intertemporal pricing and price discrimination a semiparametric hedonic analysis of the personal computer market we apply a smooth coefficient semiparametric model to a unique high frequency data set to examine the intertemporal pricing of personal computers furthermore we test whether firms charge differential component prices for their top performance personal computers and whether premium firms charge both a premium for all their computers and a premium for their top performance ones we find nonlinear effects in the pricing of personal computer components we also find that firms in general do not charge differential prices for the components of their top performance computers in addition high quality firms charge higher premia only for their most advanced products copyright 2006 john wiley sons ltd

a comparative study of modelling the demand for food in the united states and the netherlands this paper provides time series and cross sectional budget survey analyses of the demand for food in the united states and the netherlands according to the tasks set by jan magnus and mary morgan mm various econometric methods including weighted least squares wls cointegration error correction the almost ideal demand system aids and time varying parameter tvp techniques are used and the estimated demand elasticities compared across country and over time 1997 john wiley sons ltd

the effect of female education on fertility and infant health evidence from school entry policies using exact date of birth this paper uses age at school entry policies to identify the effect of female education on fertility and infant health we focus on sharp contrasts in schooling fertility and infant health between women born just before and after the school entry date school entry policies affect female education and the quality of a woman s mate and have generally small but possibly heterogeneous effects on fertility and infant health we argue that school entry policies manipulate primarily the education of young women at risk of dropping out of school

returns to schooling for urban and migrant workers in china a detailed investigation abstractwe use a new data set the 2009 rural urban migration in china rumic to estimate returns to schooling in china using instrumental variable iv estimation after identifying a set of instruments we conduct comprehensive validity and relevance testing of different combinations of instruments as well as robustness analysis of our estimates for rural to urban migrants and urban residents in china we find that our point estimates are in the 6 9 range for urban workers compared to 7 8 for migrant workers returns for men at 8 9 are slightly higher than for women at 6 7 thus private returns to education in urban china in 2009 were not as high as other transition and developing countries but substantial and have increased over time comparing ols and iv estimates we also find that the attenuation bias due to measurement error is generally large and more important in the migrant sample compared to the urban sample

empirical implications of alternative models of firm dynamics abstract this paper considers two models of firm behavior that allow for heterogeneity among firms idiosyncratic or firm specific sources of uncertainty and discrete outcomes exit and or entry both the characteristics of firm level panel data sets and the nature of the questions we characteristically ask of them imply that models with these features are likely to underlie most detailed empirical work on microdata sets the models we consider are a bayesian learning model due to jovanovic 20 and a model of research and exploration due to ericson and pakes 11 the paper provides a simple set of empirical procedures to help determine which if either of these two models might be appropriate for alternative data sets we conclude by checking for the implications of the two models on an eight year panel of wisconsin firms the results indicate that one model is consistent with the data on manufacturing firms while the other is consistent with the data on retail trade journal of economic literature classification numbers c52 l60 l80

nonparametric estimation of the effects of advertising the case of lydia pinkham this article reexamines some of the issues raised subsequent to the classical research by palda 1964 we use a nonparametric estimation method that allows us to incorporate both seasonal and smoothness constraints to estimate the parameters of a demand function using monthly data on lydia pinkham s vegetable compound the analysis indicates that the parameters of the estimated demand equation are not constant throughout the long period of the data which covers the whole life cycle of the product

seasonality in dynamic regression models this paper examines the implications of treating seasonality as an unobserved component which changes slowly over time this approach simplifies the specification of dynamic relationships by separating non seasonal from seasonal factors we illustrate this approach using the consumption model of davidson et al 1978 and estimate a stable error correction model between consumption income and prices over the period 1958 92 more generally we argue that autoregressive models are unlikely to successfully model slowly changing seasonality and may confound seasonal effects with the dynamic responses of prime interest our approach can be used in a wide range of cases and we show that there is little loss in efficiency even if seasonality is deterministic

on the performance of differently regulated financial institutions some empirical evidence abstract the paper raises two questions about the industrial economics of banking first why are financial market configurations so different across nations we discuss the theoretical arguments by following the sequence regulation structure performance section 2 second do the differences in regulation and structure matter section 3 provides empirical evidence pertaining to that question throughout the paper we refer to two polar cases of financial systems market m and bank b based systems as for banks we distinguish between specialised and universal banks universal banking is a particular institutional representation of b systems a first empirical test relating macroeconomic growth to financial variables suggests that these variables matter we then test with a set of 88 banks the effects of regulatory and structural variables on the level and variability of bank performance we conclude that universal banks achieve a better risk return trade off due to superior monitoring and information collection capacity

banking reforms in eastern european countries this paper investigates the present state of reforms in the banking sector of the central european countries with occasional comparisons with other eastern european countries progress is variable across the countries of the region but in all countries banking reforms generally lag reforms in other areas and much remains to be done regulation generally takes the european union s regulatory framework as a model progress on paper is much more advanced than implementation and as a result all banking systems in the region are fragile and prey to instability the paper also looks at basic performance indicators and arrives at the conclusion that even basic intermediation has remained rudimentary and quite inefficient this analysis suggests the urgency of the following measures i the further opening up of the sector to foreign penetration ii the withdrawal of the state from bank ownership hi the speeding up of implementation of existing regulations and iv the completion of the regulatory framework adding specific measures dealing with local problems that are not reflected in the imported regulatory map

the effect of sibling sex composition on women s education and earnings this paper documents the impact of siblings on the education of men and women born in the united states between 1920 and 1965 we examine the effect of the number and sex composition of a boy or girl s siblings on that child s educational attainment we find that throughout the century women s educational choices have been systematically affected by the sex composition of her siblings and that men s choices have not women raised only with brothers have received on average significantly more education than women raised with any sisters controlling for household size since sibling sex composition affects women s educational attainment and plausibly may be unrelated to other determinants of earnings it may provide a useful instrument for education in earnings functions for women our results suggest that standard estimates significantly underestimate the return to schooling for women

credit markets credibility and economic transformation this paper focuses on the special role that capital markets play in the transformation of centrally planned economies into well functioning market economies we demonstrate that underdeveloped credit markets inhibit the effectiveness of price reform monetary and credit policies and trade liberalization we explore various ways to overcome the difficulties associated with the underdeveloped credit markets in this regard we examine the implications of cleaning the balance sheets of enterprises and banks from nonperforming loans as well as ways to enhance credibility the paper concludes with a brief discussion of sequencing of economic reform measures

semiparametric analysis to estimate the deal effect curve abstract the marketing literature suggests several phenomena that may contribute to the nature of the relationship between sales and price discounts these phenomena can produce complex nonlinearities and interactions in the deal effect curve that are best captured with a flexible approach because a fully nonparametric regression model suffers from the curse of dimensionality the authors propose a semiparametric regression model store level sales over time are modeled as a nonparametric function of own and cross item price discounts and a parametric function of other predictors the authors compare the predictive validity of the semiparametric model with that of two parametric benchmark models and obtain superior performance the results for three product categories indicate threshold and saturation effects for both ownand cross item temporary price cuts the authors also find that the nature of the own item curve depends on other items price discounts comparisons with restricted model specification

cointegration analysis of the advertising sales relationship the examination of stochastic properties of the annual advertising and sales data from the lydia pinkham company reveals that the series are cointegrated and therefore possess a long run equilibrium condition according to the estimates of the error correction model of the series in the short run advertising is found to be more responsive than sales in adjustments to eliminate departures from the long run equilibrium condition the author s analysis in general implies that the observed business firms decision rules fixing advertising spending as a percentage of sales revenue may hold as a long run equilibrium condition copyright 1991 by blackwell publishing ltd

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

central bank independence and macroeconomic performance some comparative evidence this note uses information on a sample of sixteen oecd countries to assess the relationship between central bank independence and macroeconomic performance as previous work suggests politically controlled central banks are more likely to pursue policies that lead to high and variable inflation however the authors find little evidence that political control of central bank policy has any impact on measures of the level or variability of growth unemployment or the ex ante real interest rate copyright 1993 by ohio state university press

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

financial structure and reforms in central and eastern europe in the 1980s abstract the paper analyzes the evolution of the financial structure of the countries of central and eastern europe during the 1980s in these countries the financial system is assigned a limited and mostly passive function this needs to be seen in the context of the allocative system of centrally planned economies where the transfer of financial resources between sectors is largely performed directly by the state through the price system taxes and subsidies the analysis focuses specifically on hungary poland and czechoslovakia the development of their financial structure is assessed through a number of quantitative indicators we find that the partial economic and financial reforms introduced in hungary and poland before 1989 did not substantially modify the role and performance of the financial system whose size in relation to the real economy remained modest at the same time however the reforms exacerbated some of the distortions of the planned system and generated larger macroeconomic imbalances the effects of which tend to cloud the interpretation of financial indicators at the end of 1980 the banking systems of hungary and poland although formally decentralized continued to allocate credit mostly according to automatic criteria and had virtually no experience in assessing and monitoring borrowers and investment projects in this respect they differed little from that of czechoslovakia which remained based on the classic model of a single state bank

minimum wages and teenagers enrollment employment outcomes a multinominal logit model this paper tests the hypothesis that the effect of minimum wage legislation on teenagers education decisions is asymmetrical across family income classes with the legislation inducing children from low income families to reduce their levels of schooling and children from higher income families to increase their educational attainment we use data from the national longitudinal surveys nls and exploit the fact that although the minimum wage is fixed at a point in time its value relative to adult wages varies across areas multinomial logit models of teenagers enrollment employment outcomes are estimated the hypothesis appears to be confirmed for white teens however the evidence for nonwhites is more ambiguous

productivity analysis of u s manufacturing using a stochastic coefficients production function in this article we show that the production aggregation and estimation theories that lead to a stochastic coefficients production function are more general than those leading to a fixed coefficients production function estimates of productivity changes implied by these two types of cobb douglas production functions are compared for several u s manufacturing sectors for the period 1955 1982 all of the estimates of the stochastic coefficients cobb douglas function have the right algebraic sign for all industries considered whereas some of the estimates of its fixed coefficients counterpart have the wrong sign

using unemployment rates as instruments to estimate returns to schooling i use state unemployment rates during a person s teenage years to estimate the returns to schooling a higher unemployment rate reduces the opportunity costs of attending school using the same 1980 census data set that angrist and krueger 1991 use i also estimate returns to schooling with a modified version of their quarter of birth instrument the estimates from the two stage least squares 2sls model using the unemployment rate and the model using the quarter of birth instruments are almost identical in addition these 2sls estimates are larger than the ordinary least squares ols estimates supporting this counterintuitive yet prevalent result in the literature

something to talk about social spillovers in movie consumption we exploit the randomness of weather and the relationship between weather and moviegoing to quantify social spillovers in movie consumption instrumenting for early viewership with plausibly exogenous weather shocks captured in lasso chosen instruments we find that shocks to opening weekend viewership are doubled over the following five weekends our estimated momentum arises almost exclusively at the local level and we find no evidence that it varies with either ex post movie quality or the precision of ex ante information about movie quality suggesting that the observed momentum is driven in part by a preference for shared experience and not only by social learning

the returns to education microeconomics in this paper we focus on education as a private decision to invest in human capital and the estimation of the rate of return to that private investment while the literature is replete with studies that estimate the rate of return using regression methods where the estimated return is obtained as the coefficient on a years of education variable in a log wage equation that contains controls for work experience and other individual characteristics the issue is surrounded with difficulties we outline the theoretical arguments underpinning the empirical developments and show that the evidence on private returns to the individual is compelling despite some of these issues surrounding the estimation of the return to schooling our evidence based on estimates from a variety of datasets and specifications is that there is an unambiguously positive effect on the earnings of an individual from participation in education moreover the size of the effect seems large relative to the returns on other investments

returns to women s education using optimal iv selection this paper investigates returns to women s education by applying an optimal iv selection approach post lasso iv estimation which improves the first stage predictive relationship between an endoge

positive assortative mating and spouses as complementary factors of production a theory of labour augmentation this article develops a model of intellectual labour augmentation to explain both the marriage wage premium and educational assortative mating we suggest that husbands and wives are complementary factors of production where a spouse s education and skills augment their partner s productivity and earnings potential we test this proposition using data from the 2000 us census of population and the 2003 current population survey our results indicate that for working couples the marriage premium for husbands and wives is directly related to the education level of their spouses suggesting that positive assortative mating may be attributable to the labour market effects of intellectual augmentation of married households

temporal aggregation the data interval bias and empirical estimation of bimonthly relations from annual data in an important study reviewing the literature on econometric studies of the relationship between advertising and sales clarke clarke darral g 1976 econometric measurement of the duration of advertising effects on sales j marketing res 13 november 345 357 concluded that the implied duration interval of the effects of advertising on sales were too long when the studies used annual data a theoretical explanation is provided here for the observation of parameter estimates which vary with the data interval employed in the analysis parameter estimates are developed on the basis of data aggregated at various levels of temporal aggregation and compared with theoretical values it is demonstrated that it is possible to recover bimonthly parameters when only annual data are available

estimating the economic return to schooling on the basis of panel data this paper is concerned with estimating the economic return to schooling of men in the netherlands an iv approach is adopted to estimate a panel data model with random individual effects the fact that older individuals have relatively less schooling than younger individuals is exploited to construct instruments and gnp per worker at the time an individual turned 16 is included to control for birth cohort effects the estimated return to schooling is about 15 ignoring the endogeneity of schooling results in a lower return to schooling ignoring birth cohort effects results in a lower return to work experience

an innovatory package for financial sector reforms in eastern european countries abstract this essay sees reform of the financial sector as the key to successful transition to a market economy the analysis generates the following practical proposals first the central bank should be endowed with strong independence accumulating the deposit insurance supervisory and lender of last resort functions second the central bank should host the payments system and impose gross settlement without credit lines in excess of required reserve balances it should also impose suitable capital requirements for credit exposure third universal banking should be accepted to improve corporate governance and to make a well functioning capital market less necessary fourth to reduce moral hazard and provide maximum flexibility an innovatory multi tier bank licensing is proposed fifth when government cannot borrow from the central bank borrowing will contribute to the development of securities markets whose other two pillars are privatisation and mortgage financing to alleviate the burden on public finance and maximise liquidity perpetuals assorted with suitable calls and puts are proposed

why did the ssi disabled program grow so much disentangling the effect of medicaid the number of participants in the ssi program grew by 1 1 million from 1987 to 1993 this paper examines the role of medicaid on the ssi participation decision i use the rapid growth in average medicaid expenditure as a proxy for its value ols estimates of medicaid s effect may be biased because of omitted variables bias and measurement error i therefore apply two stage least squares to estimate medicaid s effect using average medicaid expenditure for blind ssi recipients as an instrument these estimates show that rising medicaid expenditure significantly increased ssi participation among adults with low permanent incomes explaining 20 of the growth

a natural experiment of the effect of advertising on sales the sasol case the effect of advertising in a major product category petrol on the market share of a brand petrol produced by sasol of south africa was estimated using variants of a koyck distributed lag model our use of a single equation model was supported by granger causality tests showing that advertising caused sales but that sales did not simultaneously cause advertising the situation is a unique natural experiment in that non promotional variables in the marketing mix price location of sale and product characteristics are largely invariant between sasol s petrol and competing brands allowing isolation of the effect of advertising on market share dummy variables were used to allow for the varying effect of different advertising campaigns and thus allow for the quality of advertising copy the results supported the hypotheses that sales are determined by past as well as current advertising expenditures but that the cumulative effects of advertising lasts for months rather than years the major finding

banking deregulation in europe banking deregulation ernst baltensperger and jean dermine deregulation of financial services is well under way in many european countries this has led to fears that economies are now more vulnerable to macroeconomic shocks the authors focus on one aspect of financial deregulation namely liberalization of the banking system they show that measures such as the abolition of reserve requirements increase macroeconomic variability under some circumstances but reduce it under others no general macroeconomic case can be made for banking regulation or for its liberalization analysis of microeconomic issues is more fruitful asymmetric information and the risks of contagion in a panic can lead to runs against the banking system to the extent that these are socially inefficient public intervention may be justified this presumption is stronger since the risks of bank runs have grown recently with the increased maturity mismatch the finance of illiquid loans by liquid short term deposits to meet this danger the authors recommend regulation of deposit contracts whilst preserving incentives for bank monitoring by private parties specifically they propose an ex post liability of current and former depositors when banks default thereby offsetting the incentive to withdraw funds at the onset of a crisis being quick off the mark would no longer be sufficient and sophisticated depositors would press for greater disclosure and fuller monitoring of bank activities the authors also recommend that remaining controls on deposit interest rates should be scrapped and that supervision of international banking should be cooperatively conducted by host and parent authorities