcement policy the relationships among drug offenses prorperty crime and the allocation of police resources are investigated in a structural model using data from florida countries law enforcement resources are scarce and as efforts to combat drug crime increase the amount of these resources allocated to property crime is reduced this reallocation of police resources results in reduced deterrence for property crime and as a result an increase in these crimes the evidence presented suggests that rising property crimes in florida are at least partially the result of drug enforcement policy

rational habit formation abstract this paper discusses consumer demand under rational habit formation if consumer tastes change endogenously through habit stocks depending on past consumption the rational consumer will make allowance of the future habit forming effects of current consumption a model with rational habit formation is made formally equivalent to an intertemporal consumer model without habit formation by redefining the cost of consumption and wealth the cost of consumption is obtained by adding the cost of future induced consumption to the rental price of the commodity the extended wealth concept is obtained by subtracting the cost of the initial stocks of habits and the cost of future physically necessary consumption from wealth the paper also investigates the implication of rational habit formation for constructing one period cost of living indices

the duration of the smoking habit i introduction most smokers smoke out of habit once the habit is ended many of smoking s most harmful effects decline rather quickly preventing and ending cigarette addiction is therefore the straightest path toward preventing the health damage done by cigarette smoking consequently the related questions of why people start smoking and why they quit are central to formulating and evaluating effective antismoking policies duration or hazard models are designed to measure the probability of transition between states and are thus ideal for investigating the structural determinants of the transition between addiction and non addiction nevertheless most previous work in the economics literature uses the aggregate smoking participation rate defined as the percentage of people who currently smoke or an individual s probability of participation rather than a hazard rate to measure the attractiveness of habitual smoking this paper models the hazard rates of both starting and quitting the cigarette smoking habit the starting hazard rate is the probability that an individual will start smoking in a given time period conditional on being a nonsmoker until then the quitting hazard rate is the probability of quitting smoking in a given time period conditional on being a smoker since the starting date both of these rates should rise and fall in response to changes in the attractiveness of smoking the two rates will respond differently to different stimuli since the starting hazard reflects the point of view of nonsmokers and the quitting hazard reflects the point of view of smokers hazard or duration models possess several advantages over smoking participation models most obviously smoking participation rates cannot directly distinguish between increased starting rates and decreased quitting rates but the hazard models can also in a participation rate model it is difficult to control for the effect of the duration of the habit whereas duration models are designed specifically to allow for and measure the dependence of the hazard rate on duration another advantage is that the participation rate at any one time will oversample the number of long term smokers relative to those who had a short term habit whereas a duration model is designed to avoid this source of bias one drawback however is that because of their inherent panel nature the data requirements of duration models are somewhat more difficult to satisfy as shall be seen the only previous work in the economics literature that estimates the hazard rate of starting smoking is douglas and hariharan 1994 my paper improves upon douglas and hariharan in at least three important ways first it estimates the hazard rate of quitting smoking as well as that of starting second it takes into account variation in state level regulation third its time varying covariate model allows hazard rates to respond dynamically to changes in cigarette price regulation and information variables the use of time varying covariates is important because it brings the empirical model into much closer accord with theory the decision whether or not to start or quit smoking is an ongoing decision made one day at a time on the basis of current information the hazard of starting is greatest when the cost of the habit appears lowest and its benefit appears highest this comparison of cost and benefit changes through time as price information income and life cycle variables change while douglas and hariharan 1994 used price information from the potential smoker s most vulnerable age on the theory that its marginal effect is greatest at that time the model used in this paper allows each individual s hazard rate to respond to changes in price and public information as they occur the leading theoretical model of the decision to smoke is the rational addiction model of becker and murphy 1988 which assumes that consumers of addictive goods begin smoking only after fully weighing the costs and benefits of the habit

endangering the war on terror by the war on drugs the united states is currently engaged in two wars one of which is less than a decade old the other has lasted over a century the first the war on terror against islamist fundamentalists began with al qaeda s destruction of the world trade centre s twin towers on sept 11 2001 this led to the us invasion of afghanistan the defeat of the taliban and the dislocation of al qaeda s terrorist infrastructure with osama bin laden and his deputy al zawahari having to flee to the lawless badlands between pakistan and afghanistan with the creation of a democratically elected government under ahmad karzai it might have been thought that the war on terror in afghanistan had been won but as the taliban cum al qaeda scorpion had been squashed but not killed it is now remerging with the resurgence of the taliban and its continuing support for the refurbished al qaeda terrorist network in the southern provinces particularly in helmand of afghanistan this area also happens to be the major poppy growing area in afghanistan for conversion into opium and heroin in 2007 it provided 92 of the world s opium supply whose farm gate value was us 1 billion 1 it is this opium economy which is now as in the past providing the taliban with the money for arms and growing control over the southern opium growing provinces by offering farmers protection from the opium eradication programs spearheaded by the us as part of its war on drugs the first part of this paper

alcoholism work and income this article reports on an empirical analysis of the relationships between alcoholism and income and working we show that the relationships between alcoholism and labor market success have important age or life cycle dimensions we present evidence that alcoholism may affect income more by restricting labor market participation than by affecting the wages of workers finally we demonstrate that the effects of alcoholism on earnings depend on the extent to which one controls for other covariates associated with alcoholism as such we suggest that there may be important indirect as well as direct effects of alcoholism on labor market success

transmission and generation investment in electricity markets the effects of market splitting and network fee regimes abstract we propose an equilibrium model that allows to analyze the long run impact of the electricity market design on transmission line expansion by the regulator and investment in generation capacity by private firms in liberalized electricity markets the model incorporates investment decisions of the transmission system operator and private firms in expectation of an energy only market and cost based redispatch in different specifications we consider the cases of one vs multiple price zones market splitting and analyze different approaches to recover network cost in particular lump sum generation capacity based and energy based fees in order to compare the outcomes of our multilevel market model with a first best benchmark we also solve the corresponding integrated planner problem using two test networks we illustrate that energy only markets can lead to suboptimal locational decisions for generation capacity and thus imply excessive network expansion market splitting heals these problems only partially these results are valid for all considered types of network tariffs although investment slightly differs across those regimes

employment wages and alcohol consumption in russia 1 introductionconcerns regarding the relationship between alcohol consumption and labor market productivity are well grounded if problem drinking or alcoholism is considered a disease then it may have depressant effects on labor market productivity causing reductions in employment earnings and other labor market outcomes mullahy and sindelar 1993 1996 kenkel and ribar 1994 however there is a medical literature that documents a u shaped relationship between alcohol consumption and the risk of cardiovascular disease according to this literature moderate drinkers have a lower risk of cardiovascular disease than do either abstainers or heavy drinkers beaglehole and jackson 1992 doll et al 1994 consistent with this evidence several economists have found a positive association between moderate drinking and earnings berger and leigh 1988 french and zarkin 1995 heien 1996 hamilton and hamilton 1997 zarkin et al 1998 macdonald and shields 2001 this article investigates the impact of alcohol consumption on employment and wages in russia the primary contributions of the article are twofold first it enhances the economic literature on the relationship between alcohol consumption and labor market behavior by using data from a longitudinal survey the use of a longitudinal data set enables the estimation of a fixed effects model which helps avoid the potential bias caused by unobserved individual factors not captured in cross sectional models the use of a fixed effects model is an important extension to the literature because the data sets used in previous studies are cross sectional and usually lack adequate variables that could serve as identifying instruments to control for the endogeneity of alcohol consumption 1 furthermore the richness of the data set used in this article allows for the application of three alternative measures of alcohol consumption in the empirical analysis this is important because the relationship between alcohol consumption and labor market outcomes may be sensitive to the alcohol measure that is used the second notable contribution of this article is that it provides the first empirical evidence on the association between alcohol consumption and labor market outcomes in russia excessive alcohol consumption is a widespread problem in russia where per capita alcohol consumption is around 14 liters per year the world health organization who considers 8 liters to be a sign that a country has a critical consumption level for health problems quinn judge 1997 furthermore the dramatic fluctuations in mortality rates experienced in russia over the past 15 years have generated considerable attention to the potential effect of alcohol consumption on the overall health of the russian population it is important to investigate how labor market outcomes would be affected by alcohol consumption in a country which demonstrates such dramatic fluctuations in alcohol consumption and mortality consistent with the previous studies cross sectional results generally support the hypothesis of an inverse u shaped relationship between alcohol consumption and wages and employment results from the fixed effect models are found to be quite different from those of cross sectional models the positive effect of alcohol consumption on employment disappears for both males and females once the individual fixed effects are controlled for the results of the wage model lend support to a small and linear return to alcohol consumption but the effects are significant only at the 10 level the fixed effects estimates are smaller in magnitude and estimated with less precision compared with cross sectional estimates section 2 reviews the previous literature section 3 discusses the conceptual issues and empirical strategy section 4 introduces the data set section 5 provides a discussion of the results and sensitivity analyses section 6 concludes the article

drugs economics and policy drug ii let the market work there is no necessary link between drug consumption addiction and social disintegration empirical evidence suggests that a considerable share of the population has consumed illegal drugs during some period of their lives a substantial proportion of drug users have a job and home many mature out of drug consumption in their thirties most drug users are normal consumers responding systematically to relative prices after the failure of a repressive drugs policy switzerland allows cities to pursue a third way between repression and liberalization the state allows carefully screened heavy addicts to inject heroin at a nominal price while at the same time raising the cost to potential entrants the experiment has produced encouraging results the health of heroin users has improved and crime has been reduced a homogenized drugs policy in the european union would probably disallow such promising programmes bruno s frey

an analysis of economic warfare in times of conflict an adversary s resources are a source of potential harm many geopolitical tactics are thus quite explicitly economic as they seek either to deter an adversary s worst intentions or reduce its capacity to inflict damage richardson 1960 tullock 1974 relevant policies include trade limiting sanctions galtung 1967 pape 1997 and direct attacks on an adver sary s military infrastructure or personnel 1 this paper explores a third example namely efforts to undermine an adversary s source of income i focus on us efforts to reduce the resources of taliban loyal insurgents by suppressing the afghan opium trade with additional applications to conflicts involving oil producing nations the taliban historically profited from the opium trade through a 10 percent tax on farmers known locally as ushr and by providing traffickers with protection services this link between opium income and taliban resources coupled with concerns about a narcoticsinsecurity cycle motivates the view that the united states should suppress the afghan opium trade blanchard 2009 caution is warranted

on the existence of balanced growth equilibrium the authors characterize the class of dynamic models that allow for the most commonly used types of sustained economic growth balanced and asymptotically balanced they show that under a constant returns to scale technology asymptotically constant discount rate and asymptotically constant elasticity of marginal felicity are not only necessary but also sufficient conditions for the existence of a n asymptotically balanced growth equilibrium path the authors provide examples of recursive utility models that accept a n asymptotically balanced growth equilibrium and discuss their implications on cross country differences in growth rates as well as on savings behavior and wealth distribution copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

integration scenarios of demand response into electricity markets load shifting financial savings and policy implications abstract demand response allows for the management of demand side resources in real time i e shifting electricity demand according to fluctuating supply when integrated into electricity markets demand response can be used for load shifting and as a replacement for both control reserve and balancing energy these three usage scenarios are compared based on historic german data from 2011 to determine that load shifting provides the highest benefit its annual financial savings accumulate to 3 110 m for both households and the service sector this equals to relative savings of 2 83 compared to a scenario without load shifting to improve demand response integration the proposed model suggests policy implications reducing bid sizes delivery periods and the time lag between market transactions and delivery dates in electricity markets

the demand for alcohol the differential response to price although several studies indicate that drinking is responsive to price little work has focused on whether prices have a differential effect on light moderate or heavy drinking this study examines the price responsiveness of the demand for alcohol whether heavy drinkers are less sensitive to price than light or moderate drinkers the study uses data on alcohol consumption on the 1983 national health interview survey the results indicate that both light and heavy drinkers are much less price elastic than moderate drinkers further we cannot reject the hypothesis that the very heaviest drinkers have perfectly price inelastic demands