natural resources and the marshallian effects of input reducing technological changes abstract input reducing technologies are often cited as potential solutions to the pressure for over harvesting natural resources the underlying implicit assumption that technological change reducing the hicksian input demand also reduces the marshallian input demand neglects the impacts of input reducing technological changes on marshallian supplies this reasearch shows that marshallian supply effects generally offset the impacts of technological change on hicksian input demands and if the offset is large enough marshallian input demands could even increase as an example i statistically determine the extent increased technological efficiency in lumber production reduced the demand for sawlogs in the pacific northwest the statistical results indicate that input reducing technological changes did not reduce the overall marshallian demand for sawlogs resource conservation policies which rely solely on the implementation of input reducing technologies may be ineffective or even counterproductive

ex ante consumer welfare evaluation in cost benefit analysis abstract public projects and policies are normally evaluated ex ante i e while consumers may still be uncertain about future prices income levels interest rates and preferences this paper extends the theory of ex ante consumer welfare evaluation by developing a 2 period model with multiple sources of uncertainty it provides insights into the influence of temporal uncertainty on the empirical measurement of ex ante willingness to pay

environmental quality competition and eco labeling abstract a three stage game of investment environmental quality provision and price competition is developed to study the impact of green technology investment eco labeling in a duopoly model of vertical product differentiation the firms incentives to invest in green technologies depend on their relative cost structure when firms are identical with respect to fixed costs both firms will always invest but if one firm is more efficient in investing then the other firm may or may not invest depending on the level of unit cost of investment quality competition will be tighter when the low quality firm is more efficient and looser when the high quality firm is more efficient in investing socially optimal investment for both firms is always positive but lower than in the duopoly solution in the absence of environmental externalities the quality dispersion chosen by profit maximizing firms may be too high or too low while environmental externalities increase the possibility low quality dispersion that is too low within the market solution finally and importantly ecolabeling can be used as a means of reducing excessive investment and increasing environmental quality that is too low

disclosure strategies for pollution control disclosure strategies which involve public and or private attempts to increase the availability of information on pollution form the basis for what some have called the third wave in pollution control policy after legal regulation the first wave and market based instruments the second wave while these strategies have become common in natural resource settings forest certification and organic farming for example they are less familiar in a pollution control context yet the number of applications in that context is now growing in both oecd and developing countries this survey will review what we know and don t know about the use of disclosure strategies to control pollution and conclude with the author s sense of where further research would be particularly helpful

let the good times roll the economic expectations of u s voters increasingly the concept of expectation is utilized to explain political choices with voters being depicted as prospective rather than retrospective in their orientations this paper tests competing theories of economic expectations forecasts with data from consumer surveys 1960 91 forecasts of inflation confirm the hypothesis of adaptive expectations but forecasts of general economic conditions do not nor do those forecasts conform to rational expectations instead voter forecasts of economic conditions are prone to a significant asymmetry while good economic times tend to foster optimism in an adaptive fashion bad times do not similarly feed pessimism instead they trigger a reverse forecast we explore this remarkable behavior in the light of psychological economics

firm incentives to promote technological change in pollution control reply abstract the process of technological change in pollution control is broken into three basic steps innovation diffusion and optimal agency response firm incentives to promote these steps are then examined under five regulatory regimes direct controls emission subsidies emission taxes free marketable permits and auctioned marketable permits on a relative basis emission taxes and auctioned permits provide the highest firm incentives to promote technological change at times free permits generate lower incentives direct controls which are common regulatory tools usually provide the lowest relative firm incentives to promote technological change

potential for private cost increasing technological innovation under a tax based economic incentive pollution control policy a criticism of the current pollution control policy is its lack of incentive for technological innovation the author argues that the implementation of a tax based economic incentive policy may have its pay off in terms of lower real control outlays but this makes it possible for total private compliance costs resource costs and tax or transfer costs to actually increase upon the introduction of some new less expensive control technologies he presents a numerical illustration of this phenomenon then derives the conditions under which such cost increases may occur cost increasing technological innovations could generally be avoided if the tax incentive is coupled with a net revenue lid for the pollution control authorities 4 references 3 tables

partisan preferences electoral prospects and economic expectations research shows that economic expectations reflect partisan preferences those who support the current government tend to think the future will go well at least by comparison with those who oppose the government but there always is uncertainty surrounding the political future especially in the period before elections this article considers whether the uncertainty matters specifically it examines whether people s economic expectations are conditional on their own estimates of who will win the analysis relies on data from five election study panels in the united states and the united kingdom both majoritarian systems where the effects of partisan winning and losing are most likely the results imply that people in these countries do anticipate election outcomes that is economic expectations prior to elections reflect both the political present and future this tells us not only that expectations in these systems are substantially rational but that politics plays a much bigger role in our economic

animal spirits the effect of economic expectations on economic output the public is characterized as able forecasters of future economic performance they engage in rational expectations empirical evidence exists to bolster the claim this article considers the possibility that the public does more than predict economic output they may engage in a self fulfilling prophecy where belief about the future economy translates into personal financial behaviour e g consumption and investment that actually drives economic performance after controlling for rational expectations with elite forecasts leading indicators and past economic performance it is shown that between 5 and one third of the variance in economic output can be explained by prospective economic sentiment this result has broad implications for electoral behaviour research

a new view of political accountability for economic performance most political support models imply that in evaluating economic performance voters use a standard that would provide poor predictions of the future and leave the economy vulnerable to manipulation by vote hungry politicians drawing on macroeconomic theory we develop a simple standard of evaluation which encompasses a concern not only for current economic outcomes but also for accurately assessed future consequences of current policies we find that political support for the president can be explained as well by models that assume that voters use this sophisticated standard as by models that assume voter naivete our analysis questions the wisdom of measures typically used to assess voter evaluation of economic performance in a variety of theoretical contexts the results also help to explain the absence of convincing evidence that governments exploit voter ignorance in manipulating the economy

information as regulation the effect of community right to know laws on toxic emissions abstract there is growing academic and policy level interest in the use of information as quasi regulatory mechanisms such as toxic release inventory tri and green labels mandatory disclosure requirements have been touted as market based incentives that may affect firm behavior we provide new evidence on the effectiveness of disclosure requirements by examining firm behavior in response to disclosures of tri emissions we find that firms with the largest stock price decline on the day this information became public subsequently reduced emissions more than their industry peers this is consistent with the view that financial markets may provide strong incentives for firms to change their environmental behavior

how should food safety certification be financed an analytical framework where consumers are imperfectly informed about the safety of products is used to investigate the welfare effects of a public certification system several certification fees under alternative structures of certification cost are analyzed by maintaining competition among numerous sellers voluntary certification financed by a per unit fee is efficient and sufficient to signal product safety however mandatory certification linked with a fixed user fee may be necessary if a seller wields monopoly power further certification by a single private agency results in a distorted fee copyright 2001 oxford university press

ghg registries participation and performance under the canadian voluntary climate challenge program between 1994 and 2004 the voluntary challenge and registry vcr played an important role in canadian climate change policy in this paper we examine the decision of firms to participate in the vcr the extent of their involvement and then ask if greenhouse gas emissions are related to past vcr participation as an information provision program we find evidence that firms may participate in vcr to signal their environmental responsibility to regulators and to some extent investors but not to consumers we also find that past involvement in the vcr is a strong and significant determinant of current involvement in the registry greenhouse gas emissions reported to the mandatory greenhouse gas reporting program in 2004 however do not appear to be different between vcr reporters and non reporters ghg emissions are observed to be significantly lower among firms that are smaller emit fewer toxic releases use more renewable energy sources are intermediate good producers and are located in quebec ontario and manitoba

economic expectations and voting behavior in united states house and senate elections past individual level studies of economic voting 1 have incorrectly operationalized the model they employ by using past oriented rather than future oriented questions and 2 have failed to examine the level of economic voting in united states senate elections using the 1978 national election study we show that economic voting exists in senate but not house elections presumably due to the differences in electoral context even when economic voting occurs however there is no guarantee that the public will influence the direction of macroeconomic policy

equilibrium number of firms and economic welfare in a spatial price discrimination model abstract we examine welfare implications of the equilibrium number of entering firms in a spatial price discrimination model in contrast to salop salop s 1979 monopolistic competition with outside goods bell journal of economics 10 141 156 the equilibrium number of firms can be either excessive or insufficient from the normative viewpoint

the political and economic origins of consumer confidence economic conditions the story usually goes influence consumer confidence which in turn influences both political evaluations and votes but we have little sense of the origins of consumer confidence itself it is generally assumed that monthly reports of the nation s level of consumer confidence respond to objective economic conditions we argue that politics is important for understanding consumer sentiment beyond what we know from economic conditions specifically we demonstrate a direct effect of political evaluations of the president s management of the economy the party of the president extraordinary political events and monetary policy as well as an indirect effect of media coverage of the economy on consumer sentiment after controlling for economic conditions when news coverage is positive citizens give favorable evaluations leading to more positive sentiment our findings suggest that understanding the political economy requires an emphasis on the causal effect of politics as well as economics

two moment decision models and expected utility maximization two moment decision models are consistent with expected utility maximization only if the choice set or the agent s preferences are restricted this paper identifies a restriction which is sufficient to ensure this consistency and confirms that it holds in many economic models the implications for economic analysis are then derived two different approaches to representing an agent s preferences over strategies yielding random payoffs are in wide use under the mean standard deviation ms approach the agent is assumed to rank the alternatives according to the value of some function defined over the first two moments of the random payoff while the expected utility eu criterion assumes that the expected value of some utility function defined over payoffs is used instead the fact that there are these two competing approaches has generated a considerable literature some authors are concerned with the advantages and disadvantages of each while others deal with conditions under which the potentially different approaches would yield the same results or at least approximately so space does not

ecolabeling consumers preferences and taxation abstract ecolabeling is a means of reducing the information gap between consumers and producers we study the implication of ecolabeling a supposedly green good for a consumer s allocation of income between a dirty and the supposedly green good in the model the role of the ecolabel is to help product differentiation to give reliable information and to reduce informational asymmetries we show that a conscious consumer someone with a stronger green attitude or quality concerns demands more ecolabeled goods price oriented consumers demand fewer ecolabeled goods a subsidy resp tax on the price of the ecolabeled resp dirty good leads to a larger consumption of the ecolabeled resp dirty good whereas it may increase or decrease the demand for the dirty resp ecolabeled good depending on whether the consumer views both goods as gross substitutes or complements we then use a cross individual dataset of 22 568 consumers and show that the demand for ecolabeled goods increases strongly with the consciousness of the consumer but decreases for price oriented consumers ecolabel oriented consumers feel more informed more conscious consumers prefer a subsidy on green goods and a tax on dirty goods price oriented consumers do not care about the green subsidy but would vote against a tax on the dirty goods

economic prescriptions for environmental problems how the patient followed the doctor s orders o ne of the dangers with ivory tower theorizing is that it is easy to lose sight of the actual set of problems which need to be solved and the range of potential solutions as one who frequently engages in this exercise i can attest to this fact in my view this loss of sight has become increasingly evident in the theoretical structure underlying environmental economics which often emphasizes elegance at the expense of realism in this paper i will argue that both normative and positive theorizing could greatly benefit from a careful examination of the results of recent innovative approaches to environmental management the particular set of policies examined here involves two tools which have received widespread support from the economics community marketable permits and emission charges pigou 1932 dales 1968 kneese and schultze 1975 both tools represent ways to induce businesses to search for lower cost methods of achieving environmental standards they stand in stark contrast to the predominant command and control approach in which a regulator specifies the technology a firm must use to comply with regulations under highly restrictive conditions it can be shown that both of the economic approaches share the desirable feature that any gains in environmental quality will be obtained at the lowest possible cost baumol and oates 1975 until the 1960s these tools only existed on blackboards and in academic journals as products of the fertile imaginations of academics however some countries have recently begun to explore using these tools as part of a broader strategy for managing environmental problems

an integrated environmental and fairtrade labelling scheme for product supply chains environmental initiatives such as carbon labelling have been suggested as a driver for achieving sustainable production systems of product supply chains the paper therefore presents a systematic process of developing an environmental labelling framework as an extension of carbon labelling using the fairtrade certification as a platform to facilitate the process using the general theoretical constructs of lifecycle assessments the framework presented provides insight into the formulation of multi regional supply chains which has been specifically characterised in this paper for the uk india rest of the world supply chain the environmental labelling process presented in this paper is based on two key principles quantitative principle in eco labelling and the principle of whole lifecycle perspective and it is used to inform two key stakeholder groups in the supply chain consumers and supply chain partners for consumers a consistent way of presenting the environmental label information is presented highlighting the supply chain impacts across the indicators of co2 eq emissions water consumption and land use in addition to regional contributions to these impacts from a global supply chain perspective additionally communicating the environmental impacts to supply chain partners provides a decision support to take actions to reduce the overall impacts by identifying processes within the global supply chain that needed prioritisation given that fairtrade partnership is based on participatory development and a strict guidelines and standardisation process it is envisaged that synergies can be derived by integrating environmental labelling with the fairtrade scheme to enhance the environmental sustainability of product supply chains

peasants or bankers the american electorate and the u s economy t he usual model of electoral reaction to economic conditions assumes the retrospective economic voter who bases expectations solely on recent economic performance or personal economic experience voter as peasant a second model assumes a sophisticated economic voter who incorporates new information about the future into personal economic expectations voter as banker using the components both retrospective and prospective of the index of consumer sentiment ics as intervening variables between economic conditions and approval we find that the prospective component fully accounts for the presidential approval time series with aggregate consumer expectations about long term business conditions in the approval equation neither the usual economic indicators not the other ics components matter moreover short term changes in consumer expectations respond more to current forecasts than to the current economy the qualitative result is a rational expectations outcome the electorate anticipates the economic future and rewards or punishes the president for economic events before they happen economics moves political behavior with hard times administrations lose support with good times they gain it we know this to be true but when we ask how by what processes the political translation of economic experience occurs the an

credence goods efficient labelling policies and regulatory enforcement we analyse the optimality of information revelation of hidden attributes of credence goods via alternative labelling procedures when consumers are heterogeneous in their willingness to pay for the hidden attribute producers can either self label their products or have them certified by a third party the government can impose self or third party labelling requirements on either the green or the brown producers our benchmark model develops a condition that links the optimal imposition of third party labelling to the relative market share of each type of the good under complete information we extend our analysis to incorporate asymmetric information and cheating by the producers when corrupt producers can affix spurious labels the government needs to supplement the labelling policy with costly monitoring activities we find that mandatory self labelling schemes generally dominate mandatory third party labelling unless the market share effect greatly exceeds the incentive to cheat effect

the economics of eco labeling standards costs and prices abstract the existing eco label landscape is fragmented because of the presence of numerous labels with different standards and is a pre competitive environment for firms to play in with many unanswered questions different standards eco labels are built around have different effects on credibility and legitimacy costs and benefits and ability to achieve sustainability goals of eco labeling focusing on eco label standards and using a hotelling type horizontal differentiation model we identify standards specific issues for and characterize primary barriers to eco labeling some of the major findings are as follows 1 more rigorous environmental standards enforced by higher integrity labels do not necessarily translate into higher selling prices 2 higher prices commanded by labeled products do not guarantee that a firm will derive higher profits from eco labeling 3 auditing fees paid per product unit being inspected for ensuring compliance with an eco label standard rather than participation fees paid up front is the primary de facto barrier to business involvement in eco labeling and 4 customers willingness to pay price premiums for eco labeled products is not a sufficient condition to generate a premium in the market

firm incentives to promote technological change in pollution control comment following on from an analysis by milliman and prince this article considers further the relative incentives for technical change provided by different pollution control instruments the comments involve the recognition that emission targets are typically chosen fairly arbitrarily because of regulators lack of knowledge of abatement cost schedules there is also a more detailed discussion of the practicability of auctioning emissions permits as these have been less thoroughly covered in the literature than the other instruments

new models for new labour the political economy of labour party support january 1992 april 1997 this article uses newly available british time series data to analyze dynamic interrelationships among labour vote intentions perceptions that the labour leader would make the best prime minister and labour party identification error correction models reveal that best prime minister perceptions and party identification have important short and long run influences on vote intentions tests of rival models indicate that personal economic expectations outperform other economic evaluations in the vote intention and party identification analyses national retrospective judgments perform well in analyses of best prime minister perceptions and emotional reactions to economic conditions significantly influence these perceptions as well as party identification

partisanship and economic behavior do partisan differences in economic forecasts predict real economic behavior survey data regularly show that assessments of current and expected future economic performance are more positive when a respondent s partisanship matches that of the president to determine if this is a survey artifact or something deeper we investigate whether partisanship is associated with behavioral differences in economic decisions we construct a new data set of county level quarterly taxable sales to examine the effect of partisanship on consumption consumption change following a presidential election is correlated with a county s partisan complexion a result consistent with partisans acting outside the domain of politics in accordance with the opinions they express in surveys these results support an expansive view of the role of partisanship in mass politics and help validate surveys as a method for studying political behavior

environmental auditing in management systems and public policy abstract new international standards for environmental auditing are now being actively promoted by public authorities and adopted by private firms one important feature of these standards is their emphasis on managerial systems and incentives that support a wiser use of environmental resources this paper studies such a system in which incentive compensation may be based in part on the results of an environmental audit it is found that optimal wages after an environmental audit is performed should have a greater range than wages paid when no audit has occurred it is also shown that the decision to conduct an environmental audit and the size of the expected wage in this case depend crucially on whether the agent s prudence or precautionary motives dominates his aversion to risk it is finally found that the insertion of environmental audits within current management systems would certainly induce a manager to care more about the environment although this may come at the expense of less concern for other activities we find plausible circumstances in which properly designed environmental audits overcome such a tradeoff and increase the manager s attention tobothenvironmental and traditional tasks some implications of the analysis for environmental public policy are also discussed briefly

private enforcement of federal environmental law while the role of nongovernmental organizations in environmental policy is growing rapidly our analytical understanding of the causes and consequences of this emerging role has not kept pace in the 1970s congress authorized private organizations to seek injunctions and in some cases penalties against firms violating the terms of their environmental operating permits the economic models in this paper show how the varying remedies limitations and reimbursement procedures can affect both the level and patterns of litigation activity as well as the compliance consequences a database containing information on 1 205 cases is used to infuse empirical content into the analysis

innovation in pollution control comparisons of the various institutional arrangements for controlling pollutant emissions from individual sources effluent fees effluent control subsidies marketable permits and direct command and control regulation have usually focused on their static efficiency properties and institutional feasibility e g dales 1968 zerbe 1970 baumol and oates 1975 kneese and schultze 1975 marin 1978 mills and white 1978 spence and weitzman 1978 russell 1979 a relatively neglected area has been the study of how each arrangement influences innovation in pollution control a few studies e g kneese and schultze 1975 marin 1978 mills and white 1978 russell 1979 have casually claimed that the control methods that rely on economic incentives provide superior incentives for innovation but there have been few systematic studies of the question this paper provides a simple model of pollution control innovation by a profitmaximizing polluter who is subject to the various control methods the consequences of the methods will be explored in three major contexts first we assume that the polluter and the innovation is a small enough part of the overall pollution problem so that none of the important marginal conditions are changed by the innovation second we assume that the polluter and the innovation are important enough so that marginal conditions are changed by the innovations but that the governmental authority determining pollution control incentives or levels fails to make the appropriate adjustments third we again assume that the innovation causes marginal conditions to change but in this case the governmental authority makes the appropriate adjustments we use the term ratcheting to describe this last phenomenon in all cases we assume that the innovating polluter correctly predicts the reactions of the governmental authority and bases his innovation decisions on that prediction a profit maximizing entrepreneur would normally be expected to adopt any innovation that promised gains present discounted value to him in excess of initial

informal regulation of pollution in a developing country evidence from india abstract recent policy discussions recognise the limitations of formal regulations to stem pollution in developing countries as a result there is a growing interest in the potential of informal regulations to achieve environmental goals in india many polluting industries fall under the rubric of the unorganised sector in such a context localised pollution may be influenced by discussions and reports on pollution in the vernacular press this study attempts to test the hypothesis that the press can act as an informal agent of pollution control this hypothesis is tested using monthly water pollution data from four hot spots in the state of gujarat india for the period 1996 to 2000 the results show that the press can function as an informal regulator if there is sustained interest in news about pollution however not all pollution agents are affected by pollution news press coverage appears to mainly influence industrial estates with a mix of small medium and large industries

protecting the environment when costs and benefits are privately known in this survey i analyze different approaches for protecting the environment when stakeholders are privately informed about the costs and benefits of pollution reduction the presence of asymmetric information calls for some important departures from the textbook prescriptions of marketable permits and emission taxes for controlling pollution for instance it may no longer be optimal to equate the social marginal benefits to the marginal cost of cleanup in determining appropriate abatement levels i conclude this review with some suggestions for future research in this area

the effects of price uncertainty on the factor choices of the competitive firm it is well known that if the price of a variable factor or of output is uncertain when the level of a quasi fixed factor must be chosen by a competitive firm the profit maximizing allocative choices differ from those made when all prices are fixed at their expected values the expected responses of input levels to price uncertainty depend on the characteristics of the production function but even their signs are difficult to determine empirically as they depend on among other parameters the third derivatives of the production function which are difficult to identify this paper shows that the response of the quasi fixed factor and the expected short run response of the variable factor are directly related to observable characteristics of the input demand and output supply functions but concentration on the responses of individual inputs provides only a partial view of the allocative effects of price uncertainty when the full effects on both factors are considered together both types of price uncertainty induce different biases in expected factor proportions relative to choices under certainty the directions of these biases cannot be inferred from results regarding the sign of the response of either factor viewed in isolation previous studies in this field include sandmo 11 batra and ullah 1 and holthausen 4 who showed that non neutral attitudes toward risk can affect the level of output and the amount of a quasi fixed input chosen by a firm faced with product price uncertainty stewart 12 showed a similar result for factor price uncertainty the above studies all assume explicitly or implicitly 6 4 that there is no reduction in price uncertainty between the time if any separating decisions on different inputs thus the usual distinction between short run and long run allocative decisions is ruled out turnovsky 13 showed that this assumption is crucial using a model which maintained an alternative assumption that firms could modify their planned output at additional cost after the selling price is known the effect of output price uncertainty on planned

do voluntary biotechnology labels matter to the consumer evidence from the fluid milk market this article examines the effects on the demand of voluntary labeling for the use of genetically modified growth hormone for retail fluid milk using supermarket scanner data retail fluid milk tracks one of the first biotechnology products approved is fairly standardized and ubiquitous and allows for cross sectional differentiation between labeled and unlabeled products and between conventional and organic brands the results indicate that voluntary labeling increases the demand for recombinant bovine growth hormone free milk in addition the estimated effects of labeling appear to have increased over time innovations through biotechnology enable agricultural producers to reduce production costs and or enhance product quality for many livestock and crop commodities at the same time however these innovations may affect the demand for the products that utilize those commodities many individuals for example are concerned about potential risks to human health although by no means all consumers have such concerns burton metcalfe and smith heiman just and zilberman the use of the recombinant bovine growth hormone rbgh in milk production has been a particular concern for some consumers as approximately one third of the united states dairy herd about 3 million dairy cows currently receive rbgh supplements monsanto product labeling particularly with respect to the provision of health and environmental information is increasingly being used to provide information about product characteristics such as biotechnology content that

green markets eco certification and equilibrium fraud abstract consumers voluntarily pay significant price premiums to acquire unobservable environmental attributes in green markets this paper considers the performance of eco certification policy under circumstances where consumers cannot discern environmental attributes in goods but are able to form rational expectations regarding the extent of illicit activities in the green market the main results are i fraud is less prevalent in green markets when entry barriers limit the number of firms ii conventional environmental policies on polluting techniques increase the incidence of fraud and can even preclude the use of non polluting techniques which would otherwise emerge in green markets iii voluntary eco certification policies can decrease fraud increase output and raise profits per firm and iv in cases where the socially optimal resource allocation can be supported the optimal policy involves negative unit certification fees positive fixed certification fees and is revenue generating for the certifying agent

uncertainty over future environmental taxes impact on current investment in resource conservation besides static efficiency properties environmental policies should be evaluated in terms of their longer run impacts on investment and technological change to reduce pollution and degradation of natural resources using a stochastic dynamic programming approach this paper analyzes how uncertainty about a future environmental tax on a polluting input alters investment in resource conservation and how such investment affects future demand for the polluting input the impact on investment depends crucially on price elasticities of demand and on the manner in which investment shifts and rotates the demand schedule for the polluting input in the future the expectation of a higher tax does not necessarily create stronger incentives for investment in resource conservation more uncertainty about future policies does encourage investment if it makes a firm more responsive to future price changes and discourages investment if it makes a firm less responsive to price changes

the personal and political underpinnings of economic forecasts recently a great deal of attention has been focused on the impact of prospective evaluations of the economy on vote choice yet little attention has been focused on the actual process whereby such evaluations are formed this paper employs panel data to test a model of the formation of prospective evaluations of inflation and unemployment our findings indicate that retrospective assessments of economic conditions do not greatly influence economic forecasts instead economic forecasts are shaped by personal economic circumstances and partisan assessments of governmental performance the political implications of such findings are discussed

economic voting and the symbolic politics argument a reinterpretation and synthesis economic voting is generally regarded as a straightforward political demand for the amelioration of economic grievances this assumption about motives underlies the implicit theories of politicians and the imputations of interests to voters in aggregate time series models several recent articles have argued that voting is not self interested but a manifestation of symbolic preferences at the level of the collectivity this article places the dispute between personal and collective decision referents into the broader perspective of a multi stage model of information processing and decision making personal and collective decision referents are shown to define the poles of a continuum and several hypotheses are derived to predict the relative weights assigned to each in the voter s calculus the model is used in analyses of both the public s evaluations of incumbent economic management and economic voting in different electoral arenas by varying issue publics designed to maximize comparability with aggregate studies this research includes both objective and subjective measures of economic conditions and indexes changes in personal conditions over time from panel data

how can economic interests influence support for free trade recent research on the sources of individual attitudes toward trade policy comes to very different conclusions about the role of economic self interest the skeptical view suggests that long standing symbolic predispositions and sociotropic perceptions shape trade policy opinions more than one s own material well being we believe this conclusion is premature for two reasons first the practice of using one attitude to predict another raises questions about direction of causation that cannot be answered with the data at hand this problem is most obvious when questions about the expected impact of trade are used to predict opinions about trade policy second the understanding of self interest employed in most studies of trade policy attitudes is unrealistically narrow in reality the close relationship between individual economic interests and the interests of the groups in which individuals are embedded creates indirect pathways through which one s position in the economy can shape individual trade policy preferences we use the data employed by mansfield and mutz to support our argument that a more complete account of trade attitude formation is needed and that in such an account economic interests may yet play an important role 1