offset carbon emissions or pay a price premium for avoiding them a cross country analysis of motives for climate protection activities abstractthis article contributes to the economic literature on pure and impure public goods by considering two alternatives for contributing to the public good climate protection offsetting carbon emissions from conventional consumption or paying higher prices for climate friendly products we empirically examine a wide range of motives and their impact on individuals choice in favour of these two alternatives relying on data from representative international surveys our results indicate that environmental awareness warm glow motives and the desire to set a good example have the most robust effects on both climate protection activities in germany and the united states however some motives differ considerably between both alternatives and the two countries a green identity enhances the willingness to pay a price premium for climate friendly goods or services in germany while social norms seem to be of much higher relevance in the united states our results further suggest that the choice of climate

rebates matches and consumer behavior an experiment conducted to examine the effects of different discount formats on consumer purchases is reported participants made a series of purchase decisions for chocolate bars given 1 rebates from the listed price 2 matching quantities of chocolates for each bar purchased and 3 simple price reductions contrary to standard theoretical predictions and consistent with results in the context of charitable contributions by eckel and grossman 2003 we find that participants purchase significantly more chocolate bars under a matching sales format than under a comparable rebate format inattention to the net consequences of decisions as well as some rebate aversion explain the preference for matching discounts

effects of the price of charitable giving evidence from an online crowdfunding platform abstract a long literature has examined the effects of the price of giving that is the amount an individual must give for one dollar to accrue to the charitable activity itself on donative behavior we use data from donorschoose org an online platform linking teachers with prospective donors that are uniquely suited to addressing this question due to exogenous variation in overhead costs an increased price of giving results in a lower likelihood of a project being funded we also calculate the price elasticity of giving finding estimates between 0 8 and 2 finally we examine the effect of competition on giving and find that increased competition reduces the likelihood of a project being funded these results provide insight into the workings of the market for charitable gifts

the influence of collective action on the demand for voluntary climate change mitigation in hypothetical and real situations in this experiment we investigate determinants of the individual demand for voluntary climate change mitigation subjects decide between a cash prize and an allowance from the eu emissions trading scheme for one ton of co2 that will be deleted afterwards we vary the incentives of the decision situation in which we distinguish between real monetary incentives and a hypothetical decision situation with and without a cheap talk script furthermore decisions were implemented either as purely individual or as a collective action using majority voting we observe a significant hypothetical bias in the demand for voluntary climate change mitigation in case of the individual decision situation this bias is caused solely by subjects with low income collective decision making affects demand positively in the hypothetical decision situation only

collateral avoids ponzi schemes in incomplete markets without introducing either debt constraints or transversality conditions to avoid the possibility of ponzi schemes we show the existence of equilibrium in an infinite horizon incomplete markets economy with a collateral structure

why do people volunteer an experimental analysis of preferences for time donations why do individuals volunteer their time even when recipients receive far less value than the donor s opportunity cost previous models of altruism that focus on the overall impact of a gift cannot rationalize this behavior despite its prevalence we develop a model that allows for differential warm glow depending on the form of the donation in a series of laboratory experiments that control for other aspects of volunteering such as its signaling value subjects demonstrate behavior consistent with the theoretical assumption that gifts of time produce greater utility than the same transfers in the form of money subjects perform an effort task accruing earnings at potentially different wage rates for themselves or a charity of their choice with the ability to transfer any of their personal earnings to charity at the end of the experiment subjects exhibit strong preferences for donating time even when differential wage rates make it costly to do so the results provide new insights on the nature of vo

educational assortative mating and earnings inequality in the united states1 this article investigates how changes in educational assortative mating affected the growth in earnings inequality among households in the united states between the late 1970s and early 2000s the authors find that these changes had a small negative effect on inequality there would have been more inequality in earnings in the early 2000s if educational assortative mating patterns had remained as they were in the 1970s given the educational distribution of men and women in the united states educational assortative mating can have only a weak impact on inequality and educational sorting among partners is a poor proxy for sorting on earnings

why do people give testing pure and impure altruism abstract researchers measure crowd out around one level of charity output to identify whether giving is motivated by altruism and or warm glow however crowd out depends on output implying first that the power to reject pure altruism varies and second that a single measurement of incomplete crowd out can be rationalized by many different preferences by instead measuring crowd out at different output levels we allow both for identification and for a novel and direct test of impure altruism using a new experimental design we present the first empirical evidence that consistent with impure altruism crowd out decreases with output jel d64 l31

slipping into and out of poverty the dynamics of spells this paper examines the dynamics of poverty previous analyses have examined either fluctuations in the male heads earnings or the frequency of poverty periods over a fixed time frame our approach depends on a definition of spells of poverty using this methodology we find that the majority of poor persons at any time are in the midst of a rather long spell of poverty the methodology also allows us to estimate that less than 40 percent of poverty spells begin because of a drop in the heads earnings while 60 percent of the spells end when the heads earnings increase thus researchers must focus on household formation decisions and on the behavior of secondary family members there has been a dramatic resurgence recently of discussion of the underclass the discussion is reminiscent of debates about poverty during the 1960s when the notions of a culture of poverty particularly as popularized by michael harrington s other america 1962 dominated both intellectual and policy thinking the idea of an underclass seems inconsistent however with much of the research on the dynamics of poverty during the 1970s that research using new longitudinal data seemed to show that the bulk of the poor were poor for only a few years the research also showed that the poor were a very heterogeneous group including a small minority of persistently poor the persistence of poverty is of interest both for understanding the phenomenon and for developing policy claims about dependency and separate life styles among the poor rest on assumptions about the long term nature of poverty questions

trends in intergenerational income mobility previous studies of recent u s trends in intergenerational income mobility have produced widely varying results partly because of large sampling errors by making more efficient use of the available information in the panel study of income dynamics we generate more reliable estimates of the recent time series variation in intergenerational mobility our results which pertain to the cohorts born between 1952 and 1975 do not reveal major changes in intergenerational mobility

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

educational assortative mating and household income inequality we use data from denmark germany norway the united kingdom and the united states to document the degree of educational assortative mating how it evolves over time and the extent to which it d

warm glow giving earned money and the option to take giving in dictator games has been shown to vary with the nature of the endowment earned vs house money and the action space give only vs the option to give or take this article is the first to test if these factors similarly affect warm glow giving alone there is no reason that one would expect the same outcomes given that the motivations for warm glow giving are different from the motivations for total warm glow plus purely altruistic giving we find that warm glow giving to charity or philanthropic institutions in a real donation experiment increases when the endowment is earned the option to take does reduce warm glow giving to charity but significant giving remains our results suggest that donating earned income creates greater utility than donating an equal amount from a windfall gain and that warm glow comes not merely from the act of giving but also from the characteristics of the recipient jel c90 d64 h41

biases in standard measures of intergenerational income dependence abstract estimates of the most common mobility measure the intergenerational elasticity can be severely biased if snapshots are used to approximate lifetime income however little is known about biases in other popular dependence measures using long swedish income series we provide such evidence for log linear and rank correlations and rank based transition probabilities attenuation bias is considerably weaker in rank based measures life cycle bias is strongest in the elasticity moderate in log linear correlations and small in rank based measures however there are important exceptions persistence in the tails of the distribution is considerably higher and long distance downward mobility lower than estimates from short run income suggest

earnings inequality and the changing association between spouses earnings increases in the association between spouses earnings have the potential to increase inequality as marriages increasingly consist of two high earning or two low earning partners this article uses log linear models and data from the march current population survey to describe trends in the association between spouses earnings and estimate their contribution to growing earnings inequality among married couples from 1967 to 2005 the results indicate that increases in earnings inequality would have been about 25 30 lower than observed in the absence of changes in the association depending on the inequality measure used three components of these changes and how they vary across the earnings distribution are explored

does the government crowd out private donations new evidence from a sample of non profit firms abstract during the 1980s government grants to non profit organizations declined dramatically and the price of private donations increased given there are different costs associated with government grants and private donations to non profits it is important to study the relationship between these two sources and determine whether government grants crowd out private donations i take a fresh look at the issue of crowd out and improve upon the literature by exploiting a panel data set that links private donations to non profit firms with the government grants they received i study 430 non profit shelter human services and other similar types of organizations that were in operation between 1982 and 1992 i find private donations to these non profits effectively do not change with changes in government grants after controlling for firm heterogeneity and political and economic factors under an ols specification in a 2sls specification after controlling for possible endogeneity of the government grants the estimated crowd out is significantly different from zero and one dollar on average the estimated crowd out is 50 cents

how giving affects giving a long term analysis of donations social preferences theories suggest that at least some people show altruistic behaviour however this philanthropic behaviour ranges from pure altruistic preferences to reluctant altruists the fa

a theory of impact philanthropy this article develops a new model of altruism called impact philanthropy an impact philanthropist is someone who wants to personally make a difference while that motive is straightforward its logical implications are significantly different from other models of philanthropy for example the contributions of other donors can reduce an impact philanthropist s charitable fulfillment as a result cooperation among impact philanthropists can reduce aggregate giving in addition impact philanthropy can lead to a codependent relationship between givers and receivers in which both benefit from the other finally the model suggests a conflict between charitable organizations and its donors concerning the allocation of charitable gifts in particular a charitable organization prefers to spread a donor s contribution across many goods whereas a donor prefers to target his or her contribution at a specific good d 2003 elsevier b v all rights reserved

public versus private education when differential fertility matters we assess the merits of different education systems in a framework that accounts for the joint decision problem of parents regarding fertility and education specifically we compare the implications of a public and a private schooling regime for economic growth and inequality we find that private schooling leads to higher growth when there is little inequality in human capital endowments across families in contrast when inequality is high public education yields higher growth by reducing fertility differentials in addition public schooling leads to income convergence while private schooling can result in ever increasing inequality our analysis highlights theimp ortanceof accounting for endogenous fertility differentials when analyzing educational policies

inequality and crime this paper considers the relationship between inequality and crime using data from urban counties the behavior of property and violent crime are quite different inequality has no effect on property crime but a strong and robust impact on violent crime with an elasticity above 0 5 by contrast poverty and police activity have significant effects on property crime but little on violent crime property crime is well explained by the economic theory of crime while violent crime is better explained by strain and social disorganization theories

education segregation and marital sorting theory and an application to the uk abstract this paper presents a model of the intergenerational transmission of education and marital sorting parents matter both because of their household income and because their human capital determines the distribution of a child s disutility from making an effort to become skilled we show that an increase in segregation has potentially ambiguous effects on the proportion of individuals that become skilled in the steady state and hence on marital sorting the personal and household income distribution and welfare we calibrate the steady state of our model to uk statistics we find that an increase in the correlation of spouses in their years of education will bring about a small increase in the proportion of skilled individuals when the relative supply of skilled individuals is variable at the family level and a decrease when this supply is fixed ex ante utility of an unborn individual increases in the first case and decreases in the second the welfare effect of increased sorting is negative for unskilled individuals and positive for skilled individuals increased segregation always leads to an increase in welfare inequality between skilled and unskilled individuals

sorting and inequality in canadian schools abstract a student s peers are often thought to influence his or her educational outcomes if so an unequal distribution of advantaged and disadvantaged students across schools sorting in a community will amplify existing inequalities this paper explores the relationship between the degree of sorting across schools within a community and educational inequality as measured by the variance of standardized high school exam scores within the community cross sectional ols estimates suggest that the variance of test scores is related to sorting by ethnicity but not to sorting by income or parental education we then implement two strategies for addressing endogeneity in the degree of sorting a standard unobserved effects first difference approach and a first difference instrumental variables approach in which the structure of school choice number and relative size of schools is used to construct instruments for the degree of sorting the results from both approaches indicate that the variance of test scores is related to sorting by home language and parental education but not to sorting by income our results also suggest that reducing sorting would have little effect on inequality of outcomes in the typical alberta community but would have substantial effects in the larger cities

an experimental test of the under annuitization puzzle with smooth ambiguity and charitable giving abstract in a life cycle model with a bequest motive we study the impact of smooth ambiguity aversion to uncertain survival probabilities on the optimal demand for annuities we implement a theory driven laboratory experiment first a subject s ambiguity attitude is elicited in a simple experimental setting able to make the smooth ambiguity model operational then in a two period annuity bequest decision problem the subject s bequest in the second period is presented as a donation to a previously chosen charity contingent to the subject being active after the first period in line with the theoretical predictions we find that ambiguity averse resp loving subjects invest less resp more in annuities than ambiguity neutral ones furthermore subjects contingent donation to the chosen charity increases in their investment in annuities only for sufficiently high levels of warm glow altruism

responsible management incentive systems and productivity a disconnect remains between theories about responsible management and application in real life organizations part of the reason is due to the complexity and holistic nature of the field and the fact that many of the benefits of aligning business objectives with changing societal conditions are of an intangible nature human resource management is an increasingly important part of the field with benefits including talent retention higher levels of motivation and improvements in organizational cohesion this paper sets out an experiment run at a large spanish university to try to analyze the impact on worker productivity of a responsible management stance by an employer based on the corporate social performance model the paper examines the issue from the point of view of responsibilities responsiveness and outcomes and considers the cost benefit effect of incorporating a social responsibility variable into the wage structure to measure the impact on productivity

intergenerational income mobility in the united states social scientists and policy analysts have long expressed concern about the extent of intergenerational income mobility in the united states but remarkably little empirical evidence is available the few existing estimates of the intergenerational correlation in income have been biased downward by measurement error unrepresentative samples or both new estimates based on intergenerational data from the panel study of income dynamics imply that the intergenerational correlation in long run income is at least 0 4 indicating dramatically less mobility than suggested by earlier research copyright 1992 by american economic association

job information networks neighborhood effects and inequality this paper explores the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends relatives and acquaintances during job search and its consequences for the job market it also addresses the role of network structure and size the resource endowments of contacts and nature of the links between contacts to explain differences in the effects of job information networks in doing so the paper also turns to the sociology literature on job information networks and provides an economic perspective on such sociological concepts as strong versus weak ties inbreeding distance from structural holes etc the paper distinguishes between models of exogenous job information networks that is where individuals obtain job related information through a given social structure and endogenous job information networks which are social networks that result from individuals uncoordinated actions the paper pays special attention to such issues as physical and social proximity and sharing of information and discusses them in the context of the recent social interactions and neighborhood effects literature finally the paper outlines a model that integrates job information networks where interactions occur in business cycle frequencies with the dynamics of human capital formation which include the joint effects of parental community and neighborhood human capital and are set in life cycle frequencies for the purpose of organizing suggestions for future research and examining earned income inequality

crime and social interactions the high variance of crime rates across time and space is one of the oldest puzzles in the social sciences this variance appears too high to be explained by changes in the exogenous costs and benefits of crime we present a model where social interactions create enough covariance across individuals to explain the high cross city variance of crime rates this model provides an index of social interactions which suggests that the amount of social interactions is highest in petty crimes moderate in more serious crimes and almost negligible in murder and rape

the price elasticity of warm glow giving abstract we examine the charitable giving behavior of warm glow givers in response to the same donation incentive structure but with formally different schemes at this aim we implement a large online survey n 1655 using the amazon mechanical turk platform first we elicit and measure warm glow giving then we employ a between subjects design in which each warm glow donor n 881 is randomly assigned to one of two treatment groups that differ for the subsidy rebate or matching and is asked to make a series of allocation decisions between himself and a charity of his choice the results show that contributions are significantly more responsive to matching 1 15 than to rebate subsidies 0 17 moreover we provide evidence that under rebate price elasticity decreases as the warm glow magnitude increases for weak warm glow givers price elasticity is double that for strong warm glow donors

regression toward mediocrity in economic stature this paper provides estimates of the correlation in lifetime earnings between fathers and sons intergenerational data from the national longitudinal survey are used earlier studies conducted for the united states report elasticities of children s earnings with respect to parent s earnings of 0 2 or less suggesting extensive integenerational mobility these estimates however are biased downward by error contaminated measures of lifetime economic status estimates presented in this paper correct for the problem of measurement error and find the intergenerational correlation in income to be on the order of 0 4 this suggests considerably less intergenerational mobility than previously believed jel j62

economic and mechanical models of intergenerational transmission the author critically examines gary beckers attempt to integrate the theory of income distribution intragenerational differences with the theory of mobility intergenerational differences in an economic model of the family he assesses beckers claims of distinctiveness integration explanatory power and surprise and arrives at a rather skeptical view of the contribution that the core of microeconomics has made to this study of the family a reply by becker is included pp 514 8 excerpt

assortative mating and female labor supply this paper investigates married women s hours worked disaggregated by the husband s wage decile in the united states this pattern has changed from downward sloping to hump shaped we show that this development can be explained within a standard household model of labor supply when taking into account trends in assortative mating a quantitative analysis of our model shows that female wage growth and decreasing fertility are primarily responsible for the overall increase in wives hours since the 1970s the fact that the most pronounced increases are observed for wives married to high wage men is a result of trends in assortative mating

the price elasticity of charitable giving new experimental evidence abstract we examine the charitable giving decisions of donors under two subsidy mechanisms rebate and matching and we calculate the price elasticity of giving we implement an online survey using the amazon mechanical turk platform participants are asked to make a series of allocation decisions between themselves and a charity of their choice we vary endowment and subsidy rates in line with the literature the results show that contributions under matching subsidies are significantly higher than contributions under rebate subsidies participants who usually make a donation are more likely to give and are less responsive to price changes moreover the probability of giving increases monotonically along with subsidy rates

subsidizing charitable giving with rebates or matching further laboratory evidence we examine two different ways to subsidize charitable giving by a rebate returning a portion of the donation to the giver or by a match adding additional donations to the giver s donation in previous experimental research we have shown that participants give more to charity under the match than under an equivalent rebate the previous within subject experimental design required participants to make a series of decisions under both types of subsidy each decision consisted of an allocation of an endowment between the subject and a charity chosen by the subject from a specified list this article examines whether that result is an artifact of the previous within subjects design subjects may have failed to fully distinguish the two types of subsidy in the current article we report results from a between subjects design where participants are required to make only one type of decision involving rebates or involving matching subsidies our results confirm previous findings

estimates of the economic returns to schooling from a new sample of twins this paper uses a new survey to contrast the wages of genetically identical twins with different schooling levels multiple measurements of schooling levels were also collected to assess the effect of reporting error on the estimated economic returns to schooling the data indicate that omitted ability variables do not bias the estimated return to schooling upward but that measurement error does bias it downward adjustment for measurement error indicates that an additional year of schooling increases wages by 12 to 16 percent a higher estimate of the economic returns to schooling than has been previously found copyright 1994 by american economic association

social interactions in labor supply our research examines the effect of interdependence on estimation and interpretation of earnings labor supply equations we consider the cases of 1 a positive spillover from others labor supplied and 2 a need for conformity with others labor supplied qualitative and quantitative comparative statics results with a stone geary utility function demonstrate how spillover effects increase labor supply uniformly alternatively conformity effects move labor supplied toward the mean of the reference group so that in the limit labor supply becomes perfectly inelastic at the reference group average when there are unmodeled exogenous social interactions conventional wage elasticities are still relatively well estimated although structural parameters may not be omitting endogenous social interactions may seriously misrepresent the labor supply effects of policy however jel d11 j22 z13

an accurate measurement of the crowd out effect income effect and price effect for charitable contributions in the past empirical research on charitable contributions has focused on two issues estimating the income and price elasticities of contributions and estimating the extent to which government funding crowded out private contributions the two fundamental problems in all these studies are the differences in the underlying conceptual models and the use of imperfect data for empirical analysis this paper addresses both of these problems

intergenerational persistence of earnings the role of early and college education recent empirical evidence from the united states indicates a high degree of persistence in earnings across generations designing effective public policies to increase social mobility requires identifying and measuring the major sources of persistence and inequality in earnings we provide a quantitative model of intergenerational human capital transmission that focuses on three sources innate ability early education and college education we find that approximately one half of the intergenerational correlation in earnings is accounted for by parental investment in education in particular early education we show that these results have important implications for education policy

paying for good neighbours estimating the value of an implied educated community by definition spillovers across households in residential communities mean that people incur costs from living in neighbourhoods where a high proportion of households suffer deprivation regardless of their own economic circumstances to verify the existence of intracommunity spillovers this paper shows that home owners in england and wales are prepared to pay a substantial premium to avoid educationally poor neighbourhoods an increase of 1 per cent in the proportion of higher educated residents in a community relative to the regional mean increases prices by 0 24 per cent one interpretation of this educational elasticity is that it estimates the social benefits of education in the local community a hedonic approach is used paying careful attention to the endogeneity of neighbourhood characteristics in a property price model

charity donations in the uk new evidence based on panel data abstract this paper presents a set of panel data estimates for 159 of the most prominent uk charities for the period 1983 1990 in evaluating alternative specifications we settle on a fixed effects estimation social welfare charities are shown to fund raise short of the point at which net revenues are maximized whereas health and overseas charities are found to net revenue maximize religious charities maximize total revenues estimates of price and fund raising elasticities are presented for charities overall and for four cohorts for alternative income sources no evidence of crowding out is found

location matters historical racial segregation and intergenerational mobility abstract this paper explores historical patterns of racial segregation and its relationship with the observed spatial variation in contemporaneous economic mobility established in chetty et al 2014 we combined data from the equality of opportunity project with a novel measure of racial segregation developed in logan and parman forthcoming and find that past racial segregation explains a significant portion of the spatial variation in intergenerational mobility these findings are consistent with models showing that persistent institutional factors may drive long term outcomes across areas racial segregation and the environment that fosters it may diminish upward economic mobility by reducing access to networks labor and capital markets and political institutions if so then reducing the impact of these persistent processes may be key to mitigating current day gaps in wealth income and overall well being

family economics and macro behavior in this 1987 presidential address to the american economic association the author explores the contributions of the field of family economics to macroeconomic analysis the focus is on family behavior as an active endogenous factor that both affects and is affected by the evolution of the economy much of the time is spent on long term economic growth although i also discuss short and long cycles in economic activity and the interaction between overlapping generations through social security transmission of inequality and in other ways many conclusions in these and presumably other macro areas change radically when family choices get the attention they deserve excerpt

stratification and public utility services in colombia subsidies to households or distortion of housing prices domiciliary public utility services in colombia have a cross subsidy system which charges subsidized rates to the households who live in houses located in strata associated to low wealth levels and taxed rates to the better off we assesses the hypothesis that the flow of subsidies that potentially come from a particular house are discounted by housing market agents so that most of them are transferred to the prices of the houses that generate the subsidies by estimating a hedonic prices model applying a regression discontinuity approach we find that the increment in house value estimated because of subsidies is similar in magnitude to the present value of the flow of subsidies likely effects are found on the rent amount we conclude that subsidies to the poor population through public spending in domiciliary public utility services in colombia is being achieved if anything in a very limited way most of the financial effort on this subject ends up distorting housing relative prices according to socioeconomic strata with an annual cost of up to 0 7 of gdp in supposed gross subsidies to domiciliary public utility services

unobservable family and individual contributions to the distributions of income and wealth this paper uses combinations of full brothers half brothers and fathers and sons to measure the effect of common family background on a household s income and wealth while the data are drawn from a nineteenth century population the intraclass correlation for income ranges from 13 to 18 which is similar to that found in modern samples intraclass correlations for wealth are significantly higher 18 35 than are those for income intraclass correlations of half brothers compared to those for full brothers suggest that fathers play a dominant role in the transmission of the common family effect when unobserved background is decomposed into individual and family effects the individual effect dominates the family effect for income while the family effect dominates the individual effect for wealth

social responsibility and incentives in the lab why do agents exert more effort when principals donate abstract we test experimentally whether and why principals charitable giving affects agents efforts we study a simple principal agent setting in the lab where a principal decides whether to donate a fixed amount to a charity and in the next step an agent chooses his effort we argue there are three potential mechanisms that can trigger a higher effort after a donation in this setting distributional concerns reciprocal altruism and shared warm glow utility we find agents choose higher efforts when principals donate with respect to the mechanisms we find evidence for reciprocal altruism and distributional concerns as drivers of agents performance reactions in the lab

waiting for mr right rising inequality and declining marriage rates abstract this paper demonstrates that women search longer for their first or second husband in cities with higher male wage inequality and examines several alternative explanations a causal link is established by controlling for city fixed effects and city specific time trends and by using inequality in the woman s state of birth as a proxy for local male inequality increasing inequality explains about 25 of the marriage rate decline over the last few decades and this is not due to the endogenous moving or labor force decisions of women nor to the marital decisions of men in reaction to changes in their own wages

statistical arbitrage with default and collateral abstract this paper studies the implications of the absence of statistical arbitrage opportunities in a two period incomplete market economy where default is allowed but there are collateral requirements modified versions of the fundamental theorem of asset pricing are obtained

ethnic capital and intergenerational mobility this paper analyzes the extent to which ethnic skill differentials are transmitted across generations i assume that ethnicity acts as an externality in the human capital accumulation process the skills of the next generation depend on parental inputs and on the quality of the ethnic environment in which parents make their investments or ethnic capital the empirical evidence reveals that the skills of today s generation depend not only on the skills of their parents but also on the average skills of the ethnic group in the parent s generation

an experimental test of warm glow giving abstract this paper reports the results of an experimental test of the warm glow hypothesis a participant is presented with the opportunity to contribute from her own endowment to a charity of choice the experiment is designed so that a pure altruist has no incentive to donate the amount the designated charity will receive is preset any contribution by the participant crowds out dollar for dollar giving by the proctor we find that participants on average donated 20 of their endowments and that approximately 57 of the participants made a donation

charitable giving in the german welfare state fiscal incentives and crowding out there are two ways that government activities influence private charitable giving 1 government spending on the provision of public goods may cause crowding out of private charitable contributions and 2 tax incentives may boost private charitable giving from a sample of german income tax returns we estimate the elasticity of charitable giving relative to tax incentives income and government spending using censored quantile regression analysis we derive results for different points of the underlying distribution of charitable giving evaluating overall treasury efficiency the tax deductibility of charitable donations fosters enough private giving to offset foregone tax revenues

strategic thinking in public goods games with teams abstract we experimentally investigate team behavior in repeated public goods games and use team chat logs to study motives for contribution subjects are matched into two person teams and each team makes a joint decision in each period we compare teams with individuals and find similar overall contributions however initial contribution is higher and endgame effects are more pronounced for teams we examine strategic discussions within teams and find strong evidence of concern for repeated game effects and limited backward induction we also find evidence of confusion and explore its potential sources

snapshots versus movies empirical studies of the intergenerational inheritance of economic status should use observations on complete lifetime status profiles of parents and children to be consistent with underlying theory but they cannot only snapshots rather than movies on status are currently available in samples estimates of the degree of intergenerational inheritance may therefore be subject to lifecycle biases the paper investigates these in the context of a lifecycle earnings model and shows that these biases may be large that their direction varies and that correction methods suggested hitherto have questionable reliability until more complete data sets become available researchers should be more temperate in the conclusions they draw

assessing the importance of tiebout sorting local heterogeneity from 1850 to 1990 this paper argues that long run trends in geographic segregation are inconsistent with models where residential choice depends solely on local public goods the tiebout hypothesis we develop an extension of the tiebout model that predicts as mobility costs fall the heterogeneity across communities of individual public good preferences and of public good provision must weakly increase given the secular decline in mobility costs these predictions can be evaluated using historical data we find decreasing heterogeneity in policies and proxies for preferences across i a sample of u s municipalities 1870 1990 ii all boston area municipalities 1870 1990 and iii all u s counties 1850 1990

partners in giving the crowding in effects of uk government grants abstract this study examines the determinants of voluntary donations to uk charities using empirical specifications that combine error component and simultaneous equations methods in a series of tests we identify the one way fixed effects endogenous representation for government grants as the best empirical model when this endogeneity is taken into account government grants cause significant crowding in for the full sample and the two largest cohorts price coefficients are negative and fund raising coefficients are positive religion charities are net revenue maximizers whereas other charity cohorts fund raise short of net revenue maximization

interactive property valuations this paper estimates models of social interactions within residential neighborhoods using data on neighborhood clusters for standard metropolitan areas in the united states from the american housing survey for 1985 and 1989 it examines eects of social interactions in the form of reaction functions for homeowners valuation of their properties at the level of the immediate residential neighborhood with neighborhoods consisting of a randomly chosen dwelling unit and about ten nearest neighbors the paper identifies the eect of endogenous social interactions to be significant and large ranging from 0 587 to 0 770 and much more important then the dynamic autoregressive structure of the model when both variables are present and both are significant the interactive regressions that it reports improve upon commonly used hedonic regressions as well the paper provides empirical support for the notion common in the real estate world of the importance of neighboring properties in property valuations

mothers and sons preference formation and female labor force dynamics this paper argues that the growing presence of a new type of man one brought up in a family in which the mother worked has been a significant factor in the increase in female labor force participation over time we present cross sectional evidence showing that the wives of men whose mothers worked are themselves significantly more likely to work we use variation in the importance of world war ii as a shock to women s labor force participation as proxied by variation in the male draft rate across u s states to provide evidence in support of the intergenerational consequences of our propagation mechanism

impure altruism in dictators giving abstract we design an experiment to test whether incomplete crowding out in dictator games can be rationalized by the impurely altruistic preferences by giving the recipients an endowment of varying levels we create an environment in which crowding out may occur we find that the behavior of 66 of the dictators can be rationalized by the impurely altruistic utility function

why governments should invest more to educate girls abstract women and men often receive the same percentage increase in their wage rates with advances in schooling because these returns decline with more schooling the marginal returns for women will tend to exceed those for men especially in countries where women are much less educated the health and schooling of children are more closely related to their mother s education than father s more educated women work more hours in the market labor force broadening the tax base and thereby potentially reducing tax distortions these three conditions it is argued justify the disproportionate allocation of public expenditures toward women s education

the mystery of monogamy we examine why developed societies are monogamous while rich men through out history have typically practiced polygyny wealth inequality naturally pro duces multiple wives for rich men in a standard model of the marriage market however we demonstrate that higher female inequality in the marriage market reduces polygyny moreover we show that female inequality increases in the process of development as women are valued more for the quality of their chil dren than for the quantity consequently male inequality generates inequality in the number of wives per man in traditional societies but manifests itself as inequality in the quality of wives in developed societies jel j12 j16 j24 z13

preferences for power abstract power the ability to determine the outcomes of others usually comes with various benefits higher compensation public recognition etc we develop a new game the power game to demonstrate that a substantial fraction of individuals enjoy the intrinsic value of power they accept lower payoffs in exchange for power over others without any benefits to themselves these preferences exist independently of other components of decision rights cannot be explained by social preferences and are not driven by mistakes confusion or signaling intentions we further show that valuation of power i is higher when individuals directly determine outcomes of others ii depends on how much discretion one has over those outcomes and iii is tied to relationships between individuals we establish that ignoring preferences for power may have large welfare implications and consequently should be included in the study of political systems and labor contracts

how much does sorting increase inequality some commentators argue that increased sorting into internally homogeneous neighborhoods schools and marriages is radically polarizing society calibration of a formal model however suggests that the steady state standard deviation of education would increase only 1 7 percent if the correlation between neighbors education doubled and would fall only 1 6 percent if educational sorting by neighborhood disappeared the steady state standard deviation of education would grow 1 percent if the correlation between spouses education increased from 0 6 to 0 8 in fact marital and neighborhood sorting have been stable or even decreasing historically sorting has somewhat more significant effects on intergenerational mobility than on inequality

heterogeneity social esteem and feasibility of collective action abstract in the presence of individual heterogeneity a major problem with egalitarian partnership such as complete income pooling is that individuals of comparatively high ability are induced to exit the arrangement this is nevertheless ignoring the possible impact of social esteem considerations based on a comparison of members performances in this paper drawing inspiration from pooling experiences in a japanese fishery we show that the exit problem can be surmounted if sensitivity to social esteem is neither too strong nor too weak if it is too strong the lower ability agents will exit out of social shame whereas if it is too weak the higher ability agents will not consider it worthwhile to transfer income to their partners when the arrangement is sustainable the lower ability people strive towards limiting the income gap

lifestyles of the rich and polygynous in cote d ivoire abstract this paper investigates whether the sources of income not just the levels determine whether an individual is monogamous our results support the idea that polygyny stunts development by allowing wealthy men to acquire wives rather than investing in child quality

intergenerational income mobility among daughters new evidence on daughters intergenerational mobility in a framework that encompasses women not in the labor force using broader measures of economic status than just the women s own earnings is presented and the role of husbands earnings is highlighted a parallel analysis of sons mobility is performed intergenerational transmission of income status may be weaker for daughters than for sons but is still quite substantial assortative mating is an important element in the intergenerational transmission process

collateral once again abstract this paper shows how collateral is used to prove the second part of the fundamental theorem of asset pricing in a collateral default setting which connects the concept of an arbitrage free price with the solution of the individual utility maximization problem

neighborhood income distributions this paper studies the distribution of income within neighborhoods and contrasts it with the national income distribution it relies on a unique feature of the american housing survey whose 1985 1989 and 1993 waves of interviews provide data for small residential neighborhoods these consist of a dwelling unit and up to ten of its nearest neighbors most previous work on neighborhoods has used information for much larger groupings of the population such as census tracts the paper employs a variety of parametric and nonparametric econometric tools to study income sorting across us residential neighborhoods it documents the patterns of dependence among neighbors income and imperfect sorting with moderate but very significant correlation among incomes of neighbors and of considerable income mixing in u s neighborhoods

whose money is it anyway ingroups and distributive behavior abstract price theory is often used to explain reactions to rebates and subsidies that are meant to encourage charitable giving this paper describes the results of a laboratory experiment that tests standard price theory alongside an alternative perspective based on research on the perceptions and behavior of ingroups using a modified dictator game we find that rebates that decrease the price of giving only increase amounts given when they are exogenously funded by the experimenters when rebates are funded by members of one s group the decreased price of giving does not lead to increased amounts given the result suggests that the presence of an ingroup mentality can mediate the relationship between giving and price

intergenerational mobility and marital sorting we use data from the german socio economic panel and the british household panel survey to estimate the extent of intergenerational economic mobility in a framework that highlights the role played by assortative mating we find that assortative mating plays an important role on average about 40 50 of the covariance between parents and own permanent family income can be attributed to the person to whom one is married this effect is driven by strong spouse correlations in human capital which are larger in germany than britain 2006 the authors journal compilation royal economic society 2006

the role of collateral in a model of debt renegotiation this paper studies the effect of debt renegotiation on the design of optimal loan arrangements in a model of borrowing and lending with asymmetric information renegotiation may occur because bankruptcy involves costly asset liquidation which is ex post inefficient the author shows that the extent of the entrepreneur s liabilities in the optimal loan contract depends upon the creditor s commitment to impose bankruptcy should default ever occur a limited liability arrangement is optimal whenever the creditor is precommited not to forgive any portion of the outstanding debt otherwise debt may efficiently be secured by outside collateral copyright 1994 by ohio state university press

marital matching and earnings evidence from the unmarried population in sweden social scientists have devoted substantial research to economic basis for matching of men and women in marriage a common feature of existing studies is their reliance on samples of married couples the principal shortcoming of spouse data is that spouses earnings correlations are contaminated by the partners behaviors and other events that occur after marriage and affect their earnings this study addresses that problem by exploiting a longitudinal data file from the swedish population by selecting a sample of married couples in a given year we retreat through the file to years before the marriage using data from the spouses single years we apply the correlation methodology to their earnings evidence from the model supports positive assortative mating

are dictators averse to inequality abstract we present the results of an experiment designed to identify more clearly the motivation underlying dictators behavior in the typical dictator game recipients are given no endowment we give an endowment to the recipient as well as the dictator this new dimension allows us to test directly for inequality aversion our results confirm that the inequality between dictator s and recipient s endowment is a key determinant of the dictator s giving as we increase the recipient s endowment from 0 to an amount equal to the dictator s endowment the mean amount passed drops from 30 percent to less than 12 percent of the dictator s endowment and the proportion of dictators who pass positive amounts falls from 75 percent to 26 percent thus the majority of dictators exhibit behavior consistent with inequality averse preferences on the other hand only 24 percent of dictators split payoffs equally suggesting that maximin preferences are less important drivers of dictators giving

sorting and long run inequality many social commentators have raised concerns over the possibility that increased sorting in society may lead to greater inequality to investigate this we construct a dynamic model of intergenerational education acquisition fertility and marital sorting and parameterize the steady state to match several basic empirical endings we end that increased sorting will signiecantly increase income inequality four factors are important to our endings a negative correlation between fertility and education a decreasing marginal effect of parental education on children s years of education wages that are sensitive to the relative supply of skilled workers and borrowing constraints that affect educational attainment for some low income households

stationary equilibria in asset pricing models with incomplete markets and collateral we consider an infinite horizon exchange economy with incomplete markets and collateral constraints as in the two period model of geanakoplos and zame 2002 households can default on their liabilities at any time and financial securities are only traded if the promises associated with these securities are backed by collateral we examine an economy with a single perishable consumption good where the only collateral available consists of productive assets in this model competitive equilibria always exist and we show that under the assumption that all exogenous variables follow a markov chain there also exist stationary equilibria these equilibria can be characterized by a mapping from the exogenous shock and the current distribution of financial wealth to prices and portfolio choices we develop an algorithm to approximate this mapping numerically and discuss ways to implement the algorithm in practice a computational example demonstrates the performance of the algorithm and shows some quantitative features of equilibria in a model with collateral and default

intergenerational health mobility an empirical approach based on the echp despite the importance of the study of health mobility few attempts have been made to measure intergenerational mobility not only in the european union but also in other countries such as united states this article is focused on the study of intergenerational health mobility using data from the european community household panel echp in particular the relationships between self assessed health of parents and their sons are analysed the evidence obtained suggests that in spain sons reported health depends significantly on the self assessed health of their fathers

pareto optimal redistribution and private charity abstract when private charity exists and is motivated by utility interdependence a non pareto optimal outcome the free rider problem typically arises nevertheless incremental fiscal redistribution cannot achieve a paretian welfare improvement so long as private charity continues at positive levels donors respond to incremental fiscal redistribution by reducing their voluntary contributions by exactly a dollar for every dollar transferred in this way no net transfer is achieved unless incremental fiscal redistribution is pursued to the point where private contributions have been driven to zero alternatively a net transfer may be achieved by fiscal measures which affect donors marginal incentives to donate