markets for pollution control when firms are noncompliant the problem of noncompliance and enforcement in transferable discharge permit tdp markets has not received much attention this paper examines the consequences of noncompliance for a tdp market given fairly general assumptions about the characteristics of the enforcement policy in place the analysis reveals that when firms are noncompliant tdp markets retain their efficiency property only under some fairly stringent conditions the effect of noncompliance on the equilibrium permit price raises some important questions about the ability of a tdp market to achieve and remain in equilibrium when firms are noncompliant

what happens to wages after displacement faced with limited resources policymakers need to know when and where to target support for displaced workers the academic literature offers little support presenting wide ranging results with no consistent explanation for the observed differences in wages after workers are displaced in this paper we demonstrate that the heterogeneity found in the literature is consistent with varying market conditions the results suggest that support for displaced workers can be more efficiently allocated by considering the timing and location of displacement

demand information and competition why do food prices fall at seasonal demand peaks prices for seasonal food products fall at demand peaks price declines are not driven by falling agricultural input prices indeed farm to retail margins narrow sharply i use electronic scanner data from a sample of us supermarkets to show that seasonal price declines are closely linked to market concentration and are much larger in markets with several rivals than where a single brand dominates seasonal demand increases reduce the effective costs of informative advertising and increased informative advertising by retailers and manufacturers in turn may allow for increased market information and greater price sensitivity on the part of buyers

interest controls and credit allocation in developing countries planning authorities in less developed countries ldcs often regard financial market intervention as an efficient way to induce gr wth and structural change elaborate regimes of interest ceilings and subsidies have been used to promote industrialization exporting geographic decentralization and other national priorities some of these programs have doubtless achieved their intended objectives however with inflation frequently exceeding controlled interest rates they have also tended to generate an excess demand for loans legally prohibited from price discrimination creditors have been obliged to allocate their portfolios according to various rationing criteria and loan applicants whom creditors find relatively unappealing have been forced to rely heavily on self finance or the unregulated curb markets mckinnon 1973 and shaw 1973 have argued that such rationing regimes lead to serious factor misallocations inappropriate technology choices and unnecessarily low growth rates in the past decade their perspective has been formalized with macro models of financially repressed economies and numerous supportive empirical studies have been reported fry 1982 surveys the literature surprisingly however several fundamental micro issues have received little attention what is the nature of the bias in credit allocation that nonprice rationing induces and how does

factor demand models with nonlinear short run fluctuations abstract this paper considers asymmetric costs of adjustment that propagate nonlinear shortrun fluctuations in stochastic factor demand systems the model endogenously generates asymmetric cyclical demand for capital and labour between peaks and troughs of the business cycle the empirical analysis of the model is based on quarterly time series data of the dutch manufacturing sector for the period 1971 i 1984 iv and annual time series data of the u k manufacturing sector for the period 1955 1986 i find important differences of adjustment speed of capital and labour inputs between expansionary and contractionary phases of the business cycle

the long run demand for skilled and unskilled labor in colombian manufacturing plants this note estimates the long run demand for skilled and unskilled labor using panel data for colombian manufacturing plants unobserved heterogeneity and measurement error problems that commonly arise in microdata production estimates are examined output measurement errors cause ols estimators to underestimate the output and wage response of employment demand time difference estimators exaggerate the measurement error biases instrumental variable estimates of the output elasticities are 0 89 and 0 76 and own wage elasticities are 0 42 and 0 65 for skilled and unskilled labor respectively the output elasticity is larger for skilled labor whereas the wage elasticity is larger for unskilled labor in virtually every industry

the timing and magnitude of retail store markdowns evidence from weekends and holidays we examine daily prices of eight goods at seventeen retail stores collected in ann arbor michigan over a four month period from november 1 to february 28 we focus on weekly and seasonal price patterns and on the frequency of price markdowns or sales there were frequent markdowns in the intensive shopping period prior to christmas and a tendency for such sales to occur on weekends we interpret these findings as evidence that a significant number of markdowns are timed to occur when shopping intensity is exogenously high we complement the imperfect information based motives for sales in the literature by contributing an additional element based on the role of bulk shopping and increasing returns in the shopping technology

adjustment costs inventories and output this paper analyzes the optimal adjustment strategy of an inventory holding firm facing price and quantity adjustment costs in an inflationary environment the model nests both the original menu cost model that allows production to be costlessly adjusted and the later model that includes price and quantity adjustment costs but rules out inventory holdings it is shown that the firm s optimal adjustment strategy may involve stockouts at low inflation rates output is inversely related to the inflation rate and the length of time demand is satisfied increases with the demand elasticity but decreases with the storage cost and the real interest rate

matching bias in labor demand estimation abstract using a matched firm worker dataset we show both theoretically and empirically that positive assortative matching between firms and workers leads to an underestimation of the absolute value of wage elasticity of labor demand

incentive based policy design for pollution control and biodiversity conservation a review this paper provides a succinct review of the main developments in the literature on incentive based policy mechanisms in the contexts of pollution control and biodiversity conservation dating from the early beginnings of the science in the 1960s a focal point in the review is on the design features of these policy mechanisms key developments in policy design were originally established in controlling externalities arising from pollution and have since been extended to policy design tailored towards biodiversity conservation special emphasis is given to the spatial characteristics of the environmental problems underlying both pollution control and biodiversity conservation the paper concludes by drawing some lessons and setting out elements of a future research agenda in both policy domains

real wages and the demand for skilled and unskilled male labour in ghana s manufacturing sector 1991 1995 abstract real wage rates in ghana have fallen substantially over the last 20 years in this paper survey data for the years 1991 1995 is used to assess the changes which have occurred in the 1990s it is shown that the real wage rate for the unskilled has continued to fall factor share equations for skilled and unskilled labour are estimated which show the rise in skilled wages leading to substitution to unskilled labour but no rise in the share of skilled labour in income the own price elasticities of skilled and unskilled labour are estimated at 0 44 and 0 52 respectively

learning by doing vs learning about match quality can we tell them apart understanding the accumulation of match specific capital is crucial in shedding light on the reasons for the prevalence of long term employ ment relationships and on the welfare consequences of turnover in the labor market one of the most important source of match specific capital is human capital acquired through match specific learning such learn ing can take on two distinct forms in the first case workers accumulate match specific human capital through learning by doing in the second case a worker and a firm in an employment relationship learn about the quality of the match over time thereby acquiring valuable information i construct a structural model that embeds these two learning explana tions i show that it is possible to distinguish the two explanations given turnover data on employing firms coupled with data on workers such data now exist in the form of matched employer employee data sets i use a matched french data set to estimate the structural model using the efficient method of moments a simulation based estimation method i find that while learning by doing could be present in the first few months of an employment relationship learning about match quality dominates at tenures above half a year this finding has important consequences for economists understanding of the sources of match specific capital and for the desirability of policies that alter the incentives for turnover for workers of different tenure

assessing the performance of conservation auctions an experimental study this work uses controlled laboratory experiments to investigate the budgetary and the economic performance of competitive tenders for allocating conservation contracts to landholders experiments have been replicated in two different countries to check for robustness of results we find that auctions outperform the more traditional fixed price programs only in the one shot setting with repetition the auctions quickly lose their edge the budget constrained auction performs similarly to the target constrained in the one shot setting but appears more robust to repetition our results suggest that previous estimates of conservation auction performance are too optimistic and we propose a method for improving such estimates

employment dynamics and the structure of labor adjustment costs in this article we document the patterns of employment adjustment at the micro level we find clear evidence of lumpy adjustment consistent with the presence of nonconvexities in the adjustment technology inaction is pervasive action spells are short lived and extreme adjustment episodes are responsible for a nontrivial share of employment adjustment we also find that the probability of employment adjustment increases with the duration of inaction the skill structure of the workforce the type of employment contract and the proportion of low tenure workers which we interpret as proxies for the magnitude of adjustment costs all influence the probability of adjustment

labor adjustment costs in a destination country the case of mexico abstract rodrik rodrik d 1997 has globalization gone too far institute for international economics washington dc argues that firms use the threat of moving to low cost generally developing markets to make employment more flexible at home although a large literature documents significant adjustment costs in developed countries we know little about their size and importance in developing countries that receive capital we employ monthly mexican data from the gatt nafta period to estimate adjustment costs in mexico we consider adjustment costs for production and non production workers and allow for asymmetry while patterns of adjustment costs are similar as in developed countries adjustment costs in mexico are generally an order of magnitude smaller

an experimental investigation of the explosive effect in almost common value auctions abstract with only two bidders a slight private value advantage in a common value auction is predicted to have an explosive effect on the allocation and revenue of the auction when using a second price and or english clock mechanism this paper uses the wallet game in an english clock mechanism with two players to test these predictions the results show that the effect is proportional not explosive confirming the results of past experiments a behavioral model with two types of players naive and sophisticated is developed and tested against the experimental data in the model naive players use a rule of thumb bidding function while the sophisticated players are fully rational and when forming their strategy choosing the best response correctly account for the probability that a rival is naive or sophisticated we use cluster analysis to classify the players in the symmetric auctions as naive or sophisticated and a strict win lose criteria to classify players in the asymmetric auctions we find that those players classified as sophisticated are more aggressive in responding to high signals or advantaged status than their naive counterparts but do not lower their bids relative to the naive players when receiving low signals or when regular

a laboratory study of auctions for reducing non point source pollution abstract non point source pollution such as nutrient runoff to waterways from agricultural production is an environmental problem that typically involves asymmetric information land use changes to reduce pollution incur opportunity costs that are privately known to landholders but these changes provide environmental benefits that may be more accurately estimated by regulators this paper reports a testbed laboratory experiment in which landholder sellers in sealed offer auctions compete to obtain part of a fixed budget allocated by the regulator to subsidize abatement in one treatment the regulator reveals to landholders the environmental benefits estimated for their projects and in another treatment the regulator conceals the potential projects environmental quality the results show that sellers offers misrepresent their costs more for high quality projects when quality is revealed so total abatement is lower and seller profits are higher when landholders know their projects environmental benefits this suggests that concealing this information may improve regulatory efficiency

asymmetric substitutability theory and some applications economists usually describe goods as being either gross complements or gross substitutes yet what is less known is that one good may be a gross substitute for a second good while the second good is a gross complement to the first good this paper shows the existence of asymmetric gross substitutability and shows some potential examples and applications

emissions variability in tradable permit markets with imperfect enforcement and banking abstract in this laboratory experiment on emissions trading subjects face exogenous random emissions shocks after making production and emission control plans in some sessions subjects can bank their unused permits for future use after a reconciliation trading period following the shock realization subjects report their emissions to the regulatory authority and are placed in different inspection groups depending on their compliance history we identify important interactions between banking compliance and enforcement banking smoothes out the price variability arising from imperfect emissions control price stability comes at a cost however since noncompliance and emissions are significantly greater when banking is allowed

conservation auctions and compliance theory and evidence from laboratory experiments many agri environmental conservation programs are faced with the problem of imperfect monitoring this provides farmers with an incentive for noncompliance because they can receive subsidies without implementing the conservation scheme in this paper bidding behavior and auction performance are compared for discriminatory price and uniform price auctions in an imperfect monitoring environment our theoretical analysis suggests that auction performances are equalized between the discriminatory price and uniform price auctions however laboratory experiments reveal that although the discriminatory price auction has an advantage in terms of reducing policy costs it is more likely to cause adverse selection as a result the uniform price auction tends to have higher efficiency and cost effectiveness when compliance behavior is taken into account

the own wage elasticity of labor demand a meta regression analysis firms labor demand responses to wage changes are of key interest in empirical research and policy analysis however despite extensive research estimates of labor demand elasticities remain subject to considerable heterogeneity in this paper we conduct a comprehensive meta regression analysis to re assess the empirical literature on labor demand elasticities building on 942 elasticity estimates from 105 different studies we identify sources of variation in the absolute value of this elasticity heterogeneity due to the theoretical and empirical specification of the labor demand model different datasets used or sectors and countries considered explains more than 80 of the variation in the estimates we further find substantial evidence for the presence of publication selection bias as estimates of the own wage elasticity of labor demand are upwardly inflated

a laboratory comparison of uniform and discriminative price auctions for reducing non point source pollution auctions allow regulators to identify land management changes with substantial environmental benefit and low opportunity cost this paper reports an experiment in which seller subjects compete in sealed offer auctions to obtain part of a fixed budget allocated by the experimenter regulator to subsidize pollution abatement one treatment employs uniform price auction rules whereas another treatment employs discriminative price auction rules we find that most offers in the uniform price auction are within 2 of cost whereas most offers in the discriminative price auction are at least 8 greater than cost nevertheless the discriminativeprice auction has superior overall market performance

fiscal adjustment and labor market dynamics in an open economy this paper studies the labor market effects of fiscal adjustment in a two sector three good intertemporal framework key features of the model are an informal sector minimum wages unionized labor in the formal economy imperfect labor mobility and public production of intermediate inputs bluxuryq and wait unemployment prevail in equilibrium it is shown that if unions care sufficiently about employment and if the degree of openness is high an increase in the price of government services may reduce unemployment in the steady state a similar result would hold in an efficiency wage setting if the bdisciplinary effectq of unemployment is sufficiently strong d 2004 published by elsevier b v

employment and deadweight loss effects of observed nonwage labor costs i introduction nonwage labor costs consist of several mandated benefits health training accident housing plans as well as several taxes and are intended to increase workers welfare and job security however these benefits tend to come at the expense of reducing employment and deadweight losses to quantify these resulting effects one needs a reliable measure of the employment labor cost elasticity most studies conducted on this subject find low estimated values for this elasticity which contrasts with policy makers enthusiasm to reduce labor costs in this article using a peruvian matched firm workers data set we find that nonwage labor costs reduce employment measured in total hours of work by 17 for white collars and by 53 for blue collars with associated deadweight losses of 10 and 35 of total contributions revenues respectively we also compute employment losses of compliance with mandated employers and workers contributions of 4 for white collars and 12 for blue collars with respective associated deadweight losses of 2 and 6 of contribution revenues these results come from estimating the long run unconditional firm level labor demand function by a procedure that corrects for endogeneity of wages we show that unbiased estimates even using small units such as firm level data require not only that wages are exogenous but also that their unobserved determinants are uncorrelated with the unobserved determinants of labor demand this requirement is not fulfilled in the likely event pointed out by becker 1993 that larger firms are matched with more productive workers consequently an estimation that corrects for endogeneity yields a larger labor cost elasticity of labor demand than one that does not like ordinary least squares ols in the past two decades there has been intensive theoretical and empirical research on the effects of labor market frictions on job creation western european economies characterized by large job security provisions have been the center of attention of this research that has modeled these frictions as adjustment costs in labor demand bentolila and bertola 1990 hamermesh 1989 hopenhayn and rogerson 1993 nickell 1987 rendon 2004 this literature finds that the effects of eurosclerosis that is labor markets with high firing costs are ambiguous in good times sclerotic labor markets create fewer jobs than free labor markets however in bad times sclerotic labor markets reduce job destruction most of the research done in latin america has been done under these guidelines obtaining statistically significant negative effects of job security provisions on employment rates 1 furthermore using country level data for latin america and organization for economic cooperation and development countries heckman and pages serra 2000 found large effects of job security provisions on employment 2 which are robust to several specifications ols random and fixed effects the authors present their results as a strong evidence against freeman s 2000 view that job security regulations mostly affect distribution but not efficiency and advocate the substitution of job security provisions by other mechanisms that provide income security at lower efficiency and inequality costs under a classic labor demand framework and using worker and firm level data this article provides new evidence in the same direction extending the computation of the effects of job security provisions to deadweight losses hamermesh 1993 surveys several studies on the estimation of labor demand and remarks that estimates of the labor cost employment elasticity should be interpreted and compared cautiously depending on the specification adopted capital is an explanatory variable in a short run labor demand estimation it is not in a long run labor demand estimation similarly output is included in the estimation of a conditional labor demand but excluded in the estimation of an unconditional labor demand

employment changes the structure of adjustment costs and plant size abstract in this paper we analyze the pattern of employment adjustment using a rich panel of norwegian plants the data suggest that the frequency of episodes of zero net employment changes is inversely related to plant size we develop and estimate a simple q model of labor demand allowing for the presence of fixed linear and quadratic components of adjustment costs the econometric evidence supports the existence of purely fixed components unrelated to plant size as a result the range of inaction is wider for smaller plants the quadratic component of costs is also always important in most specifications fixed costs are higher for employment contractions the quadratic component is higher during employment contractions compared to expansions for small plants while this is not true for larger plants

seniority rules and productivity an empirical test the primary purpose of this paper is to test empirically the effect of labor quality on short run manufacturing productivity in doing so the study makes major advances in two areas for the first time a job tenure function is estimated and a time series of job tenure in manufacturing is developed this estimated tenure series empirically verifies the use of seniority rules in the firm worker employment relationship having generated a tenure series the authors then test whether tenure enhances productivity in manufacturing the results clearly indicate that seniority rules have a statistically significant positive impact on productivity and the pattern of the seniority rules is reminiscent of a model where human capital has a specific component copyright 1989 by the london school of economics and political science

the impact of exchange rate volatility on plant level investment evidence from colombia abstract we estimate the impact of exchange rate volatility on firms investment decisions in a developing country setting employing plant level panel data from the colombian manufacturing census we estimate a dynamic investment equation using the system gmm estimator developed by arellano and bover 1995 and blundell and bond 1998 we find a robust negative impact of exchange rate volatility constructed either using a garch model or a simple standard deviation measure on plant investment consistent with theory we also document that the negative effect is mitigated for establishments with higher mark up or exports and exacerbated for lower mark up plants with larger volume of imported intermediates

fixed term contracts and the dynamics of labour demand abstract we estimate a model of labour demand that accounts for dynamics arising from the relative costs of hiring and firing workers on either indefinite term contract itc or fixed term contract ftc we use a panel of 1000 french firms for which we can measure the number of entries and exits for each type of contract between 1988 and 1992 our estimates suggest that 1 it is much more costly to lay off workers under itc than to hire them 2 it is much less costly to adjust the number of ftc than to adjust the number of itc 3 the asymmetry between hiring and layoff costs is more important for non production than for production workers

lost in transition the costs and consequences of sectoral labour adjustment this paper uses an equilibrium search and matching model to study canada s sectoral labour adjustment in 2002 2006 during an increase in global commodity prices and exchange rate appreciation i estimate economically significant adjustment costs for the aggregate economy in this episode and demonstrate that difficulty in transferring skills between jobs for individual workers can be an important contributor to these aggregate costs the analysis also demonstrates that the level of unemployment benefits impacts the economy s sectoral composition its aggregate productivity and the speed of its adjustment to shocks ce texte utilise un modele d equilibre de la recherche et de l arrimage pour etudier les ajustements sectoriels du travail au canada dans la periode 2002 2006 une periode d appreciation des prix globaux des produits de base et du taux de change j estime que les couts d ajustement sont economiquement significatifs pour l economie agregee au cours de cet episode et que la difficultea transferer les competences entre emplois pour les travailleurs individuels peut etre une source importante de ces couts agreges les analyses montrent aussi que le niveau des prestations d assurance emploi a un impact sur la composition sectorielle de l economie sur la productivite et sur la vitesse des ajustements aux chocs

labor demand and the structure of adjustment costs this study examines the costs firms face in adjusting labor demand to exogenous shocks evidence on monthly plant level data shows that adjustment proceeds in jumps employment is unchanged in response to small shocks but moves instantaneously to a new equilibrium if the shocks are large results in the large literature that assumes smooth adjustment are due to aggregation of this nonlinear relation the finding has implications for cyclical changes in productivity for severance pay layoff and plant closing restrictions and for all other policies that affect the cost of adjusting employment copyright 1989 by american economic association

nonhomotheticity and technological bias in production this paper develops an approach to estimating nonhomotheticity and technological bias within the class of nonhomothetic ces production functions the model is applied to cross section firm level data covering seven industries in mexico brazil colombia and four central american countries for the period 1970 74 positive nonhomotheticity higher capital intensity for larger plant size given factor price ratios is found in six industries other results are that once nonhomotheticity is accounted for technological bias is not predominantly capitalusing and equality of capital intensity between transnational and domestic firms is pervasive

auctions for initial sale of annual catch entitlement we use a laboratory experiment calibrated to a representative new zealand fishery to assess three sealed bid multi unit demand auction mechanisms under consideration for allocating quota for species being introduced into the quota management system these auctions allocate the k units to the k highest bids but prices are determined according to discriminative kth price and k 1st price rules in our experiment the auctions are equally efficient but revenue is highest in the discriminative auction and lowest in the k 1st price auction results are robust to industry subjects and subjects are responsive to the across unit bidding incentives present in multi unit demand auctions

how do retailers price beer during periods of peak demand evidence from game weeks of the german bundesliga this article considers retail beer pricing during game weeks of the german bundesliga german consumers exhibit a high degree of brand loyalty in their preference for regionally crafted beers and we exploit the regional brand loyalty of german beer consumers to identify brand level demand shocks for beers preferred by the home team s fans and visiting team s fans during bundesliga game weeks we find retailer price adjustments at the category level mask a considerably more nuanced pricing behavior at the brand level retailers in regions hosting bundesliga games significantly increase beer prices at the category level during game weeks however at the brand level we find retailers selectively discount prices on the home team s sponsored beers and systematically raise prices on the visiting team s sponsored beers our findings are consistent with a tourist natives model of retail pricing during periods of increased demand in the german beer market

labor and investment demand at the firm level a comparison of french german and u s manufacturing 1970 79 we investigate how labor and investment demand at the firm level gross as well as net and replacement investment separately differs in french german and u s manufacturing and has changed since the 1974 75 crisis we use three consistent panel data samples of large firms for 1970 79 and rely on simple models of the accelerator profits type we find that the accelarator effects and the profits effects did not vary much between 1970 73 and 1976 79 and were quite comparable in the three countries the former being of a more permanent nature and the latter more transitory to a large extent these effects account for the important changes and differences in labor and investment demand between the two subperiods and across the three countries

discriminatory versus uniform treasury auctions evidence from when issued transactions abstract we use when issued transactions data to assess the treasury s current experiment with uniform auctions when issued volume is higher under uniform as compared to discriminatory auctions suggesting a higher information release which should reduce pre auction uncertainty and the winner s curse under uniform auctions when issued volatility falls after the auction and again after the outcome announcement the pattern is the opposite for discriminatory auctions this is further evidence that uniform auctions increase pre auction information and lower the short squeeze a direct comparison of markups in uniform and discriminatory auctions yields mixed results

markets beer in germany and the united states between 1950 and 2000 the four firm producer concentration ratio for beer increased from 22 to 95 in the united states and anheuser busch s share of domestic output ballooned from 6 to 54 percent in germany concentration has risen but it remains low in 2000 the four firm producer concentration ratio was just 29 and the eight firm ratio in germany was smaller than the one firm ratio in the united states in 2005 after five years of important mergers involving big brewers the german beer industry was still much less concentrated than its american counterpart in this article i discuss several candidate explanations for the failure of beer producer concentration to rise as much in germany as in the united states the relevance of the new technologies to german brewers the preferences of german consumers the rules for advertising on german television and other factors largely absent from the consensus interpretation of american experience i find that market structure depends on a remarkably broad range of factors extending well beyond technological opportunity and market size

non convex costs and capital utilization a study of production scheduling at automobile assembly plants i study detailed data from eleven automobile assembly plants these data display considerable cross plant heterogeneity in production scheduling to explain the observed heterogeneity i solve a dynamic programming model when desired production is below the plant s minimum e cient scale non convexities induce production bunching the plant uses less than full capital utilization on average and production is more volatile than sales when desired production is above the plant s minimum e cient scale the plant operates in a convex region of the cost curve in this case it uses high levels of capital utilization and production is less volatile than sales 2000 elsevier science b v all rights reserved jel classixcation e23 d21 l23

adjustment costs and factor demands in canadian manufacturing industries the question of whether regional disparities in canada could arise as a result of nonconstant returns to scale and non identical production functions is examined this is accomplished by estimating and comparing the decision rules for factor demands across canadian regions the decision rules are based on a flexible and dynamic production technology which allows for the presence of internal adjustment costs do not impose constant returns to scale or require hours and workers to have the same output elasticities the model is estimated for four separate canadian regions ontario quebec the western and eastern provinces on annual data ranging from 1965 to 1985