industry characteristics and interest group formation an empirical study the role of interest groups in the political process has been the subject of much analysis in both political science and economics however few studies have examined directly the factors which influence the variation in interest group formation across industrial sectors and between countries using data on 75 industrial sectors in 10 countries we examine the way in which variations in interest group formation are explained by variations in industrial and political characteristics in cross sectional empirical relationships we test for the significance of a variety of industry and political variables our results indicate that industry characteristics such as the proportion of total demand purchased by households and the concentration ratio are related to variations in interest group formation we discuss the implications that our results have for recent theoretical work on the effect of interest groups on economic policy

interest groups and the rise and decline of growth interest groups are known to exert a sclerotic impact on mean growth a la olson 1982 it is unknown however what impact if any groups exert on the volatility of growth an important hindrance to development in this article we first consider what impact we should expect olson groups to have on the volatility of growth we then estimate the relation between groups and growth volatility in a cross country panel using system generalized method of moments the findings indicate that groups are associated with growth stability in addition the findings suggest that interest groups may be a source of the stability observed in democracies

lobbying by capital and labor over trade and labor market policies abstract this paper uses the common agency approach to analyze the joint determination of product and labor market distortions in a small open economy capital owners and union members lobby the government on both tariffs and minimum wages while other factors of production are not organized the paper shows that product and labor market distortions always move in the same direction and that their level is not modified by social pacts between capital and labor it also shows that labor market distortions are second best hence conditionality by foreign organizations should target distortions in product markets but not in labor markets

profit shifting and investment effects the implications of zero taxable profits abstract recent empirical research documents a tendency of multinational enterprise affiliates to bunch around zero reported profit we set up a theoretical model of multinational firm behavior in which we allow for corner solutions in the choice of the optimal transfer price due to insufficient profits or losses of affiliates such constraints in the choice of the transfer price induce bunching and generate investment effects in the low tax as well as the high tax country in equilibrium affiliates might overinvest and the investment effects generate a tendency for too high profit taxes the analysis provides a micro foundation for the investment effects that result from transfer pricing the finding stands in contrast to the existing literature where transfer pricing choices are unconstrained

trade liberalization antidumping and safeguards evidence from india s tariff reform abstract this paper is the first to use product level data to examine empirically whether countries use antidumping and safeguard exceptions to unwind commitments to lower tariffs in the face of domestic political economic pressure we focus on the case of india a country that underwent a major exogenous tariff reform program in the early 1990s and subsequently initiated substantial use of safeguard and antidumping import restrictions we first estimate structural determinants of india s import protection using the grossman and helpman 1994 model and provide evidence from its pre reform tariff data of 1990 that is consistent with the theory we then re estimate the model on the indian tariff data after the trade liberalization is complete and find that the model no longer fits a result consistent with theory and evidence provided in other settings that india s 1991 1992 imf arrangement can be interpreted as resulting in an exogenous shock to india s tariff policy however when we re estimate the model on data from 2000 2002 that more completely reflects india s cross product variation in import protection by including both its post reform tariffs and its additional non tariff barriers of antidumping and safeguard import protection the significance of the grossman and helpman model determinant estimates is restored we interpret these combined results as evidence that india unwound its commitment to reduce tariffs through use of antidumping and safeguard protection in the face of political economic pressure the estimates are also economically important and provide one explanation for separate results in the literature that the magnitude of import reduction associated with india s use of antidumping is similar to the initial import expansion associated with its tariff reform finally we interpret the implications of our results for the burgeoning research literature examining the effects of liberalization on india s micro level development

the political economy of declining industries senescent industry collapse revisited many observers have noted a strong tendency for protection once it is instituted to persist over time this paper first shows that persistent protection arises whenever lobbying is an alternative to costly adjustment with endogenous protection the level of tariffs is an increasing function of past tariffs the more an industry lobbies the greater the current protection it receives and the less it adjusts and the less the industry adjusts the more effective it is as a lobby in the future when the costs of lobbying and adjustment are fully variable declining industries contract more slowly over time and never fully adjust however the paper shows that adding a fixed cost of lobby formation or maintenance is sufficient to generate an endogenous collapse of protection such as that predicted by cassing and hillman 1986 american economic review 76 516 523 in which an industry abruptly terminates its lobbying and loses its protection finally the paper examines the well documented bias against growing industries in the lobbying process

interest groups and economic performance some new evidence mancur olson s theory of the decline of nations is path breaking in political economics it has been tested cross sectionally in numerous empirical studies we survey the existing results briefly with a special focus on studies using the number of lobbies as an exogenous variable using data from the period 1973 2006 we then present the field s first time series analysis of the effects of the number of interest groups on the german lobby list and macroeconomic performance gauged in terms of economic growth and inflation the number of interest groups as a proxy for their influence is shown to have an important impact on macro variables interest group activity significantly leads to a decline in the growth rate and a rise in the inflation rate

dwelling unit choice in a condominium complex analysis of willingness to pay and preference heterogeneity we study the choice of dwelling units in a condominium complex a problem that has not been thoroughly investigated in the housing research literature we take a revealed preference approach to quantify home buyers preference toward attributes associated with a dwelling unit in particular we estimate a mixed logit model using the hierarchical bayes approach based on the markov chain monte carlo method we derive the willingness to pay measures for detailed attributes associated with a dwelling unit including its floor level orientation location in the complex location on a floor level and the type of bathrooms we also find strong evidence for the preference heterogeneity among home buyers and conduct regression analysis to explain the preference heterogeneity using home buyers socioeconomic characteristics our results show that home buyers with older ages and higher annual household income tend to focus more on the quality of the dwelling units while first time home buyers are more willing to accept dwelling units with less desirable attributes

modelling the choice of tenure and building type a multinomial logistic mnl model and a naive nested logistic model are estimated to relate differences in household size age income and housing prices to differences in the choice of tenure and building type the estimated models show that the demand for lower density options decreases with a reduction in household size and increases with increasing age and real income higher rents increase the demand for owner occupied single family detached houses higher price levels for the ownership option shift demand toward all of the higher density options particularly toward high rise rental apartments the key assumption underlying the mnl model is examined and shown to not hold true however the differences in the predictions made by the two models are too small to matter in the study of the choices among the major building types issues regarding the choice of models are discussed in the conclusions

tenure choice and the demand for housing this paper deals with the estimation by means of nonlinear methods of preference parameters from observation of behaviour in housing markets it differs from previous work on housing market behaviour in several important aspects first it treats the choice of tenure mode that is whether to rent or own and the housing consumption decision as a joint decision second it explicitly uses the same behavioural model in analysing these discrete and continuous elements of housing market behaviour third it allows for an analysis of the role of capital market imperfections and discriminatory practices in constraining housing market decisions

determinants of interest group formation it is widely recognized that interest groups affect both microeconomic and macroeconomic outcomes however few researchers have attempted to discern empirically the factors that contribute to interest group activity this paper provides a test of several theories of group formation in a panel setting a nation s stability socioeconomic development political system size and diversity all appear to contribute to interest group formation as predicted by theory

rent seeking and market structure comment if the firms in an industry are to be successful in raising money to influence government two conditions must be met 1 there must be sufficient rents available from government decisions regarding that industry to make such expenditures worthwhile and 2 the industry must be sufficiently concentrated to avoid a free rider problem in fund raising this argument though seemingly intuitively appealing has been under recent empirical attack this paper seeks to restore the parapets

capital income and profit taxation with foreign ownership of firms abstract this paper establishes optimal rules for capital income and profits taxation in the open economy with or without foreign ownership of domestic firms we show that if there are constraints on the feasibility of profits taxation both saving and investment taxes generally enter the optimal tax package if instead profits can be fully taxed then source based investment taxes vanish if domestic firms are in part owned by foreigners then source based investment taxes can be used to shift income away from these to domestic citizens and they may even be used to finance lump sum transfers to domestic residents

rent seeking distributional coalitions taxes relative prices and economic growth the results clearly indicate that much of the considerable variation in the pace and pattern of economic growth between the various american states is explainable by institutional arrangements amenable to revisions through public policy the findings suggest that long run economic growth would be best served by constraining distributional coalitions be it through constitutional restraints e g balanced budget amendments the item veto statutory changes e g subjecting coalitions like labor unions to the antitrust laws or some other means e g labor and capital fleeing distributional coalitions such as in the movement of workers and plants to nonunion areas

an analysis of household mobility and tenure choice an empirical study of korea abstract this paper develops a model of households joint mobility tenure decisions which improves upon the sole existing model in two important ways first the probabilistic structure is appropriately framed to capture the simultaneity of the mobility and tenure decisions second the model is based more directly on utility maximization theory an additionally distinguishing characteristic of the model is the fact that all independent variables in the estimation are expressed in flow terms this is done in an effort to more truly reflect their importance in the decision making of the household the model is estimated using microlevel data from korea the coefficients and derived elasticities are consistent with expectations and korean households are found to behave in a manner similar to that in the united states this suggests that the basic motivations underlying households mobility tenure decisions are invariant across countries

distributional coalitions state strength and economic growth toward a comprehensive theory of economic development high performing economies in the asia pacific region together with only mediocre economic development in latin america prompts the question of what explains differential economic growth rates among developing countries combining a statist perspective with olson s theory of interest group formation this research hypothesizes that nations with weak distributional coalitions will more likely experience high growth and state intervention will be effective using a longitudinal research design this secondary analysis involves a comparative and interactive examination of eight asian pacific and twelve latin american countries by considering the role of the state in interaction with distributional coalitions in society the results indicate that approximately two thirds of the variance in national economic growth is explained

housing demand and community choice an empirical analysis abstract housing demand reflects the household s simultaneous choice of the neighborhood whether to own or rent the dwelling and the quantity of housing services demanded existing literature emphasizes the final two factors but overlooks the choice of community this paper develops an econometric model that incorporates all three components and then estimates this model using a sample of tampa florida households incorporating community choice increases the price elasticity of demand and reduces the differential between white and comparable nonwhite households the results are robust to the inclusion of permanent income and taxes

the taxing task of taxing transnationals financial and real investment flexibility tax competition and superior economic information by transnationals both create a rationale for corporate income taxation and limit the effectiveness of such taxation while these factors have led to a variety of transnational tax policies such as deferral double taxation apportionment and trade rules very few of these institutional features have been integrated into tax competition and agency models in this paper i show how the integration of investment flexibility tax competition and agency issues is crucial to our understanding of corporate tax policies

cross border tax effects on affiliate investment evidence from european multinationals recent studies suggest that multinational firm activities at home and abroad are positively correlated which may be due to the use of common inputs like marketing patents etc then a cost shock at one location may lead to reduced activity in all other locations within the firm in this paper we theoretically and empirically analyze national corporate tax policy in such a setting our main hypothesis is that corporate taxation at the parent location not only reduces the parent s capital stock but also lowers capital stocks at affiliates abroad using micro data on european multinational firms we confirm the hypothesis showing that a 10 percentage point increase in corporate tax rates is associated with a 5 6 decrease in the affiliate s capital stock from a welfare point of view this cross border tax effect on the capital stock gives rise to a negative fiscal externality of corporate taxation which is empirically shown to compensate a substantial fraction of the well known positive externality due to profit shifting

assortment optimization under variants of the nested logit model we study a class of assortment optimization problems where customers choose among the offered products according to the nested logit model there is a fixed revenue associated with each product the objective is to find an assortment of products to offer so as to maximize the expected revenue per customer we show that the problem is polynomially solvable when the nest dissimilarity parameters of the choice model are less than one and the customers always make a purchase within the selected nest relaxing either of these assumptions renders the problem np hard to deal with the np hard cases we develop parsimonious collections of candidate assortments with worst case performance guarantees we also formulate a convex program whose optimal objective value is an upper bound on the optimal expected revenue thus we can compare the expected revenue provided by an assortment with the upper bound on the optimal expected revenue to get a feel for the optimality gap of the assortment by using this approach our computational experiments test the performance of the parsimonious collections of candidate assortments that we develop

combining revealed and stated data to examine housing decisions using discrete choice analysis abstract this paper uses stated preference and revealed preference data separately and jointly to examine individuals housing choices in particular it combines an established revealed preference approach discrete choice analysis of actual housing purchases and a relatively new stated preference approach choice based conjoint analysis of hypothetical housing purchases to provide us with a better understanding of the factors driving housing decisions these methods are appropriately combined since they reflect the same decision process households select the dwelling that provides the best combination of attributes from the feasible set of alternatives in total this paper analyzes three data sets only actual housing purchases only hypothetical housing purchases and both types of purchases combined analysis finds that actual and hypothetical housing purchases are similar decision processes with respect to some attributes yet are dissimilar with respect to other attributes nevertheless combining the two types of data improves identification of both categories of attributes journal of economic literature classification number r21

putting the puzzle together why people join public interest groups why people join organizations especially public interest groups has been an unsolved puzzle in this analysis choice based probability methods are employed to combine data from the 1980 national election study with comparable information about common cause members and to estimate models of the participation calculus that put the pieces of the puzzle together the results demonstrate the primary importance of political interest and policy preferences for the membership choice citizens who are politically interested and have preferences that roughly match an organization s reputation find that associational membership has both greater benefits and lower costs for them than it does for others variations in the costs of communication to the degree that they can be measured are unimportant for the joining decision an ability to pay is also irrelevant regardless of educational attainment and despite members high incomes organizational leaders deliberately keep the costs of membership low relative to most citizens ability to pay this encourages potential contributors to join in order to learn about the organization

geographic income shifting by multinational corporations in response to tax rate changes we investigate geographic income shifting by 191 u s multinational corporations in response to worldwide changes in tax rates during 1984 90 between 1984 and 1986 the united kingdom reduced corporate tax rates from a maximum of 45 to 35 and in 1985 france reduced rates from 50 to 45 following these reductions in european rates the united states reduced top corporate tax rates from 46 to 34 between 1986 and 1988 canadian rates increased between 1984 and 1986 and then decreased through 1989 beginning in 1988 numerous countries enacted tax cuts apparently in response to those that occurred earlier in other countries as discussed in section 3 differential changes in tax rates provide incentives for geographic income shifting by multinational firms we identify two subperiods during 1984 90 in which relative tax rate changes

company tax reform with a water s edge this paper analyzes the effects of switching from a corporate tax system based on separate accounting sa towards a system in which two countries form a formula apportionment fa union while a third country sticks to sa water s edge our analysis draws a positive picture on the water s edge regulation in the short run for given tax rates the transition from sa to fa is likely to reduce profit shifting from the fa union to non fa tax havens in a long run tax competition analysis we find a negative water s edge externality under fa that tends to be less detrimental than the profit shifting externality under sa and may offset other externalities under fa

dynamic modeling of housing tenure choice abstract in this study a dynamic random effects simultaneous equation model is developed to model household tenure choice decision the novelty of the study lies in accounting for the dynamic aspects of housing tenure mode namely a move is prerequisite to a change in tenure mode and they are determined jointly expected mobility and tenure choice are interdependent decisions and tenure choice may be state dependent i e taste for ownership acquired or reinforced through the experience of being an owner in addition unobservable household heterogeneity is controlled by imposing a random effects specification the estimation is based on panel data from the psid using the method of maximum simulated likelihood

tenure choice and expected mobility a synthesis abstract this study employs a joint logit probability model to estimate the effects of a vector of independent variables on the household s current tenure choice and expected mobility which are hypothesized to be simultaneously determined in the empirical analysis it was found that the coefficient on the endogenous variables tenure choice and expected mobility is the most highly significant of all the coefficients estimated in addition in previous analyses the age of the household head has always exhibited a highly significant positive effect on the probability of ownership however in this analysis it is demonstrated that this age variable was acting as a proxy for the expected mobility and wealth of the household

government special interest groups and economic growth in descending order of robustness and strength the four major conclusions are i the experience of industrial countries in the postwar period indicates that a large welfare state has been associated with a high rate of economic growth ii the olson thesis that powerful special interest groups impede growth receives empirical support iii the relation between growth and the welfare state is non linear with increases in the size of the welfare state beyond some critical level one sixth of gdp according to our estimates resulting in reductions rather than increases in the growth rates and iv the strength of the growth promoting properties of the welfare state is positively related to the strength of special interest groups as proxied by the proportion of the work force unionized one possible interpretation of these results runs as follows a large welfare state may retard economic growth by reducing the incentives to work to save to move and to change on the other hand in a situation where special interest groups have aquired significant power to block change if they so desire the welfare state which offers assistance to those who are the victims of change may play a growth enhancing role in reducing the incentive to block change the fourth conclusion just stated supports this view the welfare state may also foster economic growth through favourable effects on social consensus political stability and labour management relations the results suggest that the growth promoting forces predominate as long as the welfare state is not too large but beyond a certain point which corresponds more or less to the median situation among developed countries today the growth retarding elements come to the fore

protectionist responses and declining industries abstract this paper employs a three factor ricardo viner model of a small economy to analyse the effect of a falling world import price on the domestic price of the economy s importable good in the presence of an endogenously determined tariff the outcome is seen to depend on a the way in which the recycled tariff revenue is allocated to the three factor groups and b differences in relative risk aversion across those groups however under reasonable assumptions hillman s 1982 result that a declining industry will continue to decline is seen to hold in our general equilibrium framework

market structure and campaign contributions does concentration matter a reply economic rents may be obtained through the process of market competition or be obtained by resorting to governmental protection rational firms choose the least costly alternative collusion to obtain governmental protection will be less costly the higher the concentration ceteris paribus however high concentration in itself is neither necessary nor sufficient to induce governmental protection

determinants of the increase in the number of interest groups in western democracies theoretical considerations and evidence from 21 oecd countries mancur olson s theory of institutionalsclerosis is based on the notion that thenumber of interest groups within a countryincreases with the duration of itspolitical stability the following paperargues that the increase in the number ofinterest groups over time could also be aconcomitant of economic development theoretically both explanations provetenable an empirical cross sectionalregression analysis using data from 21oecd countries finds no evidence for asignificant impact of the duration ofpolitical stability on the number ofinterest groups a significantly positiveeffect is however reported for the degreeof economic development

investment incentives and corporate tax asymmetries abstract recent facts on the importance of corporate losses motivate more careful study of the impact of tax incentives for investment on firms that lose money i model firm investment decisions in a setting featuring financing constraints and carrybacks and carryforwards of operating losses i estimate investment responses to tax incentives allowing effects to vary with cash flows and taxable status results suggest that asymmetries in the corporate tax code could have made recent bonus depreciation tax incentives at most 4 less effective than they would have been if all firms were fully taxable cash flows have more important effects on the impact of tax incentives recent declines in cash flows would predict a 24 decrease in the effectiveness of bonus depreciation results thus suggest that tax incentives have the smallest impact on investment exactly when they are most likely to be put in place during downturns in economic activity when cash flows are low

tax revenue losses through cross border loss offset an insurmountable hurdle for formula apportionment abstract this paper analyzes the relevance of firm losses for tax revenues and welfare when switching from separate accounting to a system of tax base consolidation with formula apportionment we find that a system change unambiguously decreases tax revenues in the short run in which neither firms nor governments can adjust their behavior due to the cross border loss offset inherent in formula apportionment in the medium run in which only firms can adjust their strategies tax revenues are still lower under formula apportionment if the probability of incurring losses or the costs of profit shifting are sufficiently small however in the long run where firms and governments can adjust their behavior a switch from separate accounting to formula apportionment is beneficial under the aforementioned conditions furthermore we show that a higher weight on input shares in the apportionment formula may mitigate tax competition and thus increase tax revenues because contrary to output factors input factors provide a backstop against a shortfall of tax revenues due to loss making subsidiaries

model unvertainty political learning and institutions a broader view on mancur olson s theory of institutional sclerosis in his rise and decline of nations mancur olson argues that politically stable countries suffer from declining growth rates caused by the growing influence of distributional coalitions that accumulate over time the empirical literature supports the notion of a negative relationship between a country s duration of political stability and its growth rates but finds only weak support for a negative influence of distributional coalitions on growth this paper sketches a simple model of party competition under model uncertainty which may explain this mixed empirical picture it shows that politically stable democracies are less well equipped to adjust to shifts in their economic environment than democracies with a shorter history of political stability in a further step the paper relates the major theme of this theory and olson s theory to the more recent literature on institutions and growth directions for further research are discussed

explaining differences in state growth catching up versus olson in this paper we have tested various explanations for differences in rates of economic growth across states we found no evidence consistent with olson s hypothesis that differences in state age a proxy for the strength of special interest groups can explain differences in state growth furthermore our results indicate that a regression containing only initial income explains most of the variation in the growth of state income in sum a good part of the more rapid growth of southern and other fast growing states is simply a convergence to the national average this convergence is an expected result of basic economic theory given free trade in goods and factors our results are however not necessarily a rejection of the olson hypothesis it may well be that the hypothesis should only be applied to comparisons between nation states not to comparisons between political divisions of the same nation state the institutional and political similarities of the american states may swamp the differences and make the olson hypothesis inapplicable the tendencies cited by olson may indeed be present in the american economy but their differential effect is much too small to explain any of the variation in economic performance across states

on discrete choice models of housing demand abstract this paper explores several specifications of discrete choice models in estimating housing consumption for purposes of projection and policy simulation we view housing consumption comprehensively as it includes the choice between three types of homeownership five types of rented housing and as a ninth alternative not heading a household the familiar multinomial logit specification is rejected by several specification tests the paper therefore studies a variety of nested multinomial logit models of hierarchical choice that allow a richer substitution pattern among the very disparate housing choices enumerated above estimations of different nesting structures reveal strong and plausible differences among nesting structures

a two stage housing choice forecasting model a new housing choice forecasting model is developed here to answer a practical question how to forecast housing demand at a disaggregate level being different from the previous housing choice mod

household tenure choice and migration abstract a model of the joint tenure choice and migration decision is estimated unlike previous work that has considered each decision separately or examined the premigration tenure status choice jointly with the migration decision this analysis addresses change in tenure status as well the empirical findings indicate that variables often thought to affect either or both tenure status of the residence location change decision have offsetting or augmenting effects on their joint probabilities which are masked if the decisions are examined independently

income shifting investment and tax competition theory and evidence from provincial taxation in canada abstract we study corporate income taxation when firms operating in multiple jurisdictions can shift income using tax planning strategies because income of corporate groups is not consolidated for tax purposes in canada firms may use financial techniques such as lending among affiliates to reduce subnational corporate taxes a simple theoretical model shows how income shifting affects real investment government revenues and tax base elasticities depending on whether firms must allocate income to provinces or not we then analyze data from administrative tax records to compare the behavior of corporate subsidiaries that may engage in income shifting to comparable firms that must use the statutory allocation formula to determine their taxable income in each province the evidence suggests that income shifting has pronounced effects on provincial tax bases according to our preferred estimate the elasticity of taxable income with respect to tax rates for income shifting firms is 4 9 compared with 2 3 for other comparable firms

foreign direct investment and the domestic capital stock this paper evaluates evidence of the impact of outbound foreign direct investment fdi on domestic investment rates oecd countries with high rates of outbound fdi in the 1980s and 1990s exhibited lower domestic investment than other countries which suggests that fdi and domestic investment are substitutes u s time series data tell a very different story however years in which american multinational firms have greater foreign capital expenditures coincide with greater domestic capital spending by the same firms one dollar of additional foreign capital spending is associated with 3 5 dollars of additional domestic capital spending in the time series implying that foreign and domestic capital are complements in production by multinational firms this effect is consistent with cross sectional evidence that firms whose foreign operations expand simultaneously expand their domestic operations and suggests that interpretation of the oecd cross sectional evidence may be confounded by omitted variables this abstract was borrowed from another version of this item

market structure and political influence new data on political expenditures activity and success this paper utilizes new data to evaluate the determinants of the political influence of thirty five manufacturing industries on the u s congress during 1976 80 several measures of influence serve to distinguish between political activity and success seller concentration and geopolitical dispersion increase both activity and success but neither industry size nor leading firm size proves significant we test whether political expenditures facilitate obtaining the favors conferred on an industry by its market structure or by influence independent of that strurture statistical inference strongly confirms both roles

a joint model of tenure choice and demand for housing in the city of karachi the paper estimates a joint model of tenure choice and demand for housing for the city of karachi pakistan using a two stage estimation procedure permanent income and demographic variables are included in the analysis the study uses data collected at the household level in the city in 1987 88 results show that ownership rates are high in karachi ownership is more likely with increases in permanent income age household size and residence in the unauthorised areas permanent income transitory income age and education of the head significantly affect the consumption of housing both for renter and owner households results of the analysis and the estimated income elasticities of demand are comparable and consistent with those reported for other developing countries

the determinants of industry political activity 1978 1986 c ampaign contributions made by corporate political action committees pacs are increasingly important and controversial in u s elections influence purchasing is often alleged by pundits and campaign finance reform is continually debated in congress in the academy social scientists have analyzed the allocation of interest group monies and have looked for possible impacts on legislation few however have tried to explain the total contributions of economic interest groups we shall analyze variations in contributions across industries and over time with an empirical model based on organizationally constrained profit maximizing behavior we assume that corporate pac contributions in an industry are raised to enhance industry profits subject to the constraints of organization costs and freeriding incentives our empirical work covers 124 industries over five election cycles from 1978 through 1986 both the costs and benefits of political activity vary across industries we argue that the benefits of political action are determined by direct contact with the government as a regulator or purchaser of industry output by government s ability to ameliorate adverse market conditions and by the industry s ability to solve collective action problems without government assistance the costs of industry political action arise mainly from collective action problems because effective political activity often requires concerted action by the constituent firms in each industry we also make a methodological contribution previous studies use statistical techniques that suffer from sample selectivity bias or else force the probability of acting politically to be explained by the same set of coefficients as is the amount of action taken we explain and employ a technique that accounts for both problems the results are consistent with the theses that industries follow investment oriented goals in deciding the amount of political action to undertake and that collective action problems are important constraints on industry political activity we can explain between 60 and 80 of the variation in contributions in our sample first we review existing work on corporate political activity particularly papers examining patterns of aggregate pac spending by industry then we present an organization cost constrained industryprofit maximizing model based on a comparison between an idealized zero organization cost industry and the more realistic case where organizing collective action is difficult the independent variables used in the analysis are also discussed and defined next we discuss the dependent variable and total industry contributions and explain our statistical method then the results are presented followed by a discussion of industry structure and political activity to make clear how our results can explain different contribution patterns we give examples using five actual industries

on the implications of introducing cross border loss offset in the european union abstract this article investigates a tax competition model where countries compete for capital and profits of multinational enterprises mnes through statutory tax rates and cross border loss offset provisions which allow a transfer of foreign subsidiaries losses to the parent company a joint implementation of full cross border loss relief is welfare maximizing because it ensures production efficiency and no profit shifting in equilibrium local governments choose zero level of the loss relief in a noncooperative equilibrium if only capital is mobile and relax the loss offset when mnes engage in profit shifting therefore allowing multinationals to undertake international tax planning activities may be welfare improving in our model

the hazard rate of political regimes we present a preliminary study on the stability of political regimes in a longitudinal data set we study the effect of some observable economic and political conditions on the hazard rate of different types of political regimes we find that economic development has a stabilizing effect in countries with democratic political institutions but rich autocracies do not show a lower hazard rate than less developed autocracies while the stability of autocracies is not affected by their degree of economic development it is greatly associated with the degree of popular discontent widespread discontent with leaders in autocratic regimes highly increases their hazard rate this relationship is much weaker for regimes with democratic institutions we also find a non monotonic time dependence pattern for the hazard rate of political regimes political regimes are found to be at an increasing risk of collapse during the first years with their hazard rates reaching a peak around the fourth year

a hierarchical model of housing choice the main objective of this paper is the construction of an expanded model of housing choice that includes not only tenure choice which has traditionally been the subject of analysis but also other housing characteristic choices in this model the probability of the household making a given tenure choice is estimated at the first level of a choice hierarchy the family s choices over dwelling size and quality are then estimated at succeeding levels of that hierarchy conditionally on the choices which precede them these conditional probabilities can be combined with the probability of tenure choice to produce eight joint probabilities of housing choice in addition for a particular household or group of households we can determine the effect of a change in any of the systems variables on the probability of the families making a given housing choice in the empirical section it is demonstrated that this model provides much greater insight than the conventional tenure choice study regarding the effects o

discrete choice modelling of urban housing markets a critical review and an application the housing choice literature is a vast area of housing research which has resulted in giant leaps forward in recent years in terms of its econometric modelling this is due in large part to the significant increases now available in computing power allowing researchers to combine the latest advances in theory with empirical application this paper brings together and critically reviews the housing choice literature and techniques that have been used to model the household s housing choice decision the basic multinomial logit model is reviewed alongside the more recent advances in discrete choice modelling the nested multinomial logit model and the heteroscedastic extreme value model the various techniques are illustrated using data from the australian census of 1986 and 1996 to model housing choice in sydney the results show that careful consideration must be given to the assumptions underlying any chosen modelling technique if one is not to draw misleading conclusions from the analysis

an examination of the factors affecting the formation of interest groups in oecd countries perhaps the best way to summarize the empirical results is to classify the hypotheses into three groups those which can be readily accepted because they are supported in all tests those which can be readily rejected because no test results support them and those upon which one should remain agnostic because the test results are not consistent in the first group are population pop decentralization of government dcnt and length of time of modernization date one can state quite confidently that these three variables are determinants of interest group activity in the second group are the variables measuring characteristics of the political system poly dem1 dem2 pfrc one can with ease reject the hypotheses to which these variables are relevant there is a large group of variables which stand in the middle group however for these variables there are gradations of success in the tests the variables on socioeconomic development inc agri news and number of industries and political subdivisions nind regp are only significant in the one variable tests especially important is their failure to obtain the correct signs in the tests reported in table 3 the variables on ethnic fractionalization efrc and olson s hypothesis on destruction of groups ndfo have the correct signs in table 3 and are significant in table 1 thus it is more difficult to reject efrc and ndfo as determinants of interest group activity than inc nind and regp finally it should be mentioned that once appropriate simultaneous equations techniques are applied government size is no longer supported as a significant variable this paper will conclude with comments of a more conjectural nature on the implications of the results in the case of three specific variables first the results on hypothesis 3 suggest that population affects the number of interest groups independently of indirect effects through other variables this direct effect occurs because groups become proportionately smaller and more homogeneous as population increases hence one can expect the political economy of larger countries to be significantly different from that of smaller countries the results suggest that larger countries will have a denser array of interest groups and that these groups because of their homogeneity will find it easier to decide on and pursue policies in the narrow interests of their members secondly the results support olson s claim that there will be a gradual accumulation of interest groups in developed democracies given that olson attributes to interest groups a large role in determining the economic fortunes of a country the fact that his accumulation hypothesis is supported is a result of some significance finally if one accepts the two stage least squares results it has been shown that changes in government size do not induce changes in interest group activity an important conclusion can be reached when this result is taken in combination with the results of other studies which show that interest groups induce changes in the size of government mccormick and tollison 1981 and mueller and murrell 1983 these results do not support the capture theory of government that governmental institutions are created perhaps in the public interest and then dominated by interest groups rather the results support the theory that the institutions themselves are the creatures of interest group activity

joint choice of tenure and dwelling type a multinomial logit analysis for the city of chongju this paper explores the plausible variables that influence choices in the chongju housing market a joint model of tenure and dwelling type is estimated within the multinomial logit framework the