estimates of the returns to quality and coauthorship in economic academia salaries of academic economists are studied to determine if individuals receive differential returns to publishing articles of varying quality and to coauthored versus single authored articles estimates based on detailed data and a flexible nonlinear least squares procedure indicate that substantial returns to quality exist and that an individual s return from a coauthored paper with n authors is approximately 1 n times that of a single authored paper

incentives productivity and labor contracts the relationship between age earnings profiles and worker incentives is examined by contrasting wage and salary workers with the self employed it is argued that the steepness of wage and salary workers age earnings profiles reflects the desire to provide work incentives to those workers since self employed workers do not face this agency problem they are used as a benchmark to gauge productivity empirical support of the proposition is provided and the effects of human capital accumulation are separated empirically from incentive effects the most important conclusion is that under some strong assumptions most of the slope in age earnings profiles is accounted for by the desire to provide incentives rather than by on the job training

pricing variation within dual distribution chains the different implications of externalities and signaling for high and low quality brands within many of the multioutlet branded chains that dominate the retail and services landscape the organizational form e g company management franchising used to manage an outlet varies from site to site as do the prices charged at those sites i propose that organizational form and prices may be systematically related as a result of brand externalities in particular i develop logic that the relevant form of externality should differ for upper quality tier brands and lower tier brands using panel data on price and organizational form from more than 6 700 branded u s hotels affiliated with 40 dual distribution brands those brands that simultaneously company manage and franchise individual outlets i find that consistent with the brand externality arguments company managed locations have higher prices within high quality chains whereas franchisees price higher in the lower tiers this paper was accepted by bruno cassiman business strategy

contractual design and networks performance empirical evidence from franchising this article deals with the links between networks performance and the design of vertical contracts it provides evidence broadly consistent with the hypothesis that within franchising systems constraining contracts for the retailers favour a better performance at the network level

a multisector model of efficiency wages the pattern of effort and wages is derived in a multisector efficiency wage model firms choose effort endogenously easily monitored or low turnover jobs have high effort and may have low wages in equilibrium empirical wage differentials from a measure of supervision are smaller than observed industry differentials that have been attributed to efficiency wage models and are closer to those predicted by the model workers can search for and avail of on the job offers if sectors grow at different rates or the unemployment rate changes the pattern of wage differentials is unaffected

intraurban wage gradients evidence by race gender occupational class and sector abstract a general functional form is used to estimate intraurban wage gradients for various groups of workers with 1980 data from the philadelphia detroit and boston metropolitan areas as predicted by the standard monocentric model of urban land use the following results are obtained for most groups of white workers negative and statistically significant wage gradients steeper wage gradients for higher wage earners and an increase in the steepness of wage gradients as the cbd is approached positive wage gradients are not found for black workers despite the fact that suburban employers hire large numbers of these workers who reside within the central city this result is taken as support for the hypothesis that blacks have been disadvantaged by job suburbanization and continued housing market segregation

wage premia in employment clusters how important is worker heterogeneity this article tests whether the correlation between wages and concentration of employment can be explained by unobserved worker productivity residential location is used as a proxy for unobserved productivity and average commute time to workplace is used to test whether location based productivity differences are compensated away by longer commutes analyses using confidential data from the 2000 decennial census find that estimates of agglomeration wage premia within metropolitan areas are robust to comparisons within residential location and that estimates do not persist after controlling for commuting costs suggesting that the productivity differences across locations are due to location not individual unobservables

intrametropolitan variation in wage rates the case of atlanta fast food restaurant workers this paper utilizes a unique data base to provide some rare evidence on wage variation within a metropolitan area positively sloped wage gradients are found for both black and white employees of fast food restaurants in atlanta georgia blacks are found to work on that portion of the gradient where wage rates are lowest evidence on discrimination suggests that consumer prejudice affects the wages paid to black workers as distance from the central business district center increases the positive wage gradient effect is found to strongly dominate the negative effect on wages from greater consumer discrimination copyright 1994 by mit press

the cost channel reconsidered a comment using an identification robust approach we re examine the empirical relevance of the cost channel of monetary policy e g ravenna andwalsh 2006 employing recently developed moment conditions inference meth ods including identi cation robust procedures using us data our results suggest that the cost channel e ect is poorly identi ed and we are thus unable to corroborate the previous results in the literature

the impact of franchising on labor standards compliance recent studies document pervasive noncompliance with basic labor standards in industries with high concentrations of low wage workers the authors examine how franchising a common form of business organization in low wage industries affects compliance they estimate the effect of franchise ownership on compliance with federal minimum wage and overtime standards in the fast food industry using unique data on top 20 branded restaurants franchised outlets have far higher levels of noncompliance than comparable company owned establishments the authors argue that observed differences arise from internal incentives facing franchisees versus franchisors rather than from external enforcement pressures facing the parties

equilibrium unemployment as a discipline device when finding employment is costly in this paper we study a model that incorporates costly job search into an efficiency wage model we show that the relationship between wages and detection rates is ambiguous in this framework the model can generate a positive relationship consistent with empirically reasonable values for unemployment rates job finding rates and employment duration dans ce memoire on etudie un modele qui incorpore une recherche d emploi couteuse dans un modele de salaire d efficience on montre que la relation entre salaires et taux de detection est ambigue le modele peut generer une relation positive consistante avec des valeurs empiriquement raisonnables pour les taux de chomage les taux de detection d emplois et les durees d emplois

how do journal quality co authorship and author order affect agricultural economists salaries utilizing an original data set containing annual salaries and peer reviewed publication histories for 326 faculty members from top ranked ph d granting programs we examine the labor market for academic agricultural economists the results suggest that higher quality publications have a greater impact on annual earnings that sole authored articles have a higher return than multi authored articles and that no wage premium exists for being the lead author of a non alphabetic article

gender and promotion in the economics profession the authors use unique panel data on american economic association members to test for gender differences in promotion in a profession with a well defined promotion and job hierarchy and in which men and women exhibit similar labor market attachment the results suggest that over the period from the 1960s through the early 1980s female economists had lower levels of professional attainment and career advancement than did their male colleagues with similar attributes these gender differences remain in evidence despite controls for unobserved heterogeneity and self selection between academic and non academic jobs there is evidence however that promotion prospects for female economists significantly improved during the 1980s not only at all ranks but also within both ph d granting institutions and non ph d granting institutions in fact the results reveal no unexplained gender specific differences in promotion by the end of the 1980s

franchising agency problems and the cost of capital explanations for franchising are examined in the context of the us hotel industry the study is distinct from previous research on franchising because it explicitly recognizes the existence of three organizational forms whereas previous research has focused exclusively on two of these three forms the two organizational forms examined in previous work are franchising and company ownership the additional organizational form is company management investor ownership which involves management by the franchisor and ownership by outside investor groups a plausible explanation for the existence of the last organizational form is based on the availability of low cost capital from non chain sources

spatial mismatch and costly suburban commutes can commuting subsidies help proponents of the spatial mismatch hypothesis argue that job decentralisation harms low income residents of central cities because of barriers that limit their access to suburban labour markets such barriers can take the form of housing discrimination exclusionary zoning or long and difficult commutes this paper uses an urban equilibrium model of spatial mismatch to analyse the impact of commuting subsidies on the welfare of low income central city households with restricted mobility specifically it seeks to determine how effective such subsidies are at reducing the welfare impact of spatial mismatch while subsidised outward commuting is found to raise the welfare of the low income households the welfare gains are only a small portion of the welfare loss due to spatial mismatch

where to go workers reasons to quit and intra vs interindustry job mobility we show that workers reasons for quitting their job affect their decision to stay in or leave their industry using survey data among public sector employees in the netherlands workers quitting for e g pay work pressure or job duties move relatively often to another industry in contrast to workers quitting for commuting time or the atmosphere at work this suggests that workers use their experience in the initial job to update their expectations on other jobs in the industry as the first set of job aspects is more likely to be related among jobs within an industry than the latter furthermore it is shown that workers reasons to quit fully explain the differences in wage growth between intra and interindustry job movers lastly we find that workers who quit for pay or management often leave the public sector altogether the data used in this article are proprietary

on the relation between robust and bayesian decision making abstract this paper compares bayesian decision theory with robust decision theory where the decision maker optimizes with respect to the worst state realization for a class of robust decision problems there exists a sequence of bayesian decision problems whose solution converges towards the robust solution it is shown that the limiting bayesian problem displays infinite risk aversion and that decisions are insensitive robust to the precise assignment of prior probabilities this holds independently of whether the preference for robustness is global or restricted to local perturbations around some reference model

minimum wages for ronald mcdonald monopsonies a theory of monopsonistic competition recent empirical work on the effects of minimum wages has called into question the conventional wisdom that minimum wages invariably reduce employment we develop a model of monopsonistic competition with free entry to analyse the effects of minimum wages and our predictions fit the empirical results closely under monopsonistic competition we find that a rise in the minimum wage raises employment per firm causes firm exit and may increase or reduce industry employment minimum wages increase welfare if they raise industry employment but welfare effects are ambiguous if employment falls

is the fed too timid monetary policy in an uncertain world estimates of the taylor rule using historical data from the past decade or two suggest that monetary policy in the u s can be characterized as having reacted in a moderate fashion to output and in

entry level salaries of academic economists does gender or age matter i introduction since the mid 1970s earnings differentials in academic labor markets have been extensively investigated with particular attention focused on salary differentials between males and females the leading studies use similar methodologies but differ in terms of the time period analyzed data sources and whether a single academic discipline or multiple disciplines are considered for example johnson and stafford 1974 investigate several academic professions in 1970 jusenius and scheffler 1981 consider a single discipline economics in 1973 and include a cross section of universities and professorial ranks as well as race several investigators including katz 1973 hirsch and leppel 1982 rickman 1984 and raymond sesnowitz and williams 1988 focus on a single college or university and include diverse academic disciplines the latter two studies raise the question of whether gender continued to matter in academic labor markets in the 1980s and reach opposite conclusions a consistent finding transcending early studies of academic labor markets is that earnings differentials are smallest between men and women who are at the beginning of their careers for example johnson and stafford in a widely cited study state the most important finding is that the salaries of females start out at not much less than those of males 4 to 11 percent in the six disciplines in our sample and then decline 1974 901 this paper investigates entry level salaries in a single academic discipline by considering a cross section of newly hired economists the primary source of labor market information is a unique survey of entry level salaries in the 1987 88 academic year it might seem that by the late 1980s gender differentials should have disappeared at the entry level but like johnson and stafford s 1974 earlier result our survey reveals newly hired females received 1060 3 4 percent less than males our principal purpose is to determine whether this gender differential and the effects of age are significant once other determinants of earnings are taken into account for example we consider and control for terminal degree status the quality of the ph d granting department field of specialization highest degree offered by the hiring department differences in cost of living across areas and other institutional factors that can influence beginning entry level salaries we first describe the data set developed primarily from a survey which is used to estimate entry level earnings equations we also briefly compare our survey to other surveys providing information on market outcomes for economists we then present estimates of the determinants of entry level salaries and discuss the influence of gender age and other determinants of earnings ii the survey a total of 469 u s economics departments were surveyed in the summer and fall of 1987 with 258 departments responding 55 percent 1 the 1987 88 academic year salary of each new hire was requested of each department demographic information age sex and human capital characteristics ph d granting university primary field of specialization and degree status were also requested for each new hire in addition the survey included questions on whether the hiring college university is privately or publicly supported the administrative reporting channel of the economics department highest degree offered and number of entry level persons hired the identities of the hiring department and the university at which the newly hired economist did his or her graduate work are used to construct two measures of quality the quality of the department where the ph d work was done is the first measure and the quality of the hiring department is the second 2 the survey was designed to provide microdata on individual entry level economists for the purpose of estimating earnings equations in an effort to maximize responses the questionnaire was intentionally brief only questions directly relevant to estimating the earnings equation of entry level economists were included

gender segregation in the academic staff of universities in great britain 1980 81 1993 94 this paper analyses gender segregation within the academic staff of universities in great britain over the period 1980 81 1993 94 it finds that the level of gender segregation increased as measured by the karmel maclachlan index ip using a decomposition procedure it is possible to identify the composition effect which is the contribution of a change in the gender ratio of individual academic levels to the overall change in the level of segregation this was found to have decreased over the 12 years indicating that each grade of appointment became less segregated however the decline in segregation at each level of academic employment was six times greater in us institutes of higher education the small extent of improvement in great britain focuses attention on the perceived lack of effectiveness of equal employment opportunity policy and programmes within the university sector identified by both the commission for racial equality and the hansard society

did the elimination of mandatory retirement affect faculty retirement a special exemption from the 1986 age discrimination act allowed colleges and universities to enforce mandatory retirement of faculty at age 70 until 1994 we construct a survey that permits us to compare faculty turnover rates before and after the law changed at a large sample of institutions with defined contribution pension plans after the elimination of compulsory retirement the retirement rates of 70 and 71 year olds fell by two thirds and were comparable to rates of 69 year olds these findings indicate that u s colleges and universities will experience a rise in the number of older faculty over the coming years jel j26 i21

environmental and ecological economics in the 21st century an age adjusted citation analysis of the influential articles journals authors and institutions we investigate the influence of articles authors journals and institutions in the field of environmental and ecological economics we depart from studies that investigated the literature until 2001 and include a time period that has witnessed an enormous increase of importance in the field we adjust for the age effect given the huge impact of the year of an article s publication on its influence and we show that this adjustment does make a substantial difference especially for disaggregated units of analysis with diverse age characteristics such as articles or authors we analyse 6597 studies on environmental and ecological economics published between 2000 and 2009 we provide rankings of the influential articles authors journals and institutions and find that ecological economics energy economics and the journal of environmental economics and management have the most influential articles they publish very influential authors and their articles are cited most the university of maryland resources for the future the university of east anglia and the world bank appear to be the most influential institutions in the field of environmental and ecological economics

is there a trade off between supervision and wages an empirical test of efficiency wage theory abstract the logic of efficiency wage theory suggests a trade off between wages and supervision this paper reports evidence that high levels of supervision are indeed associated with lower wage levels the empirical investigation centers on the effect that safety supervision by host employers has on the wages of contract maintenance workers in the petrochemical industry this narrow focus is important special institutional features of the contract employment relationship in petrochemicals make it possible to ameliorate econometric problems that may have influenced earlier studies

agency theory and franchising some empirical results this article provides an empirical assessment of various agency theoretic explanations for franchising including risk sharing one sided moral hazard and two sided moral hazard the empirical models use proxies for factors such as risk moral hazard and franchisors need for capital to explain both franchisors decisions about the terms of their contracts royalty rates and up front franchise fees and the extent to which they use franchising in this article i exploit several new sources of data on franchising to construct a cross section of 548 franchisors involved in various business activities in the united states in 1986 the data are most consistent with a model based on two sided moral hazard the empirical models are also more successful at explaining the extent to which franchisors choose to franchise stores than at explaining the terms of franchise contracts finally contrary to the predictions of several theoretical models i find that royalty rates and franchise fees are not negatively related

the effect of organizational form on quality the case of franchising abstract the organizational form of franchising has been shown to yield higher profits and faster growth through reducing agency costs why then does anyone not franchise in this paper i argue that the diffuse residual claims of the franchise system reduce overall system quality and that this problem is inherent in the nature of franchising the theory is tested by examining evidence from both the restaurant and the hotel industries including chains that franchise and ones that own all of their units in both industries quality is negatively related to the percent franchising in the chain controlling for size growth in units monitoring costs market segment ownership structure multi chain operation and price the results suggest that the franchise contract increases free riding and decreases quality in decentralized service chains and that quality is not contractible in this setting

the franchise life cycle and the penrose effect abstract the paper suggests that the received economic analyses of franchising give insufficient consideration to its apparent role in facilitating the rapid development of networks of outlets a characteristic which receives much attention in the industry s own periodicals the paper argues that franchising based upon standardization and replication with contractual policing rather than the direct monitoring of branches assists a rapidly growing chain to circumvent the penrose constraint on organizational development this gives rise to a life cycle effect evidence from a large sample of us franchises appears to confirm our growth facilitation hypothesis

limited entrepreneurial attention and economic development economic development depends on the allocation of entrepreneurial resources to efforts to discover new profit opportunities limited entrepreneurial attention is allocated between maintaining current activities and starting new activities this paper addresses the problem of allocating limited entrepreneurial attention in a variety of contexts the issues that are addressed are product improvement and new product development the choice of career as an innovative entrepreneur a managerial entrepreneur or a salaried employee the venture capitalist s attention to current and new ventures and funds the writing of internal contracts and market contracts and the supervising of current employees and hiring additional employees

reputational capital and academic pay geoffrey k turnbull i introduction economists continue to have a strong interest in academic labor markets as the steady stream of earnings studies over the past several decades readily attests the academic labor market draws the attention of economists not only because it is a topic of direct personal interest but also because it presents an opportunity to examine general theories of labor markets in a context with which the researcher has intimate experience nonetheless important questions about how the market values research teaching and service remain unanswered to what extent does the market reward quality versus quantity of published research or team production in the form of co authorship furthermore how durable is reputational capital for individuals whose research productivity diminishes during their career ultimately these questions relate in one way or another to the nature of the incentive structure faced by academic economists we provide new evidence concerning the role of research quality co authorship administrative service and teaching performance in the production of reputational capital in addition we explore the question of the durability of reputational capital once some of these activities cease we assume that the quantity and quality of published research largely determines an individual s reputational capital in the external market to help us sort out the separate effects on reputational capital of both the quality and quantity of research activity we measure research quality by both journal quality and career citations employing an interactive quantity quality term a related question concerns the role of team production in building an individual s reputational capital do individuals receive differential returns to publishing single authored versus co authored research papers this is an interesting question in light of the substantial increase in co authorship over the last few decades 1 one explanation of this trend is that the academic market has presented scholars with increasing opportunities for specialization in the production of knowledge and that team production involves the combination of complementary skilled researchers if team production reflects complementarities in the production of research we should observe little difference in the returns to single versus co authored work another explanation is that co authorship involves the combination of substitute skilled researchers so that co authorship presents a way for individuals to reduce their research efforts without reducing their individual measured research output to the extent that co authorshi p represents such substitution the market should fully discount the returns to multiple authored papers in this article we also move beyond identifying the factors that enhance an individual s reputation in the market to study the question of the durability of reputational capital some individuals quit publishing once they are tenured or promoted while others experience lengthy but temporary breaks in their flow of research output we examine the potential penalties associated with gaps in research output providing the first empirical evidence concerning the durability of reputational capital for academic economists in order to ensure that our analysis deals with these issues in a way that is most relevant to a large portion of the market for academic economists we use data from several research universities but restrict the sample frame to a single discipline economics much of the previous work estimating how publications or other factors affect academic salaries typically use data from a single university with earnings equations estimated across disciplines restricting the sample to a single discipline has the additional advantage of reducing potential heterogeneity problems associated with measuring productivity across disciplines in addition our data enable us more thoroughly to explore the empirical issues in the debate since they permit more precise measures of the past and current productivity of individuals engaged in comparable work

differences in citation patterns across journal tiers the case of economics we study how citation patterns differ between journal tiers in economics concretely we analyze citations patterns of more than 6 000 economics research articles published in top five second tier and top field economics journals between 1992 and 1996 in line with previous literature we find that top five journals articles generally receive more citations and that the life cycles of those citations are longer however their influence in term of citations is overestimated in its first twenty five years since publication the median top five article accumulates 4 25 around 3 as many citations when compared to the second tier and top field median article we show that this ratio is strongly associated with the field of economics research e g this ratio is the lowest for econometric methods papers and with articles impact e g in all fields of economics research except for theory this ratio decreases sharply as one moves toward high impact articles in term of citations

the role of employer employee interactions in labor market cycles evidence from the self employed self employed workers are less likely to be affected by implicit contracts efficiency wages and other forces that mute wage cyclicality and exacerbate employment cyclicality this observation motivates our comparison of the cyclical experience of the self employed with wage and salary workers who clearly have an employer we find negligible or small differences in annual hours cyclicality between the two groups but hourly wages and annual earnings are much more cyclical for the self employed these results are consistent with efficient contracting models where employers smooth workers income without causing inefficiencies in hours of work

first author conditions this paper provides a theoretical explanation for the persistent use of alphabetical name ordering on academic papers in economics in a context in which market participants are interested in evaluating the relative individual contribution of authors it is an equilibrium for papers to use alphabetical ordering moreover it is never an equilibrium for authors always to be listed in order of relative contribution in fact we show via an example that the alphabetical name ordering norm may be the unique equilibrium althoug multiple equilibria are also possible finally we charaterize the welfare properties of the noncooperative equilibrium and show it to produce research of lower quality than is optimal and than would be achieved if coauthors were forced to use name ordering to signal relative contribution

an empirical look at franchising as an organizational form franchise contracts are identified as a hybrid form of economic organization motives for the dominance of franchise arrangements are identified by examining the theoretical literature on franchising and related literatures on the theory of the firm firm growth managerial and employee selection a nd brand name capital empirical tests are performed on the incidence of franchise contracts across states for three industries in which f ranchising is prominent and data are readily available the results s uggest that both principal agent incentives and informational incenti ves favor the use of franchise arrangements copyright 1988 by the university of chicago

is there discretion in wage setting a test using takeover legislation anecdotal evidence suggests that uncontrolled managers let wages rise above competitive levels testing this popular perception has proven difficult however because independent variation in the extent of managerial discretion is needed in this paper we use states passage of anti takeover legislation as a source of such independent variation passed in the 1980s these laws seriously limited takeovers of firms incorporated in legislating states since many view hostile takeovers as an important disciplining device these laws potentially raised managerial discretion in affected firms if uncontrolled managers pay higher wages we expect wages to rise following these laws using firm level data we find that relative to a control group annual wages for firms incorporated in states passing laws did indeed rise by 1 to 2 or about 500 per year the findings are robust to a battery of specification checks and do not appear to be contaminated by the political economy of the laws or other sources of bias our results suggest that discretion significantly affects wages they challenge standard theories of wage determination which ignore the role of managerial preferences

an empirical study on contractual heterogeneity within the firm the vertical integration franchise contracts mix this paper tests a discrete choice model on the mix of franchised and company owned outlets contractual heterogeneity within the firm this is often explained by the existing literature as due to heterogeneous characteristics of the outlets however correspondence between outlets and contracts characteristics is not often observed in reality an explanation is proposed which suggests that contract mixing is driven by the contractual choice of both principal and agents and that heterogeneous agents will choose contracts that match their characteristics this hypothesis is supported by econometric results based on outlet level microdata collected by means of a survey of uk firms

the spatial distribution of black employment between the central city and the suburbs i introduction smock 1968 kain 1968 and leonard 1987 have shown that the share of jobs held by blacks is smaller in the suburbs in comparison to the central city little is known concerning the factors accounting for this skewness in the spatial distribution of black employment because of the absence of suitable data a number of possible factors can be suggested first there may be no incentive to commute to the suburbs if wages are no higher or jobs no more available than within the central city that is the alleged spatial mismatch that has presumably created a surplus of less educated workers living in the central city and a shortage of these workers living in the suburbs may in fact not exist second the distances to jobs in the suburbs may make commuting to these jobs prohibitively costly and may limit the information readily available to urban blacks on suburban job opportunities third becker type consumer and or employer discrimination may cause employers to prefer hiring blacks in the central city or prefer hiring whites in suburban areas or both finally in comparison to central city jobs fewer suburban jobs are within walking distance of a public transit stop and many central city blacks do not own automobiles 1 from a policy perspective it is crucial to determine the relative importance of the above explanations for black employment segregation for example based upon a belief in the spatial mismatch hypothesis kasarda 1989 orfield 1985 hughes 1989 skinner 1989 and wilson 1992 have recommended that improved public transportation be provided to reverse commuters however on its own this strategy may not be particularly effective if blacks encounter greater hiring discrimination outside the central city and or know little about suburban jobs to shed some light on the spatial distribution of black employment between the central city and the suburbs this paper 1 provides some evidence on whether the central city labor market is tighter or looser than the suburban labor market for less educated workers 2 develops and estimates a model which explains the racial composition of firms workforces and 3 uses the parameter estimates from this model to investigate the relative importance of the aforementioned factors as explanations for black employment segregation the data come from a survey which we conducted of the managers of 102 fast food hamburger restaurants in the atlanta georgia metropolitan area the results yield three conclusions first expected wages the probability of employment times the wage rate are higher in the suburbs than within the central city which lends support to the spatial mismatch hypothesis and reinforces the need to understand the spatial distribution of black employment second the manager s race the percentage of the restaurant s customers who are white distance from the central business district and the proximity of the restaurant to mass transit are all found to have an important influence on the racial composition of the restaurant s crew third all of these variables are found to play an important role in explaining the difference in black employment share between central city and suburban restaurants of particular interest is that approximately 36 percent of this difference can be attributed to the fact that suburban restaurants are less frequently served by public transit the next section reviews the literature on the spatial mismatch hypothesis and relates this hypothesis to black employment segregation section iii describes the data evidence is presented on the quality and availability of suburban in comparison to central city jobs in section iv a model of the racial mix of the restaurant s crew is developed in section v the results from estimating this model are discussed in section vi policy implications and suggestions for future research conclude the paper ii the spatial mismatch hypothesis and black employment segregation the last half of the 1980s witnessed a revival of interest in the old idea that the suburbanization of jobs and involuntary housing market segregation have acted together to create a surplus of workers relative to the number of available jobs in inner city neighborhoods where blacks are concentrated

optimal monetary policy with the cost channel in the standard new keynesian framework an optimizing policy maker does not face a trade off between stabilizing the inflation rate and stabilizing the gap between actual output and output under flexible prices an ad hoc exogenous cost push shock is typically added to the inflation equation to generate a meaningful policy problem in this paper we show that a cost push shock arises endogenously when a cost channel for monetary policy is introduced into the new keynesian model a cost channel is present when firms marginal cost depends directly on the nominal rate of interest besides providing empirical evidence for a cost channel we explore its implications for optimal monetary policy we show that its presence alters the optimal policy problem in important ways for example both the output gap and inflation are allowed to fluctuate in response to productivity and demand shocks under optimal monetary policy

does inflation increase after a monetary policy tightening answers based on an estimated dsge model abstract this paper estimates the importance of the cost channel of monetary policy in a new keynesian model of the business cycle a model with nominal and real rigidities is extended by assuming that a fraction of firms need to borrow money to pay their wage bill hence a monetary policy tightening increases effective unit labor costs of production and might imply an increase in inflation the paper examines the conditions under which the model can generate a positive response of inflation to a monetary contraction and estimates the model s parameters using bayesian methods the paper shows that the estimated demand side effects of monetary policy dominate the estimated supply side effect even if restrictions are imposed that make occurrence of a positive inflation response to a monetary contraction more likely

citations or journal quality which is rewarded more in the academic labor market research quality can be evaluated from citations or from the prestige of journals publishing the research we relate salary of tenured university of california uc economists to their lifetime publications of 5 500 articles and to the 140 000 citations to these articles citations hardly affect salary especially in top ranked uc departments where impacts of citations are less than one tenth those of journals in lower ranked departments and when journal quality is less comprehensively measured effects of citations on salary increase if journal quality is just measured by counting articles in journal tiers apparent effects of citations are overstated jel a14 j44

which journal rankings best explain academic salaries evidence from the university of california the ranking of an academic journal is important to authors universities journal publishers and research funders rankings are gaining prominence as countries adopt regular research assessment exercises that especially reward publication in high impact journals yet even within a rankings oriented discipline like economics there is no agreement on how aggressively lower ranked journals are down weighted and in how wide is the universe of journals considered moreover since it is typically less costly for authors to cite superfluous references whether of their own volition or prompted by editors than it is to ignore relevant ones rankings based on citations may be easily manipulated in contrast when the merits of publication in one journal or another are debated during hiring promotion and salary decisions the evaluators are choosing over actions with costly consequences we therefore look to the academic labor market using data on economists in the university of california system to relate their lifetime publications in 700 different academic journals to salary we test amongst various sets of journal rankings and publication discount rates to see which are most congruent with the returns implied by the academic labor market jel a14 i23 j44

monetary policy under model and data parameter uncertainty abstract empirical taylor rules are much less aggressive than those derived from optimization based models this paper analyzes whether accounting for uncertainty across competing models and or real time data considerations can explain this discrepancy it considers a central bank that chooses a taylor rule in a framework that allows for an aversion to the second order risk associated with facing multiple models and measurement error configurations the paper finds that if the central bank cares strongly enough about stabilizing the output gap this aversion leads to significant declines in the coefficients of the taylor rule even if the central bank s loss function assigns little weight to reducing interest rate variability furthermore a small degree of aversion can generate an optimal rule that matches the empirical taylor rule

effort and wages evidence from the payroll tax this is a pre copy editing author produced pdf file of an article accepted for publication canadian journal of economics following peer review this accepted manuscript is being archived under the conditions specified in the bu open access policy

relational contracts limited liability and employment dynamics this paper studies a relational contracting model in which the agent is protected by a limited liability constraint the agent s effort is his private information and affects output stochastically we characterize the optimal relational contract and compare the dynamics of the relationship with that under the optimal long term contract under the optimal relational contract the relationship is less likely to survive and the surviving relationship is less efficient in addition relationships always converge to a steady state under the optimal long term contract but they can cycle among different phases under the optimal relational contract

trends in rankings of economics departments in the u s an update economics departments in the u s are ranked based on 1 the number of pages published in thirty six economics journals 2 publications in five of the top journals 3 output per faculty member and 4 an index of the concentration of research in a department evidence shows that the top twenty departments have generally retained their positions since the 1970s but rather large changes have occurred in departments ranked from 240 to 100 an economists hall of fame is developed listing the top fifty individual producers of research in the thirty six journal set and the top five journals

the monetary policy response to uncertain inflation persistence abstract we consider the implications of uncertainty regarding the persistence of inflation for the conduct of monetary policy in the context of a stylized new keynesian model under the governance of a taylor type rule both bayesian and robust or ambiguity averse approaches are employed the result one might have expected based on the seminal paper of brainard 1967 which implies attenuation in policy responses does not hold for the case of uncertain inflation persistence in either the bayesian or robust cases

efficiency wage models of unemployment a second view kevin lang and shulamit kahn efficiency wage models in which firms find it profitable to pay wages above workers reservation wages provide a promising explanation for unemployment and interindustry wage differentials one criticism of such models is they imply firms should sell jobs by requiring up front bonds from new workers however only some efficiency wage models imply this moreover firms might not require bonds for many reasons we show that moral hazard and adverse selection models together explain many labor market phenomena the efficiency wage model conforms well to empirical finding but certain anomalies suggest the need to consider rent sharing models carmichael s paper in this volume is an important contribution to the debate over the importance of efficiency wages he clearly outlines some of the deficiencies in the theory and thus points out areas needing further research nevertheless his conclusions are far too negative he greatly exaggerates the theoretical weakness of the efficiency wage model and gives insufficient recognition to the empirical implications generated by this model and to tests of these implications i shirking models there is direct empirical evidence that shirking is a serious problem for firms firms spend significant sums monitoring workers levine 1987 reviews the evidence that worker shirking is widespread and costly the evidence in burroway 1979 and mars 1982 also demonstrates the importance of shirking and stealing carmichael s primary argument against shirking models is that if the payment of efficiency wages to deter shirking led to an excess supply of workers workers would buy their jobs by posting bonds since we do not observe workers posting bonds he concludes that firms do not pay efficiency wages either given the importance of shirking the absence of market clearing bonds needs explaining one explanation is that the market has found some reasonable substitute for bonds such as deferred wage payments it is theoretically feasible to substitute deferred wage payments for up front bonds as noted by akerlof and katz 1989 however the empirical evidence of industries with deferred payments i e where low beginning wages are balanced by high subsequent wages is mixed dickens and katz 1987b krueger and summers 1988 and abraham and farber 1987 indicate that industries which pay high wages to high tenure workers tend to pay high wages to low tenure workers on the other hand high wage industries also tend to have steeper earnings profiles which may be evidence of deferred earnings in these industries as shapiro and stiglitz 1984 note a second possible explanation for the absence of market clearing bonding is that bonding gives firms an incentive to fire workers immediately upon collecting their bonds however this explanation assumes that a firm will immediately fire every worker who posts a bond if there are any reputation costs at all some firms sometimes will not fire bond posting workers and we should observe some bonding yet with finite length contracts there must be some reputation costs because otherwise firms would never pay workers in the last period thus firm incentives to cheat and fire workers cannot explain the complete absence of bonding clearly the absence of market clearing bonding is not fully understood and further theoretical work is needed dickens katz lang and summers 1989 review a wide variety of possible reasons that bond posting is limited the important point is that there are many potential reasons for limited bonding other than the absence of efficiency wages on the other hand the lack of bonding despite the importance of shirking does not demonstrate that firms pay efficiency wages there may be reputation or other costs to the worker caught shirking even in the absence of bonding as dickens katz lang and summers 1989 demonstrate in the absence of bonding whether paying efficiency wages dominates relying solely on increased monitoring depends on the parameters of the model and is therefore an empirical issue

do the rich and poor colocate in large cities abstract this paper focuses on colocation rather than segregation in the context of japanese large cities using the time cost of commuting from traditional urban economic theory we analyze how different income households are sorted according to the distance from the city center by examining microdata on housing prices and rents in tokyo metropolitan area we find that the rich and poor tend to colocate and are sorted by income near the city center for detached housing prices this is predicted if the income differential is large enough we also find that different income groups coexist in the same location for condominium prices this is predicted if the income elasticity of demand for space is close to one and the pecuniary cost of commuting is zero

robust monetary policy in a small open economy abstract we study how a central bank in a small open economy should conduct monetary policy if it fears that its model is misspecified using a new keynesian model of a small open economy we solve analytically for the optimal robust policy rule and the equilibrium dynamics and we separately analyze the consequences of central bank robustness against misspecification concerning the determination of inflation output and the exchange rate we show that an increase in the preference for robustness makes the central bank respond more aggressively or more cautiously to shocks depending on the type of shock and the source of misspecification

optimal monetary policy in a model of the credit channel we study a simple extension of the basic new keynesian set up in which we relax the assumption of frictionless financial markets due to asymmetric information and default risk bank lending rates incorporate a spread over the deposit rate we demonstrate that financial frictions affect aggregate dynamics mainly through their impact on firms financing costs which increase in both the deposit rate and in the spread between lending and deposit rates welfare includes a concern for smoothing these two financial market variables our numerical simulations suggest that an aggressive easing of policy is optimal in response to adverse financial market shocks

the time varying cost channel of monetary transmission abstract this paper studies the time varying role of the cost channel of monetary transmission i e the supply side effect of monetary policy based on firms costs of holding working capital for that purpose we provide rolling window estimates of an augmented new keynesian phillips curve and show that the cost channel exhibits important time varying dynamics we find as a general pattern that the cost channel was most important in the pre volcker period and less important in the volcker greenspan era recently however the cost channel regained importance since the cost channel is based on the transmission of policy impulses through bank lending it is likely that the time varying cost channel reflects the cyclical nature of financial frictions

scholarships citations and salaries economic rewards in economics while substantial attention has been paid to the determinants of academics earnings 5 7 8 14 15 this literature has by implication suggested that the mere fact of having spent more time in the profession and the publication of more scholarly articles and books are the major determinants of salary differences our purpose here is to introduce a new determinant the quality of one s scholarly research measured by the frequency of references to that work as an additional objective measure of productivity we expect that this proxy for the extent of a scholar s influence on the work of other researchers is rewarded by the market in addition to giving a more complete picture of the determination of salaries in academic labor markets our approach should be useful in establishing a better framework for the evaluation of issues of discrimination in such markets than has been presented before 2 9

efficiency wages and employment rents the employer size wage effect in the job market for lawyers the efficiency wage hypothesis offers an explanation for employment rents according to this hypothesis firms pay wages above the opportunity cost of labor to elicit productivity or quality enhancing behaviors from employees firms pursue this strategy when alternative incentive schemes are unavailable or too costly thus firms will not pay premium wages when employees post sufficiently large performance bonds this article examines employment rents in a setting where employees post sizable performance bonds large law firms contrary to the efficiency wage hypothesis we find that associates in these large firms post substantial performance bonds while also receiving substantial ex ante rents

do fast food chains price discriminate on the race and income characteristics of an area this article reports tests for differences in prices charged by fast food restaurants that serve markets with customers of widely divergent incomes and ethnic backgrounds the data contain detailed prices on items sold at over 400 burger king wendy s kfc and roy rogers restaurants in new jersey and pennsylvania locations i find significant differences in price based on the race and income characteristics of a zip code region when income and cost differences are taken into account meal prices rise approximately 5 for a 50 rise in the black population

journals preferences and publishing in agricultural and environmental economics research quality is an increasingly important metric for determining funding allocations promotion and tenure and professional prestige a key metric often used as a proxy for research quality is the ranking of the journal in which a manuscript appears while citation based measures of journal quality are commonly used less is known about other dimensions of journal quality and prestige we report results from an international study using best worst scaling to investigate researchers journal preferences respondents used two criteria to assess journals the impact a paper in the journal would have on career progression and the impact beyond academia of papers in the journal among the sample of journals studied the american journal of agricultural economics is ranked at the top for career progression for the aggregate sample while science was rated at the top for broader impact we find no significant correlation between the journal scores based on the two criteria nor between them and the journals impact factors these results suggest that impact beyond academia is poorly aligned with career incentives and that citation measures reflect poorly if at all peers esteem of journals heteroscedastic scale adjusted latent class models reveal marked heterogeneity in journal preferences related to researchers institutional affiliation and geographic region we find significant differences in error variance over people and choices people were less consistent when choosing their least as opposed to their most preferred journal this finding has broader implications given the burgeoning use of best worst surveys

the effect of the minimum wage on the fast food industry using a longitudinal survey of fast food restaurants in texas the authors examine the impact of recent increases in the federal minimum wage on a low wage labor market less than 5 of fast food restaurants were using the new youth subminimum wage in july august 1991 even though the vast majority paid a starting wage below the new hourly minimum wage immediately before it became effective although some restaurants increased wages beyond the level needed to comply with higher minimum wages in both 1990 and 1991 those federal minimum wage increases greatly compressed the distribution of starting wages in the texas fast food industry two findings at variance with conventional predictions are that 1 employment increased more in those firms likely to have been most affected by the 1991 minimum wage increase than in other firms and 2 price changes were unrelated to mandated wage changes

the taylor rule and optimal monetary policy where it denotes the fed s operating target for the federal funds rate pt is the inflation rate measured by the gdp deflator yt is the log of real gdp and y t is the log of potential output identified empirically with a linear trend the rule has since been subject to considerable attention both as an account of actual policy in the united states and elsewhere and as a prescription for desirable policy taylor argues for the rule s normative significance both on the basis of simulations and on the ground that it describes u s policy in a period in which monetary policy is widely judged to have been unusually successful taylor 1999 suggesting that the rule is worth adopting as a principle of behavior here i wish to consider to what extent this prescription resembles the sort of policy that economic theory would recommend i consider the question in the context of a simple but widely used optimizing model of the monetary transmission mechanism which allows one to reach clear conclusions about economic welfare the model is highly stylized but incorporates important features of more realistic models and allows me to make several points that are of more general validity out of concern for the robustness of the conclusions reached the analysis here addresses only broad qualitative features of the taylor rule and attempts to identify features of a desirable policy rule that are likely to hold under a variety of model specifications

the effects of new franchisor partnering strategies on franchise system size many young firms use strategic actions to attract partners who help them increase the size of their operations quickly this article examines the use of strategic actions to attract partners and increase system size in the context of franchising we build on research in entrepreneurship marketing organization theory strategic management and finance to develop specific hypotheses about the influences of franchisor pricing policy and strategic control decisions on system size we test these hypotheses empirically using panel data on a sample of 1 292 business format franchise systems from 152 industries that were established in the united states between 1979 and 1996 and followed from their inception forward in time our model accounts for the endogeneity of strategic decisions controls for unobserved firm and industry factors and accounts for selection effects due to system failure the results show that franchisors that grow larger 1 lower royalty rates as the systems age 2 have low up front franchise fees that rise over time 3 own a small proportion of outlets and lower that percentage over time 4 keep franchisees initial investment low and 5 finance their franchisees

efficiency wages deferred payments and direct incentives in agriculture empirical evidence from agricultural labor markets is consistent with efficiency wage theory and inconsistent with several alternative explanations according to this theory the higher wage or deferred payment benefits that direct hire growers pay relative to that of farm labor contractors is an efficiency wage growers use this extra compensation to lower their monitoring expenses and reduce shirking by workers copyright 2002 oxford university press

monetary policy with uncertain parameters this thesis contains four chapters each of which examines different aspects of the uncertainty facing monetary policymakers monetary policy and market interest rates investigates how interest rates set on financial markets respond to policy actions taken by the monetary authorities the reaction of market rates is shown to depend crucially on market participants interpretation of the factors underlying the policy move these theoretical predictions find support in an empirical analysis of the u s financial markets predicting monetary policy using federal funds futures prices examines how prices of federal funds futures contracts can be used to predict policy moves by the federal reserve although the futures prices exhibit systematic variation across trading days and calendar months they are shown to be fairly successful in predicting the federal funds rate target that will prevailafter the next meeting of the federal open market committee from 1994 to 1998 monetary policy with uncertain parameters examines the effects of parameter uncertainty on the optimal monetary policy strategy under certain parameter configurations increasing uncertainty is shown to lead to more aggressive policy in contrast to the accepted wisdom should central banks be more aggressive examines why a certain class of monetary policy models leads to more aggressive policy prescriptions than what is observed in reality these counterfactual results are shown to be due to model restrictions rather than central banks being too cautious in their policy behavior an unrestricted model taking the dynamics of the economy and multiplicative parameter uncertainty into account leads to optimal policy prescriptions which are very close to observed federal reserve behavior

the mechanisms of spatial mismatch the spatial mismatch hypothesis smh argues that low skilled minorities residing in us inner cities experience poor labour market outcomes because they are disconnected from suburban job opportunities this assumption gave rise to an abundant empirical literature which is rather supportive of the smh surprisingly it is only recently that theoretical models have emerged which probably explains why the mechanisms of spatial mismatch have long remained unclear and not properly tested this article presents relevant facts reviews the theoretical models of spatial mismatch confronts their predictions with available empirical results and indicates which mechanisms deserve further empirical tests

do academic salaries decline with seniority this article reexamines the negative seniority earnings relationship for academic economists the empirical results show that the anomalous negative seniority effect found in earlier academic market studies holds in the absence of direct measures of research productivity the negative effect however eventually disappears as more comprehensive measures of publishing citations and other productivity measures are included in the wage equation to control for the quantity and quality of faculty productivity faculty with greater seniority appear to be rewarded relatively less simply because many have been relatively less productive than their colleagues with less seniority at similar stages in their careers

incomplete contracts and the choice between vertical integration and franchising abstract previous studies have demonstrated that geographical dispersion of outlets leads to an incentive for firms to franchise geographical dispersion alone however does not provide a full explanation of the firm s decision to franchise certain industries with highly dispersed retail outlets such as supermarkets almost never franchise this paper uses the incomplete contracting paradigm to demonstrate how the inability to contract over local outlet costs can drive the firm s decision to franchise or integrate since only owners have incentives to reduce cost ownership of the local outlet should rest with the party with the greatest ability to control cost the theory is then applied to several industries

endogenous objectives and the evaluation of targeting rules for monetary policy recent research in monetary economics has followed the advice of mccallum 1988 robustness properties of a rule for monetary policy carnegie rochester conference series on public policy 29 173 203 and investigated the robustness properties of monetary policy rules by evaluating them in a variety of models evaluation across models is typically based on an exogenously specified loss function however the theory on which many recent monetary policy models are based implies that changes in the structure of the model also have consequences for the policy objectives the central bank should pursue objectives are endogenous not exogenous to the model in this paper i investigate the impact of endogenous objectives on the evaluation of targeting rules for monetary policy r 2005 elsevier b v all rights reserved

interest rate pass through and monetary transmission evidence from individual financial institutions retail rates official interest rate changes should influence short rates on money market instruments and retail products such as deposit accounts and mortgages but complete pass through is often taken for granted this paper provides a theoretical and econometric framework for assessing the evidence for this assumption using seventeen years of monthly data for rates on thirteen deposit and mortgage products offered by individual uk financial institutions the methodology allows for asymmetries and non linearities in adjustment and the results show that the speed of adjustment in retail rates depends on whether the perceived gap between retail and base rates is widening or narrowing

customer discrimination and employment outcomes for minority workers this paper investigates the effects of customer discrimination on the employment and earnings of minorities particularly blacks data are used from a new survey of employers in four large metropolitan areas in the united states our results show that the racial composition of an establishment s customers has sizable effects on the race of who gets hired particularly in jobs that involve direct contact with customers and in sales or service occupations race of customers also affects wages with employees in establishments that have mostly black customers earning less than those in establishments with mostly white customers

inflation dynamics and the cost channel of monetary transmission evidence from vector autoregressions indicates that the impact of interest rate shocks on macroeconomic aggregates can substantially be affected by the so called cost channel of monetary transmission in this paper we apply a structural approach to examine the relevance of the cost channel for inflation dynamics in g7 countries we augment the so called hybrid new keynesian philips curve by letting firms costs for external funds rise with the short run nominal interest rate our estimates reveal that the magnitude of this cost channel strongly varies between countries including member countries of the emu in accordance with differences in their financial systems simulations of a new keynesian model further show that the presence of the cost channel substantially affects the transmission of monetary policy shocks in particular the inflation response

optimal monetary policy with an uncertain cost channel the cost channel of monetary transmission describes a supply side effect of interest rates on firms costs previous research has found this effect to vary both over time and across countries moreover the cyclical nature of financial frictions is likely to amplify the cost channel this paper derives optimal monetary policy in the presence of uncertainty about the true size of the cost channel in a min max approach the central bank derives an optimal policy plan to be implemented by a taylor rule it is shown that uncertainty about the cost channel leads to an attenuated interest rate setting behavior in this respect the brainard 1967 principle of cautious policy in the face of uncertainty continues to hold in both a bayesian and a min max framework

assessing generalized method of moments estimates of the federal reserve reaction function estimating a forward looking monetary policy rule by the generalized method of moments gmm has become a popular approach we reexamine estimates of the federal reserve reaction function using several gmm estimators and a maximum likelihood ml estimator first we show that over the baseline period 1979 2000 these alternative approaches yield substantially different parameter estimates using monte carlo simulations we show that the finite sample gmm bias can account for only a small part of the discrepancy between estimates we find that this discrepancy is more plausibly rationalized by the serial correlation of the policy shock causing misspecification of gmm estimators through lack of instrument exogeneity this correlation pattern is related to a shift in the reaction function parameters around 1987 reestimating the reaction function over the 1987 2000 period produces gmm estimates that are very close to the ml estimate

new keynesian economics and the phillips curve models with sticky prices are an important part of new keynesian economics the author shows that several of the new keynesian models imply a formulation that is similar to the expectations augmented phillips curve of milton friedman and edmund phelps he then presents new estimates of the new keynesian phillips curve the author uses two proxies for price expectations survey based measures and an econometric based measure originally developed by bennett mccallum 1976 overall the results are consistent with the model but the survey based results are more precise suggesting that the surveys may be better measures of actual expectations copyright 1995 by ohio state university press

firm types price setting strategies and consumption tax incidence abstract we analyze price responses to large restaurant vat rate reductions in two different european countries our results show that responses in the short and medium run were clustered around two focal points of zero pass through and full pass through differences between independent restaurants and chains is the key explanation for this pattern while nearly all independent restaurants effectively ignored the tax reductions and left consumer prices unchanged a substantial fraction of restaurants belonging to chains chose a rapid and complete pass through in the longer run prices converged but primarily through a price reversion among chain restaurants the stark difference in price responses does not appear to arise because of different market characteristics such as location initial price levels meal types and restaurant segment

crossing mother entrepreneur franchisees attempts to reduce franchisor influence abstract contractual terms guide many entrepreneur franchisees actions with the franchisor however it is impossible for franchisors to completely specify all future actions they compensate by continually attempting to influence franchisees using what franchisees perceive as suasion in their ongoing interactions we develop a theoretical framework for understanding the informal interaction dynamics between franchisors and franchisees most franchise arrangements include the payment of royalties based on sales this encourages a growth oriented strategy usually appropriate for the franchisees during the initial stages of their operations whereas a franchising strategy can reduce entreprenerial risk for franchisees it does not eliminate it thus as sales of the franchisees increase profit oriented strategies will be favored because they represent the payoffs that accrue to continuing entrepreneurial effort and risk taking these strategies may be in opposition to franchisors sales orientation when market conditions do not allow continual growth without margin penalties a research model is developed depicting the relationship between franchisees strategies and performance and the moderating effect that contractual goals and franchisees perception of franchisors attempts at suasion have on this relationship a set of research hypotheses was then empirically tested using a large sample of franchisees from the commercial truck retailing industry the results indicate that sales growth and profit growth goals are not always congruent balancing the goals of the franchisor and franchisee did not appear to be a popular option either one or the other was emphasized more importantly the results indicate that when franchisees perceive attempts by franchisors to use suasion lower levels of profits result but there is no corresponding increase in the level of sales in the long term franchisors are likely to determine that current contractual arrangements are not protecting their longer term interests thus they will be expected to attempt to modify franchise contracts in ways that force franchisees to implement sales gain strategies this will require that entrepreneur franchisees anticipate future events more carefully at the time they are examining the original franchise contract because most entrepreneurs are concerned with immediate survival at the start up stage this makes examination of the contract less likely to happen the franchise option is attractive because it reduces such risks we recommend that entrepreneurs write ex ante contingent claims contracts that ensure a gradual reduction of franchisor influence although this would assume a power or knowledge balance that favors the franchisees which is unlikely during the start up phase it will change over time as franchisees gain a better understanding of the local competitive dynamics thus it may well serve the franchisees to take a defensive posture or push a royalty arrangement that decreases the emphasis on sales over time this is most likely to be effective where the entrepreneur is considering several competing franchises at the time of the signing of the contract finally we recommend that entrepreneur franchisees should not assume that the expert advice offered by their franchisor is always in their best interests although technical advice is more likely to be unbiased and should be fully exploited as this is what makes the franchise valuable strategic advice or that which relates to goal setting may well be colored by the financial interests of the franchisor franchisors are unlikely to consider the possibility that franchisees would be better served by formulating their own strategies nor are they likely to consider that the franchise network would be better off in the longer term by the collective impact associated with numerous franchisees independently formulating their own strategies in short although we do not suggest that franchisees should always assume that crossing mother is the best response to all perceived franchisor suasion efforts they should carefully examine all strategic advice

does the fed act gradually a var analysis abstract the tendency for changes in the federal funds rate to be implemented gradually has been considered evidence of an interest rate smoothing objective for the federal reserve this paper investigates whether gradual funds rate movements can be explained by the dynamic structure of the economy and the uncertainty surrounding that structure without recourse to including an ad hoc interest rate smoothing argument in the fed s objective function in the absence of parameter uncertainty the optimal policy involves more aggressive movements in the funds rate than observed parameter uncertainty however limits the responsiveness of the interest rate as a result the optimal policy under parameter uncertainty can account for a considerable portion of the gradualism observed

seniority and monopsony in the academic labor market workers with high seniority usually have higher wages than workers with low seniority and the same total labor marke t experience in contrast the results of this paper indicate that higher seniority is associated with lower salaries for university professors the author documents this finding for national surveys a nd individual institutions and explains it as due to monopsonistic discrimination by employers copyright 1993 by american economic association

ownership agency and wages an examination of franchising in the fast food industry this paper estimates the difference in compensation between company owned and franchisee owned fast food restaurants the contrast is of interest because contractual arrangements give managers of company owned outlets less of an incentive to monitor and supervise employees estimates based on two data sets suggest that employee compensation is slightly greater at company owned outlets than at franchisee owned outlets the earnings gap is 9 percent for assistant and shift managers and 2 percent for full time crew workers furthermore the tenure earnings profile is steeper at company owned restaurants these findings suggest that monitoring difficulties influence the timing and generosity of compensation

core journals in economics gaines h liner this article ranks core journals in economics using the textbook citation method rankings are produced from citations in graduate level microeconomics macroeconomics and econometrics textbooks textbooks used in the study were chosen through responses from a survey of professors in top tier economics departments the top nine journals or core journals from this study correlate closely in rank with the results of two comparison studies second tier journals identified in this study correlate less closely in rank with second tier journals in comparison studies jel a i introduction between 1970 and 1990 the number of published pages in economics journals more than doubled laband and piette 1994 and during the early 1970s budgets of libraries devoted to journals grew in percentage terms several fold relative to those devoted to books liebowitz and palmer 1984 laband and piette 1994 reported that between 1976 and 1985 at least 55 new economics journals commenced publication although not all journals are considered general interest journals many emphasize the importance of economic theory in their submission instructions to authors with this increased emphasis on research scholars and administrators alike have acquired an increased sensitivity to how journals rank in quality influence or impact the variety of methods used to rank journals departments and authors attests to the increased concern individuals place on such issues the social sciences citation index ssci institute for scientific information 1986 has figured prominently as a source of data in a variety of studies burton and phimister 1995 laband and piette 1994 liebowitz and palmer 1984 and stigler et al 1995 provide recent examples another approach occasionally used in ranking of economics departments involves choosing citation data from the premier core or principal journals departmental rankings are then based on the number of journal articles or pages published by members of their faculty in these journals graves et al 1982 burkitt and baimbridge 1995 conroy et al 1995 scott and mitias 1996 and dusansky and vernon 1998 have used variations of this approach others have surveyed deans and chairpersons for their own rankings of journals see enomoto and ghosh 1993 for one recent example a potential weakness of this approach is that survey respondents can be influenced by recent and not so recent literature on the subject and by each other some earlier studies have attempted to rank journals by their quality see liebowitz and palmer 1984 for a review and beed and beed 1996 for a criticism of attempts to measure journal quality because an objective ranking of journals by their quality is difficult if not impossible most recent studies mentioned above have attempted to rank journals based on their impact or their influence ranking the number of citations to journal articles in other journal articles provides only one path to measuring the potential impact a journal has on individuals and the profession and ultimately the broader community davis 1998 pointed out that the often used ssci data under represent journals that share content with other social sciences a second problem noted is that not all of any journal s citations are identified by citing journal in every case the list is truncated and some portion of a journal s citations are simply entered as all other davis 1998 62 moreover the percentage of citations in the all other category is not necessarily the same from journal to journal this might bias raw counts of citations as well as attempts to adjust for impact by adjusting for the number of pages or the number of characters in the cited journals however these biases tend to have less impact on rankings of core journals than less highly ranked journals in attempts to rank authors of journal articles using ssci data alexander and mabry 1994 noted that the ssci does not include in the counts the second and subsequent authors of multiple author articles

credit incentives and reputation a hedonic analysis of contractual wage profiles a hedonic analysis of principal agent employment contracts is developed in which workers and employers exchange labor services and contractual payment patterns within this framework tests of alternative hypotheses are formulated and applied to contract data from a unique household level survey of economic activity in rural china in 1935 the results indicate that credit market constraints motivated workers and employers contract choices that shirking by workers rather than by employers was the dominant incentive issue that reputational concerns rather than threats of termination were the key worker disciplining device and finally that the contract s third party acted as an enforcement device rather than as a matchmaker subject to the availability of matched agent principal data this structural approach to modeling agency relationships can also be used in contemporary settings

life on the frontier migrant information earnings and past mobility this paper examines the extent to which information obtained from past geographic mobility affects both post move job search and earnings in subsequent migration in the united states the study considers this linkage between past and present mobility by estimating earnings frontiers for various categories of interstate migrants partitioned by prior mobility history the results demonstrate that migrant groups exhibiting high relative levels of human capital stock do not necessarily possess superior pre move labor market information it is also demonstrated that the incentive to acquire this pre move information is tied to psychic cost and variation in this cost among migrant types excerpt