measuring the spillovers from technical advance mainframe computers in financial services measuring the social gains from recent technological advances is difficult because there are no output indexes from some important adopters measurement methods that infer the willingness to pay of theadopting industries from the derived demand curve for a new technologyovercome this difficulty the derived demand for high speed computersfor use in banks finance and insurance is shown to imply a very largesocial gain to computerization that is not captured by computer manufacturers copyright 1986 by american economic association

household choices and child development the growth in labor market participation among women with young children has raised concerns about the potential negative impact of the mother s absence from home on child outcomes recent data show that mother s time spent with children has declined in the last decade while the indicators of children s cognitive and noncognitive outcomes have worsened the objective of our research is to estimate a model of the cognitive development process of children nested within an otherwise standard model of household life cycle behavior the model generates endogenous dynamic interrelationships between the child quality and employment processes in the household which are found to be consistent with patterns observed in the data the estimated model is used to explore the eects of schooling subsidies and employment restrictions on household welfare and child development

efficient methods of measuring welfare change and compensated income in terms of ordinary demand functions a utility maximizing consumer with a completely known system of ordinary demand functions q h p c is considered let p qo and p q be two arbitrary equilibrium situations the problem is to evaluate in which of the situations the utility is higher without knowing the utility function revealed preference theory tells that the ordinary demand functions which are in principle observable contain enough information to solve the problem remaining difficulties are therefore mainly computational we present how the compensated income c i c p qo and the compensated demand h p cl1 are calculated with arbitrary accuracy using only the ordinary demand system our two efficient algorithms also have interesting interpretations in terms of index numbers and consumer surplus measures

estimating griliches k shifts griliches k shift a crucial parameter in the welfare evaluation of technological change is shown to be equal to the radial rate of technological change plus a vector of commodity bias parameters obtained from the distance function the analysis permits decomposition of sectoral productivity growth into productivity growth by commodity the k shifts estimated for wheat corn soybeans and beef in u s agriculture indicate a decrease in the marginal cost of production of corn soybeans and wheat during the 1950 1993 years

patent validation at the country level the role of fees and translation costs one feature of the european patent system that is heavily criticized nowadays is related to its complex fragmentation and the induced cost burden for applicants once a patent is granted by the epo the assignee must validate and often translate it and pay the renewal fees to keep it in force in each country in which the applicant seeks protection the objective of this paper is to assess to what extent validation and renewal fees as well as translation costs affect the validation behavior of applicants we rely on a gravity model that aims at explaining patent flows between inventor and target countries within the european patent system the results show that the size of countries their wealth and the distance between their capital cities are significant determinants of patent flows validation fees and renewal fees further affect the validation behavior of applicants translation costs seem to have an impact as well the important role played by fees suggests that the implementation of cost reducing policy interventions like the london protocol would induce a significant increase in the number of patents validated in each european country

ex ante consumer welfare evaluation in cost benefit analysis abstract public projects and policies are normally evaluated ex ante i e while consumers may still be uncertain about future prices income levels interest rates and preferences this paper extends the theory of ex ante consumer welfare evaluation by developing a 2 period model with multiple sources of uncertainty it provides insights into the influence of temporal uncertainty on the empirical measurement of ex ante willingness to pay

zero expenditures and the estimation of engel curves over the brief interview periods typical of budget surveys such as the u k family expenditure survey households recorded expenditures are liable to be misleading indicators of their underlying consumption most starkly a household may not be observed to purchase commodities that it nevertheless consumes this paper considers the implications of such measurement errors for the estimation of demand systems and derives a consistent estimator for the special case of linear engel curves

private value of european patents abstract i examine the joint patent designation renewal behavior of the european patent office epo patent applicants during 1978 1996 using both nonparametric techniques and a parametric model the european patents granted through the epo are substantially more valuable than those through the national route value distribution of patents is highly skewed and even more so for the epo patent families the value of patent rights increases with the economic size of the country and exhibits modestly increasing returns to scale model estimation also reveals significant institutional differences across epo member countries in patent protection

spillovers and governance an analysis of knowledge and reputational spillovers in information technology investigating spillovers potential costs and benefits to a firm that extend beyond an individual transaction i integrate transaction cost theory and the knowledge based view of the firm in an effort to better understand the efficient governance of knowledge contracts with detailed task descriptions were associated with transactions with the potential to generate new and reusable knowledge the risk of a firm s technology spilling over to others and the risk of reputation impairing spillovers were associated with suppliers using their own employees rather than subcontractors thus results suggest that the creation and protection of knowledge are key factors in understanding governance decisions

economic welfare evaluations for producers under uncertainty the validity of producer and consumer surplus measures of firm welfare under risk is examined under constant absolute risk aversion and output price uncertainty only these measures are an exact measure of firm welfare as defined by compensating variation equivalent variation or the change in the certainty equivalent under decreasing absolute risk aversion qualitative comparisons of various measures are discussed for example producer s surplus as measured by the area above the uncompensated risk averse supply curve overstates the compensating variation of a change in expected price of output procedures for calculating firm welfare under production uncertainty and a variety of economic environments are proposed generally these procedures are applicable only when absolute risk aversion is constant

do parental time investments react to changes in child s skills and health abstract parental time investment decisions have been found to have important effects on child development however little is known about the response of parents to changes in their child s human capital across time using the longitudinal study of australian children we measure time investments considering the time young children spend with or without parents in different activities by adopting a child fixed effect instrumental variable estimation we find that parents reinforce for high socio emotional skills by spending more time socialising with their child and compensate for low cognitive skills by increasing the time the child spends in learning activities

is coal desulphurisation worthwhile evidence from the market abstract the paper develops a forward looking way to estimate the economic benefits of research and development on coal desulphurisation the methodology makes use of survey based techniques pioneered in environmental economics the empirical results illustrate the difficulty of configuring desulphurised coal to meet the requirements of existing electricity generating plants in addition to estimating the returns to investment in coal desulphurisation the contributions of the paper are in extending survey based valuation to meet the needs of r d investors for intelligence about the prospective value of their investments and using robust estimation techniques to reduce the influence of outliers

information technology and its impact on productivity firm level evidence from government and private data sources 1977 1993 robert solow s quip that we see computers everywhere but in the productivity statistics has prompted a large and growing literature examining the information productivity paradox some aggregate and industry level studies have failed to detect a positive contribution to productivity growth from investments in computer technology more recent studies utilizing firm level data however have detected a significant contribution this paper confirms the results of these latter studies using u s firm level computer asset and financial data for nonagricultural firms during the period 1977 1993 from a variety of data sources including the u s census bureau s enterprise and auxiliary establishment surveys compustat and computer intelligence infocorp a market research firm our principal finding that computers especially personal computers do contribute positively to productivity growth suggests that the traditional information productivity paradox is largely a measurement problemn this is closely related to the more general problem of assessing service sector productivity because computers are used most intensively in the service sector and in the service functions of non service sector firms e g payroll and purchasing as zvi griliches 1994 noted these activities pose the greatest problems for output and productivity measurement moreover although we may see computers everywhere they represent only a tiny fraction of capital stock on about 2 of plant property and equipment so aggregate effects may be hard to detect oliner and sichel 1993 our data indicate that computers not only contributed to productivity growth during the period 1977 1993 but they yielded excess returns relative to other types of capital the data also suggest that computer productivity peaked around 1986 1987 3 that computers are complementary with skilled labour krueger 1993 and autor katz and krueger 1997 and that use of computers may permit reductions in inventory levels finally and perhaps most interesting the evidence

nonparametric estimation of the impact of taxes on female labor supply this paper proposes a simple extension of nonparametric estimation methods for nonlinear budget set models derived in blomquist and newey 2002 to censored dependent variables the nonparametric method is applied to estimate female labor supply elasticities using data on married women from the 1985 and 1989 waves of the panel study of income dynamics exploiting the substantial variation in budget sets caused by the tax reform act of 1986 as a source of identification the estimated wage elasticities from this new method are 0 56 overall and 0 27 on the intensive margin the income elasticity estimates are close to 0 67 overall and 0 13 on the intensive margin compared with the linear labor supply model the estimated elasticities are usually larger for the nonparametric specifications that account for nonlinear budget sets copyright 2010 john wiley sons ltd

estimating the precision of welfare measures abstract three methods for constructing standard deviation and or confidence intervals for welfare estimates have been employed in the recreation demand literature a taylor s series approximation the bootstrap and a method proposed by krinsky and robb this paper presents the results of two sets of simulation experiments designed to examine the accuracy of these methods the first simulation examines the methods accuracy in estimating the standard deviation of welfare estimates the second simulation examines the accuracy of the methods in constructing confidence intervals

how valuable is patent protection estimates by technology field i present evidence on the private value of patent rights in france for different technology fields and nationalities of ownership using nonparametric techniques and a parametric model of patent renewal i find that the distribution of the value of patent rights is highly skewed that patent protection is a significant but not the major source of private returns to r d and that these characteristics vary across technology fields i compute the r d cash subsidy that is equivalent to the value of patent rights measure the variations in value of time technology fields and nationalities and show that these differences are correlated with patent grant rates

early maternal time investment and early child outcomes using large longitudinal survey data from the uk millennium cohort study this article estimates the relationship between maternal time inputs and early child development we find that maternal time is a quantitatively important determinant of skill formation and that its effect declines with child age there is evidence of long term effects of early maternal time inputs on later outcomes especially in the case of cognitive skill development in the case of non cognitive development the evidence of this long term impact disappears when we account for skill persistence

domestic and international product embodied r d diffusion abstract the paper examines the process of product embodied rd it is the fastest growing acquired technology cluster with the share of other technology clusters steady or declining the authors would like to thank two anonymous referees for their constructive comments to previous versions of this paper while absolving them from any remaining errors the views expressed in this paper are those of the authors and do not necessarily reflect those of the oecd its member countries or the central research institute of the electric power industry in japan

analyzing the relationships between information technology inputs substitution and national characteristics based on ces stochastic frontier production models abstract this research examines four interrelated issues at the country level the value of information technology it inputs substitution and complement the complementarity phenomenon created by it and national characteristics and the productivity paradox jointly and critically from a global perspective using the so called productive efficiency as the performance measure to that end we develop the three factor constant elasticity of substitution ces stochastic production frontier model and apply it to a set of panel data from 15 countries over the period 1993 2003 along with the traditional two factor ces models within the one and two equation frameworks in the two equation setting six national characteristics are selected as the contributing factors of the productive efficiency the findings include i the value of it as measured by the productive efficiency is duly recognized ii the productivity paradox is found to be absent from the production process in a majority of developed and developing countries considered rejecting the existing argument that the paradox exists only in developing economies but does not exist in developed countries however the developed countries have used it capital in their production systems more productively efficiently than the developing nations iii traditional capital non it capital traditional labor and it capital are not pairwise substitutable contrary to the notion that they are pairwise substitutable at the firm level iv constant returns to scale as commonly assumed are not supported by the data v different national characteristics affect a country s output represented by gross domestic product or gdp and its productive efficiency differently and vi the complementarity phenomenon is observed in most of the countries developed and developing under study

errors in the numerical assessment of the benefits of price stabilization this paper presents a simple computational procedure for determining a consumer s willingness to pay to have a price stabilization policy implemented numerical simulations are then provided which demonstrate that the commonly used expected surplus measures whether hicksian or marshallian can in fact seriously misstate the true benefits of price stabilization these simulations also illustrate the extent to which the results may be dependent upon the assumptions made implicitly or explicitly regarding the consumer s attitudes toward risk thereby underscoring the need to conduct sensitivity analyses to determine the robustness of cost benefit assessments with respect to these assumptions

the welfare analysis of product innovations with an application to computed tomography scanners the main goal of this paper is to put forward a methodology for the measurement of product innovations using a value metric that is equating the magnitude of innovations with the welfare gains they generate this research design is applied to the case of computed tomography scanners a revolutionary innovation in medical technology the econometric procedure centers on the estimation of a discrete choice model the nested multinominal logit which yields the parameters of a utility function defined over the changing quality dimensions of the innovative product the estimated flow of social gains from innovation is used to compute a social rate of return to r d to explore the interrelation between innovation and diffusion and to trace the time profile of benefits and costs the latter suggesting the possible occurrence of technological cycles

on measuring the benefits of lower transport costs despite large amounts invested in rural roads in developing countries little is known about their benefits this paper derives an expression for the willingness to pay for a reduction in transport costs from the canonical agricultural household model and uses it to estimate the benefits of a hypothetical road project estimation is based on novel cross sectional data collected in a small region of madagascar with enormous yet plausibly exogenous variation in transport cost a road that essentially eliminated transport costs in the study area would boost the incomes of the remotest households those facing transport costs of about usd 75 ton by nearly half mostly by raising non farm earnings this benefit estimate is contrasted to one based on a hedonic approach

the welfare effects of environmental taxation on a green market where consumers emit a pollutant this paper examines the welfare impact of emission taxes and subsidies in a green market where consumers emit a pollutant through their usage of products produced by duopolists for this purpose we employ a discrete continuous model including both consumer choice and usage of an environmentally differentiated product in a utility consistent framework the findings indicate that an emission tax is always welfare dominant over a subsidy on consumer purchases of the clean product because of its contribution to a reduction in environmental damage it does this by both inducing firms to improve the environmental qualities of their products and by constraining consumer usage of these products

a general model of r d competition and policy this article constructs a model of r d with heterogeneous firms each firm s probability of success is a function of its sunk and recurrent r d expenditures the social gains from an innovation are not fully captured by the successful firm the comparison of the social optimum and the market equilibrium involves balancing spillover and crowding effects pigovian corrective policies as well as strategic policies for a subset of colluding firms are discussed

the solow productivity paradox what do computers do to productivity 1 you don t see computers everywhere in a meaningful economic sense computers and information processing equipment are a relatively small share of gdp and of the capital stock 2 you only thinkyou see computers everywhere government hedonic price indexes for computers fall too fast according to this position and therefore measured real computer output growth is also too fast 3 you may not see computers everywhere but in the industrial sectors where you most see them output is poorly measured examples are finance and insurance which are heavy users of information technology and where even the concept of output is poorly specified 4 whether or not you see computers everywhere some of what they do is not counted in economic statistics examples are consumption on the job convenience better user interface and so forth 5 you don t see computers in the productivity statistics yet but wait a bit and you will this is the analogy with the diffusion of electricity the idea that the productivity implications of a new technology are only visible witlh a long lag 6 you see computers everywhere but in the productivity statistics because computers are not as productive as you think here there are many anecdotes such as failed computer system design projects but there are also assertions from computer science that computer and software design has taken a wrong turn 7 there is no paradox some economists are counting innovations and new products on an arithmetic scale when they should count on a logarithmic scale

can weak substitution be rehabilitated this paper develops a graphical analysis and an analytical model that demonstrate how weak substitution can be used for non market valuation weak complementarity and weak substitution represent preference restrictions that allow us to develop equivalent price changes to describe quantity or quality changes in non market goods the price changes are hicksian equivalents in that they yield the same utility changes as would the quantity or quality changes after discussion of several potential applications of weak substitution the paper develops the parallel between the restriction and recent strategies from modeling differentiated goods

presidential address antitrust restrictions on single firm strategies this article offers an overview of selected developments in the law and economics of antitrust regulation of single firm strategies the strategy generating the most cases historically is resale price maintenance here the law has moved sharply in both canada and the u s towards more solid economic foundations yet a gap between the law and economics remains the economics of resale price maintenance is reviewed within a framework that is much simpler and more general than the existing literature the law on a second strategy predatory pricing represents in my view a success story for the influence of economic theory in spite of the absence of a single accepted theory of predatory pricing the remaining single firm strategies are concerned largely with the exclusion by a dominant firm of rivals from a market i review with application to cases the two most basic questions concerning exclusionary strategies are exclusionary anticompetitive contracts ever entered into voluntarily by market participants on the other hand is complete or substantial foreclosure of a market through exclusionary strategies necessarily anticompetitive cette allocution presidentielle a l association canadienne d economique presente une vue d ensemble des developpements dans le droit et l economie de la reglementation antitrust sur les strategies d une firme unique la loi sur la strategie qui genere historiquement le plus de cas le maintien du prix de revente a change dramatiquement au canada et aux etats unis et derive vers une politique qui a des assises economiques solides mais il reste un ecart entre le droit et l economie on reexamine l economie du maintien du prix de revente a l aide d un cadre d analyse qui est a la fois plus simple et plus general que ce qui existe dans la litterature specialisee la loi pour ce qui est d une seconde strategie prix d eviction est a mon avis une grande reussite pour la science economique malgre l absence d une seule theorie du prix d eviction generalement acceptee un troisieme ensemble de strategies concerne l exclusion de ses rivaux d un marche par la firme dominante l auteur reexamine avec un recours extensif aux cas les deux questions de base pour ce qui est des strategies d exclusion est ce que les participants sur un marche entrent jamais volontairement dans un arrangement contractuel qui exclut et est anticoncurrentiel d autre part est ce que la saisie complete ou substantielle d un marche par des man uvres d exclusion est necessairement anticoncurrentielle

improving environmental valuation estimates through consistent use of revealed and stated preference information abstract environmental valuation data from stated and revealed preference methods are integrated into a unified model of preferences for environmental quality improvement that identifies the use and nonuse components of the total value estimate this articulates clearly what parts of the total value estimate come from each type of data and permits tests of whether estimated preferences satisfy weak complementarity between the environmental good of interest and related private goods the statistical advantages of using more information for the valuation problem are exploited while retaining flexibility to identify value estimates from any individual method of analysis

regional welfare loss meaures of the 1973 oil embargo a numerical methods approach 1987 regional welfare loss meaures of the 1973 oil embargo a numerical methods approach applied economics vol 19 no 10 pp 1317 1327

schools skills and synapses american society is polarizing proportionately more american youth are graduating from college than ever before at the same time american born youth are graduating from high school at lower rates than 40 years ago this paper reviews and interprets these trends the origins of inequality are examined and policies to alleviate it are analyzed families play a powerful role in shaping adult outcomes the accident of birth is a major source of inequality recent research by cunha and heckman 2007a 2008b shows that about half of the inequality in the present value of lifetime earnings is due to factors determined by age 18 compared to 50 years ago relatively more american children are being born into disadvantaged families where investments in children are smaller than in advantaged families policies that supplement the child rearing resources available to disadvantaged families reduce inequality and raise productivity

patent protection in the shadow of infringement simulation estimations of patent value empirical estimates of the private value of patent protection are derived for four technology areas computers textiles combustion engines and pharmaceuticals using new patent data for west germany 1953 1988 patentees must pay renewal fees to keep their patents in force as well as legal expenses in order to enforce them a dynamic stochastic discrete choice model of optimal renewal decisions is developed incorporating both learning and depreciation as well as the potential need to prosecute infringement the evolution of the distribution of returns over the life of a group of patents is calculated for each technology using a minimum distance simulation estimator results indicate that the aggregate value of protection generated per year is on the order of 10 of related r d expenditure

exact consumer s surplus and deadweight loss consumer s surplus is a widely used tool in applied welfare economics both economic theorists and cost benefit analysis often use consumer s surplus despite its somewhat dubious reputation the basic idea is to evaluate the value to a consumer or his willingness to pay for a change in price of a good from say pricep to pricep because price changes affect consumer welfare an evaluation of this effect is often a key input to public policy decisions yet consumer s surplus is probably the most controversial of widely used economic concepts both paul samuelson and ian little conclude that the economics profession would be better off without it it is my feeling of the situation that substantial agreement exists on the correct quantities to be measured the amount the consumer would pay or would need to be paid to be just as well off after the price change as he was before the price change the quantities correspond to john hicks compensating variation measures an alternative measure which takes ex post price change utility as the basis of comparison is hicks equivalent variation the controversy arises in the measurement of these quantities the usual measurement procedure is to use the area to the left of the marshallian market demand curve between two price levels jules dupuit originated this measure of welfare change and alfred marshall and hicks derived appropriate conditions for its use the primary condition for the area to the left of the demand curve to correspond to the compensating variation is to have constant marginal utility of income marshall gave this condition and if it holds the same quantity will be derived as the area to the left of the compensated hicksian demand curve this area to the left of the compensated demand curve is exactly what the compensating variation and equivalent variation measure thus the constant marginal utility of income is a sufficient condition for marshallian consumer s surplus to be equal to hicks consumer s surplus in this case arnold harberger s plea to use the welfare triangle as one half times the product of the price change times the quantity change to measure deadweight loss corresponds to the correct theoretical amount of welfare change in a recent paper robert willig derives bounds for the percentage difference between the correct measure of either the compensating or equivalent variation and the marshallian measure derived form the market demand curve his bounds which depend on the income elasticity of demand for the single good in the region of price change being considered as well as the proportion of the consumer s income spent on the good demonstrate that the marshallian consumer s surplus is often a good approximation to hicks consumer s surplus the fact that the proportion of the consumer s income spent matters as well as the income elasticity was first pointed out by harold hotelling willig contends that the approximation error will be less than the errors involved in estimating the demand curve thus he hopes to remove the need for apology that applied economists often need to give to theorists who remark on the inappropriateness of using marshallian consumer s surplus to measure welfare change however in this paper i show that for the case primarily considered by willig of a single price change which is also the situation in which consumer s surplus is often used in applied work no approximation is necessary professor of economics massachusetts institute of technology and research associate national bureau of economic research i would like to thank peter diamond erwin diewert daniel mcfadden robert merton robert solow hal varian joel yellin and the referees for help and comments research support from the national science foundation is acknowledged the reason that we still have two rather than one of samuelson s six measures of consumer s surplus arises from an index number problem of the correct basis for the welfare comparison i will give both measures but plan to concentrate on the compensating variation

a partial adjustment approach to evaluating and measuring the business value of information technology abstract in this paper we develop a partial adjustment approach based on the theory of partial adjustment to assess the value of information technology we also propose a performance measure derived from the approach the constrained structural or implicit and unconstrained non structural or explicit models derived from the approach are fitted into a set of panel data at the country level covering the period from 1993 to 2006 for a sample of 12 countries including the g7 nations and are estimated by the seemingly unrelated regression estimation the results produced by the models are robust with respect to the choice of the production function representing the true desired or maximum output and challenge the widely held belief that the productivity paradox has disappeared and the view that the productivity paradox exists in developing economies only the proposed approach compares favorably with the time varying stochastic production frontier approach since it is easier and simpler to apply but unlike the non parametric data envelopment analysis approach it is parametric

characteristics of patent litigation a window on competition we examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to r d yet the propensity of semiconductor firms to patent has risen dramatically since the mid 1980s we explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 u s semiconductor firms during 1979 1995 the results suggest that the 1980s strengthening of u s patent rights spawned patent portfolio races among capital intensive firms but it also facilitated entry by specialized design firms copyright 2001 by the rand corporation

an empirical model of mainframe computer investment this paper introduces a dynamic model of investment decisions in mainframe computer systems i estimate and test the model using detailed micro data from a company in the telecommunications industry the model accounts for technological depreciation which distinguishes computers from other investment goods where physical depreciation is typically a key factor underlying replacement investment decisions the company increased its installed mainframe computer capacity by over 30 fold over the 10 year sample period part of this growth was undoubtedly due to the huge increase in performance and the corresponding drop in the per unit cost of processing capacity of mainframes a consequence of moore s law however there was also tremendous growth in the need for computers for billing account processing and other tasks due to the rapid growth in the telecommunications industry over this same time period i estimate the unknown parameters of the investment model using a nonlinear least squares nested fixed point algorithm nls nfxp which solves the bellman equation underlying the dynamic model of investment and replacement of mainframe computers by nonlinear least squares i demonstrate that it is feasible to estimate this model on an ordinary pc whereas standard discretization approaches to solving the firm s optimal investment policy might not even be feasible using supercomputers i show that the estimated model fits the data very well and accurately captures the large growth in installed mainframe capacity the timing and magnitude of replacement investment as well as periodic upgrades of existing mainframe units i use the model to decompose how much of the 30 fold increase in mainframe computer capacity is due to moore s law i e the huge drop in the unit cost of installed mainframe capacity and how much is due to the growth in demand for services of mainframes due to the rapid growth in demand for telecommunications services particularly cell phone accounts by the firm s customers copyright 2010 john wiley sons ltd

computerisation and wage dispersion an analytical reinterpretation the rich countries have recently seen a dramatic rise in income inequality all the more surprising because the long term trend had been toward equality this paper examines one of the leading explanations computerisation in the workplace i offer a theory of computers impact on white collar work which goes far toward explaining the timing form and locus of recent labour market changes the theory looks at the bureaucratic and organisational applications of computers that have been first largest and most influential they have two effects on firms demand for labour at different skill levels

welfare measurement in the household production framework the household production approach to consumer behavior developed from the work of gary becker william gorman and kelvin lancaster has considerable descriptive appeal in modelling the decisions of households the approach derives from the observation that households frequently purchase market goods that do not yield utility directly but are combined to produce commodity service flows which the household values thus observed behavior is determined by household production technology as well as by tastes the advantage of this distinction is that we can pose reasonable hypotheses about characteristics of technology though we rarely possess useful a priori information regarding tastes the putative advantages of the household production approach are questioned on empirical and conceptual grounds by robert pollak and michael wachter 1975 they show that jointness in production or nonconstant returns to scale cause implicit commodity prices to depend on both tastes and technology raising serious econometric difficulties in the estimation of commodity demand functions in addition since commodity prices become functions of the commodity bundle consumed the analogy to traditional demand theory breaks down joint production occurs when a good enters several production processes simultaneously or equivalently when a good in one production process also enters directly into the individual s utility function the most common example is time which provides the context for all production processes and is often associated with the production of several commodities simultaneously since joint production in the household is likely to be pervasive the critique by pollak and wachter cannot be ignored in response to the comment by william barnett pollak and wachter 1977 suggest dispensing with the notion of commodity prices and treating the demand for commodities as a function of goods prices this approach confounds tastes and technology but it eliminates the troublesome concept of commodity prices as parameters when in fact they are likely to be endogenous in this paper we show that results from positive analysis such as the critique by pollak and wachter have implications for the use of the household production framework for welfare analysis the household production function approach has had considerable appeal for measuring welfare effects of public actions in the environmental and natural resource areas gardner brown john charbonneau and michael hay elizabeth wilman yet traditional approaches to welfare measurement are frequently inapplicable we argue that welfare measurement in this framework is complicated by the difficulties of unravelling tastes and technology we extend pollak and wachter s results by demonstrating that marshallian demand functions for commodities cannot be uniquely defined thus marshallian functions cannot be used to derive exact compensated functions in the manner of jerry hausman and of george mckenzie and i f pearce nor can compensating and equivalent variation measures be bounded by marshallian consumer s surplus estimates following robert willig in fact duality results that normally allow us to move between marshallian and hicksian functions are not assistant and associate professors respectively department of agricultural and resource economics university of maryland college park md 20742 this paper is scientific article no a3404 contribution no 6476 of the maryland agricultural experiment station we wish to thank darrell hueth james opaluch v kerry smith and elizabeth wilman for comments on an earlier draft

what s the use welfare estimates from revealed preference models when weak complementarity does not hold abstract in this paper we consider the theoretical and empirical ramifications of welfare measurement in revealed preference models when weak complementarity does not hold in the context of a kuhn tucker model of recreation demand we show that while it is possible to estimate preferences that do not appear to exhibit weak complementarity the calculation of welfare measurements from these models requires a cardinal interpretation of preferences that cannot be tested furthermore we reiterate the under appreciated fact that even traditional use value estimates require a cardinal restriction on preferences that while often intuitive also cannot be tested we demonstrate empirically that the choice of restrictions can have significant ramifications as use value estimates can vary based on the assumed preference structure

evaluating the performance of alternative municipal water tariff designs quantifying the tradeoffs between equity economic efficiency and cost recovery the design of municipal water tariffs requires balancing multiple criteria such as financial self sufficiency for the service provider equity among customers and economic efficiency for society a modeling framework is developed for analyzing how alternative municipal water tariff designs affect these three criteria it is then applied to a hypothetical community in which a municipal water utility provides metered piped water and wastewater services to 5 000 households we analyze how the shift from a uniform volumetric tariff to different increasing block tariff ibt designs affects households water use and water bills and how these changes in turn affect measures of equity and economic efficiency for two different financial self sufficiency targets we calculate how changes in assumptions about 1 the correlation between household income and water use and 2 households response to average or marginal prices affect the tariffs performance in terms of these three criteria the results show that ibts perform poorly in terms of targeting subsidies to low income households regardless of the magnitude of financial subsidies that a utility receives from high level government when cost recovery is low the distribution of subsidies under ibts is even worse if the correlation between water use and household income is high ibts introduce price distortions that induce economic efficiency losses but we show that these welfare losses are relatively small especially when households respond to average prices

the benefits of in kind government programs abstract in this paper i present a methodology to calculate the benefits of in kind programs such as public housing which restrict consumption of some goods to the levels offered by the government most previous studies begin with an a priori specification of the direct utility function i begin with the ordinary demand function and then integrate demand to recover the indirect utility function and the expenditure function i argue that this approach gives additional flexibility in choosing a functional form which best describes the data i then use this methodology to estimate the benefits of the u s government s section 8 housing program

axiomatic foundations of hicksian measures of welfare change abstract the aggregate hicksian measures i ev i and i cv i are characterized by three simple properties one property concerns the ranking of two states the measures are paretian a second property expresses the postulate that welfare changes are to be evaluated in money the third one deals with redistributions of incomes distributional considerations are taken into account by employing variable distributional weights i

comparing open ended choice experiments and experimental auctions an application to golden rice we use two experimental valuation methods to estimate consumer demand for genetically modified golden rice the first is an open ended choice experiment oece where participants name the quantities of golden rice and conventional rice demanded at each of several price combinations one of which will be randomly chosen as binding this allows us to estimate market demand by aggregating demand across participants this estimate of market demand also allows us to estimate own price elasticity and consumer surplus for golden rice comparing willingness to pay wtp estimates from the oece with those from a uniform price auction we find that oece wtp estimates exhibit less affiliation across rounds and the effects of positive and negative information under the oece are more consistent with prior expectations and existing studies we also find that while auction wtp estimates more than double across five rounds oece wtp estimates are stable across rounds and are always roughly equal to those from the final auction round

intrafamily resource allocations a dynamic structural model of birth weight using large american and british survey data this paper provides structural estimates of the production functions for birth weight and fetal growth in addition to maternal smoking we estimate the impact of when a mother stops work which has not been considered in the literature mothers work interruptions of up to 3 months before birth have a positive effect on birth outcomes especially among british children parental behavior appears to respond to child idiosyncratic endowments in a way that suggests that parents have inequity aversion concerns evidence in favor of inequity aversion emerges also from the analysis of breast feeding decisions

on measuring the value of a nonmarket good using market data we use line integral theory to lay out in a more general theoretical framework the conditions under which it is possible to measure with market data the welfare effects of a change in a nonmarket good we present in detail a numerical method of measuring the value of nonmarket goods using market data under either weak neutrality or weak complementarity our numerical method is more flexible than the existing analytical method because it can be used with any well behaved marshallian demand function and can be used even when the willig condition does not hold

estimating multiple discrete choice models an application to computerization returns buyers in many markets face multiple discrete choices they can purchase multiple units as well as multiple brands at the same time this paper presents a multiple discrete choice model for the analysis of differentiated products demand users maximize profits by choosing the number of units of each brand they purchase i estimate the model using micro level data on the demand for personal computers i use the estimated demand structure to assess the welfare gains from computerization and technological innovation in peripherals the estimated return on investment in personal computers is 92 moreover a 10 increase in the performance to price ratio of microprocessors leads to a 2 2 gain in the estimated user surplus the personal computer pc market is of interest to industrial organization economists because of its size the continual technological change and above all because of the farreaching implications of pcs on the economy as a whole several distinct features make pc demand difficult to model pcs are a differentiated durable good in constant technological evolution moreover buyers make multiple discrete choices firms according to our data spread their purchases of pcs over different brands at the same time they buy pcs in blocks several units of each brand that they have chosen the aim of the paper is to present a model that captures these features and to use this model to estimate the welfare gains from computerization classical discrete choice models allow one choice among mutually exclusive alternatives in contrast the proposed framework allows users to demand multiple units and multiple brands the model can be applied to other cases of multiple discrete choices e g the composition of airline fleets car holdings per household the fields of the faculty in economics departments household cereals consumption or any other good consumed in more than one variety during a relevant time period although pervasive multiple discrete choice problems have received little attention because of their complexity a central issue regarding the pc market is the current controversy in the economics literature about the computerization puzzle this puzzle stems from the empirical finding that computerization has had no effect on firm productivity griliches and siegel 1991 and morrison and berndt 1990 contrary to those results hendel 1994 and lichtenberg 1995 using more disaggregate data than most previous studies report excess returns to computerization this indicates that data aggregation may have created the computerization puzzle in this paper i present a model consistent with the basic

markets and the measurement of value consumer s surplus and the hicksian measures of compensating and equivalent variation have a long history in empirical economic analysis however at both the theoretical and the empirical level economists psychologists and public choice theorists have not been able to reach a significant consensus regarding the usefulness of these measures economic theorists have only recently dissected the differences which exist between alternative welfare measures in a systematic and transparent fashion in willig 1976 hausman 1981 and takayama 1984 the role of income in determining the correct theoretical measurements of compensating and equivalent variations was exposed during this same period of time theoretical results obtained by the psychologists kahneman and tversky 1979 indicated that the fundamental structure of preferences upon which the theoretical economic results are based is flawed the so called prospect theory of decision developed by these authors indicated that measured of welfare based upon payment will differ from measures of welfare based upon compensation because of the fact that individuals will value losses at a greater marginal rate than gains this difference was then predicted to dominate any income effect important in the economist s model finally this period recorded the emergence of many demand revealing processes which provide individuals with appropriate incentives to accurately reveal their preferences as summarized in coursey and schulze 1986 one interpretation of the literature on incentive compatibility suggests a set of well defined guidelines for improving both the accuracy and validity of compensating and equivalent variation measures these differences in professional preferences regarding what is important in improving the accuracy of economic welfare measurements led john

welfare losses due to market power hicksian versus marshallian measurement this paper warns against the use of marshallian welfare loss in applied analysis of market power we show how to compute the hicksian deadweight loss from an ordinary demand then from an experiment using real data on twenty one sectors of the french food industry we find that the marshallian deadweight loss poorly approximates the exact hicksian measure hence it is advisable to use the latter in applied welfare analysis copyright 2001 oxford university press

the determinants of human capital formation during the early years of life theory measurement and policies in this paper i discuss a research agenda on the study of human capital accumulation in the early years with a particular focus on developing countries i discuss several methodological issues from the use of structural models to the importance of measurement and the development of new measurement tools i present a conceptual framework that can be used to frame the study of human capital accumulation and view the current challenges and gaps in knowledge within such an organizing structure i provide an example of the use of such a framework to interpret the evidence on the impacts of an early years intervention based on randomized controlled trial

quality adjusted price indexes and the willig condition abstract this paper provides a graphical explanation of willig s condition for developing consistent price indexes for quality change the framework also describes how the single crossing condition generalizes the willig condition

computers productivity and input substitution i introduction the last two decades has been a puzzling time for many productivity analysts while computer prices fell at extraordinary rates and firms invested hundreds of billions of dollars in new computer equipment aggregate productivity growth remained sluggish this computer productivity paradox has generated a large literature that examines the economic impact of the computer revolution 1 this paper offers a simple solution to the computer productivity paradox by making careful distinction between computers as an output from one sector and an input to other sectors data for 35 manufacturing and service sectors for 1947 1991 show that sectoral differences are crucial in understanding the impact of computers aggregate analysis is inappropriate since it obscures basic distinctions between a shifting production function in the computer producing sector multi factor productivity growth and movements along production functions in the computer using sectors substitution and capital accumulation once these differences are isolated the growth impact of computers is readily observable the computer producing sector experienced fundamental technological progress and now produces cheaper better computers the sectoral data show this as rapid multi factor productivity mfp growth for 1973 1991 although aggregate mfp growth remains below historic averages the computer producing sector has clearly done its part mfp growth in this sector is many times the economy average and has contributed over one third of aggregate mfp growth for 19811991 the sectoral detail shows that the slowdown in aggregate productivity would have been much more severe were it not for such large mfp gains in the computer producing sector for the other sectors of the economy computers affect growth in a more traditional although less glamorous way when the price of real computing power fell so dramatically in the 1970s and 1980s firms responded by substituting away from relatively expensive labor and non computer capital and investing heavily in cheap computers for these sectors the computer revolution affects output growth not by raising mfp but by inducing firms to accumulate computers at extraordinary rates real computer services for example grew in excess of 20 per year in 14 out of 35 sectors for 1973 1991 although virtually all sectors are rapidly accumulating computer equipment computers remain small in levels in 1991 for example computer investment was only 10 of private fixed investment so the growth contribution of computers remains small relative to sectoral aggregates of labor and non computer capital the rapid rates of accumulation however are clearly making computers a more important source of growth across sectors with this heavy investment also came the wide spread expectation that computers would fundamentally alter the way firms operate and lead to higher mfp the reality has been very different as the most computer intensive sectors show steep declines in mfp growth after 1973 with three quarters of all computers concentrated in three service sectors trade fire and other services however this finding must be interpreted with caution as griliches 1994 notes output in these sectors is largely unmeasurable and thus mfp growth will be understated nonetheless it is quite reasonable that even computer using sectors where output is easier to measure show no mfp gains computer investment creates a capital input that enters the production function like any other purchased input since constant quality deflators embody productivity improvements in investment the direct impact is seen through the rapid capital accumulation only if the adoption of computers leads to production externalities or spillovers would computer investment also increase mfp growth the data however show no evidence of this ii computers and growth the national statistics most clearly show the computer revolution in the investment data

a dynamic stochastic analysis of international patent application and renewal processes abstract this paper formulates a dynamic stochastic model to examine the joint patent application and renewal behaviors under an international patent protection regime the framework makes it possible to utilize both the cross sectional multi country application and the time series patent renewal dimensions of available international patenting data to estimate the private value of patent protection and allows us to distinguish more aspects of patent returns the evolution dynamics of the value of european patents in pharmaceutical and electronics industries are examined estimation results indicate that pharmaceutical patents are endowed with higher initial returns thus their owners tend to seek patent protection in more countries than electronics patent holders however pharmaceutical patents become obsolete at a much faster pace than electronics patents and consequently they have lower renewal rates and shorter lives

welfare and distribution effects of water pricing policies in this paper distribution and welfare effects of changes in block price systems are evaluated a method is discussed to determine for a marshallian demand function equivalent variation in case of a block price system the method is applied to compare for the metropolitan region of sao paulo alternative pricing policies on the basis of their demand welfare and distribution effects of changing water prices results show that there is a trade off between average welfare and income distribution a pro poor price system may result in lower average welfare than a flat price system but in higher individual welfare for the poor moreover there is a trade off between revenues for the water company and income distribution even though pro poor price systems may not be as good for average welfare as flat price systems their direct effects on poverty are important introducing pro poor price systems however may have financial consequences for the water companies

recovering weakly complementary preferences abstract this paper demonstrates a method for recovering weakly complementary expenditure and indirect utility functions while integrating back from marshallian demand specifications that do not intrinsically embody weak complementarity weak complementarity of a good with quality provides information about how the constant of integration over price must behave with respect to quality and this information can be incorporated into the process of recovering preferences the weakly complementary expenditure and indirect utility functions are recovered for the linear demand specification and for the stone geary utility function with any value of the subsistence parameter

globalization trade and income my purpose in this paper is to address two questions that confront our discipline repeatedly these days first what is a useful classification of the symptoms and the determinants of globalization a phase used in a remarkable variety of contexts to economists globalization is generally thought of as the increasing internationalization of the production distribution and marketing of goods and services the term is used less precisely in the popular literature perhaps best exemplified by kenichi ohmae s book the borderless world and when used loosely it invokes a wide variety of political sociological environmental and economic trends that are the concern of media attention almost daily however one defines globalization it is surely a development that is having a profound impact on the subject of economics as a whole and ought to have on the field of international economics in particular my second purpose is to ask how globalization is affecting our profession s view of theory and empirical work in international economics traditional trade theory was concerned with a set of fairly well defined questions regarding the determinants of trade the pattern of trade and the welfare consequences of various trade policy instruments the last two decades and perhaps the last decade in particular has led to a much wider interpretation of what living in an open economy means the change that is occurring on a wide range of economic social scientific and

consumer s surplus without apology the purpose of this paper is to settle the controversy surrounding consumer s surplus and by so doing to validate its use as a tool of welfare economics i will show that observed consumer s surplus can be rigorously utilized to estimate the unobservable compensating and equivalent variations the correct theoretical measures of the welfare impact of changes in prices and income on an individual i derive precise upper and lower bounds on the percentage errors of approximating the compensating and equivalent variations with consumer s surplus these bounds can be explicitly calculated from observable demand data and it is clear that in most applications the error of approximation will be very small in fact the error will often be overshadowed by the errors involved in estimating the demand curve the results in no way depend upon arguments about the constancy of the marginal utility of income consequently this paper supplies specific empirical criteria which can replace the apologetic caveats frequently employed by those who presently apply consumer s surplus moreover the results imply that consumer s surplus is usually a very good approximation to the appropriate welfare measures to preview below i establish the validity of these rules of thumb for a

investigating and comparing the dynamic patterns of the business value of information technology over time abstract the long debated issue of the business value of information technology it to the firm country has received a great deal of attention in the literature but the studies have rarely examined the dynamic patterns of the it value as measured by the firm s productive efficiency over time the objective of this paper is to apply the three factor constant elasticity of substitution ces time varying stochastic production frontier models and use the same data set as used in several previous studies to investigate the dynamic patterns of it value over time in connection with the issues of inputs substitution and complement and the productivity paradox this paper adopts two analytical skills collective and individual to analyze the empirical results collectively we find that the dynamic patterns of it value are closely related to the substitution and complement of three inputs and the it productivity paradox individually we identify five common dynamic patterns of the it value measured by productive efficiency and interpret their implications for the productivity paradox as summarized in a two by two matrix of practical applications and strategies this matrix accounts for four different scenarios of the relationship between the average productive efficiency and the it productivity paradox illustrates some practical applications by the analytical results and provides some business insights and managerial strategies for it decision makers and po is managers this represents a new contribution to the understanding of the dynamic influence of it investments upon the value of it over time

the taxation of drivers and the choice of car fuel type in this paper the choice of the car fuel type is studied in the dutch situation three types are important gasoline diesel and lpg with 80 of the cars using gasoline incentives for using diesel or lpg are provided by the tax system that implies higher fixed cost but lower variable cost for users of these fuel types we start by studying fuel type choice on the basis of a logit model and move on to estimate demand functions for kilometres driven for social purposes while correcting for the possible selectivity bias we find that diesel and lpg are in general regarded as inferior alternatives but that monetary incentives are sufficiently strong to overcome this hurdle for drivers with a large demand for kilometres we also find that there are significant effects of the lower variable cost for diesel and lpg drivers on their demand for kilometres the conclusions are confirmed by estimation of a structural model in which fuel type choice and demand for kilometres are consistently explained on the basis of one set of preferences and unobserved heterogeneity is taken into account

selling university technology patterns from mit many research universities engage in efforts to license inventions developed by university affiliated inventors however no systematic explanation of the conditions under which university inventions will be licensed or commercialized has been provided drawing on transaction cost economics i provide a conceptual framework to explain which university inventions are most likely to be licensed commercialized and generate royalties and who will undertake that commercialization i test this framework on data on the 1 397 patents assigned to the massachusetts institute of technology during the 1980 1996 period the results showthat 1 university inventions are more likely to be licensed when patents are effective 2 when patents are effective university technology is generally licensed to noninventors 3 when patents are effective licensing back to inventors increases the likelihood of license termination and reduces the likelihood of invention commercialization and 4 the effectiveness of patents increases royalties earned for inventions licensed to noninventors the implications of these findings for innovation management and strategy entrepreneurship and university technology commercialization are discussed

a penny for your quotes patent citations and the value of innovations the use ofpatents in economic research has been seriously hindered by the fact that patents vary enormously in their importance or value and hence simple patent counts cannot be informative about innovative output the purpose of this article is to put forward patent counts weighted by citations as indicators of the value of innovations thereby overcoming the limitations of simple counts the empirical analysis of a particular innovation computed tomography scanners indeed shows a close association between citation based patent indices and independent measures of the social value of innovations in that field moreover the weighting scheme appears to be nonlinear increasing in the number of citations implying that the informational content of citations rises at the margin as in previous studies simple patent counts are found to be highly correlated with contemporaneous rd however here the association is within afield over time rather than cross sectional

technological and organisational change in a process of industrial rejuvenation the case of the italian cotton textile industry the coevolution of technological and organizational change shapes modernization in mature industries only large vertically integrated managerial firms can bear the delays between the adoption of new information technologies and their positive effects on productivity growth a feature of the italian cotton industry is the highly specialized colocalized family owned small firm that is functionally organized it emerged in the 1970s to cope with the introduction of technological changes such as shuttleless looms and open end spinning this structure risks delaying the successful implementation of technological innovations an industrial policy aimed at the adoption of both technological and organizational change could counterbalance the trend toward decline copyright 1998 by oxford university press

approximating compensated income from ordinary demand functions abstract this paper proposes a re versible s econd or der t aylor resort approximation to compensated income from ordinary demand functions resort yields the malmquist vartia m v algorithm as a first order case using the slutsky equation resort obtains the substitution matrix and checks it for symmetry and negative semi definiteness to validate compensated income this validation procedure is an improvement over m v

estimates of the value of patent rights in european countries during the post 1950 period this paper examines the distribution of the values of patent rights in the united kingdom france and germany during the post 1950 period these values are inferred from the behavior of patentees with respect to payment of renewal fees on their patents a simple economic model of renewal decisions is combined with data on the proportion of patents renewed at alternative ages and the renewal fee schedules to produce estimates of the distribution and the total value of patent rights in these countries moreover the data indicate that there have been changes in the value distribution and we follow these changes over the period the empirical results of particular interest concern the total value of patent rights and the relationship between changes in it and changes in the quantity of patents the skew in the distribution of patent values and the rate of obsolescence on the returns to patents

expenditure function estimates of the efficiency and distributive impact of indirect taxes in the united kingdom abstract this paper uses the expenditure function to consider the efficiency and distributional impact of indirect taxes in the united kingdom estimates of the parameters of the linear expenditure system of demand equations are employed to measure the compensating variation and equivalent variation costs of taxes on households in different income groups in addition distributional weights are used to consider the overall impact of different taxes and tax changes on social welfare finally we consider other types of demand system estimates which might be used in this kind of exercise

patents as options some estimates of the value of holding european patent stocks in many countries holders of patents must pay an annual renewal fee in order to keep their patents in force this paper uses data on the proportion of patents renewed and the renewal fees faced by post world war ii cohorts of patents in france the united kingdom and germany in conjunction with a model of patent holders renewal decisions to estimate the returns earned from holding patents in these countries since patents are often applied for at a nearly stage in the innovation process the model allows agents to be uncertain about the sequence of returns that will be earned if the patent is kept inforce formally then the paper presents and solves a discrete choice optimal stochastic control model derives the implications of the model on aggregate behaviour and then estimates the parameters of the model from aggregate data the estimates enable a detailed description of the evolution of the distribution of returns earned from holding patents over their life spans and calculations of both the annual returns earned from holding the patents still in force or the patent stocks in the alternative countries and the distribution of the discounted value of returns earned from holding the patents in a cohort this abstract was borrowed from another version of this item

a consistent semiparametric estimation of the consumer surplus distribution abstract in this paper we examine the consequences of demand function heterogeneity for the estimation of the consumer surplus in particular we show that given a linear demand function with random coefficients one can consistently estimate the consumer surplus distribution without making parametric assumptions about the coefficient distribution the approach is illustrated using data on gasoline consumption

early health shocks intra household resource allocation and child outcomes an open question in the literature is whether families compensate or reinforce the impact of child health shocks discussions usually focus on one dimension of child investment this paper examines multiple dimensions using household survey data on chinese child twins whose average age is 11 we find that compared with a twin sibling who did not suffer from negative early health shocks at ages 0 3 the other twin sibling who did suffer negative health shocks received rmb 305 more in terms of health investments but received rmb 182 less in terms of educational investments in the 12 months prior to the survey in terms of financial transfers over all dimensions of investment the family acts as a net equalizer in response to early health shocks for children we estimate a human capital production function and establish that for this sample early health shocks negatively affect child human capital including health education and socioemotional skills compensating investments in health as measured by bmi reduce the adverse effects of health shocks by 50 but exacerbate the adverse impact of shocks on educational attainment by 30

innovation r d cooperation and labor recruitment evidence from finland this article investigates the role played by one type of firm interaction namely rd rd and labor acquisition appears to be only of limited importance for innovation

the microeconomics of manufacturing modernization programs abstract manufacturing modernization programs are designed to improve the competitiveness of small and medium sized manufacturers by accelerating their use of best practice technologies justification for these programs is most often cast in terms of past slow rates of adoption international economic competitiveness and market failures in the provision of information these frameworks however do not adequately address policy and programmatic issues related to program design financing and program evaluation using a microeconomic model based on the firm and industry level effects of these programs we examine the importance of spillover benefits from modernization efforts both horizontal spillovers to rivals of program clients and vertical spillovers to clients customers and the implications for these policy and programmatic issues

linear demand functions in theory and practice abstract integrability conditions for an incomplete system of linear demand functions are considered the parameter restrictions consistent with integrability are identified and the structure of the conditional preference map is obtained it is found that the conditional preferences for a set of linear demand functions are either quadratic or leontief from a translated origin welfare analysis with linear demand models is also considered

environmental food taxes and inequalities simulation of a meat tax in sweden abstract this paper investigates the distributional effect of an environmental tax on meat in sweden if such a tax was to be introduced welfare effects are measured as compensation variation cv for multiple price changes where hicksian cross price elasticities household expenditures and price changes are included in the calculations results show that taxes on meat are almost neutral over households when expenditures on meat are used as welfare indicators and regressive if income is used this can be explained by the households similar shares of total expenditures on meat the households with the smallest income levels need to be compensated with 904 sek per person and year equivalent to euro 86 6 per year in the year 2009 exchange rate to feel that utility is not lowered if taxes on meat are introduced and the households with the highest income levels need to be compensated with 1141 sek euro 109 3 per person and year for the year 2009 these compensations correspond to 0 74 and 0 78 of total expenditures for the low and high income group respectively when instead comparing the compensation with income levels the effects correspond to 0 99 for the households with the smallest income levels and to 0 51 for the households with the largest income

information provision and consumer behavior a natural experiment in billing frequency abstract in this study i estimate a causal effect of increased billing frequency on consumer behavior i exploit a natural experiment in which residential water customers switched exogenously from bimonthly to monthly billing customers increase consumption by 3 5 5 in response to more frequent information this result is reconciled in models of price and quantity uncertainty where increases in billing frequency reduce the distortion in consumer perceptions using treatment effects as sufficient statistics i calculate consumer welfare gains equivalent to 0 5 1 of annual water expenditures heterogeneous treatment effects suggest increases in outdoor water use

price and welfare effects of a pharmaceutical substitution reform the price effects of the swedish pharmaceutical substitution reform are analyzed using data for a panel of all pharmaceutical product sold in sweden in 1997 2007 the price reduction due to the reform was estimated to average 10 and was found to be significantly larger for brand name pharmaceuticals than for generics the results also imply that the reform amplified the effect that generic entry has on brand name prices by a factor of 10 results of a demand estimation imply that the price reductions increased total pharmaceutical consumption by 8 and consumer welfare by sek 2 7 billion annually

heterogeneity intrafamily distribution and child health data were collected in candelaria colombia from 1968 to 1974 to evaluate the impact of child health services in all households in which there were any children under 6 years old to estimate the birth outcome equation and post birth health equation a subsample of 109 households was selected in which at least 2 children were born during the 7 year program the sample size was 238 children estimates of the parameters of the normalized weight equations were obtained using seemingly unrelated regression sur the family fixed effects procedure ffe and the lagged instrumental fixed effects technique life an illustrative dynamic model of intra family allocative behavior incorporating variations in individual child characteristics was formulated to show how both the timing of childbearing and child specific allocations vary with both family and child specific health endowments the information restrictions were used in the model associated with the sequencing of births to develop an estimation procedure which takes into account both intrafamily and interfamily heterogeneity longitudinal data on children and households compared estimates of the effects of birth order birth spacing and timing per capita food consumption inoculations and the incidence of breast feeding on the age standardized weight of children at 2 life cycle points at birth and within 6 months after birth the estimates indicated that healthier families for given income had more children and more closely spaced children but consumed no more food per capita than did less well endowed families these results imply that families behave so as to reduce inherent interfamily inequalities in child health however while the estimates suggest that the healthier the prior surviving child the more quickly parents are likely to have a subsequent child parents are also more likely to breastfeed an inherently healthier child

patent quality and research productivity measuring innovation with multiple indicators we analyse the determinants of the decline in research productivity using panel data on manufacturing firms in the us for the period 1980 93 we focus on three factors the level of demand the quality of patents and technological exhaustion we develop an index of patent quality using detailed patent information and show that using multiple indicators substantially reduces the measured variance in quality research productivity at the firm level is inversely related to patent quality and the level of demand as predicted by theory and patent quality is positively associated with the stock market value of firms

computing productivity firm level evidence we explore the effect of computerization on productivity and output growth using data from 527 large us firms over 1987 1994 we find that computerization makes a contribution to measured productivity and output growth in the short term using one year differences that is consistent with normal returns to computer investments however the productivity and output contributions associated with computerization are up to five times greater over long periods using five to seven year differences the results suggest that the observed contribution of computerization is accompanied by relatively large and time consuming investments in complementary inputs such as organizational capital that may be omitted in conventional calculations of productivity the large long run contribution of computers and their associated complements that we uncover may partially explain the subsequent investment surge in computers in the late 1990s

the structure of technology in a multioutput branch banking firm we formulate and estimate a multioutput bank s cost function amenable for distinguishing between economies of scale and economies of network density we find significant returns to network density especially for smaller banks diseconomies of scale are found for the larger banks whereas the hypothesis of constant returns to scale could not be rejected for the smaller banks