demand systems with nonstationary prices relative prices are nonstationary and standard root t inference is invalid for demand systems but demand systems are nonlinear functions of relative prices and standard methods for dealing with nonstationarity in linear models cannot be used demand system residuals are also frequently found to be highly persistent further complicating estimation and inference we propose a variant of the translog demand system the ntlog and an associated estimator that can be applied in the presence of nonstationary prices with possibly nonstationary errors the errors in the ntlog can be interpreted as random utility parameters the estimates have classical root t limiting distributions we also propose an explanation for the observed nonstationarity of aggregate demand errors based on aggregation of consumers with heterogeneous preferences in a slowly changing population estimates using u s data are provided

quality adjusted cost functions and policy evaluation in the nursing home industry proper evaluation of cost quality trade offs inherent in regulatory policy requires identifying the structure of production from the behavioral response of quality to the policy change however estimating the structure of production with endogenous quality is difficult because of both measurement problems and data availability we develop a simple method for identifying and estimating cost functions in the presence of endogenous and unobserved quality using this method we estimate that a quality adjusted cost function for nursing homes treating quality as exogenous yields seriously misleading estimates of marginal cost and economies of scale we then used the parameter estimates to evaluate the cost quality trade off in nursing home regulatory policy

quasi and simulated likelihood approaches to censored demand systems food consumption by food stamp recipients in the united states a quasi maximum likelihood estimator is proposed and applied to a censored translog demand system for foods using a sample of food stamp recipients in the united states the procedure produces remarkably close parameter and elasticity estimates to those of the simulated maximum likelihood procedure a two step procedure is also considered but it produces different elasticities demands are found to be price elastic for pork and fish but price inelastic for all other food products gross complementarity and net substitutability are obvious but these cross price effects are much less pronounced than own price and total food expenditure effects copyright 2003 oxford university press

pollution control and the ramsey problem pollution is an inevitable by product of production and is only gradually dissolved by the environment it can be reduced by producing less and by cleaning up the environment but neither occur when they are left to the market cleaning activities and the optimal emission charges increase with the stock of pollutants when one allows for pollution of the environment in the classical ramsey problem the capital stock is less than in the market outcome and a fortiori less than under the golden rule the analysis distinguishes between stock and flow externalities arising from pollution an increase in impatience can lead to more capital accumulation even though this leaves less room for current consumption

habit formation interdependent preferences and demographic effects in the almost ideal demand system the authors model myopic habit formation interdependence of preferences among consumers and demographic effects as taste shifters in a micro consumer demand model of the almost ideal demand variety the model is estimated for dutch micro data the authors investigate the dynamic properties of the model and find that it behaves very differently from models without interdependence of preferences the implications for micro macro modeling are discussed copyright 1991 by royal economic society

cost function estimation under risk aversion standard definitions of the cost function do not admit risk standard ex post approaches to cost function estimation yield biased and inconsistent estimates when production is stochastic recently an ex ante approach to cost function estimation with stochastic production has been developed by imbedding the distance function in the cost function estimation problem we generalize the approach to consider risk aversion in decision making only two empirical studies have considered stochastic production in cost function estimation both have required constant returns to scale we demonstrate a methodology sufficiently general to consider nonconstant returns to scale

competition and substitutability in the swedish pharmaceuticals market substitution possibilities between brand name pharmaceuticals are analysed the analysis is based on data from three different markets the prescription drug market for beta blocking agents the over the counter market for purgatives and the hospital market for two pharmaceutical treatments for gastric ulcers the results indicate that there exist some substitution possibilities among the brand name drugs included in the study

a generalized equivalence property of mixed international vat regimes it is shown that the equivalence of a global destination based and a global origin based vat regime can be extended to a class of mixed regimes where the origin principle is applied for all trade within the eu and a destination based eu specific border tax adjustment is applied for eu trade with the rest of the world such a unified restricted origin regime is superior to the non reciprocal restricted origin regime proposed by lockwood de meza and myles 1994a since it is the more general vat regime and offers a higher probability of political acceptance than the latter regime

estimation of technical efficiency using flexible functional form and panel data this article presents an econometric model capable of accommodating a nonradial measure of input specific technical inefficiency and suggests an estimation technique that reduces dependency on distributional assumptions on inefficiency it also makes use of the demand system derived from a flexible cost function and imposes concavity restrictions as required by economic theory panel data on 12 finnish foundry plants are used to estimate technical efficiency of labor and energy for each of these plants

the comparison between destination and origin principles under imperfect competition abstract especially but not only in the european union closer economic integration is putting increasing pressure on the destination principle under which goods entering international trade are normally taxed this has raised the possibility of switching to the origin principle which dispenses with problematic border tax adjustments this paper compares destination and origin principles under conditions of imperfect competition previous analyses which have considered only the competitive case have led to a qualified presumption in favour of the destination principle a series of results are established here for both cooperative and non cooperative tax setting which challenge that presumption under imperfect competition

a precursor to muth tinbergen s 1932 model of rational expectations this paper describes a model published in 1932 in which explicitly rational expectations are used to study a dynamic problem of intertemporal inventory allocation the model is very similar to muth 1961 except that the stochastic process in the latter is serially correlated whereas in tinbergen s model the disturbances are serially uncorrelated hence tinbergen was able to solve a rational expectations model thirty years before muth s much more well known contribution copyright 1991 by royal economic society

the impact of environmental regulations on industry productivity direct and indirect effects abstract the paper develops an approach to measuring the impact of environmental regulations on total factor productivity growth which is less restrictive than a simple growth accounting approach environmental regulations have a direct impact on productivity growth due to the diversion of resources toward required abatement capital there can be a further indirect effect however as conventional inputs and production processes are changed in response to requirements to purchase abatement capital we estimate this indirect effect using a flexible functional form cost function total factor productivity and the direct and indirect productivity effects of environmental regulations are presented for five polluting industries we find that the indirect effect can be either positive or negative and in all industries is energy using the net impact of environmental regulations on total factor productivity growth is fairly small given that these are the most polluting industries they account for about 10 30 of the productivity decline of the 1970s in these industries

harmonisation of commodity taxes the restricted origin principle comment abstract this note shows that within a model where tariffs have distorted the pre tax situation as in the one used by berglas 1981 application of the restricted origin principle causes resource misallocation even when trade deflection takes place this conclusion is different from the one derived from models where the pre tax situation is pareto optimal e g shibata 1967 where trade deflection guarantees optimal allocation

estimating functional forms in cost prices abstract klaus conrad 1983 developed the cost price approach based upon the notion of partially fixed factor proportions as an alternative to the traditional neoclassical method of modeling cost and production functions he showed that a simplified version of his model could be used to estimate a cobb douglas cost function in cost prices we have been able to estimate the full form of conrad s proposed model and extend his technique to the ces and generalized leontief cost functions we also illustrate how to model technical change in cost prices and in cost shares

dealing with uncertainty in agent based simulation farm level modeling of adaptation to climate change in southwest germany climate change will most likely confront agricultural producers with natural economic and political conditions that have not previously been observed and are largely uncertain as a consequence extrapolation from past data reaches its limits and a process based analysis of farmer adaptation is required simulation of changes in crop yields using crop growth models is a first step in that direction however changes in crop yields are only one pathway through which climate change affects agricultural production a meaningful process based analysis of farmer adaptation requires a whole farm analysis at the farm level we use a highly disaggregated mathematical programming model to analyze farm level climate change adaptation for a mountainous area in southwest germany regional level results are obtained by simulating each full time farm holding in the study area we address parameter uncertainty and model underdetermination using a cautious calibration approach and a comprehensive uncertainty analysis we deal with the resulting computational burden using efficient experimental designs and high performance computing we show that in our study area shifted crop management time slots can have potentially significant effects on agricultural supply incomes and various policy objectives promoted under german and european environmental policy schemes the simulated effects are robust against model uncertainty and underline the importance of a comprehensive assessment of climate change impacts beyond merely looking at crop yield changes our simulations demonstrate how farm level models can contribute to a process based analysis of climate change adaptation if they are embedded into a systematic framework for treating inherent model uncertainty

international policy coordination in interdependent monetary economies abstract an optimising equilibrium model of two interdependent monetary economies with no other assets except cash perfect foresight flexible exchange rates and imperfect substitution between home and foreign goods is analysed both non cooperative and cooperative market oriented outcomes are time inconsistent since each government has an incentive to renege and levy a surprise inflation tax international policy coordination without pre commitment can be counterproductive even though there are no tax distortions and the provision of public goods is optimal since it exacerbates the credibility problems perceived by the private sectors and therefore leads to a too low level of real money balances and excessive inflation

measurement methods for technological change embodied in inputs abstract this paper shows how unmeasured quality change embodied in purchased materials input may be estimated as part of a cost function model the methods presented simultaneously incorporate quality adjusted price and quantity of the materials input into the model

how reliable is duality theory in empirical work the neoclassical theory of production establishes a dual relationship between the profit value function of a competitive firm and its underlying production technology this relationship commonly referred to as duality theory has been widely used in empirical work to estimate production parameters such as elasticities and returns to scale we generate a pseudo dataset by monte carlo simulations which starting from known production parameters yield a dataset with the main characteristics of u s agriculture in terms of unobserved firm heterogeneity decisions under uncertainty unexpected production and price shocks endogenous prices output and input aggregation measurement error in variables and omitted variables production parameters are not precisely recovered when performing econometric estimation based on the duality approach and the elasticity estimates are inaccurate deviations of own and cross price elasticities from initial median values given our parameter calibration range between 6 and 690 with an average of 90 also own price elasticities are as imprecisely recovered as cross price elasticities sensitivity analysis shows that results still hold for different sources and levels of noise and sample size used in estimation

behavioral heterogeneity and the income effect inspired by the recent literature on aggregation theory this paper introduces hits a semiparametric model of consumer demand that allows for diversity in tastes the strong variation of budget shares observed across income groups has two possible origins the individual income effect and taste differences between poor and rich households consumer surveys reporting repeated cross sections do not permit the direct measurement of these two effects in hits linear heterogeneity allows the gmm estimation of structural coefficients on an aggregate series the joint density of spending and tastes is then recovered from cross sections by a nonparametric procedure involving a deconvolution we estimate the model on british data 1968 1998 and report that taste heterogeneity explains a large fraction of the variation of budget shares with income

harmonization of commodity taxes destination origin and restricted origin principles abstract the three tax principles are compared using a multiproduct custom union model it is shown that if member countries use the destination or origin principles no distortion or redistribution of income occurs even if their tax rates differ however under the restricted origin principle different tax rates result in distortion and income redistribution equal tax rates still result in a redistribution of real income an exact measurement of this redistribution is derived given these results it seems possible to conclude that the origin principle is superior to the other tax principles

an empirical comparison of flexible demand system functional forms this paper compares the performance of eight frequently used flexible forms that are either 1 locally flexible 2 effectively globally regular or 3 asymptotically globally flexible results show that the functions with global properties generally perform better particularly those models having asymptotic properties results using us consumption data indicate substitutability among the components of consumption at most data points there is also some interesting substitution volatility around the time of recessions in the usa copyright 2001 john wiley sons ltd

household demand for fats and oils two step estimation of a censored demand system a censored system of household fat and oil demand equations is estimated with a two step procedure using cross sectional data from the 1987 1988 us nationwide food consumption survey own price and total expenditure elasticities are close to unity and there is no evidence of gross substitutability compensated elasticities suggest net substitution among the products considered

does labour regulation affect technical and allocative efficiency evidence from the banking industry in light of the ongoing restructuring of the european banking industry and the challenging macroeconomic environment banks have increased their efforts to reduce operating costs yet the institutional features that affect banks ability to adjust costs and in particular personnel expenses which comprise a significant part of banks non interest cost structure have not been adequately studied this paper investigates the effect of labour market institutions and regulations on bank performance in 15 european countries over the period 2005 2010 using the fraser index for labour regulation and its disaggregated sub components we propose a novel methodology to measure performance based on the seminal work of kumbhakar and tsionas 2005 which allows the estimation of technical and allocative efficiency and the examination of the effect of labour market regulations in a single stage results indicate the existence of a positive relationship between the liberalisation of eu labour markets and allocative efficiency while the effect on technical efficiency appears to be negative although not statistically significant when looking at the disaggregated components of the labour index we further confirm that different forces are at play

demand systems with and without errors revealed preference theory assumes that each consumer has demands that are rational meaning that they arise from the maximization of his or her own utility function in contrast econometric or statistical demand models assume that each consumer s demands equal a rational systematic component derived from a common utility function plus an individual specific additive error term this paper reconciles these differences by providing necessary and sufficient conditions for rationality of statistical demand models given individual consumer rationality

estimating a multiple output generalized box cox cost function cost structure and productivity growth in belgian railroad operations 1950 1986 abstract in this paper we estimate a multiple output generalization of berndt and khaled s box cox cost model to study the cost structure and growth in productivity in belgian railroad operations the estimated model includes several commonly used flexible functional forms as special or limiting cases empirical results indicate approximately constant returns to scale and an average rate of productivity growth of slightly less than 2 over the sample period these findings were robust across cost function specifications casting some doubt on the importance of choosing among flexible functional forms

public good provision and the welfare effects of indirect tax harmonisation the paper considers the welfare effect of the harmonisation of indirect taxes in two open economies the revenue from taxation is used for the production of a non tradeable public good the welfare levels are affected via two channels i changes in the levels of public good provision and ii changes in deadweight loss associated with the taxes we develop a number of rules of harmonisation and derive conditions under which they lead to potential pareto improvement

renegotiation proof equilibria in repeated prisoners dilemma abstract in this note it is shown that the requirement of weak renegatiation proofness does not eliminate any subgame perfect equilibrium outcome of the repeated prisoner s dilemma specifically it is demonstrated that when players are sufficiently patient any feasible and individually rational outcome can be sustained by means of an equilibrium in which the punishing player always profits by carrying out the punishment

the own wage elasticity of labor demand a meta regression analysis firms labor demand responses to wage changes are of key interest in empirical research and policy analysis however despite extensive research estimates of labor demand elasticities remain subject to considerable heterogeneity in this paper we conduct a comprehensive meta regression analysis to re assess the empirical literature on labor demand elasticities building on 942 elasticity estimates from 105 different studies we identify sources of variation in the absolute value of this elasticity heterogeneity due to the theoretical and empirical specification of the labor demand model different datasets used or sectors and countries considered explains more than 80 of the variation in the estimates we further find substantial evidence for the presence of publication selection bias as estimates of the own wage elasticity of labor demand are upwardly inflated

monetary rewards and decision cost in experimental economics a survey of thirty one experimental studies which report data on the comparative effects of monetary rewards and opportunity cost shows 1 several studies in which increased rewards shift the central tendency of the data toward the predictions of rational models 2 in virtually all cases rewards reduce the variance of the data around the predicted outcome this is consistent with a model in which rewards are balanced against decision cost in agent behavior and explicates the argument that when rational models fail it can be attributed to low opportunity cost of deviations from the rational prediction

robust error specification in a production system economists estimating demand and supply systems face the question of using shares or quantities as dependent variables this article finds that inconsistent estimates are obtained if one makes the wrong choice a robust structure is presented to let the data choose the preferred form empirical applications to u s and texas agriculture using the generalized method of moments suggest that shares and quantities are rejected in favor of a more general functional form the texas application provides some evidence for fixed capital but not for labor copyright 2013 oxford university press

collective decision making and heterogeneity in tastes this article begins by proposing a random taste parameterization of a quadratic extension of the piglog demand system at the household level which is consistent with exact aggregation this variation in tastes is a random function of household characteristics the econometric implication is that a well defined heteroscedastic error enters the demand system this heteroscedasticity can be handled by a gmm technique using a large canadian cross sectional household data set and the quadratic almost ideal demand system homoscedasticity is rejected however when heteroscedasticity is allowed for there are no longer inconsistencies between the theoretical and empirical evidence particularly with respect to the collective decision making properties of homogeneity sr1 symmetry and distribution factor proportionality and linearity

nonparametric engel curves and revealed preference this paper applies revealed preference theory to the nonparametric statistical analysis of consumer demand knowledge of expansion paths is shown to improve the power of nonparametric tests of revealed preference the tightest bounds on indifference surfaces and welfare measures are derived using an algorithm for which revealed preference conditions are shown to guarantee convergence nonparametric engel curves are used to estimate expansion paths and provide a stochastic structure within which to examine the consistency of household level data and revealed preference theory an application is made to a long time series of repeated cross sections from the family expenditure survey for britain the consistency of these data with revealed preference theory is examined for periods of consistency with revealed preference tight bounds are placed on true cost of living indices

analysis of hospital production an output index approach in this study a new model of hospital costs is developed and estimated utilizing an output index this theoretically appropriate output index is constructed to accurately reflect the differentiated nature of hospital care by employing both patient and diagnosis characteristics in its construction using this output index we estimate a long run translog cost function with a dataset of 321 california hospitals for the year 2003 we find evidence of economies of scope across specialties within primary care and evidence of scope diseconomies within secondary and tertiary care point estimates of scale economies using the output index indicate that minimum efficient scale is reached at a larger level than when using less refined output measurement techniques that have often been used in similar studies our estimates indicate the importance of accounting for specialty specific scope economies when analyzing the production properties of firms producing differentiated products

on the choice offunctional forms in agricultural production analysis empirical results obtained by an analyst may depend on prior choice of functional form three alternative parametric specifications of the cost function are considered these are generalized leontief translog and normalized quadratic functions performance of these functional forms is evaluated by allen elasticities of substitution biases in technical change and some theory based hypotheses all three parametric specifications yielded mixed results together empirical results reinforce the need for model specification searches

price formation of fish an application of an inverse demand system inverse demand systems explain price variations as functions of quantity variations they have properties analogous to those of regular demand systems there are very few examples of their empirical application in part this is due to lack of data for which price is the decision variable and the quantity given the case of fish landed at belgian sea ports appears to suit an inverse demand system well a rotterdam variant of such a system in estimated allais interaction intensities have been derived and show a reasonable pattern

measuring consumer welfare with mean demands the welfare change from a price increase for example the compensating variation cv is often calculated using the expenditure function from an estimated demand if there is unobserved preference heterogeneity then the estimated demand is an average over households with different preferences and the cv from the mean demand does not generally equal the mean cv we give conditions ensuring that the cv from the mean demand equals the mean cv is less than the mean cv and approximates the mean cv better than the change in consumers surplus a necessary condition is that demands become more dispersed as income rises

production of public safety are socioeconomic characteristics of local communities important factors this paper uses the translog cost function and cross section data from florida to investigate the importance of socioeconomic characteristics sec of local communities in the production of public safety the approach used is noteworthy in four respects 1 the underlying production function is specified as an agem production function 2 sec are treated as non purchased fixed inputs 3 two variables are used to proxy sec in estimation and 4 the paper test for the existence of endogenous quality differences in safety it is shown that exclusion of sec from the production cost function of safety leads to misspecification and hence they provide a misleading guide to policy

the risk of financial intermediaries this paper reconsiders the formal estimation of bank risk using the variability of the profit function in our model point estimates of the variability of profits are derived from a model where this variability is endogenous to other bank characteristics such as capital and liquidity we estimate the new model on the entire panel of us banks spanning the period 1985q1 2012q4 the findings show that bank risk was fairly stable up to 2001 and accelerated quickly thereafter up to 2007 we also establish that the risk of the relatively large banks and banks that failed in the subprime crisis is higher than the industry s average thus we provide a new leading indicator which is able to forecast future solvency problems of banks

quasi fixed inputs and long run equilibrium in production a cointegration analysis this paper proposes a cointegration approach to testing the validity long run equilibrium in production where capital and labour are taken as quasi fixed inputs previous studies consider only capital as the quasi fixed input and do not take account of the time series properties of the variables assuming implicitly that they are stationary the canonical cointegrating regressions ccr procedure is employed to test for cointegration in both the single equation and the seemingly unrelated regressions framework and long run equilibrium conditions are tested the evidence from us manufacturing reveals that capital and labour are not fully adjusted to their long run optimal values casting doubt on the long run equilibrium hypothesis copyright 2001 john wiley sons ltd

accounting for heterogeneity in multicrop micro econometric models implications for variable input demand modeling this article aims to show that if the farm sample under consideration is characterized by significant heterogeneity recovering output specific input uses or modeling farm level input uses may be more complicated than previously recognized the article theoretically investigates the problems implied by farm heterogeneity in input allocation equations and multicrop econometric models proposes an empirically tractable solution for overcoming these problems and assesses the empirical relevance of the theoretically identified problems the results demonstrate that heterogeneity matters but that the revealed heterogeneity bias has a limited impact on the empirical results copyright 2012 oxford university press

nonparametric welfare and demand analysis with unobserved individual heterogeneity abstract this paper combines revealed preference and nonparametric estimation techniques to obtain nonparametric bounds on the distribution of the money metric utility and demand functions over a population of heterogeneous households our approach is independent of any functional specification on the household utility functions our method applies the weak axiom of revealed preference to a population of heterogeneous households although this does not produce the sharpest bounds we show that it is computationally attractive and provides narrow bounds we demonstrate the usefulness of our results by applying it to the consumer expenditure survey a us cross sectional consumption data set jel codes d12 c14

additive general error models for production cost and derived demand or share systems many empirical studies of production specify a deterministic model of the firm derive the implied behavioral equations input demand or share system and then embed this system in a stochastic framework by tacking on linear error terms in contrast this paper proposes general error models gems in which the error specification is an integral part of the optimization model these models are the statistical embodiment of stigler s view that apparent observed inefficiencies reflect the investigator s ignorance of the true optimization problem additive gems are proposed and interpreted specification tests indicate that a translog additive gem is superior to the standard translog specification

tax harmonization and tax competition in europe opening europe s borders in 1993 makes the allocation of resources more vulnerable to differences in the national tax rates the first part of the paper demonstrates that direct consumer purchases will imply distortions resulting from diverging vat rates and it clarifies why the frequently cited exchange rate argument is of no help the second part shows that in the case of direct taxation a harmonization of tax bases is more important than a harmonization of tax rates either the combination of true economic depreciation and residence taxation or the combination of immediate write off and source taxation will result in an efficient international allocation of capital independent of the national tax rates the paper concludes with a verdict on tax competition arguing that free migration renders a policy of income redistribution which is interpreted as insurance against the risk of lifetime careers impossible this abstract was borrowed from another version of this item

country bashing tariffs do bilateral trade deficits matter abstract this paper investigates the impact of restricting bilateral trade imbalances in a three country three good model bilateral trade balances matter because in the nash equilibrium each country will impose tariffs on countries with whom they have bilateral deficits or promote trade with countries with whom they have bilateral surpluses all countries lose from a nash country bashing war each country loses from the unilateral elimination of its bilateral imbalances but a country can gain from a bilateral agreement with its deficit partner provided that country has a surplus with a country devoted to free trade

commodity tax competition under destination and origin principles abstract this paper studies the effect of switching from the destination to the origin principle of taxation on non cooperative commodity tax equilibrium when taxes are constrained to be uniform across commodities the switch has no effect when differentiated taxes are allowed the effects of the switch depend on whether countries are small or large in both cases the switch imposes the requirement that taxes must be uniform across commodities within each country in the second case there are two further effects of the switch i negative spillover effects from tax policy are introduced ii incentives to manipulate the terms of trade are changed the switch does not necessarily lead to a fall in all tax rates

nonresponse in panel data the impact on estimates of a life cycle consumption function if missing observations in a panel data set are not missing at random many widely applied estimators may be inconsistent in this paper we examine empirically several ways to reveal the nature and severity of the selectivity problem due to nonresponse as well as a number of methods to estimate the resulting models using a life cycle consumption function and data from the expenditure index panel from the netherlands we discuss simple procedures that can be used to assess whether observations are missing at random and we consider more complicated estimation procedures that can be used to obtain consistent or efficient estimates in case of selectivity of attrition bias finally some attention is paid to the differences in identification consistency and efficiency between inferences from a single wave of the panel a balanced sub panel and an unbalanced panel

the bell system divestiture deregulation and the efficiency of the operating companies abstract a variety of casual evidence has been offered in measurement of the efficiencies and inefficiencies thought to flow from the bell system divestiture and accompanying state regulatory reforms to address several questions in this regard we estimate a regulated cost function for local exchange services using panel data on the divested bell operating companies bocs divestiture and regulatory reform are found to have produced significant efficiencies as of 1993 saving about 20 percent in cost relative to what would have obtained in the absence of these events more specifically to 1993 the divestiture yielded savings of 115 4 billion and state level regulatory reform yielded a slightly smaller 96 7 billion in savings both measured in 1993 dollars output augmentation factor bias and allowed rate of return effects contribute in identified ways to these overall results

interrelated labor decisions of farm couples a censored response analysis of off farm work farm couples labor market responses are partly the discrete choice of entering the off farm labor market and partly the continuous choice of off farm working hours given entry such a setting is interesting when examining the increasing occurrence of multiple job holdings among farmers in western economies most existing analyses of off farm labor supply only model the decisions of the farmer not the joint decisions of the farm couple this article presents a framework for handling such interrelated discrete continuous choices involving also farm production and household consumption the derived two equation sub model for husband wife s censored labor responses is estimated from a 10 year norwegian panel data for 342 farms the results agree to some extent with earlier studies but are more informative because of the longer panels which allows a more extensive examination of latent heterogeneity and behavioral persistence because it provides cross effects in the spouses labor supplies the results show some interesting differences between how the independent variables influence the labor supply of operator and spouse this is most evident for the cross effects of education children and wage rate overall the results strongly support applying a panel censoring model that accounts for latent heterogeneity in this context

the equivalence between destination and non reciprocal restricted origin tax regimes it is well known that destination and reciprocal restricted origin tax regimes are only equivalent under very stringent conditions an alternative nonreciprocal restricted origin regime is proposed and then shown to be equivalent to the destination regime under a wide set of conditions including imperfect competition and transport costs the policy implications of the result for the european community are discussed copyright 1994 by the editors of the scandinavian journal of economics

trade deflection trade distortions and pareto inefficiencies under the restricted origin principle abstract this paper shows that trade deflection is not the administrative aspect of the restricted origin principle as suggested in the literature but an important analytical issue that bears on resource allocation when deflection is taken into account trade distortions are avoided only when either domestic or at least border tax adjustment rates are equal in the member countries and trade balances are in bilateral equilibrium the control of deflection via rules of destination causes trade distortions and sometimes pareto inefficiencies the paper further shows that when the vat is calculated according to the credit method and trade is conducted by registered traders trade distortions are prevented when tax rates are set in inverse relation to bilateral trade balances

on the superiority of the destination over the origin principle of taxation for intra union trade this paper shows that the widely accepted view that the destination principle is preferred to the restricted origin principle on allocative efficiency grounds is not correct in a more realistic model of a customs union with common external tariffs the restricted origin principle can be superior to the destination principle for both general and nongeneral taxes the two principles can also be equivalent in the case of both general and nongeneral taxes but under different sets of conditions copyright 1992 by royal economic society

keynesian and new classical models of unemployment revisited several keynesian and new classical models of unemployment for the united states are reevaluated the models are examined for adequacy by testing the cross equation restrictions where appropriate and using diagnostic and nonnested tests that explicitly recognize the problem introduced by generated regressors the best new classical model for the 1946 73 period is found to be adequate when it is estimated over the 1946 85 period whereas the keynesian model is not existing results of tests obtained at the single equation level ignoring generated regressors are not always supported when the test statistics are calculated using the correct covariance matrix or maximum likelihood copyright 1991 by royal economic society