children as collective goods and divorce settlements the failure of many divorced fathers to comply with court mandated child support awards has been identified as a major reason why a growing number of children live in poverty in female headed households this paper presents a model that seeks to explain why so many divorced fathers allow their children s welfare to suffer as a consequence of divorce the point of departure is the recognition that children are collective consumption goods from the point of view of the father and mother within marriage proximity and altruism serve to overcome the free rider problem associated with the provision of public goods however on divorce the noncustodial parent suffers a loss of control over the allocative decisions of the custodial parent and it is not feasible for the couple to achieve a pareto optimal allocation of their joint resources a model of optimal marriage contracts is constructed in which a couple decides on the allocation of resources within marriage and on the terms of a settlement in the event

building the family nest premarital investments marriage markets and spousal allocations we develop a model of the household in which spousal incomes are determined by premarital investments the marriage market is characterized by assortative matching and endogenously determined sharing rules form the basis of intra household allocations by incorporating pre marital investments and spousal matching into the collective household model we are able to identify the fundamental determinants of endogenously determined and maritally sustainable intra marital sharing rules in particular we find that all sharing rules along the assortative order support unconditionally efficient outcomes where both pre marital investments and intra household allocations are efficient the efficiency of both pre marital choices and household allocations then enables us to show that for each couple the marriage market generates a unique and maritally sustainable sharing rule that is a function of the distribution of pre marital endowments and the sex ratios in the market

distributional weights in cost benefit analysis should we forget about them many argue that it is socially inefficient to use distributional weights in cost benefit analysis and that doing so implies large inefficiency losses when distributional matters can be dealt with trough income taxation instead our results question this view by showing a large range of cases when distributional weights are second best optimal to use one example is when different provided goods affect tax revenues equally per dollar spent utility functions that are separable in the provided goods is sufficient for this most results hold for linear and non linear income taxes and whether they are optimal or not general policy implications are discussed

a derivation of the marginal abatement cost curve abstract the relationship between a firm s technology and its marginal abatement cost mac curve is explored even under the simplest specifications the mac curve will be kinked at some point except under a special assumption which in reality could easily be violated the nondifferentiability implies that the choice of instrument under uncertainty may depend on the targeted level of emissions reduction also stability conditions for dynamic tax mechanisms may be violated in the neighborhood of the kink point a policy implication is that in some cases output restrictions are as efficient as emissions restrictions in contrast to previous results

intra household allocation of parental leave we introduce childcare sharing in a collective model of household behavior to investigate which factors make spouses increase or decrease their share of parental leave the concern about future consumption motivates parents to invest in their human capital and to limit their leave duration using relative income and the age difference between spouses as distribution factors we cannot reject pareto efficiency in childcare sharing higher relative incomes and larger age differences shift the conditional leave allocation towards the relatively poorer and younger partner respectively households with higher total income purchase more professional childcare

project evaluation with democratic decision making what does cost benefit analysis really measure abstract it is often argued that projects involving public good changes should be chosen on the basis of monetary valuation and cost benefit analysis cba however cba is not value free when used to measure welfare it is based on highly controversial value judgements when used to measure efficiency it is based on assumptions of limited relevance to democratic decision making processes cba measures total net willingness to pay neither more nor less while interesting in its own right the normative significance of this indicator is not obvious

marriage divorce and reciprocity based cooperation this paper considers partnership formation partnership dissolution and reciprocity based cooperation by couples in the form of voluntary transfers to smooth consumption while risk sharing is one benefit of having a partner it is also limited by the endogenous risk of separation the equilibrium formation and dissolution of partnerships are determined simultaneously with cooperative behavior publicly provided earnings insurance is shown to increase the turnover rate in the marriage market as well as to reduce the steady state marriage rate and the implicit financial cooperation between partners

gender neutral inheritance laws family structure and women s status in india this paper examines whether economic empowerment of women improves their autonomy within their marital household and investigates the mechanism by exploiting variation from a legal reform aimed at improving women s inheritance rights in india results suggest that the reform increased women s participation in decision making but at the expense of the older generation of household members and not at the expense of their husbands two channels are proposed to explain this phenomenon first this can be driven by a shift in the family structure from traditional joint families to nuclear households such a change is consistent both with the increase in women s decision making authority which they can exert to move out of the joint household as well as with men s incentives since men have weaker financial links with their parents post reform second even within joint families the amendments empowered young couples at the expense of the older generation of household members

the barely revealed preference behind road investment priorities an attempt is made to reveal the preference of decision makers within the regional norwegian public roads administration the order of priority assigned to the respective competing public road investment opportunities within the various counties provinces is studied by means of a rank order multinomial logit model explanatory variables used include cost benefit and a variety of attributes characterizing the individual investment projects although statistically significant cost and benefit appear to be of only marginal importance for the priorities set more weight is attached to cost than to benefit smaller projects are preferred to larger given the benefit cost ratio in general the models estimated are able to explain only a relatively small share of the priority setting made

class systems and the enforcement of social norms abstract we analyze a model in which there is socially inefficient competition among people in this model self enforcing social norms can potentially control the inefficient competition however the inefficient behavior often cannot be suppressed in equilibrium among those with the lowest income due to the ineffectiveness of sanctions against those in the society with the least to lose we demonstrate that in such cases it may be possible for society to be divided into distinct classes with inefficient behavior suppressed in the upper classes but not in the lower

divorce remarriage and welfare a general equilibrium approach modern marriage markets display increasing turnover with less marriage but more divorce and remarriage as a consequence a large number of children live in single parent and step parent households we summarize here a general equilibrium approach that allows welfare evaluations in the absence of children we show that higher aggregate divorce may raise welfare because it facilitates remarriage even children may be better off in a high divorce remarriage environment because of stronger incentives for fathers to transfer money to the custodial mothers jel j1 j12 j13 k1 k10

child support and partnership dissolution this article studies the determinants of partnership dissolution and focuses on the role of child support we exploit the variation in child support liabilities and entitlements driven in part by the introduction of a new set of complex rules that determined child support liability in the uk and by their interaction with welfare rules our panel has the virtue that the post 1993 variation in child support liability for all couples in partnerships formed prior to 1993 is unanticipated we find strong evidence that the resulting large child support liabilities significantly reduced dissolution risks

accounting for supply integration and income in foreign trade this paper provides alternative estimates of export and import demand functions it is suggested that previous estimates of export and import functions may be biased since they ignore factors such as the integration of markets through customs unions and supply effects the results in this paper reveal that when these factors are incorporated into the model the estimated income elasticities of exports and imports decline substantially and trade flows are found to be more responsive to unanticipated variations in income the analysis further reveals that the degree of integration in markets is closely linked to the level of economic growth

opportunity cost of environmental conservation in the presence of externalities application to the farmed and wild salmon trade off in norway estimation of the opportunity cost is necessary for the economic assessment of environmental conservation policies this paper considers the case where an environmental good is negatively affected in the process of the production of marketable goods in the presence of externalities conservation implies the undertaking of abatement measures by polluters a relevant measure of opportunity cost in these settings is the abatement cost required to preserve or restore a unit of the environmental good in question current economic literature lacks an established methodology for deriving such measures as it commonly focuses on pricing pollutants rather than the natural stocks affected by them this paper uses a non optimal valuation approach suggested by fenichel and abbott jaere 1 1 2 1 27 2014 as a point of departure and develops a framework for deriving the opportunity cost of conservation as the cost of externality abatement per unit of environmental good an empirical illustration is provided for the case of the farmed and wild salmon trade off in norway in light of the current pollution control regulations

national accounts and environmental resources in the paper optimal growth theory is used to derive the appropriate definition of the net national product concept when there are environmental resources and environmental damage to take into account the basic conclusions are that conventional defined np should be corrected by deducting environmental damage and adding the value of the net change of all resources

marriage and class here we consider a matching model where agents are heterogeneous and utilities nontransferable we utilize this framework to study how equilibrium sorting takes place in marriage markets we impose conditions that guarantee the existence of a steady state equilibrium and then characterize it several examples are developed to illustrate the richness of equilibria the model reveals an interesting sorting externality that can support multiple steady state equilibria even with constant returns to matching excerpt

project analysis as input to public debate environmental valuation versus physical unit indicators abstract monetary valuation of environmental change is useful if one aims to rank alternative projects according to some specific social welfare function however if the project analysis is intended as background information to a democratic debate the advantages of monetary valuation are less obvious this paper analyzes aggregation of information taking normative disagreement explicitly into account it is demonstrated that monetary valuation is not always more informative than a physical unit measure of environmental change

power couples changes in the locational choice of the college educated 1940 1990 college educated couples are increasingly located in large metropolitan areas these areas were home to 32 percent of all college educated couples in 1940 39 percent in 1970 and 50 percent in 1990 we investigate whether this trend can be explained by increasing urbanization of the college educated or the growth of dual career households and the resulting severity of the colocation problem we argue that the latter explanation is the primary one smaller cities may therefore experience reduced inflows of human capital relative to the past and thus become poorer

investment in schooling and the marriage market we present a model in which investment in schooling generates two kinds of returns the labor market return resulting from higher wages and a marriagemarket return defined as the impact of schooling on the marital surplus share one can extract men and women may have different incentives to invest in schooling because of different market wages or household roles this asymmetry can yield a mixed equilibrium with some educated individuals marrying uneducated spouses when the labor market returns to schooling rises home production demands less time and the traditional spousal labor division norms weaken more women may invest in schooling than men

differences in income elasticities and trends in real exchange rates abstract one might expect that differences in income elasticities in trade and or differences in growth rates among countries would give rise to strong secular trends in real exchange rates for example fast growing countries might need steady depreciation to get the world to accept their growing exports in fact however income elasticities are systematically related to growth rates by the 45 degree rule under which fast growing countries appear to face high income elasticities of demand for their exports while having low income elasticities of import demand the net effect of this relationship between elasticities and growth rates is that secular trends in real exchange rates are much smaller than one might otherwise have expected relative ppp holds fairly well this paper documents the existence of a 45 degree rule and suggests an explanation in terms of increasing returns and product differentiation

birth control and female empowerment an equilibrium analysis we analyze from a theoretical perspective the impact of innovations in birth control technology on intrahousehold allocation of resources we consider a model of frictionless matching on the marriage market in which men as well as women differ in their preferences for children moreover men unlike women must marry to enjoy fatherhood we show that more efficient birth control technologies generally increase the power hence the welfare of all women including those who do not use them this empowerment effect requires that the new technology be available to single women an innovation reserved to married women may result in a disempowerment effect

long term partnership formation marriage and employment of course marriage and employment are different nevertheless a worker looking for a job a rm looking for worker or a single person looking for a marriage partner face similar problems as all are seeking a long term partner indeed forming long term partnerships is a common occurrence in life there are many other examples business people search for other business people to form a pro table relationship bridge players seek to nd a suitable partners students search for a good university we would all like to nd a good friend etc the problem becomes signi cant if there are substantial differences in the return obtained from forming a partnership with different partners for example employers differ in the wages they offer or in the work environment they provide in such a situation a worker may reject some job offers similarly as many have learned to their cost some make better marriage partners than others the problem is two sided while a worker is evaluating a potential employer the employer is also evaluating the worker it is this two sided aspect of the problem that generates a signi cant interest a worker s willingness to accept employment at a rm depends not only on the characteristics of the rm but also the other possible options open to the worker the better an individual s opportunities elsewhere the more selective he or she will be in evaluating a potential partnership an academic who believes harvard may make an offer in the near future will be more selective in evaluating offers from lesser universities in this way expectations play a role if a single man believes that few if any women will nd him an acceptable marriage partner then he may accept the rst opportunity that presents itself partnership formation typically does not comply with a classic market situation where all participants know everything and all trades take place at zero cost finding a job nding a husband or wife or nding a business partner is a time consuming activity where opportunities typically arrive over time at uncertain intervals of time of course we can act in ways that in uence the arrival rate of potential partner workers go to employment agencies or read help wanted advertisements in newspapers singles of a certain age go to discos or join tennis clubs the literature on search and matching sm see mortensen 1982 and pissarides 1990 for early examples 1 provides an excellent framework for the economic journal 109 june f307 f334 royal economic society 1999 published by blackwell publishers 108 cowley road oxford ox4 1jf uk and 350 main street malden ma 02148 usa

the applicability of marginal abatement cost approach a comprehensive review abstract the marginal abatement cost mac methodology is widely used in climate change policies policy makers rely on mac to assess feasible strategies and related costs to achieve emission reduction goals this paper introduces a variety of mac methodologies aiming at solving diverse problems which utilizes various calculable logic thus producing different results and implications this study applies a mind mapping method to capture differentiation of mac methods and systematically classify mac methodologies the applicability path analysis was proposed based on principles such as stakeholder type decision making objectives cost concept strategy mode and information scope our goal is to assess the applicability of different methodologies to reduce misuse by policy makers and to serve as a guide for subsequent research which might prompt and lead to the derivation of more consequential results in future studies the results of this study suggest that the complex method is not always better than the simplified method because policy makers are required to select the appropriate method according to the type of information needed it may even be suggested that mac could be reliable by ranking relative value of options compared with baseline rather than focusing on the absolute value of individual measures

the role of social norms in a model of marriage and divorce in the us the rate of divorce has increased at an alarming rate since the 1960s this paper presents a mechanism which gives rise to the emergence of multiple equilibria and a discrete jump in the rate of divorce in a simple search environment we attempt to show that social norms influence the way each agent searches for a matching partner and hence the probability of divorce in a low divorce equilibrium agents are willing to spend more cost in the search process as a result the act of divorce becomes a more accurate signal of unobservable characteristics of a divorced agent this type of social norms is self consistent in equilibrium as social stigma attached to divorce is relatively high and this forces agents to be more discreet in the search process for exactly the opposite reason a high divorce equilibrium can also be supported where agents are willing to spend little cost in the search process in the light of this logic the rapid increase in the rate of divorce can be seen as a movement from a low divorce to a high divorce equilibrium possibly triggered by a temporary shock

on the state of the union an overlapping generations model of marriage and divorce is constructed to analyze family structure and intergenerational mobility agents differ by sex marital status and human capital single agents meet in a marriage market and decide whether to accept or reject proposals to wed married couples must decide whether to separate or not parents invest in their children depending on their wherewithal a simulated version of the theoretical prototype can generate an equilibrium with a significant number of female headed families and a high degree of persistence in income across generations to illustrate the model s mechanics the effects of two antipoverty policies namely child support and welfare are investigated

divorce remarriage and child support there is some evidence that children of divorced parents do not perform as well as comparable children in intact families but that this gap declines with the aggregate divorce rate we develop a model in which the higher expectations for remarriage associated with higher divorce rates can trigger an equilibrium in which divorced fathers make more generous transfers that benefit their children and the mother in the aftermath of divorce as a result the welfare loss of children from the separation of their parents can be lower when divorce and remarriage rates rise

matching finding a partner for life or otherwise how do job worker and husband wife relationships form and why do some matched pairs subsequently separate economists and game theorists are in the process of developing and applying an equilibrium explanation of match formation and separation based on the principle of voluntary pairing under competitive conditions the purpose of this paper is to assess the current state of these developments the general existence of patnership structures with the property that no one has an incentive to separate has been established these equilibrium structures maximize aggregate value over the set of all feasible match structures in the transferable utility case according to this pure theory of matching competition for partners can be expected to yield equilibrium match structures that are both stable and socially efficient at least under conditions of frictionless certainty search theoretic models that take account of meeting costs and initial uncertainty about match values have been developed to explain sepa