a model of candidate location with endogenous valence this work gives a theoretical explanation for the increase in campaign spending and party polarization in u s politics i assume that the effectiveness of persuasive advertising and of costly valence campaigning in general positively depends on the share of nonpartisan voters a decline in the number of partisan voters in a constituency results in greater campaign spending by the candidates if the voters are risk averse the candidates who maximize their expected office rents minus the cost of campaigning will choose divergent policy platforms strategically in order to reduce the costs of subsequent campaign spending the degree of policy divergence positively depends on the share of nonpartisan voters for a broad class of voter disutility and candidate cost of valence functions

candidate reputations and the incumbency effect abstract a major shortcoming of the classical median voter model is that its central prediction convergence of platforms to the median voter s ideal is seldom observed one reason is that the classical model neglects the importance of voter expectations as a determinant of votes here we associate voters expectations about candidates with past as well as current candidate pronouncements and assume that incumbents whose actions are consistent with their reputations are perceived as less risky than challengers in equilibrium candidates choose distinct platforms typically neither adopts the median voter s ideal point either candidate may win depending on how well the incumbent s reputation reflects current voter tastes and how relatively risky the electorate perceives the challenger to be

electoral outcomes with probabilistic voting and nash social welfare maxima abstract this paper provides unexpected support to nash s view of how bargaining determines the social choice we first present a spatial model of electoral competition with probabilistic voting and a very close relation between voters preferences and their choice probabilities the outcome of the electoral competition game is then shown to be precisely the social alternative that maximizes a nash type social welfare function theorem 1 this electoral outcome is also interpreted as a unanimity likelihood maximum corollary 1 within our framework existence and uniqueness of such an outcome are guaranteed corollaries 2 and 3

extremism campaigning and ambiguity this paper studies a model of how political parties use resources for campaigning to inform voters each party has a predetermined ideology drawn from some distribution parties choose a platform and campaign to inform voters about the platform we find that the farther away parties are from each other on average the less resources are spent on campaigning on average thus if parties are extreme less information is supplied than if parties are moderate we also show that if a public subsidy is introduced we have policy convergence given some mild technical restrictions on the public subsidy

a spatial theory of positive and negative campaigning abstract in order to explore the content of electoral campaigns this paper makes two modifications to hotelling s model of spatial competition first we assume that agents inherit initial locations and engage in costly relocation second an agent s relocation is affected by her rival s actions we investigate how a candidate allocates resources between positive campaigning which influences voters perceptions of her own ideology and negative campaigning which influences her opponent s perceived ideology our theory predicts that the candidate who is perceived as having less attractive personal attributes runs a relatively more negative campaign the theory s implications are illustrated for the 1988 presidential election journal of economic literature classification numbers c7 h0

bargaining in legislatures bargaining in legislatures is conducted according to formal rules specifying who may make proposals and how they will be decided legislative outcomes depend on those rules and on the structure of the legislature although the social choice literature provides theories about voting equilibria it does not endogenize the formation of the agenda on which the voting is based and rarely takes into account the institutional structure found in legislatures in our theory members of the legislature act noncooperatively in choosing strategies to serve their own districts explicitly taking into account the strategies members adopt in response to the sequential nature of proposal making and voting the model permits the characterization of a legislative equilibrium reflecting the structure of the legislature and also allows consideration of the choice of elements of that structure in a context in which the standard institution free model of social choice theory yields no equilibrium

changes in the u s wage structure 1963 1987 application of quantile regression the 1980 s witnessed rapid changes in the structure of wages in the united states in this study recently developed techniques for quantile regression are applied to every march current population survey since 1964 and changes in the return to schooling and experience at different points of the wage distribution are examined the quantile regression technique parsimoniously describes the entire conditional wage distribution this conditional distribution is used to examine changes in within group wage inequality as measured by the difference between conditional quantiles two linear models are considered a simple one group model and a 16 group model the results suggest that the returns to schooling and experience differ across quantiles of the wage distribution but their patterns of change are similar significant differences in wage inequality are also found across the various skill groups the paper also presents a new imputation method for cps data

school expenditures and post schooling earnings evidence from high school and beyond studies based on inputs measured at the state level generally report that school expenditures have substantial effects on students adult wages whereas studies based on less aggregated measures report small effects the author uses wage data from high school and beyond to analyze this discrepancy and to estimate the effect of school expenditures on students post schooling earnings the author finds that the discrepancy in the literature stems mostly from two factors measurement error in district level expenditures and omitted state effects in the earnings regression the author also finds that the effect of school expenditures on earnings is significant but small a 10 increase in school spending would increase students adult wages by only 0 68 copyright 1996 by mit press

valence politics and equilibrium in spatial election models spatial models of two party or two candidatecompetition almost never have pure strategy nashequilibria when the issue space has more than onedimension this paper shows that the introduction ofvalence issues can create conditions where equilibriaexist even in a multidimensional setting we derivesufficient conditions for the existence of equilibria and characterize the spatial locations of twocompeting parties or candidates when such equilibriaexist the party with the advantage on the valencedimension will generally take a moderate position onthe positional issues we consider the implications ofthese results for public perceptions of the parties incumbency advantages and realigning elections

education returns across quantiles of the wage function alternative explanations for returns to education by race in south america private wage returns to schooling in south africa in 1993 are twice as high for nonwhites as for whites and substantially higher at advanced levels of schooling for both races to explore how these returns might be expected to change as the proportion of africans with secondary and higher education increases quantile regressions for the wage function are estimated for african males and white males if the residuals based on a standard wage function specification are interpreted as omitted ability and it is assumed that ability increases decreases returns to schooling then we expect quantile returns to increase decrease at higher quantiles this is not observed for africans at the higher and secondary school level but is evident among whites at higher educational levels the opposite pattern of differential returns favoring the least able i e lowest deciles is reported for the lower tail of the educational distribution that is for africans at the level of primary school and for whites at secondary school authors

the dynamics of locally adaptive parties under spatial voting abstract we explore the dynamics of a model of two party competition under spatial voting the parties are allowed to incrementally adapt their platforms by following the voting gradient imposed by the preferences of the electorate and the platform of the opposition the emphasis in this model is on the dynamic system formed by these conditions in particular we examine the characteristics of the transient paths and the convergence points of the evolving platforms we find that in a simple spatial model with probabilistic voting regardless of the initial platforms of each party platforms eventually converge to a unique globally stable equilibrium matching the strength weighted mean of the voters preferred positions this result appears robust to many variations in voter preferences and party behavior however we do find some conditions under which other dynamic possibilities occur including multiple equilibria and perhaps limit cycles

imperfectly informed voters and strategic extremism we analyze a two candidate downsian model considering that voters use shortcuts e g interest group media endorsements to infer candidates policy platforms that is voters do not observe candidates exact platforms but only which candidate offers the more leftist rightist platform relative positions in equilibrium candidates behavior tends to maximum extremism but it may converge or diverge depending on how voters behave when indifferent policywise between the candidates when the tie breaking rule used by the voters is sufficiently fair candidates converge to the extreme preferred by the median voter but when it strongly favors a certain candidate each candidate specializes in a different extreme

finagle s law and the finagle point a new solution concept for two candidate competition in spatial voting games without a core we investigate the geometry underlying finagle s law which states no matter what happens you can come out ahead if you just know how to finagle and we introduce a new solution concept for two candidate sequential spatial voting games the finagle point the finagle radius is the radius of a circle such that if a candidate locates at its center some alternative in the circle can beat any alternative in the space the finagle point is the point with minimum finagle radius from it a candidate can with only minuscule changes in his initial policy location find a response to any challenger that will defeat that challenger for each possible candidate location we provide a geometric construction which gives an outer bound for its finagle radius a measure of the attractiveness of that location to a finagling politician for three voter games without a core we provide an analytic solution for the point with minimal finagle radius that guarantees that the maximum finagle needed to defeat an opponent will in general be quite small relative to the pareto set we also show how the construction used to generate the finagle point in the three voter case can be extended to the n voter case the basic idea underlying the finagle point is that it is unnecessary and indeed usually impossible to find a position that will defeat all challengers but it is possible to find a position that is virtually invulnerable to challenge since any position that beats it can be countered by shifting to a position very close to the original location that will defeat the challenger moreover even if not at the point with minimal finagle radius in searching for positions to respond optimally to the location of the other candidate a candidate will in general not find it necessary to move far from an initial point located near the finagle point since points located near the finagle point will also have a small finagle radius

covering dominance and institution free properties of social change this paper shows that different institutional structures for aggregation of preferences under majority rule may generate social choices that are quite similar so that the actual social choice may be rather insensitive to the choice of institutional rules specifically in a multidimensional setting where all voters have strictly quasi concave preferences it is shown that the uncovered set contains the outcomes that would arise from equilibrium behavior under three different institutional settings the three institutional settings are two candidate competition in a large electorate cooperative behavior in small committees and sophisticated voting behavior in a legislative environment where the agenda is determined endogenously because of its apparent institution free properties the uncovered set may provide a useful generalization of the core when a core does not exist a general existence theorem for the uncovered set is proven and for the downsian case bounds for the uncovered set are computed these bounds show that the uncovered set is centered around a generalized median set whose size is a measure of the degree of symmetry of the voter ideal points

majority rule and election models abstract this paper surveys the theoretical work that has been done on majority rule and economic models of elections section i provides an overview of the topic section 2 reviews the most important results that have been obtained about majority rule as an abstract collective choice rule section 3 identifies some alternative inferences that can be made from those results section 4 covers some models that include additional features that are present in political institutions where majority rule is used section 5 concentrates on some alternative election models and equilibrium concepts section 6 focuses on election models with abstentions and or candidate uncertainty about voter behaviour section 7 compares and contrasts models where candidates are certain about what the voters choices will be contingent upon about the choices made by the candidates and models where they are uncertain about those choices section 8 closes the survey by identifying some emerging areas of research

equilibrium political budget cycles political business cycle theories generally rely on nominal rigidities and voter myopia this paper offers an equilibrium theory that preserves some basic insights from earlier models though with significant refinements the political budget cycle emphasized here is in fiscal policy rather than output and inflation it arises via a multidimensional signal process one can consider the welfare implications of proposals to mitigate the cycle and the effects of altering the electoral structure copyright 1990 by american economic association

labour market impacts of school expenditure and class size evidence from china this study is a first attempt to estimate the impact of school resources on students subsequent labour market earnings in china combining unprecedented school data from the early 1950s to the 199

determinants of portfolio performance in order to delineate investment responsibility and measure performance contribution pension plan sponsors and investment managers need a clear and relevant method of attributing returns to those

does school quality explain the recent black white wage trend around 1980 the trend toward racial wage convergence essentially stopped i ask whether this break in the convergence trend can be explained by school quality department of education surveys provide earnings data for the high school class of 1972 in 1979 and the class of 1980 in 1986 both linked to data from the respondents high schools by several measures differences between schools attended by blacks and whites were already rather small in the 1970s furthermore i find that measurable school inputs generally have little effect on wages thus school quality explains little of the recent black white wage trend

demand and supply side determinants of conditional cash transfer program effectiveness summary the programa nacional de becas estudiantiles is a conditional cash transfer program designed to promote human capital accumulation and reduce poverty among argentine youth this study follows a 1999 cohort of students for five years and uses matching methods with a comparison group of students excluded due to quotas to estimate average and marginal program impacts multilevel methods are used to explore the role of program management and execution in explaining variation between schools in student outcomes the results suggest that the becas program improved students attendance and performance in part through program conditions requiring good attendance and academic progress for continued scholarship receipt

learning about voter rationality we model the accountability relationship between voters and politicians to clarify what can and can t be learned about voter rationality from existing evidence from the behavior literature we make two key points first we show that evidence on the electoral consequences of natural disasters and economic shocks typically interpreted as evidence for voter irrationality is consistent with a canonical model with rational voters second we show that the evidence on the electoral consequences of disaster response typically interpreted as evidence for voter rationality is consistent with the same model with irrational voters hence neither body of evidence can adjudicate between rational and irrational voting behavior we also derive new hypotheses that can better guide future empirical work attempting to assess voter rationality

does school quality matter returns to education and the characteristics of public schools in the united states this paper estimates the effects of school quality measured by the pupil teacher ratio average term length and relative teacher pay on the rate of return to education for men born between 1920 and 1949 using earnings data from the 1980 census we find that men who were educated in states with higher quality schools have a higher return to additional years of schooling rates of return are also higher for individuals from states with better educated teachers and with a higher fraction of female teachers holding constant school quality measures however we find no evidence that parental income or education affects average state level rates of return

electoral equilibria with restricted strategies we construct a spatial election model in which candidates inherit initial positions in the strategy space presumably from previous political activity and they are restricted to strategies close to their initial positions we establish sufficient conditions for the existence of an equilibrium the equilibrium need not entail an expectation of a zero plurality for each candidate we then apply this model to a sequence of elections in which a series of opposition candidates challenge incumbents given certain regularity conditions the result will be an apparent incumbency advantage corresponding to that observed in recent congressional elections

voters private valuation of candidates quality abstract different voters might have different valuations of candidates qualitative features we argue that this intuitive fact acts as a strong stabilizing force in electoral competition dynamics when candidates are office motivated pure strategy equilibria may exist unlike when all voters favor the same candidate perhaps more importantly it affects candidates platform moderation incentives in a rather intriguing manner when voters are evenly split in terms of their candidates quality valuations then both candidates have incentives to locate sufficiently near but not necessarily exactly at the center of the policy space however as the number of voters who favor the same candidate rises maximum equilibrium differentiation follows a non trivial u shaped pattern it is first decreasing and then increasing in the fraction of voters who prefer the more popular candidate

interest groups campaign contributions and probabilistic voting this essay develops a simple model to analyze the impact of campaign contributions on electoral policy decisions of candidates for office interest groups here are firms that select contributions under the assumption that candidates policies and opposing groups donations remain unaltered candidates however recognize that their policy choices affect contributions campaign contributions are used by candidates to affect policy oriented voters perceptions of candidates positions in this framework the introduction of campaign contributions may affect candidates electoral policies and if they do then they benefit surely exactly one of the two interest groups

the impact of school quality on earnings and educational returns evidence from a low income country abstract the expansion of education has been widely adopted as a key element in the development strategies of low income countries while there is substantial evidence on the benefits of greater educational attainment for subsequent labor market earnings empirical evidence on the role played by school quality is scarce this paper combines household survey data with unique data on school quality from honduras to study the importance of school quality as a determinant of earnings our objective measures of school quality capture teacher training school infrastructure and school crowding the results display strong positive effects of school quality on earnings and on educational returns these effects persist across a variety of model specifications

declining inequality in schooling in brazil and its effects on inequality in earnings abstract household survey data demonstrate that brazilian males born between 1925 and 1963 experienced steady increases in mean schooling and significant declines in schooling inequality the variance in years of schooling increased for cohorts born up until 1950 with steady declines for more recent cohorts decomposition of a standard human capital earnings equation indicates that trends in schooling tended to reduce earnings inequality from 1976 to 1985 due to reductions in both the variance of schooling and in returns to schooling these improvements were more than offset however by increases in other sources of inequality although the net increase in earnings inequality from 1976 to 1985 is disturbing the reduction in schooling inequality represents a fundamental improvement in the determinants of earnings inequality in brazil that will have beneficial effects for decades

a reform dilemma in polarized democracies abstract we study the feasibility and efficiency of policy reforms in democracies we develop a simple election model where i reforms are costly for voters and politicians and these costs increase with the extent of policy change and ii politicians differ in their ability to carry out reforms efficiently we identify a so called reform dilemma which manifests itself in two variants from a static perspective low reform ability politicians are elected when political parties are polarized who then impose high costs on citizens for each reform step this property of elections arises as low reform ability is a substitute for policy commitment from a dynamic perspective incumbents may choose socially undesirable policies to align the social need for reform with their own reform ability and are thus re elected regardless of their reform ability

on the nature of equilibria in a downsian model with candidate valence abstract i analyze mixed strategy equilibria in a downsian model with two office motivated candidates in which one candidate is endowed with a sufficiently large valence advantage that a voter might prefer this candidate even if the voter strictly prefers the other candidate s policies there is a discrete one dimensional policy space and the preferences of the median voter are uncertain i show that there is a range of moderate policies with no gaps that are optimal for the advantaged candidate there is also a range of liberal policies with no gaps and a corresponding range of conservative policies with no gaps that are optimal actions for the disadvantaged candidate the upper and lower bounds on these ranges of policies vary in predictable ways with the size of the advantaged candidate s advantage

performance attribution measuring dynamic allocation skill classical performance attribution methods do not explicitly assess managers dynamic allocation skill in the factor domain the authors propose a generalized framework for performance attribution that decomposes the allocation effect into value added from both static and dynamic factor exposures and thus yields additional insight into sources of manager alpha

opportunity inequality and the intergenerational transmission of child labour this paper presents a model in which opportunity differences within society result in child labour where opportunity is broadly defined but can include school quality access to higher paying jobs access to information about the returns to education and actual discrimination if opportunity differences exist child labour and poverty are shown to be symptomatic of this underlying socioeconomic condition it is then shown that policies that ban child labour and or introduce compulsory education laws can actually reduce dynastic welfare increase poverty and further exacerbate income inequality within society because they treat the symptom rather than the disease the lack of opportunity

incumbency electoral safety and turnover in the house of representatives 1952 76 two hypotheses have received a great deal of attention from students of congressional elections first many analysts have concluded that an increase in the electoral value attached to incumbency accounts for the rise in incumbents victory margins observed since the mid sixties second many scholars have attributed the decline in electoral turnover to the percentage increase in victory margins analyzing the electoral histories of 13 house cohorts 1952 76 this study reexamines these two hypotheses within theframework of a quasi experimental design the results presented here in contrast to those of previous studies cast doubt on the increased incumbency effect moreover little relationship is found between an increase in electoral safety as reflected by increased victory margins and a decline in electoral turnover

quality of higher education and the labor market in developing countries evidence from an education reform in senegal summary while many studies examine the effect of primary education quality on labor market outcomes in developing countries little is known about the effects at higher levels we exploit the quasi experiment provided by a large scale education reform launched in senegal in 2000 to investigate how quality improvements at the university level affect employment our difference in difference estimates suggest that young high skilled workers experienced a nine percentage point employment gain relative to older workers they are also more likely to have better jobs in the service industry or government suggesting a reduction in the mismatch between the quality of high skilled labor demanded and supplied

global equity fund performance an attribution approach using data on portfolio holdings we examine the performance of 143 global equity funds over 2002 2012 we find that the average global equity manager outperforms the benchmark by 1 2 1 4 a year before fees attribution analysis reveals that the prime source of excess return is selecting stocks that beat their local markets modest contributions come from country selection most notably in emerging markets whereas currency effects are mixed our findings support considering active management in global equity markets at least for institutional accounts that pay annual fees of less than 1

school quality and black white relative earnings a direct assessment the wage differential between black and white men fell from 40 percent in 1960 to 25 percent in 1980 it has been argued that this convergence reflects improvements in the relative quality of black schools to test this hypothesis we assembled data on pupil teacher ratios annual teacher pay and term length for black and white schools in the eighteen segregated states from 1915 to 1966 these data are linked to estimated returns to education for southern born men from different cohorts and states in 1960 1970 and 1980 improvements in the relative quality of black schools explain 20 percent of the narrowing of the black white earnings gap between 1960 and 1980

wage inequality and the distribution of education abstract this paper analyzes the relationship between education and wage inequality in metropolitan brazil the study is based on data from ten brazilian annual household surveys pnads which are available for the period 1976 1986 the universe of analysis is limited to occupied prime age males the inequality measure used was theil s second measure which is analytically convenient for a study of the determinants of inequality it is shown that there exist sharp differences in wage inequality across metropolitan areas to identify whether these large regional differences in inequality are directly associated with differences in educational levels or with differences in the steepness of the wage education profiles some simulations are conducted the results indicate that regional differences in the distribution of education are not able to explain much of the regional differences in wage inequality as a matter of fact the differences in wage inequality were shown to be intrinsically associated with differences in the steepness of the wage education profiles

asymmetric information and the electoral momentum of public opinion polls this paper demonstrates that the existence of public opinion polls amplifies the effects of shifts in the distribution of the public s preferences over the issue space on the election s results voters evaluate candidates by their positions on the issue space and by a valence or general ability dimension some individual s the informed have more precise information about the relative abilities of candidates than others the uninformed since public opinion polls reflect the information of the informed high approval for a candidate at the polls signals to the uninformed that he is more likely to be abler however high approval may also reflect changes in the distribution of the public on the issue space as a result the uninformed partly confuse the two effects and public opinion polls tend to reinforce the effects of shifts in the public s ideological preferences on election results a shift to the right that shows up as more support for the right wing candidate at the polls is partly interpreted as a higher efficiency of this candidate as a result he wins with a higher margin than the margin he would have won with in the absence of polls or under perfect information

the quality of schooling quantity alone is misleading although much research discusses the quantity of schooling as an effective impact on productivity and earnings most such research leaves out the idea of the quality of schooling which may cause biases in the estimated returns to schooling this paper consequently attempts to extend the standard mincerian approach to incorporate school quality as well as quantity it demonstrates how exclusion of quality in the standard procedure may cause biases in the estimated returns to years of schooling probably in the upward direction the paper explores the implications of this extension of the standard model for the case of young brazilian males it shows that the estimate of the private return to years of schooling using the preferred quality inclusive specification is only one half the estimate using the standard procedure indicating substantial upward bias in the standard estimates it further outlines a method for estimating a social return to quality and finds that it exceeds substantially the social return to quantity the paper then shows why this in turn suggests there may be an equity productivity trade off in schooling investments

incumbency effects in political campaigns in this paper we examine two effects of incumbency first an incumbent may have an advantage in creating a favorable image in the eyes of the voters second the incumbent may have to chose a position before the challenger this second aspect of incumbency is modelled as stackelberg leadership in the model two candidates run for election by choosing a position in an ideological spectrum voters care about candidates chosen positions as well as non policy attributes of candidates which we call charisma charismata are not known when candidates choose policy positions they are only revealed on election day so that winning is not usually a certain prospect candidates care about the probability of winning but they also dislike compromising their own ideals

evaluating the effects of optimally distributed public programs child health and family planning interventions this paper develops and tests an optimizing model determining the distribution of family planning and health subsidies across heterogeneous households and assesses the biases in cross area estimates of the health effects of such subsidies due to public resource optimization the model incorporates both health externalities and the endogenous response of the size of the recipient population to program subsidies longitudinal data describing child health and publicly provided family planning and health programs in 20 barrios in laguna province in the philippines are used to estimate the effects of such programs on child health and the relationships between the distribution of the programs and preprogram health levels the impact of a program on a particular childs health status is viewed as dependent upon the childs length of exposure to the program a basic feature of the model is the presence of health externalities which is shown to be sufficient along with plausible features of household behavior to make selective subsidization of fertility control either alone or in combination with health investment subsidies pareto efficient the model suggests that subsidization of fertility control is likely to be pareto efficient in the presence of health or human capital externalities when human capital and family size are gross substitutes and or when any per child human capital subsidies may substitute for direct subsidies to health investment and an equalizing distribution of the subsidies the highest family planning subsidies to the lowest health recipient households is efficient when both health and family planning subsidies are used fertility control subsidies minimize the subsidy burden for donors and are highest when total subsidy expenditures per child are greatest

candidate ability and platform choice abstract contrary to the median voter theorem candidates in real world elections do not always adopt moderate platforms using a modified hotelling model we show that low ability candidates may attempt to differentiate themselves from higher ability competitors by choosing less moderate platforms