the importance of financial considerations in divorce decisions i introduction one of the most dramatic and commonly cited consequences of divorce is the fall in family money income especially for households headed by divorced women using the panel survey of income dynamics duncan and hoffman 1985 estimate that the family income of divorced and separated women fell by 19 percent during the year following divorce or separation a study by nestel et al 1983 using data from the mature women s cohort of the national longitudinal survey of labor market experience indicates that the poverty rate for households headed by women who were divorced during the survey and did not remarry rose from 10 percent just prior to divorce to 25 percent immediately after dovorce similar results are reported by mott and moore 1982 and espenshade 1979 these statistics however may overestimate the long term negative consequences of divorce because they ignore the possibility of an improvement in financial circumstances through remarriage 1 mott and moore 1982 find that even for women who do not remarry economic status improves over time due primarily to better employment prospects given the large financial costs of divorce especially in the short run it is reasonable to ask how important are financial considerations in divorce decisions this paper explores the linkages between the financial consequences of divorce and the decision to become divorced the paper extends previous work by measuring these consequences over a period of time rather than at one point in time in particular the paper addresses two issues 1 do the expected financial consequences of divorce affect the decision to become divorced and 2 what is the relative importance of short versus long run considerations a standard choice theoretic model predicts that the smaller are the financial costs of divorce the greater is the probability of divorce the financial opportunity cost of divorce is measured as the difference in the expected present values of the income streams within marriage and at divorce the expected income stream at divorce includes the financial value attached to a possible remarriage as well as income from employment welfare alimony and child support payments the empirical analysis utilizes data from the national longitudinal survey of work experience of young women nls a sample of those divorced between 1973 and 1978 is observed over time during marriage after divorce and for some during a remarriage thus the actual income changes resulting from divorce and remarriage are measured income changes for a sample of continuously married women are also measured over a comparable period the expected changes in income for each subsample are estimated as a function of socio economic variables and the values are imputed for the entire sample to explore the relationship between these expected income streams and decisions about divorce the result indicate that the expected short term financial consequences of divorce are a better predictor of subsequent divorce than are the longer term consequences this evidence implies that individuals behave as if they face high discount rates ii economic models of divorce one of the first economic models of divorce was developed and emphirically tested by becker landes and michael 1977 as in any choice theoretic model divorce occurs when the gains from that choice exceed the benefit from remaining married gains from marriage include both a pecuniary component such as pooled household income from the market work of the husband and wife and a non pecuniary component such as children love companionship and household goods from home production gains from divorce include own labor market income home production which may differ between the divorced and married states and the expected value of potential new relationship e g remarriage marriage specific capital such as children has a higher value within marriage and increases the opportunity cost of divorce

market structure and price adjustment in the u s wholesale gasoline markets abstract the issue of sticky prices in u s wholesale gasoline market is re examined allowing for the effect of market structure due to increased market concentration caused by mergers acquisitions and joint ventures which started in the late 1990s in the u s oil industry i investigate the effects of market structure on the pattern of price adjustment based on the notion that increased market concentration leads to downward price stickiness and asymmetric short run price adjustment in the transmission of crude price changes to wholesale gasoline price i find that market concentration has an insignificant asymmetric effect on the speed of price adjustment but a significant asymmetric effect on short run price adjustments in the response of wholesale gasoline prices to crude price shocks in three u s wholesale markets furthermore the signs on the coefficients of market concentration effects on price dynamics in the models support the assertion that increased market concentration leads to downward price stickiness in only one of the three markets examined overall the results indicate that market structure does not have a strong effect on the dynamics of price adjustment

testing for asymmetric pricing in the canadian retail gasoline market abstract this paper applies a threshold regression model to test for asymmetric pricing in the retail gasoline market in canada using weekly data for the period january 1990 to december 1996 we present results for 13 canadian cities for both premium and regular gasoline within the context of an error correction model we test for the presence of asymmetric price behaviour using average changes in crude prices as well as various lags for the change in crude as possible thresholds we are unable to find any evidence to support this view

incentive effects of the u s welfare system a review the author would like to acknowledge support for prior work on this topic from the u s department of health and human services and helpful comments from three anonymous referees rebecca blank howard chernick john fitzgerald irwin garfinkel peter gottschalk edward gramlich david greenberg judith gueron james heckman v joseph hotz robert hutchens michael keane frank levy larry mead michael murray robert plotnick anuradha rangarajan philip robins howard rolston jeffrey smith and daniel weinberg all opinions and errors are those of the author alone

rockets and feathers the asymmetric speed of adjustment of uk retail gasoline prices to cost changes abstract the paper develops a quadratic quantity adjustment model to test the hypothesis put forward in the recent monopolies and mergers commission report that the speed of adjustment of uk retail gasoline prices to cost changes is more rapid when costs rise than when they fall and that the adjustment path is more concentrated around the mean value on the upswing using data from 1982 to 1989 evidence of faster and more concentrated responses to cost increases were found

paradoxical effects of increasing the normal retirement age a prospective evaluation abstract a life cycle model that incorporates both disability insurance di and old age insurance oai is developed to study social security reforms and is compared to an alternative model without di the model with di predicts that increasing the normal retirement age nra causes a decrease in employment and an increase in di receipt and that the decrease of payroll tax revenue and the increase of di expenses combined offset about 40 of the decrease of oai expenses these paradoxical effects of increasing the nra are absent from the model without di i employ both models to search for reforms that will balance the government budget in an economy with an aging population which has the demographics for the year 2100 and find that the required change in tax and benefit rules differ substantially across the two models

work and welfare as determinants of female poverty and household headship this paper formulates and estimates a model of the determinants of female household headship headship responds to variations in the levels of well being a woman can expect if she marries or if she heads her own household the authors measure the opportunity cost of female headship and the effects of welfare benefits and womens work in the market on female headship and poverty they find that if welfare benefits were reduced there would be small reductions in the proportion of women heading households for whites and nonwhites but a substantial increase in poverty for nonwhites they also find that wives work in the market reduces poverty and female headship for nonwhites and reduces poverty but increases headship for whites the study is based on 1975 u s data excerpt

low inflation pass through and the pricing power of firms abstract recently there has been a significant decline in the degree to which firms pass through changes in costs to prices a decline that is frequently characterized as a reduction in the pricing power of firms the decline appears to be associated with the decline in inflation in many countries the decline has important implications for monetary policy because it affects both forecasts of inflation and the effects of changes in monetary policy on inflation some have argued that the decline in pricing power helped to keep inflation low in the face of apparently strong demand pressures in the united states in the late 1990s this paper puts forth the view that the decline in pass through or pricing power is due to the low inflation environment that has recently been achieved in many countries first a microeconomic model of price setting is used to show that lower pass through is caused by lower perceived persistence of cost changes evidence is then presented showing that inflation is positively correlated with persistence of inflation suggesting that the low inflation itself has caused the low pass through an economy wide model consistent with the micromodel is then presented to illustrate how such changes in pricing power affect output and inflation dynamics in favorable ways but can disappear quickly if monetary policy and expectations change

symmetric or asymmetric oil prices a meta analysis approach the analysis of price asymmetries in the gasoline market is one of the most widely studied in energy economics however the great variation in the outcomes reported makes the drawing of any definitive conclusions difficult given this situation a meta analysis serves as an excellent tool to discover which characteristics of the various markets analyzed and which specific features of these studies might account for these differences in adopting such an approach this paper shows how the particular segment of the industry analyzed the characteristics of the data the years under review the type of publication and the introduction of control variables might explain this heterogeneity in results the paper concludes on these grounds that increased competition may significantly reduce the possibility of occurrence of asymmetric behavior these results should be taken into consideration therefore in future studies of asymmetries in the oil industry

prices rise faster than they fall output prices tend to respond faster to input increases than to decreases this tendency is found in more than two of every three markets examined it is found as frequently in producer goods markets as in consumer goods markets in both kinds of markets the asymmetric response to cost shocks is substantial and durable on average the immediate response to a positive cost shock is at least twice the response to a negative shock and that difference is sustained for at least five to eight months unlike past studies which documented similar asymmetries in selected markets gasoline agricultural products etc this one uses large samples of diverse products 77 consumer and 165 producer goods accordingly the results suggest a gap in an essential part of economic theory as a start on filling this gap the study finds no asymmetry in the resonse of an individual decision maker a supermarket chain to its costs but it finds above average asymmetry where a cost shock is filtered through a fragmented w

retail gasoline price dynamics and local market power using monthly data from the 48 contiguous states except nevada for the 1988 2002 period it is shown that retail gasoline prices respond faster to wholesale price increases than to equivalent wholesale price decreases moreover markets with high average retail wholesale margins experience a slower adjustment and a more asymmetric response since gasoline is the only variable input average margins in a state likely reflect the degree of retail market power this suggests that sticky prices and response asymmetries in the gasoline market are at least partially a consequence of retail market power

a comparison of the effects of exogenous oil supply shocks on output and inflation in the g7 countries a comparison of the effects of exogenous shocks to global crude oil production on seven major industrialized economies suggests a fair degree of similarity in the real growth responses an exogenous oil supply disruption typically causes a temporary reduction in real gdp growth that is concentrated in the second year after the shock inflation responses are more varied the median cpi inflation response peaks after three to four quarters exogenous oil supply disruptions need not generate sustained inflation or stagflation typical responses include a fall in the real wage higher short term interest rates and a depreciating currency with respect to the dollar despite many qualitative similarities there is strong statistical evidence that the responses to exogenous oil supply disruptions differ across g7 countries for suitable subsets of countries homogeneity cannot be ruled out a counterfactual historical exercise suggests that the evolution of cpi inflation in the g7 countries would have been similar overall to the actual path even in the absence of exogenous shocks to oil production consistent with a monetary explanation of the inflation of the 1970s there is no evidence that the 1973 1974 and 2002 2003 oil supply shocks had a substantial impact on real growth in any g7 country whereas the 1978 1979 1980 and 1990 1991 shocks contributed to lower growth in at least some g7 countries jel e31 e32 q43

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

symmetric or asymmetric price adjustments in the oil market an empirical analysis of the relations between international and domestic prices in the federal republic of germany 1972 89 abstract this paper investigates how german consumer and wholesale prices for gasoline and light heating oil react to changes in the corresponding rotterdam prices monthly data from 1972 to 1989 are employed and the subperiods of the 1970s 1972 to 1979 and 1980s 1980 1989 are distinguished error correction models are estimated to seperate long run equilibrium relations and short run adjustment processes for the 1980s we find rapid symmetric and full adjustment of the german prices to the rotterdam prices whereas during the 1970s we find some asymmetries and at least for gasoline the adjustment processes took considerably more time

estimating retail gasoline price dynamics the effects of sample characteristics and research design the study shows that much of the variation in the findings of the literature on retail gasoline price dynamics is systematic rather than sample variation from using different data estimates of pass through rates depend systematically on research design and features of the data such as the sampling frequency the choice of upstream price whether taxes are included or not the sample length and the postulated lag structure in addition there are systematic differences between time periods and countries using a 20 year long dataset of 28 european union countries we quantify the extent of estimate variation that arises from the choice of data structure from that arising from temporal and country heterogeneity and sampling variation we also show that country heterogeneity itself has systematic components with wealthier countries experiencing slower adjustments our results inform the interpretation of results on pass through rates derived from error correction models they are also of relevance for the broader literature estimating the transmission of price shocks in the economy

divorce as a risky prospect in 1910 the divorce rate per 1000 members of the us population stood at 0 9 1 this rate showed a slow upward trend for the next 50 years and by 1960 had more than doubled to 2 2 it took only 20 years for the rate to more than double again so that by 1980 the rate was 5 3 for the last 20 years the marriage rate by contrast has experienced mild fluctuations between 10 0 and 11 0 per 1000 in the population with no discernible trend if the same pattern for both rates holds until the year 2000 the annual number of divorces will exceed the annual number of marriages although sociologists have researched divorce extensively only a few economic studies exist this is unfortunate since divorce is likely to have considerable impact on economic vaiables such as hours of work labour force participation human capital accumulation work performance and earnings 2 without denying the influences of peer groups social norms and role models it seems reasonable to suggest that pecuniary considerations ma

price transmission in the eu wholesale petroleum markets this article employs nonlinear smooth transition models to analyze the relationship between upstream and midstream prices of petroleum products we test for the presence of nonlinearities in price linkages using both weekly series constructed using official eu procedures and also daily industry series applied for the first time our results show that the estimated shape of the transition function and equilibrium reversion path depend on the frequency of the price dataset our analysis of the crude oil to wholesale price transmission provides evidence of nonlinearities when prices are observed with daily frequency the nature of the nonlinearities provides evidence in support of the existence of menu costs or more generally frictions in the markets rather than supply adjustment costs this result differs from that found for the u s petroleum markets

taxes and transfers their effects on the decision to end a marriage abstract the transfer system typically has large marriage disincentives while the income tax system is likely to subsidize marriage for many low income families in other words the tax system may offset an increase in transfer benefits associated with marital separation the interaction of the transfer system with the income tax system has largely been overlooked the income tax system has become more relevant for low income families with the recent expansion of the earned income tax credit which filers may be eligible for even if their tax liability is zero this paper uses family level measures of the change in transfer benefits and tax liability associated with a change in family structure to consider the effect of these financial incentives on separation decisions

price transmission and asymmetric adjustment in the u s beef sector the u s livestock sector has experienced numerous structural changes in recent years for example the meatpacking industry has experienced many mergers and acquisitions leading to significant increases in industry concentration in particular the four firm concentration ratio for steer and heifer slaughter a frequently cited statistic and an important indicator of industry concentration increased from 35 7 in 1980 to 79 8 in 1997 usda there have also been significant regional shifts in livestock production and changes in marketing practices with decreased use of public markets in many areas for some products traditional auction markets have been largely replaced by contract production and sales cattle inventories have also trended downward over the last two decades this has been accompanied by decreases in the number of producers and in some cases with significant increases in the scale of operations the vertical transmission of shocks among various levels of the market is an important characteristic describing the overall operation of the market of course price is the primary mechanism by which various levels of the market are linked the extent of adjustment and speed with which shocks are transmitted among producer wholesale and retail market prices is an important factor reflecting the actions of market participants at alternative market levels the nature speed and extent of adjustments to market shocks may also have important implications for marketing margins spreads and mark up pricing practices an extensive literature has examined mar

price adjustments by a gasoline retail chain we use daily data to examine price responses in the swedish gasoline market to changes in the rotterdam spot price exchange rates and taxes the distribution of price adjustments by a leading retail chain for the period january 1980 to december 1996 is symmetric with no small adjustments an error correction model shows that in the short run prices gradually move towards the long run equilibrium in response to cost shocks there is some evidence that also in the short run prices are stickier downwards than upwards prices respond more rapidly to exchange rate movements than to the spot market price our analysis emphasizes that to fully understand price adjustments it is necessary to examine data sets where the sample frequency at least matches that of price adjustments

is there an asymmetry in the response of diesel and petrol prices to crude oil price changes evidence from new zealand this paper examines how pre tax petrol and diesel prices in new zealand respond to changes in crude oil prices using an asymmetric error correction model our results show that oil companies adjust diesel prices upwards faster than they adjust them downwards and the difference is statistically significant however we find no statistical evidence for an asymmetry in the adjustment of petrol prices even though the magnitude of estimated coefficients suggests a faster response to rising prices as diesel pricing is not as competitive as petrol pricing calls for further government actions and monitoring of the oil market may be justified our findings also have important implications for the conduct of monetary policy as the pass through of crude oil price changes can affect cost push inflation

the speed of gasoline price response in markets with and without edgeworth cycles retail gasoline prices are known to respond fairly slowly to wholesale price changes this does not appear to be true for markets with edgeworth price cycles recently many retail gasoline markets in the midwestern u s and in other countries have been shown to exhibit price cycles in which competition generates rapid cyclical retail price movements we show that cost changes in cycling markets are passed on 2 to 3 times faster than in markets without cycles we argue that the constant price movement inherent within the edgeworth cycle eliminates price frictions and allows firms to pass on cost fluctuations more easily

asymmetric dynamic pricing in a local gasoline retail market asymmetric price adjustment is a common phenomenon in many markets around the world particularly in retail gasoline markets this paper studies the existence of this phenomenon in the retail gasoline market in the city of santiago chile using a data set of weekly gas station prices that covers a period of almost four years we found that prices adjust asymmetrically and the asymmetry is different for branded gas stations and unbranded stations in addition we found that the asymmetry for high margin stations is statistically equivalent to that for low margin stations this evidence is suggestive of collusion as a rationale for the asymmetric pricing policy observed

can adequate child support be legislated responses to guidelines and enforcement i introduction in response to the high levels of poverty faced by children of divorced parents federal and state governments adopted a number of policies during the 1980s aimed at increasing child support awards and payments these laws required all states to have numerical child support guidelines to be used by parents who could not agree on their own and to increase state enforcement of delinquent child support awards implicit in much of the policy discussion about divorce is the assumption that within marriage parents will jointly act in the best interest of their children but that after divorce children may not be adequately provided for and legislative action is required in the extreme this view is represented by the stereotype of the deadbeat dad a term that describes a father who doesn t care enough about his children to continue any involvement with them either in terms of time or money similarly economic models often assume a noncooperative outcome in which the non custodial father will not provide what he did during marriage e g weiss and willis 1985 our article makes several contributions to the literature on the determinants of child support by absent fathers in contrast to almost all of the work on this topic that has been based on noncooperative models we develop a theoretical model in which some families may be able to achieve a cooperative outcome which increases the total resources available to children in particular our model identifies three different types of outcomes 1 cooperative and self enforcing 2 noncooperative and self enforcing and 3 noncooperative and state enforced each of these outcomes has different implications for the well being of children and for the level of government involvement in divorce settlements we then derive the conditions under which families can achieve each of these outcomes and we specifically model how policy variables affect whether or not a particular outcome is achieved the levels of payments and levels of compliance conditional on the type of outcome our empirical work provides reduced fo rm evidence that is consistent with a model that distinguishes these different types of outcomes and we find that policies can affect the type of outcome as well as the level of child support awards and payments section ii of this article provides background and motivations for our topic we develop a general theoretical framework in section iii and compare outcomes under assumptions of symmetric versus asymmetric information section iv incorporates the legal environment by modeling the impact of guidelines and state enforcement efforts on the probability the custodial parent cp will impose the guidelines the level of child support awards and the noncustodial parent s ncp s compliance in section v we interpret comparative statics section vi examines the determinants of reduced form models of the probability of a court ordered child support award and shows that the predictions of the model are consistent with data on the characteristics of divorce settlements and parental behavior for those with voluntary versus court ordered settlements a summary of the findings and policy implications concludes ii background and motivation in contrast to the marriage literature which predominately uses cooperative bargaining models the literature on divorce generally assumes that divorcing parents are unable to reach cooperative agreements for example weiss and willis 1985 model parental expenditures on children after divorce as a principal agent problem in which the absent father cannot verify the child expenditures made by the mother this problem of asymmetric information leads to an inefficient noncooperative outcome del boca and flinn 1995 also use a noncooperative model to examine the government s choice of compliance outcomes others have analyzed compliance with child support awards using an economics of crime framework beron 1988 beller and graham 1991 chambers 1979

new evidence on asymmetric gasoline price responses in a 1997 paper borenstein cameron and gilbert bcg claim that gasoline prices rise quickly following an increase in the price of crude oil but fall slowly following a decrease this note estimates an error correction model with daily spot gasoline and crude oil price data over the period 1985 1998 and finds no evidence of asymmetry in wholesale gasoline prices the sources of the difference in results are twofold first we use the standard engle granger two step estimation procedure whereas bcg used a nonstandard estimation methodology second even using bcg s nonstandard specification the use of daily rather than weekly data yields little evidence of price asymmetry

does child support enforcement reduce divorce rates a reexamination during the 1990s expenditures on child support enforcement increased dramatically as did the amount of money collected in these efforts this paper examines whether there is a link between the child support enforcement program and the divorce behavior of married couples with children previous work notably that of nixon 1997 found a significant negative effect of child support enforcement policy on the probability of divorce however using a panel of state divorce rates and policy variables i find that contrary to this previous study child support enforcement policy has no significant impact on divorce rates

job displacement disability and divorce earnings shocks should affect divorce probability by changing a couple s expected gains from marriage we find that the divorce hazard rises after a spouse s job displacement but does not change after a spousal disability this difference casts doubt on a purely pecuniary motivation for divorce following earnings shocks since both types of shocks exhibit similar long run economic consequences furthermore the increase in divorce is found only for layoffs and not for plant closings suggesting that information conveyed about a partner s noneconomic suitability as a mate due to a job loss may be more important than financial losses in precipitating divorce

asymmetric fuel price responses under heterogeneity we explore the effect of cross sectional aggregation of data on estimation and test of asymmetric retail fuel price responses to wholesale price shocks the analysis is performed on data collected daily from individual fuel stations in the spanish metropolitan areas of madrid and barcelona while the standard ols estimator is applied to an error correction model in the case of the aggregated time series we use the mean group approaches developed by pesaran and smith 1995 and pesaran 2006 to estimate the short and long run micro relations under heterogeneity we found remarkable differences between the results of estimations using aggregated and disaggregated data which are highly robust to both datasets considered our findings could help to explain many of the results in the literature on this research topic on the one hand they suggest that the typical estimation with aggregated data clearly tends to overestimate the persistence of shocks on the other hand we show that aggregation may generate a loss of efficiency in econometric estimates that is sufficiently large to hide the existence of the rockets and feathers phenomenon

an empirical investigation of the determinants of asymmetric pricing abstract this article empirically investigates the cause of asymmetric pricing retail prices responding faster to cost increases than decreases using daily price data for over 11 000 retail gasoline stations i find that prices fall more slowly than they rise as a consequence of firms extracting informational rents from consumers with positive search costs premium gasoline prices are shown to fall more slowly than regular fuel prices which supports theories based upon competition with consumer search further testing also rejects focal price collusion as an important determinant of asymmetric pricing

retail price asymmetries in local gasoline markets the experience of the salt lake city retail gasoline market during the 1989 to 1993 period suggests that there was asymmetric adjustment wholesale and retail price data unique to the salt lake market are used to test for the existence of three types of price asymmetry during this period with respect to the magnitude of the pass through of wholesale price changes evidence of price asymmetry during periods of average weekly wholesale price changes is found however during market shocks the evidence points in the direction of retail price symmetry evidence of asymmetry with respect to the timing and pattern of the retail price response is found for periods of both average and market shock changes since gasoline is purchased by the consumer in local markets conclusions reached by studies of market pricing behaviour that rely on national data may not be relevant for local policy decisions this appears to be the case for the salt lake city market

long and short run price asymmetries and hysteresis in the italian gasoline market abstract using monthly data from 1994 to 2013 we study the long run relation of the pre tax retail prices of gasoline with crude price and the nominal exchange rate we find a strongly significant long run relation we then use the nonlinear ardl nardl model to assess the asymmetries on both the short and long run elasticities as well as the presence of hysteresis in the pricing behaviour the estimation results confirm the presence of asymmetry in the long run elasticities with significant differences between the crude price and the exchange rate as well as the presence of hysteresis in the relation between the retail price of gasoline and crude oil price

price asymmetry in the dutch retail gasoline market abstract this article analyses the retail price adjustments in the dutch gasoline market we estimate an asymmetric error correction model on weekly price changes for the years 1996 2001 we construct five datasets one for each working day the conclusions on asymmetric pricing are shown to differ over these datasets suggesting that the choice of the day for which the prices are observed matters more than commonly believed in our view the insufficient robustness of the outcomes might explain the mixed conclusions found in the literature using these two approaches we also show that the effect of asymmetry on the dutch consumer costs is negligible

price dynamics in european petroleum markets this paper analyses horizontal and vertical price dynamics in the eu petroleum markets the results indicate that the cross country price differentials have significant impact on the local price adjustments we investigate the cross national price spill overs and find that the extent of the welfare transfer due to asymmetric price transmission when analysed in a cross country setting is less pronounced than claimed in previous contributions in this area we also find empirical evidence although indirect for the politically charged concept of fuel tourism using a pan european cross product time series dataset