price promotions in choice models promotions are used in marketing to increase sales and drive profits by temporarily decreasing the price per unit of a good some price promotions apply to all quantities 20 off some have limits on the number of units that can be purchased at a reduced price and others only offer the discount if the volume purchased is sufficiently high we develop a model of price promotions in the context of a direct utility model where its effects are incorporated through the budget constraint price promotions complicate the estimation and analysis of direct utility models because they induce kinks and points of discontinuity in the budget set we propose a bayesian approach to addressing these irregularities and demonstrate the ability of the direct utility model to be used in counterfactual analyses of price promotions we investigate the stability of utility function estimates for consumers under alternative price promotions and find that the majority of the effect of a price promotion is through the budget s

the impacts of inclusive and exclusive taxes on healthy eating an experimental study abstract based on a laboratory experiment conducted with 131 adults non students subjects we empirically examine the differential impacts of an inclusive and exclusive tax on changing consumers eating behavior we compare the caloric and nutrient content of the meals selected by the subjects using a difference in difference regression model to determine the efficacy of the policy treatments the results indicate that an inclusive tax has a significantly stronger effect on reducing the consumption of total calories calories from fat and the intake of carbohydrates cholesterol sugar and sodium compared with an exclusive tax

occupational self selection a human capital approach to sex differences in occupational structure a rich and diverse literature exists concerning the distribution of labor incomes one approach namely that of human capital concentrates on lifetime accumulation paths of earnings capacity units human capital individual variations in human capital imply differences in earnings power thereby yielding strong implications concerning earnings distribution within a population despite its explanatory power the human capital model has been widely criticized one criticism centers on its inability to obtain inferences concerning occupational distribution the purpose of this paper is to alleviate at least some such criticism by applying the hedonic price approach so as to embed occupational choice into the human capital framework the significance is that neoclassical economic theory can be used to obtain implications concerning the determinants of occupational structure excerpt

how sensitive are environmental valuations to economic downturns abstract this paper assesses the temporal stability of willingness to pay estimates wtp under changing economic conditions specifically two questions are addressed a is wtp stable over time and b if it is not are the changes just driven by socio economic effects or something else in order to investigate these questions we used data from the contingent valuation method cvm study conducted after the prestige oil spill in spain in 2006 and a second wave of the same survey repeated in 2009 after spain entered a serious recession median wtp estimates dropped from 60 36 in 2006 to 26 92 in 2009 per household a statistically significant reduction to investigate the amount of the drop in wtp due to observables versus changes in preferences between 2006 and 2009 we use the 2006 logit wtp coefficient estimates with 2009 levels of the independent variables and we obtain a wtp of 46 37 this estimate is statistically different from the 2009 estimate 26 92 in the same fashion by using 2009 logit wtp coefficients with 2006 data we obtain an estimate of 50 29 also different from the 2006 estimate implications of these findings for temporal stability of welfare measures and benefit transfer exercises are also discussed

the compromise effect in action lessons from a restaurant s menu the compromise effect refers to individuals tendency to choose intermediate options its existence has been demonstrated in a large number of hypothetical choice experiments this paper uses field data from a specialties restaurant to investigate the existence and strength of the compromise effect in a natural environment despite the presence of many factors that potentially weaken the compromise effect e g a very large choice set the opportunity to choose familiar options we find evidence for it both in descriptive statistics and regression analyses options which become a compromise after a change in the choice set gain on average five percent in market share we also find that the compromise effect is especially pronounced in groups while for single customers it is statistically insignificant

the disparity between willingness to accept and willingness to pay measures of value psychologists have long argued that people are much more averse to a loss than attracted to an equivalent gain this behavior termed loss aversion has been formalized by kahneman and tversky 1979 in their reformulation of expected utility theory prospect theory in prospect theory the utility function is replaced by a value function that evaluates changes in income from the current level increases in income are weighted by a relatively small marginal utility decreases in income are weighted by a much larger marginal utility in effect the value function implies that a kink in the relationship between utility and income occurs at the initial income or reference point and that the slope of the utility function for losses in income is steeper than it is for gains in a recent paper knetsch and sinden 1984 report a series of experiments that demonstrate the existence of a large disparity between willingness to accept wta and willingness to pay wtp measures of value they argue that the psychological theory of loss aversion explains this difference economic theory would suggest that individuals who exhibit a large disparity between wta and wtp are perhaps underperceiving the value of gains or overperceiving the value of losses are behaving in an irrational manner and will consequently achieve a lower level of well being than if they behaved in a true utility maximizing manner this would in contrast to loss aversion usually imply near equal values for wta and wtp see willig 1976 further documentation of a larger than expected disparity between wta and wtp has been obtained in surveys asking for the value of a variety of public goods for example cummings brookshire and schulze 1986 document six

measuring heterogeneous reservation prices for product bundles this paper develops a model for capturing continuous heterogeneity in the joint distribution of reservation prices for products and bundles our model is derived from utility theory and captures both within and among subject variability furthermore it provides dollarmetric reservation prices and individual level estimates that allow the firm to target customers and develop customized and nonlinear pricing policies our experiments show that regardless of whether the products are durables or nondurables the model captures heterogeneity and predicts well models that assume homogeneity perform poorly especially in predicting choice of the bundle furthermore the methodology is robust even when respondents evaluate few profiles self stated reservation prices do not have any informational content beyond that contained in the basic model the direct elicitation method appears to understate overstate the variation in reservation prices across consumers for low priced high priced products and bundles hence this method yields biased demand estimates and leads to suboptimal product line pricing policy the optimization results show that the product line pricing policy depends on the degree of heterogeneity in the reservation prices of the individual products and the bundle a uniformly high price strategy for all products and bundles is optimal when heterogeneity is high otherwise a hybrid strategy is optimal

implicit understandings in channels of distribution formal agreements can be used to achieve coordination among channel members these agreements work by exerting explicit control over the members who make the agreements however implicit understandings can be used as a partial substitute for more formal agreements in this paper we show that implicit understandings can develop as channel members learn about each other s behavior we show that this learning leads to the use of the implicit influence each channel member has over the other s behavior the learning leading to an implicit understanding requires some form of experimentation or historical observation this learning results in an oscillating retail price when only one channel member learns the other s behavior both channel members obtain greater profits than when neither member learns and both channel members obtain less profits than when both members learn however the member who does not learn obtains more profits than the member who learns we also show that implicit understandings r

paying not to go to the gym how do consumers choose from a menu of contracts we analyze a novel dataset from three u s health clubs with information on both the contractual choice and the day to day attendance decisions of 7 752 members over three years the observed consumer behavior is difficult to reconcile with standard preferences and beliefs first members who choose a contract with a flat monthly fee of over 70 attend on average 4 3 times per month they pay a price per expected visit of more than 17 even though they could pay 10 per visit using a 10 visit pass on average these users forgo savings of 600 during their membership second consumers who choose a monthly contract are 17 percent more likely to stay enrolled beyond one year than users committing for a year this is surprising because monthly members pay higher fees for the option to cancel each month we also document cancellation delays and attendance expectations among other findings leading explanations for our findings are overconfidence about future self control or about future efficiency overconfident agents overestimate attendance as well as the cancellation probability of automatically renewed contracts our results suggest that making inferences from observed contract choice under the rational expectation hypothesis can lead to biases in the estimation of consumer preferences

unemployment insurance and precautionary saving abstract models of precautionary saving imply that households will hold more assets when faced with greater income uncertainty however previous empirical studies of income uncertainty have produced somewhat mixed support for the precautionary saving hypothesis in this paper we note that differences in the state contingent income stream available to workers through the unemployment insurance ui program provides an excellent source of variation for testing the presence of a precautionary savings motive simulations of a stochastic life cycle model suggest that a ui system similar to the type currently in place in the u s can lead to a significant reduction in the assets accumulated by a median worker moreover there is considerable variation in the ui benefit schedules for workers living in different states in the u s which provides an exogenous source of variation for empirically testing the precautionary saving hypothesis we carry out this test using data on expected ui benefit replacement rates and financial assets held by households in the survey of income and program participation our empirical results are consistent with the predictions of the model and suggest that reducing the ui benefit replacement rate by 50 percent would increase gross financial asset holdings by 14 percent or 241 for the average worker we also find empirical evidence that this crowd out effect of ui on household saving is stronger for those facing higher unemployment risk and weaker for older workers both of which are implications from our precautionary saving model

satiation in discounted utility in this paper we propose a model of intertemporal choice that explicitly incorporates satiation due to previous consumption in the evaluation of the utility of current consumption in the discounted utility du model the utility of consumption is evaluated afresh in each time period in our model the utility of current consumption represents an incremental utility from the past level when the time interval between consumption periods is large and there are therefore no carryover effects our model coincides with the du model for short time intervals between consumption periods the satiation due to previous consumption lowers the utility of current consumption several implications of our model are examined and comparisons with the du model and the habituation model are made

an analysis of the correlates of discrimination facing young hispanic job seekers this study examines the extent and correlates of discrimination faced by young accented hispanic males in chicago and san diego using the outcomes of job applications by matched pairs of anglo and hispanic job seekers this is one of the first examples of audits being used in the labormarket area the audit methodology provides a powerful basis for examining discriminatory hiring practices because it permits direct comparison of hiring outcomes for pairs of anglo and hispanic jobseekers with similar labor market qualifications in this paper we first present differences in anglo hispanic success rates in filing applications obtaining interviews and obtaining jobs this builds on the descriptive analysis presented in harry cross et al 1990 we then focus on the correlates of differential success in obtaining interviews and in subsequent job acquisition i the audit methodology

multi dimensional reference dependent preferences in sealed bid auctions how most laboratory experiments differ from the field abstract we study bidding behavior in first and second price sealed bid auctions with loss averse agents our model predicts overbidding in first price induced value auctions consistent with evidence from most laboratory experiments substantially different bidding behavior could result in commodity auctions where money and auction item are consumed along different dimensions of the consumption space differences also result in second price auctions our study thereby indicates that transferring qualitative behavioral findings from induced value laboratory experiments to the field may be problematic if subjects are loss averse

competitive pricing behavior in the auto market a structural analysis in a competitive marketplace the effectiveness of any element of the marketing mix is determined not only by its absolute value but also by its relative value with respect to the competition for example the effectiveness of a price cut in increasing demand is critically related to competitors reaction to the price change managers therefore need to know the nature of competitive interactions among firms in this paper we take a theory driven empirical approach to gain a deeper understanding of the competitive pricing behavior in the u s auto market the ability motivation paradigm posits that a firm needs both the ability and the motivation to succeed in implementing a strategy boulding and staelin 1995 we use arguments from the game theoretic literature to understand firm motivation and abilities in different segments of the auto market we then combine these insights from the game theoretic literature and the ability motivation paradigm to develop hypotheses about competition in different segments of the u s auto market to test our hypotheses of competitive behavior we estimate a structural model that disentangles the competition effect from the demand and cost effects on prices the theory of repeated games predicts that firms with a long run profitability objective will try to sustain cooperative pricing behavior as a stable equilibrium when conditions permit for example markets with high concentration and stable market environments are favorable for sustaining cooperative behavior and therefore provide firms with the ability to cooperate the theory of switching costs suggests that in markets in which a firm s current customers tend to be loyal firms have a motivation to compete very aggressively for new customers recognizing the positive benefits of loyalty from the customer base in the long run as consumer loyalty in the market increases the gains from increasing market share by means of aggressive competitive behavior are more than offset by losses in profit margins firms therefore have the motivation to price cooperatively empirically we find aggressive behavior in the minicom pact and subcompact segments cooperative behavior in the compact and midsize segments and bertrand behavior in the full size segment these findings are consistent with our theory based hypotheses about competition in different segments in estimating a structural model of the auto market we address several methodological issues a particular difficulty is the large number of car models in the u s auto market existing studies have inferred competitive behavior only in markets with two to four products they also use relatively simple functional forms of demand to facilitate easy estimation functional forms of demand however impose structure on cross elasticities between products such structure when inappropriate can bias the estimates of competitive interaction we therefore use the random coefficients logit demand model to allow flexibility in cross elasticities we also use recent advances in new empirical industrial organization neio to extend structural estimation of competitive behavior to markets with a large number of products we use the simulation based estimation approach developed by berry et al 1995 to estimate our model a frequent criticism of the neio approach is that its focus on industry specific studies limits the generalizability of its findings in this study we retain the advantages of neio methods but partially address the issue of generalizability by analyzing competitive behavior in multiple segments within the auto industry to see whether there is a consistent pattern that can be explained by theory theoretical modelers can use our results to judge the appropriateness of their models in predicting competitive outcomes for the markets that they analyze a by product of our analysis is that we also get estimates of demand and cost apart from competitive interactions for the market managers can use these estimates to perform what if analysis they can answer questions about what prices to charge when a new product is introduced or when an existing product s characteristics are changed

the bright side of managerial over optimism human estimation and inference are subject to systematic biases such as overconfidence and over optimism in contrast to prior research that has identified multiple negative consequences of these biases we focus on positive effects we empirically examine a setting in which over optimism a is a related but different bias from overconfidence b emerges dynamically in a rational economic framework and c generates higher managerial effort importantly this additional effort improves firm profitability and market value

reservation price as a range an incentive compatible measurement approach abstract drawing from the literature on buyers uncertainty in preference and product knowledge the authors suggest and empirically test the proposition that a consumer s reservation price for a product is more meaningfully and accurately represented as a range than as a single point given this conceptualization they propose an approach for incentive compatible elicitation of a consumer s reservation price range icerange that builds on becker degroot and marschak s 1964 point of purchase method two empirical applications of the approach provide an assessment of its practicality and its predictive performance relative to current methodologies for reservation price elicitation the results demonstrate that the proposed method significantly outperforms the benchmark approaches in terms of predictive validity and yields valuable incremental information about uncertainty in product valuation

how should consumers willingness to pay be measured an empirical comparison of state of the art approaches abstract this study compares the performance of four commonly used approaches to measure consumers willingness to pay with real purchase data real the open ended oe question format choice based conjoint cbc analysis becker degroot and marschak s bdm incentive compatible mechanism and incentive aligned choice based conjoint icbc analysis with this five in one approach the authors test the relative strengths of the four measurement methods using real as the benchmark on the basis of statistical criteria and decision relevant metrics the results indicate that the bdm and icbc approaches can pass statistical and decision oriented tests the authors find that respondents are more price sensitive in incentive aligned settings than in non incentive aligned settings and the real setting furthermore they find a large number of none choices under icbc than under hypothetical conjoint analysis this study uncovers an intriguing possibility even when the oe format and cbc analysis generate

the effect of bank account ownership on credit and consumption evidence from the uk this article examines the causal effects of bank account ownership on credit access and consumption by isolating an exogenous change in account ownership produced by an electronic transfer mandate in the universal uk child benefit program comparing households with and without children finds that the mandate substantially affected banking behavior with an 8 6 relative increase in transaction account ownership when households transition into account ownership results indicate large increases in credit card ownership 89 and household durable goods 55 similar changes are not seen in loan use weekly expenditures or vehicle ownership additional evidence from a panel data set indicate declines in the use of fringe bank credit informal loans and debt after households transition into bank account ownership in total evidence suggests that an important effect of owning a bank account is improved access to credit cards which enables durable good consumption

incentive aligned conjoint analysis abstract because most conjoint studies are conducted in hypothetical situations with no consumption consequences for the participants the extent to which the studies are able to uncover true consumer preference structures is questionable experimental economics literature with its emphasis on incentive alignment and hypothetical bias suggests that more realistic incentive aligned studies result in stronger out of sample predictive performance of actual purchase behaviors and provide better estimates of consumer preference structures than do hypothetical studies to test this hypothesis the authors design an experiment with conventional hypothetical conditions and parallel incentive aligned counterparts using chinese dinner specials as the context the authors conduct a field experiment in a chinese restaurant during dinnertime the results provide strong evidence in favor of incentive aligned choice conjoint analysis in that incentive aligned choice conjoint outperforms hypothetical choice conjo

optimization and analysis of the profitability of tariff structures with two part tariffs abstract service providers often offer tariff structures with several two part tariffs that consist of a fixed fee and a usage price such that consumers may pick the tariff they prefer prices of tariffs have significant impacts on service providers profit because they simultaneously influence consumers tariff choices and their usage the number of tariffs also plays an important role because more tariffs segment the market better but also increase the administrative burden and require more marketing effort this article presents a mixed integer nonlinear programming optimization problem to determine profit maximizing tariffs compares several heuristic search methods in particular the gradient method stochastic search and simulated annealing to solve this problem analyses the profitability of different tariff structures and outlines the factors that drive differences in profitability across various tariff structures the results show that especially for large samples of more than 100 consumers simulated annealing performs best and deviates only 0 2 from the optimum structures with fewer two part tariffs are generally sufficient because additional two part tariffs only negligibly increase service providers profit

augmenting conjoint analysis to estimate consumer reservation price consumer reservation price is a key concept in marketing and economics theoretically this concept has been instrumental in studying consumer purchase decisions competitive pricing strategies and welfare economics managerially knowledge of consumer reservation prices is critical for implementing many pricing tactics such as bundling tar get promotions nonlinear pricing and one to one pricing and for assessing the impact of marketing strategy on demand despite the practical and theoretical importance of this concept its measurement at the individual level in a practical setting proves elusive we propose a conjoint based approach to estimate consumer level reservation prices this approach integrates the preference estimation of traditional conjoint with the economic theory of consumer choice this integration augments the capability of traditional conjoint such that consumers reservation prices for a product can be derived directly from the individuallevel estimates of conjoint coefficients with this augmentation we can model a consumer s decision of not only which product to buy but also whether to buy at all in a category thus we can simulate simultaneously three effects that a change in price or the introduction of a new product may generate in a market the customer switching effect the cannibalization effect and the market expansion effect we show in a pilot application how this approach can aid product and pricing decisions we also demonstrate the predictive validity of our approach using data from a commercial study of automobile batteries

gender and competition at a young age gender gaps may be observed in a variety of economic and social environments one of the possible determining factors is that men are more competitive than women and so when the competitiveness of the environment increases the performance of men increases relative to that of women we test this hypothesis in a field study conducted with 9 year old children running on a track they first run alone and then in pairs over a short distance with different gender composition of the pairs the results support the hypothesis that performance in competition varies according to gender when children ran alone there was no difference in performance in competition boys but not girls improved their performance this finding relates to the discussion regarding single sex schools the outcomes of examinations in a mixed sex school can show a gender gap in favor of boys even when this gap does not reflect actual abilities girls who are as talented as boys will end up performing worse just because they are not as competitive and will not achieve as high scores in examinations as boys

identity and the economics of organizations on plebes first day at west point called r day they strip down to their underwear their hair is cut off they are put in uniform they then must address an older cadet with the proper salute and with the statement sir new cadet doe reports to the cadet in the red sash for the first time as ordered plebes must stand and salute and repeat and stand and salute and repeat until they get it exactly right all the while being reprimanded for every tiny mistake in the summary of david lipsky 2003 pp 145 154 who spent four years tracking a company of cadets at west point on r day you surrender your old self in stages but r day is just the beginning of the training and personal re engineering that is to come so that west point graduates emerge four years later as loyal officers in the u s army lipsky shows that despite some failure this tough program is remarkably successful in creating officers with the will to lead in battle economists current picture of organizations and work incentives has no place for the west point program and the motivations it seeks to inculcate in recruits in a standard economic model an individual s preferences are fixed and utility depends only on pecuniary variables the army s aim at west point is to change cadets preferences they wish to inculcate non economic motives in the cadets so that they have the same goals as the u s army alternatively stated the goal of west point is to change the identity of the cadets so they will think of themselves above all else as officers in the u s army they will feel bad about themselves they will lose utility if they fall short of the ideals of such an officer this change in identity

do women react differently to incentives evidence from experimental data and payroll records abstract we consider the response to incentives as an explanation for observed productivity differences within a firm that paid its workers piece rates we provide a framework within which the observed productivity differences can be decomposed into two parts one due to differences in ability and the other due to differences in the response to incentives we apply this decomposition to male and female workers from a tree planting firm in british columbia canada our evidence both experimental and nonexperimental suggests that there was no difference in the reaction to incentives between male and female planters the productivity differential male planters enjoyed arose because of differences in ability interpreted as strength in our application

how income transfer programs affect work savings and the income distribution a critical review for helpful comments on earlier drafts we thank without implicating moses abramovitz yves balcer john bishop alan blinder richard burkhauser michael darby irwin garfinkel alan gustman daniel hamermesh martin holmer george jakubson robert lampman paul menchik robert moffitt michael murray joseph quinn timothy smeeding eugene smolensky barbara wolfe and two anonymous referees

gender differences in market competitiveness in a real workplace evidence from performance based pay tournaments among teachers recent lab and field experiments suggest that women are less effective than men in a competitive environment in this paper i examine how individual performance in a real work place is affected by a competitive environment and by its gender mix the competition is among math english and language teachers who participated in a rank order tournament that rewarded teachers with large cash bonuses based on the test performance of their classes the evidence suggest that the average ranking winning rate and awarded prize did not differ by gender nor between teachers in competition groups with only female teachers or with both genders i also find that the direct impact of the bonus program on students outcomes did not vary by male and female teachers or by the type of competitive environment in terms of gender mix of the participants as for mechanisms that can explain these results i found no differences by either gender or by the gender mix of the competition group in teachers awareness and familiarity with the program and its rules and in effort and teaching methods women though were more pessimistic about the effectiveness of teachers performance pay and more realistic than men about their likelihood of winning bonuses

the effects of welfare vehicle asset rules on vehicle assets before 1996 households were typically ineligible for welfare if they had assets worth more than 1000 where 1500 from each vehicle s value was excluded from this determination however the 1996 welfare reform act began allowing states to increase their asset limits and vehicle exclusions this may prompt low income households to reallocate resources to or from vehicles we examine the effects of state vehicle asset rules on vehicle assets results show that liberalizing asset rules increases vehicle assets and that this increase is driven largely by eligible individuals increasing vehicle assets with no evidence indicating that ineligible individuals reduce vehicle assets to become eligible

explaining occupational sex segregation and wages findings from a model with fixed effects does segregation arise because female occupations have financial advantages for women planning to spend some time as homemakers as human capital theorists claim do male occupations have more onerous working conditions that explain their higher earnings as the neoclassical notion of compensating differentials suggests or do female occupations have low wages that are depressed by the sort of discrimination at issue in comparable worth as sociologists have argued to answer these questions the authors use a model with fixed effects to predict the earnings of young men and women from a pooled cross section time series of the national longitudinal survey analyses are undertaken for both blacks and whites a fixed effects model is useful for answering these questions because it corrects for the selection bias that results from the tendency of persons who differ on stable characteristics that are unmeasured but affect earnings to select themselves into different occupations the authors find little evidence that female occupations provide either low penalties for intermittent employment at high starting wages the advantages human capital theorists have argued them to have rather there is evidence of pay discrimination against men and women in predominantly female occupations implications for economic and sociological theories of labor markets are discussed authors

unraveling reduces mobility in a labor market gastroenterology with and without a centralized match the entry level market for american gastroenterologists was organized by a centralized clearinghouse from 1986 to 1996 before and since it has been conducted via a decentralized market in which appointment dates have unraveled to well over a year before the start of employment we find that both before and after the years in which the centralized clearinghouse was used gastroenterologists are less mobile and more likely to be employed at the same hospital in which they were internal medicine residents than when the clearinghouse was in use this suggests that the clearinghouse not only coordinates the timing of appointments but also increases the scope of the market compared to a decentralized market with early appointments

why do hot dogs come in packs of 10 and buns in 8s or 12s a demand side investigation this paper presents a theory that yields insight into the determination of package prices and sizes consumer heterogeneity in consumption rates storage costs and transactions costs costs of making trips to the store explains differences in package sizes and unit prices in the model fully informed consumers and a monopolist seller pursue optimizing behavior the seller chooses package sizes and prices to maximize profits and the consumers select package sizes that maximize their utilities the authors show that consumer heterogeneity may induce the seller to offer more than one size and that larger sizes would be sold either at unit price discounts or unit price premiums welfare implications and empirical tests of the theory are presented copyright 1987 by the university of chicago

do women shy away from competition do men compete too much we examine whether men and women of the same ability differ in their selection into a competitive environment participants in a laboratory experiment solve a real task first under a noncompetitive piece rate and then a competitive tournament incentive scheme although there are no gender differences in performance men select the tournament twice as much as women when choosing their compensation scheme for the next performance while 73 percent of the men select the tournament only 35 percent of the women make this choice this gender gap in tournament entry is not explained by performance and factors such as risk and feedback aversion only playa negligible role instead the tournament entry gap is driven by men being more overconfident and by gender differences in preferences for performing in a competition the result is that women shy away from competition and men embrace it

tournaments without prizes evidence from personnel records we use a quasi experimental research design to study the effect of giving workers feedback on their relative performance the setting is a firm in which workers are paid piece rates and where for exogenous reasons management begins to reveal to workers their relative position in the distribution of pay and productivity we find that merely providing this information leads to a large and long lasting increase in productivity that is costless to the firm our findings are consistent with the interpretation that workers incipient concerns about their relative standing are activated by information about how they are performing relative to others this paper was accepted by olav sorenson organizations

the gender wage gap and the role of reservation wages new evidence for unemployed workers this paper examines the importance of differences in reservation wages for the gender wage gap based on two waves of rich survey data for a sample of newly unemployed individuals in germany we perform a decomposition analysis including measures for reservation wages detailed information on education socio demographics labor market history as well as personality traits in order to address the potential endogeneity of reservation wages we exploit a generated instrumental variable strategy that relies on heteroscedasticity of the error terms our findings indicate that the gender wage gap becomes small and statistically insignificant once we control for reservation wages moreover we perform a subgroup analysis that provides valuable insights about the importance of potentially unobserved characteristics that affect reservation wages and realized wages simultaneously reasons for differences in reservation wages could arise from productivity differences the fact that women anticipate discrimination and different unobserved traits or preferences

one swallow doesn t make a summer new evidence on anchoring effects some researchers have argued that anchoring in economic valuations casts doubt on the assumption of consistent and stable preferences we present new evidence that explores the strength of certain anchoring results we then present a theoretical framework that provides insights into why we should be cautious of initial empirical findings in general the model importantly highlights that the rate of false positives depends not only on the observed significance level but also on statistical power research priors and the number of scholars exploring the question importantly a few independent replications dramatically increase the chances that the original finding is true

experimental economics hard science or wasteful tinkering i take it that in raising the question what have we learned from experimental economics under the broader umbrella of controversy the point is not to solicit a catalogue of experimental findings but rather to signal the more pointed question are we learning anything at all or at least much that is very useful form experimentation in economics as a practising experimentalist i am convinced that experiments do have the potential to make a significant contribution to knowledge in economics this abstract was borrowed from another version of this item

a reservation price model for optimal pricing of multiattribute products in conjoint analysis a significant application of conjoint analysis is in pricing decisions for new products conceptually profit maximization is an important criterion for selecting the price of a product however t

public insurance and private savings who is affected and by how much this paper employs a recently developed instrumental quantile regression method to investigate the effect of medicaid on household savings across different wealth groups it finds that the disincentive effect of medicaid on household savings is heavily concentrated in the middle net worth households in contrast the effects on the bottom and top net worth households are quite small and insignificant these heterogeneous incentive effects are partly explained by medicaid asset tests our findings hold regardless of whether affluence is measured in terms of wealth or income they suggest that despite generating substantial crowd out for the mean household medicaid expansions are unlikely to discourage the savings of the poorest households copyright 2008 john wiley sons ltd

viewpoint replication in economics this examination of the role and potential for replication in economics points out the paucity of both pure replication checking on others published papers using their data and scientific replication using data representing different populations in one s own work or in a comment several controversies in empirical economics are used to illustrate how and how not to behave when replicating others work the incentives for replication are examined and proposals aimed at journal editors and authors are advanced that might stimulate an activity that most economists applaud but few perform

are americans saving optimally for retirement we solve each household s optimal saving decisions using a life cycle model that incorporates uncertain lifetimes uninsurable earnings and medical expenses progressive taxation government transfers and pension and social security benefits with optimal decision rules we compare household by household wealth predictions from the life cycle model using a nationally representative sample we find making use of household specific earnings histories that the model accounts for more than 80 percent of the 1992 cross sectional variation in wealth fewer than 20 percent of households have less wealth than their optimal targets and the wealth deficit of those who are undersaving is generally small

rewards experience and decision costs in first price auctions consistent with a model of asymmetric risk aversion subjects in first price auctions consistently bid above the risk neutral nash prediction it has been argued that this is due to low opportunity cost of deviating from the risk neutral bid we increase opportunity cost and payoff levels by factors of 0 1 5 10 and 20 from the normal levels generating payoffs up to 250 for risk neutral subjects and observe an insignificant increase in the slope of individual bid functions the rmse of bids declines significantly this is consistent with a reward decision cost model of bidding behavior

the effect of means tested income support for the elderly on pre retirement saving evidence from the ssi program in the u s abstract we attempt to draw inferences about behavioral responses to means tested income support for the elderly by examining the effects on saving of the supplemental security income ssi program for the aged in the u s part of this program provides payments to the poor elderly operating as a means tested public retirement program we exploit state level variation in ssi benefits to estimate the effects of ssi on saving using data from the 1984 survey of income program participation we find evidence that high ssi benefits reduce saving among households with heads who are approaching the ssi eligibility age and are likely participants in the program

exchange economies and loss exposure experiments exchange economies were created in which individuals faced losses if people are risk seeking in the losses as predicted by prospect theory then due to the nonconvexity the competitive equilibria are all on the boundaries of the edgeworth box the experimental results are that risk seeking behavior is observed in many people and appears in markets as predicted in addition market behavior is consistent with answers to hypothetical questionnaires contrary to prospect theory risk seeking seems to diminish with experience preferences in the market setting are not labile and risk seeking preferences are not simply a result of framing effects copyright 1997 by american economic association

income transfers and assets of the poor contrary to the predictions of the standard life cycle model many low lifetime income households accumulate little wealth relative to their incomes compared to households with high lifetime income i use data from the panel study of income dynamics and a correlated random effects generalized method of moments estimator to decompose the rich poor gaps in wealth to permanent income ratio into the portions attributable to differences in characteristics such as labor market earnings income uncertainty observed demographics and the utilization of transfer programs which may have stringent income and liquid asset tests and those attributable to differences in the estimated coefficients on the respective characteristics the results suggest that wealth to permanent income ratios are increasing in permanent labor income and income uncertainty but that transfer income with or without asset tests discourages liquid asset accumulation the decompositions indicate that most of the rich poor wealth gap is attr

performance pay and teachers effort productivity and grading ethics this paper presents evidence about the effect of individual monetary incentives on english and math teachers in israel teachers were rewarded with cash bonuses for improving their students performance in high school matriculation exams the main identification strategy is based on measurement error in the assignment to treatment variable that produced a randomized treatment sample the incentives led to significant improvements in test taking rates conditional pass rates and mean test scores improvements were mediated through changes in teaching methods enhanced after school teaching and increased responsiveness to students needs no evidence was found of manipulation of test scores by teachers

broadband internet an information superhighway to sex crime does internet use trigger sex crime we use unique norwegian data on crime and internet adoption to shed light on this question a public program with limited funding rolled out broadband access points in 2000 2008 and provides plausibly exogenous variation in internet use our instrumental variables and fixed effect estimates show that internet use is associated with a substantial increase in reported incidences of rape and other sex crimes we present a theoretical framework that highlights three mechanisms for how internet use may affect reported sex crime namely a reporting effect a matching effect on potential offenders and victims and a direct effect on crime propensity our results indicate that the direct effect is non negligible and positive plausibly as a result of increased consumption of pornography

neoclassical theory versus prospect theory evidence from the marketplace several experimental studies have provided evidence that suggest indifference curves have a kink around the current endowment level these results which clearly contradict closely held economic doctrines have led some influential commentators to call for an entirely new economic paradigm to displace conventional neoclassical theory e g prospect theory which invokes psychological effects this paper pits neoclassical theory against prospect theory by investigating data drawn from more than 375 subjects actively participating in a well functioning marketplace the pattern of results suggests that prospect theory adequately organizes behavior among inexperienced consumers but consumers with intense market experience behave largely in accordance with neoclassical predictions moreover the data are consistent with the notion that consumers learn to overcome the endowment effect in situations beyond specific problems they have previously encountered this transference of behavior across domains has important implications in both a positive and normative sense

dynamic allocation of pharmaceutical detailing and sampling for long term profitability the u s pharmaceutical industry spent upwards of 18 billion on marketing drugs in 2005 detailing and drug sampling activities accounted for the bulk of this spending to stay competitive pharmaceutical managers need to maximize the return on these marketing investments by determining which physicians to target as well as when and how to target them in this paper we present a two stage approach for dynamically allocating detailing and sampling activities across physicians to maximize long run profitability in the first stage we estimate a hierarchical bayesian nonhomogeneous hidden markov model to assess the short and long term effects of pharmaceutical marketing activities the model captures physicians heterogeneity and dynamics in prescription behavior in the second stage we formulate a partially observable markov decision process that integrates over the posterior distribution of the hidden markov model parameters to derive a dynamic marketing resource allocation policy across physicians we apply the proposed approach in the context of a new drug introduction by a major pharmaceutical firm we identify three prescription behavior states a high degree of physicians dynamics and substantial long term effects for detailing and sampling we find that detailing is most effective as an acquisition tool whereas sampling is most effective as a retention tool the optimization results suggest that the firm could increase its profits substantially while decreasing its marketing spending our suggested framework provides important implications for dynamically managing customers and maximizing long run profitability

gaming against managers in incentive systems experimental results with chinese students and chinese managers we examine strategic interactions between firms and planners in china comparing behavior between i students and managers with field experience with this situation ii standard versus increased monetary incentives and iii sessions conducted in context making explicit reference to interactions between planners and managers and those without any such references the dynamics of play are similar across treatments with play only gradually and incompletely converging on a pooling equilibrium a fivefold increase in incentives significantly increases initial levels of strategic play games played in context generated greater levels of strategic play for managers with minimal impact on students

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

welfare dependence and self control an empirical analysis this paper investigates the behavioral and policy mechanisms that generate dependence on welfare programs a dynamic model with labor supply disincentives and state dependence in preferences is expanded to incorporate time inconsistency which induces addictive behavior due to problems of self commitment estimation is based on data from a welfare reform experiment which contains a unique policy feature that helps identify the time preference parameters various results indicate that the commitment problem is an important consideration in the design of policy around one fourth of the individuals are time inconsistent and neglecting time inconsistency will cause state dependence in preferences to be overestimated these individuals are more responsive to policy changes due to the presence of commitment related incentives time inconsistency reduces income and net tax contribution by at least 15 and 50 percent respectively an increase in welfare benets aggravates the commitment problem and reduces utility from a time consistent perspective certain dynamic policy interventions are more eective than static interventions in alleviating the commitment problem for instance a dynamic nonwork tax generates strong commitmentrelated work incentives and over half of time inconsistent individuals will voluntarily adopt it as a commitment device the implications of time inconsistency for other policy interventions such as earned income tax credit eitc and a prowork time limit are examined

the collapse of a medical labor clearinghouse and why such failures are rare the collapse of the clearinghouse for the entry level gastroenterology labor market offers a unique opportunity to study the failures that sometimes afflict such markets to explore the reasons for the failure of the clearinghouse we conduct an experimental investigation of demand shocks of the kind that occurred in the gastroenterology market we find that a reduction in demand for positions leads to the collapse of the match only when it is detectable by firms before being detected by workers as in the unexpected shock that took place in 1996 which could be seen by firms in their reduced applicant pools simple demand and supply imbalances do not seem to interfere with the operation of the centralized match our results suggest that the market failed when applicants lost their ability to discern when they should reject an early exploding offer this suggests that the failure of the gastroenterology clearinghouse is related to the unraveling also seen in a number of decentralized markets

gender differences in examination behavior a unique examination strategy in first year microeconomics courses is used to test for gender differences in examination behavior students have the possibility of attaining a seminar bonus on the final exam for near perfect seminar attendance and are given two voluntary initial quizzes during the semester at the final exam the scores received on initial quizzes can either be accepted as is or students can attempt to improve their marks by answering similar quiz questions on the exam results suggest that female students are more likely to take initial quizzes and receive a seminar bonus but are less likely to re take quiz questions on the final exam these results suggest higher risk aversion less overconfidence and more self discipline or less procrastination among female students relative to male students our estimated behavioral differences may have important implications in terms of final grades on the course jel i21 j16 a12 a14

limited rationality and strategic complements the implications for macroeconomics this paper considers the implications of heterogeneity in information processing abilities for macroeconomic models that exhibit strategic complements the latter is the same concept that has received much attention in the recent macro literature under the headings keynesian coordination problems and positive trading externalities we consider environments in which agents vary in terms of their ability to form expectations and ask whether it is the sophisticated agents or the naive agents who have a disproportionately large effect on macroeconomic equilibrium we find that if macroeconomic interaction exhibits strategic complementarity then it is the naive agents who have a disproportionate impact

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

viewpoint on the generalizability of lab behaviour to the field abstract we can think of no question more fundamental to experimental economics than understanding whether and under what circumstances laboratory results generalize to naturally occurring environments in this paper we extend levitt and list 2006 to the class of games in which financial payoffs and doing the right thing are not necessarily in conflict we argue that behaviour is crucially linked to not only the preferences of people but also the properties of the situation by doing so we are able to provide a road map of the psychological and economic properties of people and situations that might interfere with generalizability of laboratory result from a broad class of games

the impact of snap vehicle asset limits on household asset allocation beginning in 2001 states were given the authority to formulate their own rules on how vehicles are counted toward the asset limit in the supplemental nutritional assistance program we exploit differences in timing of the state vehicle asset policy changes to identify their effect on vehicle assets and debts car ownership liquid assets holdings as well as non housing wealth we estimate difference in differences and household fixed effects specifications and find that liberalizing vehicle asset rules increases vehicle assets of households with a high ex ante probability of program participation households also take on more debt to finance their vehicles the increase in car value can be attributed primarily to less educated single parents who already owned a car before the policy change buying more expensive cars

the external validity of experimental economics techniques analysis of demand behavior this paper examines the parallelism which exists between demand behavior determined from the sale of a private good in an actual real world field setting and in a laboratory auction setting the demand behavior observed in the two settings is significantly the same leading to the corroboration of the thesis that there is often correspondence between laboratory and real world behavior

do men and women respond differently to competition evidence from a major education reform this paper provides new evidence of gender differences in response to increased competition focusing on important life tasks performed in a regular social environment the analysis takes advantage of a major education reform in ontario that exogenously increased competition for university grades comparing students prereform and postreform using rich administrative data i find that male average grades and the proportion of male students graduating on time increased relative to females further the evidence indicates that these changes were due to increased relative effort rather than self selection the findings have implications for the delivery of education and incentive provision more generally

field experiments in the developed world an introduction field experiments represent a relatively new area in economics to understand the causal links from one variable to another they have been used by academics to help answer interesting and policy relevant questions in the developed world relating to educational attainment tax avoidance consumer finance negative externalities charitable giving and labour market contracts in this paper we bring together the key ideas behind the different variants of field experiments how field experiments have been used to test theory their limitations and the new areas currently being opened up by field experiments

the transition to home ownership and the black white wealth gap this paper analyzes differences in the likelihood that black and white families become homeowners by following a sample of black and white renters over time we are able to separately study racial differences in the likelihood of applying for a mortgage and in the likelihood that a mortgage application is accepted although its effect on the race gap in housing transitions is small we find strong evidence that black applicants are almost twice as likely as comparable white households to be rejected even when credit history proxies and measures of household wealth are accounted for we show that the housing transition gap exists primarily because blacks are less likely to apply for mortgages in the first place the analysis suggests that differences in income family structure and in the ability and willingness of parents to provide down payment assistance are the primary reasons for this applications gap we speculate that the portion of the gap that remains unexplained after controlling for income d

does uncertainty matter consumer behavior under three part tariffs in communication information and other industries three part tariffs are increasingly popular a three part tariff is defined by an access price an allowance and a marginal price for any usage in excess of the allowance empirical nonlinear pricing studies have focused on consumer choice under two part tariffs we show that consumer behavior differs under three part tariffs and assess how consumer demand uncertainty impacts tariff choice we develop a discrete continuous model of choice among three part tariffs and estimate it using consumer level data on internet usage our model extends prior work in accommodating consumer switching to competitors thereby capturing behavior in competitive industries more accurately our empirical work shows that demand uncertainty is a key driver of choice among three part tariffs consumers expected bill increases with the variation in their usage steering them toward tariffs with high allowances consequently demand uncertainty decreases consumer surplus and increases provider revenue a further analysis of consumers responsiveness to the different elements of a three part tariff under the provider s current pricing structure reveals that prices affect a consumer s tariff choice more than her usage quantity and that the allowance plays a strong role in consumer tariff choice based on our results we derive implications for pricing with three part tariffs

longitudinal analyses of the effects of trade unions but union members are different from nonmembers in unobserved ways biasing your estimates y ou should make a selectivity bias correction simultaneously determine union status and economic outcomes develop an unobservables model use longitudinal data archetypical comment on virtually any study of the economic effects of umomsm or suitably modified on any other empirical subject

a conjoint model of quantity discounts quantity discount pricing is a common practice used by business to business and business to consumer companies a key characteristic of quantity discount pricing is that the marginal price declines with higher purchase quantities in this paper we propose a choice based conjoint model for estimating consumer level willingness to pay wtp for varying quantities of a product and for designing optimal quantity discount pricing schemes our model can handle large quantity values and produces wtp estimates that are positive and increasing in quantity at a diminishing rate in particular we propose a tractable wtp function that depends on both product attributes and product quantity and that captures diminishing marginal wtp we show how such a function embeds standard wtp functions in the quantity discount literature as special cases we also demonstrate how to use the model to estimate the consumer value potential which is the product of the premium a consumer is willing to pay and her volume potential finally we propose a parsimonious experimental design approach for implementation we illustrate the model using data from a conjoint study of online movie rental services the empirical results show that the proposed model has good fit and predictive validity in addition we find that marginal wtp in this category decays rapidly with quantity we also find that the standard choice based conjoint model results in anomalous wtp distributions with negative wtp values and nondiminishing marginal willingness to pay curves finally we identify four segments of consumers that differ in terms of magnitude of wtp and volume potential and we derive optimal quantity discount schemes for a monopolist and a new entrant in a competitive market

does means testing welfare discourage saving evidence from a change in afdc policy in the united states abstract this paper provides empirical evidence on the impact of a welfare program s asset test on the saving behavior of its target population the approach exploits a policy experiment the essential federalization of the afdc program s asset testing policy in 1981 data on female headed households from the national longitudinal survey young women are used to test the hypothesis that likely afdc users adjusted their asset stocks in response to this change the findings indicate additional saving between 1978 and 1983 of about 25 cents for each additional 1 increase in the limit in most states

risky choice in the limelight this paper examines how risk behavior in the limelight differs from that in anonymity in two separate experiments we find that subjects are more risk averse in the limelight however risky choices are similarly path dependent in the different treatments under both limelight and anonymous laboratory conditions a simple prospect theory model with a path dependent reference point provides a better explanation for subjects behavior than a flexible specification of expected utility theory additionally our findings suggest that ambiguity aversion depends on being in the limelight that passive experience has little effect on risk taking and that reference points are determined by imperfectly updated expectations

bidding in common value auctions how the commercial construction industry corrects for the winner s curse experienced construction industry executives suffer from a winner s curse in laboratory common value auction markets dyer et al dyer d j h kagel d levin 1989 a comparison of naive and experienced bidders in common value offer auctions laboratory analysis econom j 99 108 115 this paper identifies essential differences between field environments and the economic theory underlying the laboratory markets that account for the executives success in the field and a winner s curse in the lab these are 1 industry specific mechanisms which enable contractors to escape the winner s curse even when they bid too low 2 learned industry specific evaluative processes which enable experienced contractors to avoid the winner s curse in the first place and 3 important private value elements that underlie bidding also identified are a number of industry specific bidding characteristics whose evolution can be explained using modern auction theory lessons are drawn regarding the use of experime

savings and prize linked savings accounts abstract many households have insufficient savings to handle moderate and routine consumption shocks many of these financially fragile households also have the highest lottery expenditures as a proportion of income this combination suggests that prize linked savings pls accounts combining security of principal with lottery type jackpots can increase savings among these at risk households results from an online experiment show that the introduction of pls accounts increase total savings and reduce lottery expenditures significantly especially among individuals with the lowest levels of savings and income the results imply that pls accounts offer a plausible market based solution to encourage individuals to increase savings

referendum models and economic values theoretical intuitive and practical bounds on willingness to pay innovations in the estimation of referendum type contingent valuation models have led to willingness to pay wtp measures inconsistent with consumer preferences and unbounded from above or below we propose a set of criteria which guarantee a bounded measure of wtp the criteria reject the traditional random utility model with unrestricted error terms in favor of the random wtp model with bounds on wtp once wtp is bounded by zero and income the form of the distribution is less consequential a new model for wtp is developed based on the beta distribution and is compared to previously estimated models

a choice model for packaged goods dealing with discrete quantities and quantity discounts utility maximizing solutions to economic models of choice for goods with either discrete quantities or non linear prices cannot always be obtained using standard first order conditions such as kuhn tucker and roy s identity when quantities are discrete there is no guarantee that derivatives of the utility function are equal to derivatives of the budget constraint moreover when prices are nonlinear as in the case of quantity discounts first order conditions can be associated with the minimum rather than the maximum value of utility in these cases the utility function must be directly evaluated to determine its maximum this evaluation can be computationally challenging when there exist many offerings and when stochastic elements are introduced into the utility function in this paper we provide an economic model of demand for substitute brands that is flexible parsimonious and easy to implement the methodology is demonstrated with a scanner panel data set of light beer purchases the model is used to explore the effects of price promotions on primary and secondary demand and the utility of product assortment

performance in competitive environments gender differences even though the provision of equal opportunities for men and women has been a priority in many countries large gender differences prevail in competitive high ranking positions suggested explanations include discrimination and differences in preferences and human capital in this paper we present experimental evidence in support of an additional factor women may be less effective than men in competitive environments even if they are able to perform similarly in non competitive environments in a laboratory experiment we observe as we increase the competitiveness of the environment a significant increase in performance for men but not for women this results in a significant gender gap in performance in tournaments while there is no gap when participants are paid according to piece rate this effect is stronger when women have to compete against men than in single sex competitive environments this suggests that women may be able to perform in competitive environments per se

a general choice model for bundles with multiple category products application to market segmentation and optimal pricing for bundles abstract the attribute based approach to study customer choices cannot deal with bundles of heterogeneous components which are usually drawn from different product categories the authors develop the comparability based balance model which is a unified framework for modeling bundle choices the model can be employed for any bundle regardless of the heterogeneity of bundle components under a pure bundling strategy the conjoint model and balance model are special cases of the general model the authors use mixture distributions in a hierarchical bayesian framework to incorporate consumer heterogeneity in a more flexible manner than the extant approaches such as latent class and random coefficient models the empirical tests of the model show that most attribute effects are significant and consistent with the model s predictions the model is superior to those that do not consider the issues of comparability of attributes latent class structure and heterogeneity among respondents the authors show how

who was affected by new welfare reform strategies microdata estimates from canada abstracta heterogeneous mix of aggressive welfare reforms took effect in different provinces and years starting in the 1990s welfare participation rates subsequently declined previous investigations of these declines focused on cuts in benefits and stricter eligibility requirements this article focuses instead on work requirements diversion earning exemptions and time limits referred to jointly as new welfare reform strategies while controlling for benefit levels eligibility requirements province specific labour market conditions and gdp growth as well as individual level socio economic information province year specific variation in new reform strategies produce estimates implying that their presence is associated with a large decline in welfare participation of 1 3 percentage points 14 relative to the unconditional mean participation rate of 9 2 our coding scheme generates new measures of policy variation that distinguish reductions in benefit levels and tighter eligibility restriction

do welfare asset limits affect household saving evidence from welfare reform we use data from the panel study of income dynamics to estimate the effect of new saving incentives implemented as part of the 1996 welfare reform on household saving economic theory predicts that loosening asset limits will increase total savings for households with a large ex ante probability of welfare receipt such as female headed households with children we follow a sample of female heads with children and find that in both absolute terms and relative to comparison groups of male heads and female heads without children there has been no effect of welfare policy changes on the saving of at risk households

ecosystem service arguments enhance public support for environmental protection but beware of the numbers abstract the trend in the discourse around environmental protection towards arguments based on ecosystem services and monetary valuation has prompted considerable controversy among academics and practitioners concerned with conservation this paper informs the debate by exploring which arguments are most effective in garnering support for environmental protection in a survey based online experiment participants stated their level of dis approval of a large scale hydropower dam project after being presented with various kinds of arguments and information about the environmental impacts the results show that ecosystem service arguments reduced levels of approval of the dam significantly i e they increased support for environmental protection however moral ecological arguments for protecting the environment proved even more effective while a combination of both types of arguments reduced the dam approval ratings the most including a cost benefit analysis cba with monetary valuation of the costs of losing ecosystem services altered dam approval upwards or downwards depending on the outcome of the cba the approval rates of males of older participants and of politically right wing participants were particularly sensitive to the outcomes of monetary valuation more research is needed to understand the short and long term influence of different environmental discourses on peoples judgments and levels of environmental concern

welfare the earned income tax credit and the labor supply of single mothers during 1984 1996 welfare and tax policy were changed to encourage work by single mothers the earned income tax credit was expanded welfare benets were cut welfare time limits were added and welfare cases were terminated medicaid for the working poor was expanded as were training programs and child care during this same time period there were unprecedented increases in the employment and hours of single mothers we show that a large share of the increase in work by single mothers can be attributed to the eitc and other tax changes with smaller shares for welfare benet cuts welfare waivers training programs and child care programs