can falling supply explain the rising return to college for younger men a cohort based analysis although the college high school wage gap for younger u s men has doubled over the past 30 years the gap for older men has remained nearly constant in the united kingdom and canada the college high school wage gap also increased for younger relative to older men using a model with imperfect substitution between similarly educated workers in different age groups we argue that these shifts reflect changes in the relative supply of highly educated workers across age groups the driving force behind these changes is the slowdown in the rate of growth of educational attainment that began with cohorts born in the early 1950s in all three countries

two part models are robust to endogenous selection abstract this note shows that the two part model tpm can be used to estimate conditional and population averaged effects of exogenous covariates when there is endogenous selection between the two parts much like estimating an average treatment effect on the treated the tpm estimator only needs estimates of parameters that are recoverable from the observable data to estimate covariate effects the tpm estimator is consistent for the counter factual of interest when selection between the parts is endogenous because the unobservable parameter is multiplied by zero

the demand for spatially complementary national parks using a panel dataset on annual visits to each u s national park we empirically analyze the demand for these parks using a spatial lag model which accounts for the complementary nature of the parks our results suggest that increases in fuel costs temperature increases of greater than 3 f and restrictions on foreign tourism all lower visitation to u s national parks causing associated decreases in money spent by tourists jobs created and income generated these results can also be used to analyze the possible implications of proposed public policies such as international visa requirements gas taxes and carbon taxing trading

the effect of cohort size on earnings growth a reexamination of the evidence this study reexamines the effect of cohort size on earnings growth finis welch finds that individuals in larger cohorts experience depressed earnings conditions on entry into the labor market but that their earnings grow at faster rates than in smaller cohorts thus a large portion of the cohort size effect on earnings dissipates after a few years however using data almost identical to those of welch but estimating less restrictive models it is found here that cohort size not only depresses earnings at entry but also seems to slow down early career earnings growth the evidence suggests that earnings ini larger cohorts do not approach normal levels after at brief period in the labor force rather the negative cohort size effect on earnings appears to worsen with experience

fuel taxes an important instrument for climate policy abstract this article shows that fuel taxes serve a very important role for the environment and that we risk a backlash of increased emissions if they are abolished fuel taxes have restrained growth in fuel demand and associated carbon emissions although fuel demand is large and growing our analysis shows that it would have been much higher in the absence of domestic fuel taxes people often assert that fuel demand is inelastic but there is strong research evidence showing the opposite the price elasticity is in fact quite high but only in the long run in the short run it may be quite inelastic which has important implications for policy makers had europe not followed a policy of high fuel taxation but had low us taxes then fuel demand would have been twice as large hypothetical transport demand in the whole oecd area is calculated for various tax scenarios and the results show that fuel taxes are the single most powerful climate policy instrument implemented to date yet this fact is not usually given due attention in the debate

evaluating echelon stock r nq policies in serial production inventory systems with stochastic demand this paper studies echelon stock r nq policies in serial production inventory systems with stochastic demand we provide a recursive procedure to compute the steady state echelon inventory levels of the systems which can be used to evaluate the long run average holding and backorder costs as well as other performance measures the procedure is based upon an observation of a relationship between the inventory status of adjacent stages in a serial system we also device exact formulas for replenishment frequencies and setup costs our results apply to both continuous review systems with compound poisson demand and periodic review systems with independent identically distributed demands a preliminary numerical study was conducted to explore the cost effectiveness of echelon stock r nq policies for two stage systems with simple poisson demand we compared among the minimum costs of echelon stock r nq policies a lower bound on the minimum achievable costs and the minimum costs of installation stock r nq policies finally we present a modification of an existing approximate evaluation procedure

customer order information leadtimes and inventories we have an inventory to manage the scenario is standard in all respects save one instead of arriving unannounced customers provide advance warning of their demands how should we use this information and what is its effect on system performance the answers turn out to be strikingly simple there are very simple policies which perform effectively in some cases optimally also such demand leadtimes improve performance in precisely the same way that replenishment leadtimes degrade it

what drives the reversal of the gender education gap evidence from germany we study the mechanisms that are associated with the gender education gap and its reversal in germany we focus on three outcomes graduation from upper secondary school any tertiary education and tertiary degree neither individual and family background nor labour market characteristics appear to be strongly associated with the gender education gap there is some evidence that the gender gap in upper secondary education reflects the rising share of single parent households which impacts boys attainment more than girls the gender education gap in tertiary education is correlated with the development of class sizes and social norms

the effects of transport regulation on the oil market does market power matter instruments used to regulate the consumption of oil in the transport sector include fuel taxes biofuel requirements and fuel efficiency standards however the effects that these have on oil consumption and price vary if market power is present in the oil market the directions of change in consumption and price might contrast with those in a competitive market as a result the market structure affects not only the effectiveness of the policy instruments used to reduce oil consumption but also the terms of trade and carbon leakage in particular reduced oil consumption as a result of increased fuel efficiency standards will unambiguously increase the price of oil under a monopoly

short run fuel price responses at the pump and on the road abstract we provide evidence that motorists respond to short run fluctuations in fuel prices at the gas pump and not on the road employing variants of censored panel regression to control for censoring of the dependent variable we find that the fuel price has a negative impact on the quantity of fuel purchased but no consistently significant impact on the subsequent distance driven until the next refill over the short run drivers thus appear to cope with high fuel prices by adjusting fuel purchases with each visit to the filling station but without altering their daily mileage

much ado about two reconsidering retransformation and the two part model in health econometrics in health economics applications involving outcomes y and covariates x it is often the case that the central inferential problems of interest involve e y x and its associated partial effects or elasticities many such outcomes have two fundamental statistical properties y 0 and the outcome y 0 is observed with sufficient frequency that the zeros cannot be ignored econometrically this paper 1 describes circumstances where the standard two part model with homoskedastic retransformation will fail to provide consistent inferences about important policy parameters and 2 demonstrates some alternative approaches that are likely to prove helpful in applications

declining returns to education in norway comparing estimates across cohorts sectors and over time we examine the role of the norwegian education system in explaining the moderate and stable earnings dispersion in norway estimating earnings equations for 1980 and 1990 we find that returns to education have been remarkably stable in norway also when we compare returns to education across different sectors of the economy our analysis controls for self selection into education by using an instrumental variable technique we estimate separate education earnings profiles for different cohorts to identify the effect on wage premiums of the large changes that have taken place in the norwegian education system the substantially higher level of educational attainment for more recent cohorts does not cet par seem to have a negative effect on educational wage premiums for these younger cohorts jel classification j24 j31 i

the rebound effect microeconomic definitions limitations and extensions abstract the rebound effect results in part from an increased consumption of energy services following an improvement in the technical efficiency of delivering those services this increased consumption offsets the energy savings that may otherwise be achieved if the rebound effect is sufficiently large it may undermine the rationale for policy measures to encourage energy efficiency the nature and magnitude of the rebound effect is the focus of long running dispute with energy economics this paper brings together previous theoretical work to provide a rigorous definition of the rebound effect to clarify key conceptual issues and to highlight the potential consequences of various assumptions for empirical estimates of the effect the focus is on the direct rebound effect for a single energy service indirect and economy wide rebound effects are not discussed beginning with khazzoom s original definition of the rebound effect we expose the limitations of three simplifying assumptions on which this definition is based first we argue that capital costs form an important part of the total cost of providing energy services and that empirical studies that estimate rebound effects from variations in energy prices are prone to bias second we argue that energy efficiency should be treated as an endogenous variable and that empirical estimates of the rebound effect may need to apply a simultaneous equation model to capture the joint determination of key variables third we explore the implications of the opportunity costs of time in the production of energy services and highlight the consequences for energy use of improved time efficiency the influence of time costs on the rebound effect and the existence of a parallel rebound effect with respect to time each of these considerations serves to highlight the difficulties in obtaining reliable estimates of the rebound effect and the different factors that need to be controlled for we discuss the implications of these findings for econometric studies and argue that several existing studies may overestimate the magnitude of the effect

optimal and near optimal inventory control policies for a make to order inventory production system abstract this paper examines several inventory replenishment policies for a make to order inventory production system that consists of a production workshop and a warehouse demands arrive to the production workshop according to a poisson process and are processed in an fcfs manner the production workshop requires that the warehouse provides as needed raw materials for use in the production process the warehouse inventory is replenished according to an inventory replenishment policy the optimal replenishment policy which minimizes the average total cost per product is derived using a markov decision process approach the structure of the optimal replenishment policy is explored simple order up to myopic and heuristic replenishment policies are introduced the myopic and heuristic replenishment policies are easy to compute and yet perform almost as well as the optimal replenishment policy

educational attainment and cohort size we argue that the postwar baby boom caused substantial fluctuations in both the economic rewards to education and educational attainment over the last 3 decades if substitutability between young and old workers diminishes with education the present value of lifetime earnings for a boom cohort is depressed more for highly educated workers reducing incentives for educational attainment the opposite is true for pre and postboom cohorts the diminishing substitutability hypothesis explains the declines in both the returns to college and college completion rates in the 1970s and predicts a substantial increase in educational attainment for postboomers

the econometrics of piecewise linear budget constraints a survey and exposition of the maximum likelihood method in this article maximum likelihood techniques for estimating consumer demand functions when budget constraints are piecewise linear are exposited and surveyed consumer demand functions are formally derived under such constraints and it is shown that the functions are themselves nonlinear as a result the econometric problems in estimating such functions are exposited and the importance of the stochastic specification is stressed in particular the specification of both unobserved heterogeneity of preferences and measurement error econometric issues in estimation and testing are discussed and the results of the studies that have been conducted to date are surveyed

technological progress and sustainable development what about the rebound effect abstract sustainability concepts that rest on the idea of resource or energy efficiency improvements due to technological progress tend to overestimate the potential saving effects because they frequently ignore the behavioral responses evoked by technological improvements efficiency improvements also affect the demand for resources and energy and often an increase in efficiency by 1 will cause a reduction in resource use that is far below 1 or sometimes it can even cause an increase in resource use this phenomenon is commonly labeled the rebound effect which is well known among energy economists but never attracted much attention in ecological economics the paper starts with the traditional neoclassical analysis of the rebound effect in a partial equilibrium framework that concentrates on the demand of one particular energy service such as mobility or room temperature it also provides an overview of some of the main empirical studies based on this model that mostly confirm the existence of the rebound effect but are controversial about its actual importance however we have to go beyond the neoclassical single service model in order to take care of the variety of possible feedback affecting energy use the paper presents two important expansions of the single service model in order to show the potential relevance of the rebound effect to ecological economics first it is shown that in a multi services model it proves to be difficult to make general statements about the relevance of the rebound effect in this case the overall effect of an increase in energy efficiency on total energy use depends on the on the assumptions about the substitutability between the services considered and the direction of the income effect second the paper also tries to take care of the fact that changes in resource use or energy use are frequently just side effects of other forms of technological progress especially technological change of a time saving nature can have a large influence on energy use as many time saving devices for example faster modes of transport require an increase in energy consumption that is frequently reinforced by a rebound effect with respect to time this effect will be especially strong when wages are high and at the same time energy prices are low as is currently the case in most industrialized countries consequently the paper also provides a strong argument for the introduction of energy taxes

introduction to the special issue things we do and don t understand about the household and the environment environmental economics has been slow to incorporate the full and complex nature of the household into its analytical structures and to reflect empirical evidence on household decision making this paper provides an overview of some of the main unanswered questions

the simple economics of motor vehicle pollution a case for fuel tax the volume of pollution produced by an automobile is determined by driver s behavior along three margins i vehicle selection ii kilometers driven and iii on road fuel economy the first two margins have been studied extensively however the third has received scant attention how significant is this intensive margin what would be the optimal policies when it is taken into account the paper develops and analyzes a simple model of the technical and behavioral mechanisms that determine the volume emissions produced by a car the results show that an optimal fuel tax would provide drivers with appropriate incentives along all three margins and that only public information is needed for a fuel tax to be set optimally in contrast an optimal distance tax would require private information lastly relative to the optimal fuel tax a simple uniform fuel tax is shown to be progressive thus being already deployed worldwide a uniform fuel tax is an attractive second best policy these findings should be accounted for when designing new mechanisms to alleviate motor vehicle pollution

cohort effects and the returns to education in west germany using a mincer type wage function we estimate cohort effects in the returns to education for west german workers born between 1925 and 1974 the main problem to be tackled in the specification is to separately identify cohort experience and possibly also age effects in the returns for women we find a large and robust decline in schooling premia in the private sector the returns to a further year of post compulsory education fell from twelve per cent for the 1945 49 cohort to about seven per cent for those born in the early 1970s cohort effects in men s returns to education are less obvious but we do find evidence that they too have declined we conclude by identifying possible reasons for the decline

optimal control of a two station tandem production inventory system a manufacturing facility consisting of two stations in tandem operates in a make to stock mode after production items are placed in a finished goods inventory that services an exogenous poisson demand demand that cannot be met from inventory is backordered each station is modeled as a queue with controllable production rate and exponential service times the problem is to control these rates to minimize inventory holding and backordering costs optimal controls are computed using dynamic programming and compared with the kanban basestock and buffer control mechanisms that have been proposed for manufacturing facilities conditions are found under which certain simple controls are optimal using stochastic coupling arguments insights are gained into when to hold work in process and finished goods inventory comparable to previous studies of production lines in make to order and unlimited demand environments

public and private sector wages of male workers in germany we analyze several statistical assumptions used in empirical models on public private sector wage structures based on data for germany which contain a large range of background variables usually not available in other studies we investigate the sensitivity of results to various specification and identification assumptions the standard switching regression model is extended to allow for endogeneity of education level experience and hours worked these extensions lead to considerably different parameter estimates we compare conditional and unconditional wage differentials between the public and the private sector for the various specifications these differentials are sensitive to identification assumptions but robust across specifications which do and do not allow for endogeneity of education experience and hours worked

do high oil prices matter evidence on the mobility behavior of german households focusing on travel survey data from germany this paper investigates the determinants of automobile travel with the specific aim of quantifying the effects of fuel prices and fuel economy the analysis is predicated on the notion that car mileage is a two stage decision process comprising the discrete choice of whether to own a car and the continuous choice of distance traveled to capture this process we employ censored regression models consisting of probit and ols estimators which allows us to gauge the extent to which sample selectivity may bias the results our elasticity estimates indicate a significant positive association between increased fuel economy and increased driving and a significantly negative fuel price elasticity which ranges between 35 and 41 taken together these results suggest that fuel taxes are likely to be a more effective policy measure in reducing emissions than fuel efficiency standards

let them eat cake a note on comparing alternative models of the demand for medical care this article comments on the rand econometric approach to estimating and testing models of the demand for medical care as typified in duan et al 1983 the rand methodology is contrasted with more mainstream econometric approaches to similar empirical problems as developed in the sample selection literature it is shown that despite rand s claim their approach requires some fairly unusual assumptions on the model joint error distribution and functional form alternatively their model likelihood functions may be interpreted as being nested in more general sample selection model likelihood functions with easily testable parameter restrictions

a comparison of alternative models for the demand for medical care we have tested alternative models of the demand for medical care using experimental data the estimated response of demand to insurance plan is sensitive to the model used we therefore use a split sample analysis and find that a model that more closely approximates distributional assumptions and uses a nonparametric retransformation factor performs better in terms of mean squared forecast error simpler models are inferior either because they are not robust to outliers e g anova anocova or because they are inconsistent when strong distributional assumptions are violated e g a two parameter box cox transformation

distributional effects of alternative vehicle pollution control policies abstract previous work shows that policies that subsidize new vehicles and tax size miles or gasoline efficiently reduce pollution less is known about their distributional effects this paper examines distributional effects by estimating the joint demand for vehicles and miles using the consumer expenditure survey greater price responsiveness among low income households enhances progressivity of gas or miles taxes across lower incomes and mitigates regressivity across upper incomes taxes on engine size or subsidies to new vehicles are significantly more regressive than gas or miles taxes