political support and tax reforms with an application to italy in 2001 the italian government introduced a personal income tax reform to be implemented in successive phases in 2004 taxes were reduced to all income levels with higher gains for low income and high income individuals than for middle income ones a large debate arised this paper explores the political economy reasons under this tax reform mainly the attempt of the government to attract the uncertain voters swing voters a probabilistic voting model is introduced to capture the importance of swing voters the model predicts that the average personal income tax rate tends to be lower for groups of lower income higher preference for leisure and containing more politically mobile voters swing voters however data from italian polls show that while the tax reform was a good strategy to attract swing voters the specific design of the reform which favored high income and low income individuals but not the middle class was not the more appropriate strategy

electoral outcomes with probabilistic voting and nash social welfare maxima abstract this paper provides unexpected support to nash s view of how bargaining determines the social choice we first present a spatial model of electoral competition with probabilistic voting and a very close relation between voters preferences and their choice probabilities the outcome of the electoral competition game is then shown to be precisely the social alternative that maximizes a nash type social welfare function theorem 1 this electoral outcome is also interpreted as a unanimity likelihood maximum corollary 1 within our framework existence and uniqueness of such an outcome are guaranteed corollaries 2 and 3

finnish consumer perceptions of carbon footprints and carbon labelling of food products abstract the aim of this study was to explore how finnish consumers perceive the communication of carbon footprints for food products the study comprised five semi structured focus groups and an online survey of 1010 respondents the study showed that the term product carbon footprint is familiar to many but there is substantial misunderstanding of its meaning only 7 of the respondents linked product carbon footprint spontaneously to greenhouse gas emissions associated with the product and an additional 5 of the respondents linked it to climate change there are positive attitudes towards carbon labels 90 stated that a carbon footprint would have at least a little impact on their buying decision but the information became meaningful only when many other purchasing criteria such as price and taste were satisfied furthermore 86 preferred carbon labels that allow comparisons of carbon footprints to be made among food products but there is divergence on perceived needs for carbon label content

design for the environment a quality based model for green product development green product development which addresses environmental issues through product design and innovation as opposed to the traditional end of pipe control approach is receiving significant attention from customers industries and governments around the world in this paper we develop a quality based model for analyzing the strategic and policy issues concerning the development of products with conflicting traditional and environmental attributes on the demand side of the problem we use the framework of conjoint analysis to structure the preferences of the ordinary and green customers on the supply side we apply the theories in optimal product design and market segmentation to analyze the producer s strategic decisions regarding the number of products introduced and their prices and qualities on the policy side we evaluate the effects of environmental standards on the economic and environmental consequences of green product development by jointly considering the interactions among the customers preferences the producer s product strategies and the environmental standards imposed by governments we present some interesting findings that can be used to manage and regulate the development of green products two major findings show that green product development and stricter environmental standards might not necessarily benefit the environment

the variable choice set logit model applied to the 2004 canadian election formal work on the electoral model often suggests that parties should locate at the electoral mean recent research has found no evidence of such convergence in order to explain non convergence the stochastic electoral model is extended by including a competence and sociodemographic valance in a country where regional and national parties compete in the election that is the model allows voters to face different sets of parties in different regions we introduce the notion of a convergence coefficient c for regional and national parties and show that when c is high there is a significant centrifugal tendency acting on parties an electoral survey of the 2004 election in canada is used to construct a stochastic electoral model of the election with two regions quebec and the rest of canada the survey allows us to estimate voter positions in the policy space the variable choice set logit model is used to built a relationship between party position and vote share we find that in the local nash equilibrium for the election the two main parties with high competence valence the liberals and conservatives locate at the national electoral mean and the bloc quebecois with the highest competence valence locates at the quebec electoral mean the new democratic party has a low competence valence but remains at the national mean the greens with lowest competence valence locate away from the national mean to increase its vote share

political competition between differentiated candidates abstract we introduce a framework of electoral competition in which voters have general preferences over candidates immutable characteristics such as gender race or previously committed policy positions as well as their policy positions which are flexible candidates are uncertain about the distribution of voter preferences and choose policy positions to maximize their winning probability we characterize a property of voter utility functions uniform candidate ranking ucr that captures a form of separability between fixed characteristics and policy when voters have ucr preferences candidates equilibrium policies converge in any strict equilibrium in contrast notions like competence or complementarity lead to non ucr preferences and policy divergence in particular we introduce a new class of models that contains the probabilistic voting model as a special case and in which there is a unique equilibrium that generically features policy divergence

a gravity model analysis of meat trade policies abstract the conventional gravity model is revised for a single commodity and applied to meat markets to determine factors affecting trade flows of meat this study demonstrates that the gravity model for a single agricultural commodity can be parameterized more effectively by using time series and cross section data rather than cross section data alone this study reveals that trade policies and subsidies used by exporting and importing countries livestock production capacity in countries and distances play an important role in determining trade flows of meat long term agreements achieve the highest performance toward enhancing international meat trade import quotas and the hoof and mouth disease on beef greatly impair meat trade

hedonic methods for baskets of goods a b s t r a c t existing hedonic methods cannot be easily adapted to estimate willingness to pay for product character istics when willingness to pay depends on a very large basket of goods we show how to marry these methods with revealed preference arguments to estimate bounds on willingness to pay using data on purchases of seemingly impossibly high dimensional baskets of goods this allows us to use observed purchase prices and quantities on a large basket of products to learn about individual household s will ingness to pay for characteristics while maintaining a high degree of flexibility and also avoiding the biases that arise from inappropriate aggregation we illustrate the approach using scanner data on food purchases to estimate bounds on willingness to pay for the organic characteristic

the impacts of exchange rate volatility on vegetable trade flows trade flows of commodities are generally affected by the principles of comparative advantage in a free trade however trade flows might be enhanced or distorted not only by various government interventions but also by exchange rate fluctuations among others this study applies a commodity specific gravity model to selected vegetable trade flows among organization for economic co operation and development oecd countries to determine the effects of exchange rate uncertainty on the trade flows using the data from 1996 to 2002 the results show that while the exchange rate uncertainty significantly reduces trade in the majority of commodity flows there is evidence that both short and long term volatility have positive effect on trade flows of specific commodities this study also tests the regional preferential trade agreements such as the north american free trade agreement nafta the asia pacific economic cooperation apec and the eu and their different effects on commodities

exporting to new destinations and the effects of tariffs the case of meat commodities this study uses a random parameter probit estimation to examine the effects of tariff liberalization on the probability of establishing new trading relationships in meat commodities our simulation results indicate that the effects of tariff reductions decrease with distance but increase with the level of development the probabilities of trade increase at an increasing rate with the size of tariff reductions thus justifying calls for ambitious liberalization schemes canada and mexico are the nafta countries that are most likely to export in response to eu tariff reductions on bovine and poultry meats while brazil and argentina emerge as the mercosur countries most likely to penetrate the eu bovine meat market after eu tariff reductions uruguay s probability to export poultry meat is most responsive to eu tariff reductions

impacts of regulating greenhouse gas emissions on livestock trade flows policies regulating greenhouse gas ghg emissions are expected to create a significant burden on emitting industries as well as final consumers which can lead to a strong influence on international trade flows of commodities this study examines whether the regulation of ghg emissions affects livestock trade flows a commodity specific gravity model approach is employed to estimate and test the impact of regulating ghg emissions on livestock trade flows the results show that regulation of ghg emissions has a negative effect on livestock trade flows from countries restricting ghg emissions to countries without ghg restriction from restricting countries to restricting countries and unrestricting countries to restricting countries

the political economy of naturalization this paper presents a political economy model in which self interested natives decide when citizenship and or voting rights should be granted to foreign born workers native voters know that immigrants hold different political preferences and would thus tend to postpone their enfranchisement as much as possible they also consider however that a more restrictive naturalization policy may reduce the gains from immigration we find that the optimal timing of naturalization depends on the quantity quality productivity and preferences of potential immigrants the political composition and the age structure of the native population as well as the sensitivity of migration choices to the citizenship issue

does local labeling complement or compete with other sustainable labels a conjoint analysis of direct and joint values for fresh produce claim as a way to explore the increasing use of sustainability labels in the marketplace this study analyzes the differential values and interactive effects of sustainable production claims organic fair trade and carbon footprint and location claims through a conjoint choice experiment included in a 2008 u s survey locally grown is the highest valued claim and its value is further enhanced with fair trade certification but carbon intensive local products are discounted more severely than those sourced from other locations some negatively valued claims imports and carbon footprint can be mitigated by combining them with other claims organic and fair trade copyright 2011 oxford university press

the size and scope of government comparative politics with rational politicians we try to demonstrate how economists may engage in research on comparative politics relating the size and composition of government spending to the political system a downsian model of electoral competition and forward looking voting indicates that majoritarian as opposed to proportional elections increase competition between parties by focusing it into some key marginal districts this leads to less public goods less rents for politicians more redistribution and larger government a model of legislative bargaining and backward looking voting indicates that presidential as opposed to parliamentary regimes increase competition between both politicians and voters this leads to less public goods less rents for politicians less redistribution and smaller government we confront these predictions with cross country data from around 1990 controlling for economic and social determinants of government spending we nd strong and robust support for the prediction that the size of government is smaller under presidential regimes and weaker support for the prediction that majoritarian elections are associated with less public goods

which hedonic models can we trust to recover the marginal willingness to pay for environmental amenities abstract the hedonic property value model is among our foremost tools for evaluating the economic consequences of policies that target the supply of local public goods environmental services and urban amenities we design a theoretically consistent and empirically realistic monte carlo study of whether omitted variables seriously undermine the method s ability to accurately identify economic values our results suggest that large gains in accuracy can be realized by moving from the standard linear specifications for the price function to a more flexible framework that uses a combination of spatial fixed effects quasi experimental identification and temporal controls for housing market adjustment

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

green markets eco certification and equilibrium fraud abstract consumers voluntarily pay significant price premiums to acquire unobservable environmental attributes in green markets this paper considers the performance of eco certification policy under circumstances where consumers cannot discern environmental attributes in goods but are able to form rational expectations regarding the extent of illicit activities in the green market the main results are i fraud is less prevalent in green markets when entry barriers limit the number of firms ii conventional environmental policies on polluting techniques increase the incidence of fraud and can even preclude the use of non polluting techniques which would otherwise emerge in green markets iii voluntary eco certification policies can decrease fraud increase output and raise profits per firm and iv in cases where the socially optimal resource allocation can be supported the optimal policy involves negative unit certification fees positive fixed certification fees and is revenue generating for the certifying agent

equilibrium in multicandidate probabilistic spatial voting this paper presents a multicandidate spatial model of probabilistic voting in which voter utility functions contain a random element specific to each candidate the model assumes no abstentions sincere voting and the maximization of expected vote by each candidate we derive a sufficient condition for concavity of the candidate expected vote function with which the existence of equilibrium is related to the degree of voter uncertainty we show that under concavity convergent equilibrium exists at a minimum sum point at which total distances from all voter ideal points are minimized we then discuss the location of convergent equilibrium for various measures of distance in our examples computer analysis indicates that non convergent equilibria are only locally stable and disappear as voter uncertainty increases

redistribution tax under non benevolent governments i analyze redistribution policies of majority governments in one kind of representative voting system i employ these assumptions members gain special benefits in the majority parties act strategically by using redistribution transfers the member s utility function is given in a quasi linear function the government s objective functions are the weighted summation of utilities and i classify governments according to the weight the four main results are a stable majority dose not support myopic government the stable redistribution policy of benevolent government is expressed by a scope of transfers the stable transfer of non benevolent governments depends on private utilities of the majority and opportunity costs of the minority and the altruistic government is not displayed by any other majority because it offers the total welfare of the majority to the minority as a subsidy

effects of carbon reduction labels evidence from scanner data we investigate the effects of carbon reduction labels using a detailed scanner data set using a difference in differences estimation strategy we find that having a carbon label has no impact on detergent prices or demand we also investigate possible heterogeneous effects of carbon labels using the synthetic control method we find no evidence to indicate that the prices for the counterfactual detergents without the label would have been any different from the prices of the carbon labeled detergents we investigate the reasons for these results and conclude that the specific design of the carbon label is responsible for its lack of success jel d12 d83 l15 q54

electoral equilibria with restricted strategies we construct a spatial election model in which candidates inherit initial positions in the strategy space presumably from previous political activity and they are restricted to strategies close to their initial positions we establish sufficient conditions for the existence of an equilibrium the equilibrium need not entail an expectation of a zero plurality for each candidate we then apply this model to a sequence of elections in which a series of opposition candidates challenge incumbents given certain regularity conditions the result will be an apparent incumbency advantage corresponding to that observed in recent congressional elections

the effects of farm subsidies on farm exports in the united states we estimate the elasticity of u s farm exports to u s farm subsidies using a gravity model of state level farm exports to 100 major trading destinations for the period 1999 to 2011 our identification strategy exploits the within state variation that is free of endogeneity bias in the levels and trends of farm subsidies and farm exports we find that a 1 decrease in farm subsidies would reduce u s farm exports by 0 40 per annum this equivalently means that the complete abolishment of the farm subsidy program would reduce u s farm exports by approximately 15 3 billion per year importantly we document robust evidence that amber box subsidy programs such as counter cyclical payments and marketing loan gains have the strongest effect on farm exports while green box subsidy payments such as direct payments have negligible effects finally subsidy payments affect exports only in agricultural commodities not in livestock our subsidy elasticity estimates are statistically significant stable and economically meaningful and are vitally needed by u s and global policymakers in the face of critical domestic and international developments

the impact of climate information on milk demand evidence from a field experiment it has been suggested that carbon labelling of food on voluntary or non voluntary basis could reduce emissions of greenhouse gases however there is limited empirical evidence on the influence of such labels on consumer purchases the purpose of this study was to investigate whether voluntary carbon labelling affects the demand for milk a randomized field experiment was conducted in 17 retail stores in sweden where a sign provided consumers with qualitative information about the carbon impact of climate certified milk the results suggest that the sign increased the demand for the climate certified milk by approximately 6 8 and the result is robust to alternative model specifications the effect is entirely driven by large stores such as supermarkets we find no statistically significant impact on total milk sales and the dataset is too small to verify the consequences for other milk brands the effect on the demand for the labelled milk is short lived

to segregate or to integrate education politics and democracy how is the quality of public education affected by the presence of private schools for the rich theory and evidence suggest that the link depends crucially on the political system we develop a theory that integrates private education and fertility decisions with voting on public schooling expenditures we find that the presence of a large private education sector benefits public schools in a broad based democracy where politicians are responsive to low income families but crowds out public education spending in a society that is politically dominated by the rich the main predictions of the theory are consistent with state level data and micro data from the u s as well as cross country evidence from the programme for international student assessment study

on the economics of labels how their introduction affects the functioning of markets and the welfare of all participants are labels good or bad for consumers and firms the answer may seem straightforward since labels improve information yet economic theory reveals situations where their introduction reduces the welfare of at least some market participants this essay reviews the theoretical literature on labels in order to identify and explain the main reasons that may cause labeling to produce undesirable side effects in contrast to earlier reviews that either concentrate on narrow topics or treat the subject in a more or less informal way we bring together the main results from all the relevant topics by presenting and discussing the assumptions and model building techniques that underpin them the advantage of this approach is that it identifies the origin of the differences between results thus allowing the synthesis of results that sometimes appear even to be contradictory we focus on quality labels and examine the impact of labeling on market structure the side effects of costly certification issues related to the label s trustworthiness the rationale for mandatory vs voluntary labeling the level at which the label s standard is set according to the agency that selects it the political economy of labels that is pro or anti label lobbying lobbying to affect the label s standard and lobbying in favor or against the label s mandatory imposition these topics cover a wide range of applications including genetically modified organism gmos organic produce geographic indicators controlled origin eco labels etc we conclude by identifying topics that require further research

the equivalence between costly and probabilistic voting models abstract in costly voting models voters abstain when a stochastic cost of voting exceeds the benefit from voting in probabilistic voting models they always vote for a candidate who generates the highest utility which is subject to random shocks we prove an equivalence result in two candidate elections given any costly voting model there exists a probabilistic voting model that generates winning probabilities identical to those in the former model for any policy announcements and vice versa thus many predictions of interest established in one of the models hold in the other as well providing robustness of the conclusions to model specifications

the mean voter theorem necessary and sufficient conditions for convergent equilibrium formal models of elections have emphasized the convergence of party leaders towards the centre of the electoral distribution this paper attempts to resolve the apparent disparity between the formal result and the perception of political divergence by considering a model incorporating valence valence can be interpreted as the non policy basis of political judgement made by the electorate concerning the quality of political contenders the theorem presented here shows that there is a necessary condition for convergence the condition involves the difference in party valences and the electoral variance when the condition fails the low valence parties will be forced to adopt policy positions far from the electoral centre the inference appears to be substantiated by an empirical model of the israel election in 1996 copyright 2007 wiley blackwell

can information costs affect consumer choice nutritional labels in a supermarket experiment this paper investigates whether information costs under currently regulated nutritional labeling prevent consumers from making healthier food choices we implement five nutritional shelf label treatments in a market level experiment these labels reduce information costs by highlighting and summarizing information available on the nutritional facts panel following a difference in differences and synthetic control method approach we analyze weekly store level scanner data for microwave popcorn purchases from treatment and control stores our results suggest that consumer purchases are affected by information costs implemented low calorie and no trans fat labels increase sales in contrast implemented low fat labels decrease sales suggesting that consumer response is also influenced by consumers taste perceptions a combination of these claims into one label treatment increases information costs and does not affect sales significantly

carbon labelling of grocery products public perceptions and potential emissions reductions abstract public perceptions of a uk carbon labelling trial were assessed via three focus groups the public found it very difficult to make sense of labelled emissions values without additional information there was also little evidence of a willingness to use labels for product selection there is a strong case for using carbon reduction labels to indicate a programme of on going emissions reductions rather than expecting consumers to incentivise emissions reductions by actively choosing the lower carbon variant of two or more products the normalisation issues and emissions reduction potential of carbon labelling are discussed

vote motivated candidates abstract we study stochastic voting models where the candidates are allowed to have any smooth strictly increasing utility functions that translate vote shares into payoffs we find that if a strict nash equilibrium exists in a model with an infinite number of voters then nearby equilibria should exist for similar large but finite electorates if the votes are independent random events then equilibria will not depend on the utility functions of the candidates our results have implications for existing models of redistributive politics and spatial competition as the properties of pure strategy equilibria in such games carry over to equilibria in games with arbitrary candidate preferences on the other hand candidate utility functions will matter if the individual voting decisions are correlated in the presence of aggregate uncertainty such as changing economic conditions or political scandals the preferences of parties and candidates with respect to shares of votes will have an effect on political competition

political influence economic interests and endogenous tax structure in a computable equilibrium framework with application to the united states 1973 and 1983 we consider the properties of a computable equilibrium model ofa competitive political economy in which the economic interestsof groups of voters and their effective influence on equilibriumpolicy outcomes can be explicitely distinguished and computed the model incorporates an amended version of the gemtap taxmodel calibrated to data for the united states for 1973 and1983 emphasis is placed on how the aggregation of gemtaphouseholds into homogeneous groups affects the numericalrepresentation of interests and influence for representativemembers of each group

a model of stability and persistence in a democracy abstract we develop an intertemporal model of political competition which accounts for three stylized facts of political life in representative democracies i political stability and the absence of discrimination ii a limited degree of political competition and iii the persistence of different political outcomes in otherwise similar economies in our model political stability is desirable for risk averse voters voters only vote for decent policy proposals which do not discriminate against single groups we derive properties of the set of possible political outcomes and study the issue of robustness against renegotiation journal of economic literature classification numbers c72 d70 d72

local equilibrium equivalence in probabilistic voting models abstract electoral equilibria depend upon candidates motivations maximization of expected vote share may not lead to the same behavior as maximization of the probability of winning the election accordingly it is desirable to understand when electoral equilibria are insensitive to the choice of candidate motivations this paper examines sufficient conditions for local equilibrium equivalence between expected vote share maximization and maximization of probability of victory in the spatial model of elections with probabilistic voters

are contributors rational untangling strategies of political action committees empirical public choice literature and casual observation suggest that the behavior of political action committees is remarkably unsophisticated meaning that pacs give to those legislators who would support their interests anyway thus it is suggested that contributor behavior deviates from rational behavior which is a cornerstone of economic analysis in this paper a switching regression model is estimated that allows for strategies of pacs to vary for different contribution recipients i analyze the behavior of farm pacs over three election cycles in contrast to previous findings i find that contributor behavior is not inconsistent with rational behavior contributors who attempt to influence the voting behavior of members of congress give the most money to legislators whose constituency interest suggests that they are likely to be undecided on how to vote and pacs give less money to legislators who represent districts with larger farm populations because those legislators are likely to vote in con

voluntary eco labeling and the price premium international environmental organizations propose voluntary eco labeling as a market incentive to promote industry to operate in an ecologically sustainable and environmentally friendly manner a microeconomic analysis questions whether voluntary eco labeling will cause producer profits in a competitive industry to decline and whether eco labeling will necessarily generate different prices for labeled and unlabeled product using wood product as an example results identify conditions that may exist when firms lose profits even under a voluntary system and where existing production constraints may lead to a single price regardless of labeling

informal barriers and agricultural trade does monetary integration matter eu enlargement and the recent sovereign debt crisis of euro zone countries have revived the debate around the european monetary union emu in this article we ask how informal barriers to agricultural and food trade have changed since the introduction of the common european currency and whether this evolution can be attributed to monetary integration we focus on the foreign trade of the 11 emu founder countries over a nine year period covering the creation of the emu and find a diminishing marginal trade impact of both information and institutional barriers we find a lower level of trade barriers but cannot attribute this outcome to the introduction to the euro

a political economic model of u s bilateral trade a bstract interrelationships between economics and politics have long been recognized by scholars in the field of international relations this paper attempts to identify and quantify the factors aflecting bilateral trade flows between the united states and other countries by developing a gravity type model the model includes economic and political variables and is tested using data for sixty six u s trading partners results indicate that pure economic variables which reflect market forces are not the only factors affecting u s bilateral trade semi cconomic and international political factors are also important

relying on the information of interested parties we investigate the conventional wisdom that competition among interested parties attempting to influence a decisionmaker by providing verifiable information elicits all relevant information we find that if the decisionmaker is strategically sophisticated and well informed about the relevant variables and about the preferences of the interested party or parties competition may be unnecessary to achieve this result if the decisionmaker is unsophisticated or not well informed competition is not generally sufficient if the interested parties interests are sufficiently opposed however or if the decisionmaker is seeking to advance the parties welfare then competition can reduce or even eliminate the decisionmaker s need for prior knowledge about the relevant variables and for strategic sophistication in other settings only the combination of competition among information providers and a sophisticated skepticism is sufficient to allow effective decisionmaking

a theory of voting in large elections this paper provides a game theoretic model of probabilistic voting and then examines the incentives faced by candidates in a spatial model of elections in our model voters strategies form a quantal response equilibrium qre which merges strategic voting and probabilistic behavior we first show that a qre in the voting game exists for all elections with a finite number of candidates and then proceed to show that with enough voters and the addition of a regularity condition on voters utilities a nash equilibrium profile of platforms exists when candidates seek to maximize their expected margin of victory this equilibrium 1 consists of all candidates converging to the policy that maximizes the expected sum of voters utilities 2 exists even when voters can abstain and 3 is unique when there are only 2 candidates