rational household labor supply traditionally household behavior is derived from the maximization of a unique utility function in this paper we propose an alternative approach in which the household is modeled as a two member collectivity taking pareto efficient decisions the consequences of this assumption are analyzed in a three good model in which only total consumption and each member s labor supply are observable if the agents are assumed egoistic i e they are only concerned with their own leisure and consumption it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint if alternatively agents are altruistic restrictions obtain in the nonparametric context useful interpretation stems from the comparison with the characterization of aggregate demand for a private good economy

marriage market divorce legislation and household labor supply this paper provides a theoretical framework for analyzing the impact of the marriage market and divorce legislation on household labor supply in our approach the sex ratio in the marriage market and the rules governing divorce are examples of distribution factors these factors are defined as variables that affect the household members bargaining position but not preferences or the joint budget set we extend the collective labor supply model developed by chiappori to allow for distribution factors we show that our model imposes new restrictions on the labor supply functions and eases the identification of individual preferences and the intrahousehold decision process the model is estimated using psid data for the year 1988 our results do not reject the restrictions imposed by the model also the sex ratio and divorce laws deemed favorable to women are found to affect labor supply behavior and the decision process in the directions predicted by the theory and to have sizable effects

collective labor supply a single equation model and some evidence from french data in chiappori s 1988 collective model of labor supply hours of work are supposed flexible in many countries however male labor supply does not vary much in that case the husband s labor supply is no longer informative about the household decision process and individual preferences to identify structural components of the model additional information is needed we thus consider an approach in which the wife s labor supply is expressed as a function of the household demand for one specific good we demonstrate that the main properties of chiappori s initial model are preserved and apply our results on french data

collective labor supply and household production this paper emphasises the importance of incorporating household production into the collective model of the household and considers how and to what extent the results of chiappori 1992 can be extended to this case this abstract was borrowed from another version of this item

the ex dividend day behavior of canadian stock prices tax changes and clientele effects with some simple assumptions the ex dividend day price drop and the associated dividend can be used to measure the market s marginal tax rate previous research has estimated the implied tax rate for the u s this paper extends the analysis to canada where the tax treatment of dividends and capital gains is completely different from that in the u s the paper also presents estimates from 1970 80 to include four distinct periods when the tax treatment was different hence we include an implied test of market efficiency as well as those for the relevance of taxes and the existence of tax based dividend clienteles

introducing household production in collective models of labor supply in a recent paper chiappori 1992 i proposed a model of labor supply based on a collective representation of household behavior in this framework each household member is characterized by his or her own utility function and decisions are only assumed to result in pareto efficient outcomes i showed that these simple assumptions were sufficient to i generate testable restrictions on labor supply functions and ii recover individual preferences and the outcome of the decision process from observed behavior for the sake of simplicity the results were derived in the simplest possible case namely a static labor supply model with private consumptions such a framework was appropriate only for the purpose of the paper that is a preliminary exploration of the properties of collective models of labor supply the next step is to evaluate the robustness of the results to various extensions of the basic model this opens a general research program and generates a wide range of particular problems that it is hoped will be considered in the future among the most serious shortcomings of the 1992 model is the absence of household production as in most labor supply models agents were assumed to divide their time between market activities and leisure as apps and rees 1997 in this issue very rightly point out in their comment the absence of domestic production is far from innocuous as soon as welfare issues are considered for instance a low level of market labor supply will automatically be interpreted as a large consumption of leisure whereas it may in fact reflect the specialization of one of the members in domestic

the analytical derivation and empirical test of a tax adjusted fundamental value model in implementing the theory of current valuation for fixed assets accountants encounter a range of difficult estimation problems many of these problems arise because fixed assets yield their productive potential over many accounting periods theoreticians regulators users and preparers have sought to overcome difficulties in estimating values for owned used assets by estimating the historical cost or the current cost of a new asset and applying a depreciation factor that adjusts for diminished productive capacity the resulting depreciated cost estimate then serves as a proxy for the economic value of the owned used asset previous research has demonstrated that this depreciated cost estimate of economic value is sensitive to both the valuation model and the assumed depreciation schedule see for example greenball 1969 beaver and dukes 1973 beaver and landsman 1983 mohr and dilley 1984 swenson 1987 and kim and moore 1988 the purpose of our study is to extend prior research by examining the interactive

collective labour supply taxes and intrahousehold allocation an empirical approach most empirical studies of the impact of labor income taxation on the labor supply behavior of households use a unitary modeling approach in this article we empirically analyze income taxation and

should the kuznets effect be relied on to induce equalizing growth evidence from post 1950 development abstract the large body of cross sectional statistical research assessing 1 a kuznets inverted u for less developed countries ldcs 2 b a turning point is analyzed an alternative methodology is presented those countries which started in 1950 well below the turning point in rgdp and which reached an rgdp well above the turning point by 1980 are utilized as key cases income distribution data and assessments from individual country experts are combined with historical comparative microanalyses for each key case brazil costa rica greece japan malaysia south korea taiwan and turkey to construct patterns of income distribution during this crucial growth period it is demonstrated that the jury is still very much out on the kuznets inverted u for ldcs and the notion of a turning point should be rejected copyright 1997 elsevier science ltd

collective labor supply heterogeneity and nonparticipation in this paper we extend the collective model of labour supply developed by chiappori 1988 to allow for discrete choices censoring and nonparticipation in employment we derive the collective restrictions on labour supply functions that we contrast with restrictions implied by the usual unitary framework we apply our results to the estimation of a collective labor supply model for married couples without children using uk data from 1979 to 1993 taking into account unobserved heterogeneity we use the log linear labor supply framework the implications of the unitary framework are rejected while those of the collective approach are not the estimates of the sharing rule show that wages have a strong influence on bargaining power within couples

collective labour supply heterogeneity and non participation we present identification and estimation results for the collective model of labour supply in which there are discrete choices censoring of hours and non participation in employment we derive the collective restrictions on labour supply functions and contrast them with restrictions implied by the usual unitary framework using the large changes in the wage structure between men and women in the u k over the last two decades we estimate a collective labour supply model for married couples without children the estimates of the sharing rule show that male wages and employment have a strong influence on bargaining power within couples

collective female labour supply theory and application this article deals with female labour supply in the collective framework it studies married couples and starting from the empirical observation that the husband s labour supply is generally fixed at full time it shows that in this case structural elements of the decision process such as individual preferences or the rule that determines the intra household distribution of welfare can be identified if household demand for at least one commodity together with the wife s labour supply is observed these theoretical considerations are followed by an application using french data

dividend taxation and equity value the canadian tax changes of 1986 the 1986 canadian federal budget which increased the tax rate on dividends vis a vis capital gains provides a natural experiment for examining the relationship between taxation and asset values the authors employ a stock market event study to investigate the differential impact of this tax change on high and low dividend securities to control for other new information contained in the budget they focus on companies that issue both preferred high dividend stocks and common low dividend stocks the authors find that abnormal returns are negatively related to dividend yields which provides support for the hypothesis that taxes affect stock prices

time allocation within the family welfare implications of life in a couple a collective model of leisure demand generalised to the production of a household public good is estimated on the british household panel survey the sharing rule is identified by using an original parametric framework based on the change of family status from single living to couple or from couple to single living womens ratios of private household expenditures are 40 on average the level of intra household inequality appears highly dependent on the intra household wage gap omitting household production in the model would overestimate the ratio by 7 percentage points on average

capital gains tax and equity values empirical test of stock price reaction to the introduction and reduction of capital gains tax exemption abstract this paper evaluates the differential effect on stock prices of the introduction in canada of 500 000 capital gains tax exemption and the reduction of this limit to 100 000 two years later using the seemingly unrelated regression methodology and controlling for thin trading and heteroscedasticity the empirical evidence indicates that the changes in capital gains tax laws had a differential effect on low dividend yield and high dividend yield stocks on both occasions while the evidence indicates that the stock market anticipated the 1985 capital gains tax law changes the significant market reaction to the 1987 reduction of the exemption occurred a day before and after the reading of the tax reform proposals in parliament thus it can be inferred from the results that despite the presence of tax sheltering opportunities in canada changes in capital gains tax laws affect equity values

investment ramifications of distortionary tax subsidies abstract this paper examines the investment effects of tax subsidies for which some assets and not others are eligible distortionary tax subsidies concentrate investments in tax favored assets thereby reducing the expected pre tax profitability of investment and reducing payoffs to bondholders in the event of default anticipation of asset substitution encourages lenders to require covenants in debt contracts which only imperfectly address asset substitution and distort investment the result is that borrowing is made more expensive which in turn discourages investment borrowing rates can react so strongly that aggregate investment may rise very little or even fall in response to higher tax subsidies debt issued by u s firms in risk of default after the 2002 introduction of bonus depreciation for u s equipment investment contained many more covenants than in other periods a pattern that reversed when bonus depreciation was discontinued after 2004 furthermore firms at risk of default borrowed less and were more apt to lease capital than were other firms during the bonus depreciation period

consumption inequality and intra household allocations the current literature on consumption inequality treats all adults within the household equally making the implicit assumption that all consumption inequality is between not within households however increased marital sorting on earnings and the subsequent rise in the share of women s income in the household may have important implications for consumption inequality measured at the individual level we use an extension of the collective framework of chiappori to estimate a rule for assigning resources to individual household members we then construct a measure of individual level inequality by looking at implied changes in intra household allocations and explore the implications of our framework for the measurement of individual level versus household level consumption inequality our analysis which is based on households comprising one or two adults suggests that the conventional approach of ignoring intra household allocations underestimates the level of cross sectional consumption inequality by 30 and overstates the trend by two thirds our findings also indicate that increases in marital sorting on wages and hours worked can simultaneously explain virtually all of the decline in within household inequality and a substantial fraction of the rise in between household inequality in the uk since the 1970s

the effect of the investment tax credit on the value of the firm abstract a change in the tax law that increases investment incentives for new assets may result in excess returns on new investment causing firm value to increase alternatively because the investment incentives apply only to new investments the value of existing assets that compete with these investments may decline in general investment incentives have a theoretically ambiguous effect on firm value cross sectional tests examine the changes in firm value to repeated changes of the investment tax credit changes in firm value are found to be positively related to the expected receipt of investment tax credits no evidence is found to support a relationship between expected changes in the value of a firm s existing assets and changes in firm value

income splitting specialization and intra family distribution income splitting for tax purposes results in more specialization of wives but does this in turn generate more gender inequality in my dynamic bargaining model with a divorce threatpoint i find that who controls the couple s labour supply plays a crucial role in establishing this link if spouses choose their labour supply non cooperatively only the husband s increase but not her own decrease in labour supply introduces a negative term in the wife s change in welfare if the wife does not control her own labour supply a decrease in her own labour supply introduces an additional negative term la fragmentation du revenu aux fins d impot resulte en une plus grande specialisation des epouses mais est ce que cela engendre davantage d inegalite entre genres dans un modele de marchandage dynamique avec menace de divorce a la cle on decouvre que la personne qui controle l offre de travail du couple joue un role crucial dans la reponse a cette question si les epoux choisissent leurs offres de travail de maniere non cooperative seul l accroissement de l offre de travail de l epoux et non le declin de l offre de travail de l epouse introduit un terme negatif dans le changement de niveau de bien etre de l epouse si l epouse ne controle pas sa propre offre de travail un declin dans son offre de travail introduit un element negatif additionnel

the effect of long term performance plans on corporate sell off induced abnormal returns this study examines the association between long term performance plans and wealth effects accruing to stockholders of divesting firms at announcements of sell off proposals the results indicate that divesting companies with long term performance plans experience a more favorable stock market reaction at the announcement of sell off proposals relative to firms without long term performance plans the findings imply that long term performance plans serve as an effective mechanism to motivate managers to make better decisions substantial research has been undertaken on restructuring corporate assets liabilities and ownership of publicly traded corporations with regard to asset restructuring most of the literature analyzes mergers and tender offers but recently attention has been given to divesting activities divestiture is a modification of the firm s productive assets and comes in the form of sell offs or spin offs in sell offs the parent company sells part of its assets for cash assets or securities of the acquiring firm spin offs involve transfers of assets to a newly organized firm whose shares are distributed to stockholders of the parent firm or involve the distribution of shares of a subsidiary to the parent firm s shareholders while recent studies1 provide evidence that spin off announcements are associated with significant positive abnormal returns to parent firms around the day of the event the studies on voluntary sell offs report mixed results 2 these results raise questions about management s motivation to sell part of the firm s assets prior research assumes that corporate sell offs are activities consistent with stockholders interests however sell offs can be motivated by managerial selfinterest particularly when sell offs increase reported profits and hence management compensation recent articles in the financial press3 suggest that firms

market expectations of the effects of the tax reform act of 1986 on banking organizations abstract this study investigates market expectations regarding the effect of the tax reform act of 1986 on the banking industry the evidence shows that overall the tax reform did not adversely affect the stocks of banking institutions the findings suggest that overall banking organizations were expected to largely mitigate any negative effects of the tax reform on their cash flow by rebalancing and or repricing their portfolios of assets and liabilities the most significant provision of the new act was the limitation on foreign tax credits interestingly the markets did not expect any adverse valuation effects from the recapture of loan loss reserves or the elimination of the interest deductibility for carrying tax exempt securities

bargaining and distribution in marriage the standard economic model of the family is a common preference model that assumes that a family maximizes a single utility function and implies that family behavior is independent of which individuals receive income or control resources in recent years this model has been challenged by game theoretic models of marriage that do not impose pooling and are therefore consistent with empirical evidence that income controlled by husbands and wives does have different effects on family behavior in this paper the authors review a number of simple bargaining models and relevant empirical evidence and discuss their implications for distribution within marriage

should generational accounts replace public budgets and deficits the author assesses the concept of generational accounts and the specific accounts constructed by alan auerbach jagadeesh gokhale and laurence kotlikoff 1991 although these accounts support the assertion of present orientation in fiscal policy they rest on numerous assumptions based on judgments that are open to question these involve the treatment of the public budget constraint the benefits from public exhaustive expenditures economic and population projections the discount rate and fiscal incidence alternative and equally reasonable assumptions could yield radically different conclusions the author concludes that the auerbach gokhale and kotlikoff accounts should not replace the annual public budget as they argue

new evidence that taxes affect the valuation of dividends this paper uses british data to examine the effects of dividend taxes on investors relative valuation of dividends and capital gains british data offer great potential to illuminate the dividends and taxes question since there have been two radical changes and several minor reforms in british dividend tax policy during the last 30 years studying the relationship between dividends and stock price movements during different tax regimes offers an ideal controlled experiment for assessing the effects of taxes on investors valuation of dividends using daily data on a small sample of firms and monthly data on a much broader sample we find clear evidence that taxes affect the equilibrium relationship between dividend yields and market returns these findings suggest that taxes are important determinants of security market equilibrium and deepen the puzzle of why firms pay dividends financial economists have long been puzzled by corporate dividend behavior many individual investors should value a dollar of corporate dividends less than a dollar of corporate retentions because the former gives rise to greater tax liabilities corporations however face equal costs of paying out dividends and retaining earnings miller and modigliani 31 demonstrated that in the absence of taxes dividend policy should have no effect on share valuation if dividends are tax penalized however a value maximizing firm should pay no dividends widespread dividend payments to taxable investors are therefore surprising in 1981 dividend tax revenues in the united states were estimated to exceed 20 billion dollars indeed some have interpreted the large volume of dividends paid as evidence against the rational behavior postulates typically used by economists the dividend question has stimulated a large theoretical and empirical literature concerned with the qluestion of investors valuation of dividends in particular the question of how taxes affect the market valuation of dividends has generated considerable controversy numerous studies including auerbach 2 litzenberger and ramaswamy 24 26 morgan 34 and rosenberg and marathe

the impact of u s tax reform on foreign direct investment in the united states abstract this study empirically examines how taxes shape foreign direct investment and finds that increased taxes spur inward foreign investment this finding conforms with theories that recognize that foreign investor response is critically shaped by the tax provisions faced by the foreign investor in his home country and by the effects of tax reform on pre tax asset returns we demonstrate that average tax rates may better proxy tax effects than do effective tax rates our findings are more robust than previous results since we utilize the entire 1980s tax history consider a fuller set of industry distinctions and estimate the tax responsiveness in the context of exchange rate fluctuations

effective tax rates and tobin s q abstract this paper clarifies the relation between the average and marginal effective tax rates using the notion of the change in tobin s average q the equation connecting the effective rates shows that corporate taxation can be represented by a mixture of two extreme tax rules one being a distorting pure corporate tax and the other a nondistorting cash flow tax the paper proposes new measures representing this feature

the microeconomics of efficient group behavior identification1 consider a group consisting of s members facing a common budget constraint p 1 any demand vector belonging to the budget set can be privately or publicly consumed by the members although the intragroup decision process is not known it is assumed to generate pareto efficient outcomes neither individual consumptions nor intragroup transfers are observable the paper analyzes when to what extent and under which conditions it is possible to recover the underlying structure individual preferences and the decision process from the group s aggregate behavior we show that the general version of the model is not identified however a simple exclusion assumption whereby each member does not consume at least one good is sufficient to guarantee generic identifiability of the welfare relevant structural concepts

gradual incorporation of information pharmaceutical stocks and the evolution of president clinton s health care reform abstract we examine the effect of the evolution of president clinton s health care reform proposal over january 1992 october 1993 on pharmaceutical stock prices we identify a 52 3 percent decline in market adjusted prices which we then associate with health care reform applying a new technique isotonic regression we find most of the decline occurred gradually much of the decline occurred as the clinton plan adopted strategies to contain health care costs including managed competition and implicit regulation indirect evidence suggests that the wealth lost by pharmaceutical companies may have been largely an anticipated transfer our results are relevant to understanding the likely effects of the clinton plan and more recent proposals many other policy changes are marked by gradual public revelation of information which may not be completely observable by a researcher our approach may uncover information about the anticipated effects of policies unavailable from a traditional event study

an empirical model of collective household labour supply with non participation i present a structural empirical model of collective household labour supply that includes the non participation decision i specify a simultaneous model for hours participation and wages of husband and wife i discuss the problems of identification and statistical coherency that arise in the application of the collective household labour supply model the model includes random effects and it is estimated using a panel data set of dutch couples the estimates allow me to check the underlying regularity conditions on individual preferences and to obtain estimates of the sharing rule that governs the division of household income between husband and wife

stock market reactions to the depository institutions deregulation and monetary control act of 1980 abstract this paper evaluates the effects of events leading to the passage of the depository institutions deregulation and monetary control act of 1980 the evidence suggests that the initial proposal of the act by then president carter and the final passage of the act by the house of representatives produced positive abnormal returns to stockholders of large commercial banks stockholders of small commercial banks and small savings and loans on the other hand generally experienced negative abnormal returns furthermore when hopes of passage of the act faced significant negative positive abnormal returns were experienced by stockholders of large small commercial banks

dividends and capital asset prices tax based dividend models of capital asset pricing assume that dividends are known at the time prices are set dividends which are announced and paid in the same month and dividends which were expected but cancelled in the month constitute surprises which interfere with many empirical tests of the effects of expected dividend yield on returns this paper avoids these problems by relating returns to forecasts of dividend yield obtained from past data three distinct views of the importance of dividends to investors have received support at one time or another according to the two most important views dividends have a neutral and a negative effect on security prices respectively miller and modigliani 1 and miller and scholes 12 13 favor complete substitutability of dividends and capital gain brennan 6 and litzenberger and ramaswamy 9 have developed models which incorporate differential taxation of income and capital gain in these models the tax disadvantage of income changes the investor s portfolio problem from one of optimization of mean and variance of portfolio before tax return to optimization in after tax terms stocks with relatively large dividend yields should provide high expected returns and so sell for low prices to compensate the investor for the tax much of the empirical evidence seems to favor the view that tax disadvantages of dividend income do not escape investors attention and that returns are higher when they include dividend income to compensate the investor for the tax liability however interpretation of the available evidence is difficult and it is significant that most of these researchers remain unconvinced that their own findings can be satisfactorily explained by tax effects ball brown finn and officer 1 interpret their estimates as being far too strong to be explained in terms of differential taxation blume 3 reaches a similar conclusion but litzenberger and ramaswamy attribute their results to the tax disadvantage of

tax reform and collective family decision making abstract traditional analysis of tax reform treats market behaviour as arising out of individual utility maximisation in this paper behaviour is modelled as the pareto efficient outcome of a family decision process conditions for the existence of a feasible pareto improving tax change are presented and contrasted with those that obtain in the individualistic case the consequences of treating households as a single individual are also discussed

capitalization of capital gains taxes evidence from stock price reactions to the 1997 rate reduction abstract we empirically document that stock prices moved inversely with dividend yields during the may 1997 week when the white house and congress agreed on a budget accord that included a reduction in the capital gains tax rate the findings are consistent with equity prices capitalizing expected capital gains taxes two scenarios are possible first to the extent returns are expected to be taxed as capital gains a reduction in the expected capital gains tax rate enhances market value second to the extent individuals hold a stock a reduction in the expected personal capital gains tax rate increases market value

the postwar stability of the fisher effect most research concerning the fisher relationship has concentrated on the magnitude and significance of the response of nominal interest rates to anticipated inflation recently attention has shifted to the stability of that response according to previous estimates the impact of anticipated inflation on interest rates varies substantially over time by extending a standard model to include tax and aggregate supply shock effects we are able to reduce such instability considerably our results also reveal that increased foreign demand for bonds lowers the interest rate

structural estimation of family labor supply with taxes estimating a continuous hours model using a direct utility specification this paper proposes a new method for estimating family labor supply in the presence of taxes this method accounts for continuous hours choices measurement error unobserved heterogeneity in tastes for work the nonlinear form of the tax code and fixed costs of work in one comprehensive specification estimated on data from the 2001 psid the resulting elasticities for married males are consistent with those found elsewhere in the literature but female wage elasticities are substantially smaller than those found in most of the literature simulations of recent tax acts predict small effects on the labor supply of married couples

taxation and the household abstract previous analyses of demand systems and the welfare effects of taxing male and female labour supplies suppress the analysis of household resource allocation by assuming a household utility function to analyse the implications of assuming this is not the case we construct a simple but fairly general model of household resource allocation and use the properties of the equilibrium of this model to characterise the effects of tax policy on individual utilities as determined by the household resource allocation process

taxation and the earnings of husbands and wives evidence from sweden i examine the response of husbands and wives earnings to a tax reform in which husbands and wives tax rates changed independently allowing me to examine the effect of both spouses incentives on each spouse s behavior i analyze the large swedish tax reform of 1990 1991 and find that in response to a compensated fall in one spouse s tax rate each spouse s earnings rise i compare these results to those of simplified econometric models used in the typical setting in which independent variation in each spouse s tax rate is unavailable i find that standard econometric specifications may produce substantially biased estimates

intertemporal tax discontinuities we define an intertemporal tax discontinuity itd as a circumstance in which different tax rates are applied to gains realized at one point in time versus some other point in time we study the effects of itds on market behaviors at the time of disclosures of firm performance assuming that all investors who trade firm equities are subject to tax the results of our paper suggest that relative to an economy in which itds are absent itds may dampen trading volume and amplify price changes at the time of disclosure

sharing rule identification for general collective consumption models we propose a method to identify bounds i e set identi cation on the shar ing rule for a general collective household consumption model unlike the eects of distribution factors it is well known that the level of the sharing rule cannot be uniquely identi ed without strong assumptions on preferences across households of dierent compositions our new results show that though not point identi ed without these assumptions narrow bounds on the sharing rule can be obtained we get these bounds by applying revealed preference restrictions implied by the collective model to the household s continuous aggregate demand functions we obtain informative bounds even if nothing is known about whether each good is public private or assignable within the household though having such infor mation tightens the bounds we apply our method to us 1999 2009 psid data this application obtains tight sharing rule bounds that yield useful conclusions regarding the eects of income and wages on intrahousehold resource sharing and on the prevalence of individual as opposed to household level poverty

collective household models principles and main results in the traditional approach to consumer behaviour it is assumed that households behave as if they were single decision making units this approach has methodological empirical and welfare economic deficiencies a valuable alternative to the traditional model is the collective approach to household behaviour the collective approach explicitly takes account of the fact that multi person households consist of several members which may have different preferences among these household members an intrahousehold bargaining process is assumed to take place in addition to providing an introduction to the collective approach this survey intends to show how different collective household models each with their own aims and assumptions are connected

q and the tax bias theory abstract a growing body of literature analyzes the variation in q the ratio of financial market value to asset current replacement cost and makes inferences about attributes such as monopoly power profitability managerial performance etc these studies ignore potential biases embedded in q that result from non neutral tax policies this study examines the association between q and tax biases and establishes that differences in accumulated depreciation tax shields explain significant variation in q the implication that q should be adjusted for tax biases before use in empirical research is examined further adjusting q for tax biases at least with the factors herein leads only to minor changes in econometric analyses

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

married with children a collective labor supply model with detailed time use and intrahousehold expenditure information we propose a collective labor supply model with household production that generalizes an original model of blundell chiappori and meghir 2005 in our model adults individual preferences not only depend on own leisure and individual private consumption of market goods they also depend on the consumption of domestic goods which are produced by combining goods bought on the market with individuals time we apply our model to new and unique data on dutch couples with children the data contains detailed information about the spouses time use and the intrahousehold allocation of all expenditures our application uses a novel estimation strategy that builds upon the familiar two stage allocation representation of the collective model we obtain interesting and plausible empirical results spouses preferences depend on the consumption of domestically produced goods including children s welfare in addition pareto weights depend on variables like the individual wages and the share in the household s nonlabor income finally and perhaps surprisingly we do not nd evidence that mothers care more for their children than fathers this paper draws on data of the liss panel of centerdata special thanks go to marika de bruijne and arthur van soest who helped to construct the questionnaire and to guillaume schollier

gender agricultural production and the theory of the household virtually all models of the household assume that the allocation of resources is pareto efficient within many african households agricultural production occurs on many plots controlled by different members of the household pareto efficiency implies that factors should be allocated efficiently across these plots i find in contrast that plots controlled by women are farmed much less intensively than similar plots within the household controlled by men the estimates imply that about 6 percent of output is lost because of inefficient factor allocation within the household the paper suggests a new approach to modeling intrahousehold allocation consistent with the empirical results

efficient intra household allocations a general characterization and empirical tests the neoclassical theory of demand applies to individuals yet in empirical work it is usually taken as valid for households with many members this paper explores what the theory of individuals implies for households that have more than one member we make minimal assumptions about how the individual members of the household resolve conflicts all we assume is that however decisions are made outcomes are efficient we refer to this as the collective setting we show that in the collective setting household demands must satisfy a symmetry and rank condition on the slutsky matrix we also present some further results on the effects on demands of variables that do not modify preferences but that do affect how decisions are made we apply our theory to a series of surveys of household expenditures from canada the tests of the usual symmetry conditions are rejected for two person households but not for one person households we also show that income pooling is rejected for two person households we then test for our collective setting conditions on the couples data none of the collective setting restrictions are rejected we conclude that the collective setting is a plausible and tractable next step to take in the analysis of household behavior

is power more evenly balanced in poor households abstract the structure of intra household allocation is crucial to know whether a transfer from a rich household to a poor one translates into a transfer from a rich individual to a poor one if rich households are more unequal than poor ones then a progressive transfer among households reduces intra household inequality hence inequality among individuals more specifically two conditions have to be satisfied for extending generalized lorenz judgments from household level to individual one the fraction of the couple s expenditures devoted to goods jointly consumed should decrease at the margin with the couple s income as well as the part of private expenditure devoted to the disadvantaged individual this double concavity condition is non parametrically tested on the french household expenditure survey 2000 it is not rejected by the data and supports the view that power is more evenly distributed in poor households

collective household labor supply nonparticipation and income taxation in this paper we adopt the usual assumptions of the collective approach i e individualism and efficiency to study household labor supply the theoretical innovation is 2 fold first we incorporate the decision to participate in the labor market in the initial setting second we abandon the assumption of linearity of the budget constraint we show that i structural elements such as preferences or the outcome of the decision process can be recovered and ii testable restrictions are generated from the observation of the household labor supplies we also examine for this model how to simulate the incidence of fiscal reforms

are windfalls a curse abstract a puzzling feature of temporary terms of trade booms is that some countries have responded to such windfalls by running current account deficits furthermore those countries that ran current account deficits failed to attain greater post boom growth rates indicating the deficits were consumed or invested in low quality projects the point we make is that the structure of the fiscal process is critical in determining outcomes if fiscal control is unitary then the consumption smoothing effect is operative and representative agent models of the current account have predictive power however if control is divided among several fiscal claimants a voracity effect appears which counteracts the consumption smoothing effect leading to a deterioration of the current account in response to a positive temporary shock we model the interaction among fiscal claimants as a dynamic game and show that in equilibrium aggregate appropriation increases more than the windfall itself this results in a deterioration of the current account we also show that all the windfall is dissipated with the country experiencing no increase in welfare 1998 elsevier science b v

a test of the unitary and collective models of household labour supply this paper tests the unitary and the collective household labour supply models within a structural framework a nonlinear unrestricted household labour supply system is postulated and the set of parametric restrictions imposed by each model is derived our results generally reject the income pooling restrictions embodied in the unitary model also the symmetry of cross wage effects is rejected however the collective model is not rejected for groups with no pre school children

do epa defendants prefer republicans evidence from the 2000 election i introduction there is an extensive body of literature documenting the effects of political interference in bureaucratic agencies much of this deals with the enforcement of antitrust disputes as mediated by the federal trade commission a corresponding literature on the political control of the environmental bureaucracy does not exist however there is a perception that the aggressiveness of environmental protection agency epa enforcement could vary from one administration to the next 1 the present article aims to subject these anecdotal impressions to empirical tests it uses the change in the price of publicly quoted companies that have civil judicial litigation outstanding with the epa when a political event takes place such as a presidential election to assess the market s reaction to this event ii literature review the biggest problem in doing empirical studies of the effect of political and legislative changes on stock market valuations is the fact that these changes happen slowly over a period of months or years given the assumption of efficient markets stock markets should immediately reflect all available information including the possibility of political changes this is the reason why studies of the effect of legislation and political change on market valuations have generally found insignificant results as in binder 1985 cutler 1988 downs and tehranian 1988 and graddy et al 1992 2 this article uses a better measure of the probability of a political event the measure of the probability of the outcome of an election is obtained from the iowa electronic market iem only herron et al 1999 and knight forthcoming have used this data source for similar purpose before 3 the iem is a set of continuous double auction markets operated by the university of iowa henry b tippie school of business most of the existing literature in this field has used opinion poll data such as brander 1991 the disadvantages of this are well known they are usually conducted over several days and so do not represent the probability of the election of a candidate on a single day they do not represent probabilities of election but rather expected vote shares they are not usually released daily and finally they have wide margins of error especially long before an election when many people have not yet made up their minds who to support herron et al 1999 pp 58 59 these are also some of the reasons that economists are generally skeptical of surveys preferring to rely instead on revealed preferences the only other possibility is the use of bookmaker s odds as used by roberts 1990b this still has the disadvantage that odds are not quoted daily and so must be interpolated also the present study attempts to measure the importance of political control of the environmental bureaucracy the existing literature focused on a variety of other federal agencies and industries iii data and empirical model data the dependent variable used here is the abnormal daily returns to the stock market price of a company that has environmental litigation outstanding on the day of an election the idea is that if the market considers the company to be politically sensitive then the returns to the company s shares should respond to changes in the probability of a political event as reported by the iem the stock market data comes from the center for research in security prices cr sp 4 the article uses individual company returns as opposed to the construction of portfolios of stocks that are then combined with data on returns to the portfolio as used by roberts 1990b and herron et al 1999 the present paper uses interaction terms between the likelihood of political events and individual characteristics of the companies such as the industry that they are in and the number of times they have been sued before this is not possible when aggregate portfolio returns are used because that would not allow the isolation of disaggregated individual company effects

intra family distribution of paid work time this article analyses the intra family distribution of paid work time in five european countries france germany italy spain and the uk to that end we formulate a collective model which allows us to characterize the efficient labour supply decisions of each spouse this two equation model is then simultaneously estimated by using national panel data drawn from the european community household panel echp 1994 2001 empirical results clearly show that in all sample countries the labour supply of wives is affected by own wages household and own nonlabour incomes and the number of children whereas evidence for husbands differs across countries

can we insure against political uncertainty evidence from the u s stock market i show that shares currently traded on u s stock markets can be used to hedge political uncertainty focusing on the 2000 u s presidential election i construct two presidential portfolios composed of selected stocks anticipated to fare differently under a bush versus a gore presidency to construct these portfolios i use data on campaign contributions by publicly traded corporations and identify the major contributors on each side using daily observations for the six months before the election took place i show that the excess returns of these portfolios with respect to overall market movements are significantly related to changes in electoral polls

collective decisions household production and labor force participation in this paper we generalize the collective model of household labor supply with domestic production to allow for the possibility of nonparticipation in the labor market we also relax the marketability assumption according to which domestic goods and market goods are perfectly substitutable our results are twofold first we show that the main structural components of the decision process can be retrieved from observed behavior second we estimate a system of market and domestic labor supply using the panel study of income dynamics and apply the theoretical results to recover the intra household sharing of resources

partisan impacts on the economy evidence from prediction markets and close elections analyses of the effects of election outcomes on the economy have been hampered by the problem that economic outcomes also influence elections we sidestep these problems by analyzing movements in economic indicators caused by clearly exogenous changes in expectations about the likely winner during election day analyzing high frequency financial fluctuations following the release of flawed exit poll data on election day 2004 and then during the vote count we find that markets anticipated higher equity prices interest rates and oil prices and a stronger dollar under a george w bush presidency than under john kerry a similar republican democrat differential was also observed for the 2000 bush gore contest prediction market based analyses of all presidential elections since 1880 also reveal a similar pattern of partisan impacts suggesting that electing a republican president raises equity valuations by 2 3 percent and that since ronald reagan republican presidents have tended to raise bond yields

individual welfare analysis for collective households abstract we propose novel tools for the analysis of individual welfare on the basis of aggregate household demand behavior the method assumes a collective model of household consumption with the public and private nature of goods specified by the empirical analyst a main distinguishing feature of our approach is that it builds on a revealed preference characterization of the collective model that is intrinsically nonparametric we show how to identify individual money metric welfare indices from observed household demand along with the intrahousehold sharing rule and the individuals willingness to pay for public consumption i e lindahl prices the method is easy to use in practice and yields informative empirical results which we demonstrate through both a simulation exercise and an empirical application to labor supply data drawn from the panel study of income dynamics

studying firm specific effects of regulation with stock market data an application to oil price regulation regulations are often introduced and reformed in response to unanticipated changes in market forces in late 1973 for example opec quadrupled the world price of oil and u s policy makers responded by imposing oil price regulation such events pose a fundamental problem of interpretation for studies that use stock prices to identify the economic effects of regulation what portion of the capital gains or losses experienced by investors in regulated firms is due to regulation and what portion is due to unanticipated economic events to answer these questions we use microeconomic theory to derive hypotheses about how the capital gains and losses created by opec pricing and u s regulatory policies are related to the underlying characteristics of petroleum firms we test the hypotheses by including a model of firm specific abnormal returns in the standard market models of common stock returns earned by investors in petroleum firms the results indicate the u s oil production and refiner access to price controlled crude oil were sources of capital gains and that u s and foreign refining were sources of capital losses

the incidence of regulatory rents in the motor carrier industry this article focuses on two questions in the debate over motor carrier regulation first did regulation create eliminate or have no effect on monopoly rents in the trucking industry second ifthere were rents what was their incidence were they received by owners oftrucking firms dissipated through higher costs or captured by the teamsters union data on share price responses to deregulation announcements reveal declines in expected profits of 8 19 of totalfirm value this suggests that regulation created monopoly profits and indicates that at least some of these rents accrued to owners of trucking firms firms responses to regulatory change are modelled as functions of company s operating characteristics and measures of unionization operating efficiency and service characteristics are shown to affect the impact of deregulation on share values

labor supply home production and welfare comparisons abstract we consider the collective model of labor supply with marketable domestic production we first show that if domestic production is mistakenly ignored the collective indirect utility functions that are retrieved from observed behavior will be unbiased if and only if the retrieved from observed behavior will be unbiased if and only if the profit function is additive otherwise in the non additive case the direction and the size of the bias will depend on the complementarity substitutability of spouses time inputs in the production process we then show that even if domestic labor supply functions are not observed valid welfare comparisons are possible this identification result generalizes that in chiappori chiappori p a 1992 collective labor supply and welfare journal of political economy 100 437 467

optimal commodity taxation and redistribution within households using a collective model of consumption we characterize optimal commodity taxes aimed at targeting specific individuals within the household the main message is that distortionary indirect taxation can circumvent the agency problem of the household essentially taxation should discourage less the consumption of a certain group of goods those for which the slope of the engel curves is larger for the targeted person

the dynamic efficiency cost of not taxing housing traditional welfare cost estimates of tax subsidies for owner occupied housing are less than 0 5 of gnp in the united states and canada this paper argues that these static measures understate the true cost of the tax subsidy increasing the capital income tax makes untaxed housing more valuable delivering a windfall bonus to existing homeowners at the expense of future generations this intergenerational transfer has real efficiency effects in the presence of pre existing tax distortions when housing is in fixed supply the dynamic efficiency cost of preferential tax treatment for housing is as much as 2 2 of gnp or 120 billion dollars in 1990