on the political economy of educational vouchers abstract two significant challenges hamper the analyses of the collective choice of educational vouchers one is the multi dimensional choice set arising from the interdependence of the voucher public education spending and taxation second even absent a voucher preferences over public spending are not single peaked a middling level of public school spending may be less attractive to a household than either high public school spending or private education coupled with low public spending we show that besley and coate s 1997 representative democracy model provides a viable approach to overcome these hurdles we provide a complete characterization of equilibria with an endogenous voucher a voucher is adopted in political equilibrium provided the coefficient of variation of income is sufficiently small we undertake a parallel quantitative analysis and we find that no voucher arises in equilibrium for the u s income distribution which exhibits too much heterogeneity for a tighter income distribution including those in douglas county colorado where a voucher was recently adopted our model predicts a positive voucher public support for a not too large voucher arises because the cross subsidy to public school expenditure from those switching to private schools outweighs the subsidy to those who attend private school in the absence of a voucher

paired comparison and contingent valuation approaches to morbidity risk valuation abstract this research uses an experimental approach for eliciting consumer valuations of morbidity risk reductions associated with safter chemical products and introduces the paired comparison questions approach to non market valuation in four applications the paired comparisons approach yields higher morbidity valuations than the more familiar contingent valuation approach however both methodologies produce large values of morbidity reduction benefits in comparison to estimates derived from wage hedonic studies explanations for the difference in the estimates and their magnitudes are suggested along with the public policy implications

semi nonparametric distribution free dichotomous choice contingent valuation abstract we apply a semi nonparametric distribution free estimator for binary discrete response data to the estimation of a dichotomous choice contingent valuation model using this estimator mean and median compensating and equivalent variation can be consistently estimated without making nontheoretically motivated assumptions on consumer preferences the approach is illustrated using a contingent valuation survey of willingness to pay for reduction of risk of premature death due to exposure to hazardous waste we find that a conventional parametric estimator and the proposed estimator give similar estimates of unconditional wtp but that conditional on explanatory variables the estimates are quite different

differences between continuous and discrete contingent value estimates in a split sample contingent valuation study of willingness to pay wtp for food safety improvements the dichotomous choice dc elicitation method consistently generated much larger estimates of wtp than did a continuous method little or none of these differences was due to bias introduced by the statistical techniques used with the dc data most or all of the difference was due to differences in respondent behavior in addition the continuous wtp responses showed a significant scope effect while the dc responses did not the observed difference in behavior may be attributable in part to yea saying by dc respondents

valuing water supply reliability instead of creating water supply systems that fully insulate mankind from climate imposed water deficiencies it is possible that for municipal water systems a nonzero probability of water supply shortfall is efficient perfect water supply reliability meaning no chance of future shortfall is not optimal when water development costs are high designing an efficient strategy requires an assessment of consumer preferences pertaining to the reliability of water supply contingent valuations of both current and future shortfalls are reported the consistency of these measures is gauged using an expected utility model copyright 2000 oxford university press

vouchers and voting an initial estimate based on the median voter model one of the major concerns associated with school voucher proposals is that they will only benefit those who leave public schools in favor of private schools the children left behind in public schools are expected to necessarily be made worse off by such policies this paper provides evidence suggesting that children left behind in public schools will also benefit the available evidence suggests that after a voucher plan voter support for public schools will rise enough to increase the human capital of public school students despite the presence of negative peer group effects

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

competition between private and public schools vouchers and peer group effects a theoretical and computational model with tax financed tuition free public schools and competitive tuition financed private schools is developed students differ by ability and income achievement depends on own ability and on peers abilities equilibrium has a strict hierarchy of school qualities and two dimensional student sorting with stratification by ability and income in private schools high ability low income students receive tuition discounts while low ability high income students pay tuition premia tuition vouchers increase the relative size of the private sector and the extent of student sorting and benefit high ability students relative to low ability students

valuing the mortality risk of wildlife reintroduction heterogeneous risk preferences abstract this study is the first to value the mortality risk incurred from wildlife reintroduction we conducted choice experiments on wolf reintroduction in hokkaido japan in order to value the resulting mortality risk this process involves three unique factors the mortality risk is zero before the reintroduction the increment of the risk caused by the reintroduction is substantially small and the risk largely depends on citizens individual characteristics concerning reintroduction because of these factors the heterogeneity of risk preference is expected to be large in order to examine these heterogeneous risk preferences we use a random parameter logit model the estimation results confirm that considerable heterogeneous risk preferences exist finally the mean marginal willingness to pay to prevent the loss of one person per one billion people because of wolf reintroduction is several hundred yen

a satisfactory benefit cost indicator from contingent valuation abstract standard economic concepts are used to develop a model of individual behavior when subject to the constraints of the contingent valuation choice context the model yields refutable consequences that are consistent with previously reported empirical findings including some that have been thought to be anomalous the model is used to show that different contingent valuation formats have predictably different performance characteristics notably the hicksian compensating measures are satisfactory benefit cost indicators when elicited using any one of several formats identified in the text of the formats examined one form of a policy referendum appears to have the most satisfactory characteristics overall we conclude that contingent valuation is a progressing research program

the mix of social and private provision of goods and services abstract in some countries health insurance and education are supplied as social goods at near zero prices and funded from taxation this paper analyses a case where such provision competes with income supplements as a redistribution device and where taxes or transferable vouchers influence the take up of the social goods compared to alternatives available in a private market each consumer chooses to consume either social or private goods and a vertical market segmentation results from differential demand for quality

is the median voter decisive evidence from referenda voting patterns abstract this paper examines whether the voter with the median income is decisive in local spending decisions previous tests have relied on cross sectional data while we make use of a pair of california referenda to estimate a first difference specification the referenda proposed to lower the required vote share for passing local educational bonding initiatives from 67 to 50 and 67 to 55 respectively we find that voters rationally consider future public service decisions when deciding how to vote on voting rules however the empirical evidence strongly suggests that an income percentile below the median is decisive for majority voting rules especially in communities that have a large share of high income voters with attributes that suggest low demand for public services based on a model that explicitly recognizes that each community contains voters with both high and low demand for public school spending we also find that an increase in the share of low demand voters is associated with a lower decisive voter income percentile for the high demand group this two type model implies that our low demand types individuals over age 45 with no children have demands that are 45 lower than other voters collectively these findings are consistent with high income voters with weak preferences for public educational services voting with the poor against increases in public spending on education

selective versus universal vouchers modelling median voter preferences in education under the majority voting rule a system of universally available vouchers uv is politically less feasible than a system of selective vouchers sv confined to families with incomes equal to or less than median voter income after the introduction of uv public expenditure on education will have to be shared with previous private school users per capita expenditure will then drop and or tax will increase since these events will injure the median voter he will reject uv he will be indifferent between the status quo and sv indifference will turn into enthusiasm however if as can be expected the new regime sv brings effective new competition this abstract was borrowed from another version of this item

intertemporal labor supply and the distribution of family income the earnings of married women have a more equalizing effect on the distribution of lifetime family earnings or the expected present value of earnings than on the distribution of annual family earnings using panel study of income dynamics longitudinal data the intertemporal variability of wives labor supply causes the correlation between the lifetime earnings of husbands and wives to weaken relative to the correlation between their annual incomes resulting in lower lifetime inequality the inequality of potential income full employment earnings is found to be much greater for lifetime earnings than average annual earnings based on alternative endogenous wage hours models copyright 1989 by mit press

educational vouchers and cream skimming educational vouchers and cream skimming epple and romano 1998 show equilibrium provision of education by public and private schools has the latter skim off the wealthiest and most able students and universal vouchers lead to further cream skimming here we study voucher design that injects private school competition and increases technical efficiencies without cream skimming conditioning vouchers on student ability without restriction on participating schools policies fails to affect significantly cream skimming however by adding restrictions like tuition constraints such vouchers can reap the benefits of school competition without increased stratification this is accomplished while allowing voluntary participation in the voucher system and without tax increases

endogeneity of risk perceptions in averting behavior models this paper examines the relationship between averting expenditures choices and perceived health risks models in the literature often employ risk perceptions as explanatory variables without addressing the potential endogeneity of the perceived risk we examine the implications of ignoring endogeneity in this context using an application to both drinking water choices and expenditures and perceived health risks our data are from an internet based cross canada survey that employs a novel interactive risk ladder to elicit mortality risk perceptions relating to water we employ two fundamentally different methods to assess the impact of risk perceptions on behavior an analysis of expenditures on alternate water sources and a model of proportional choice of water sources results suggest the presence of averting behavior with respect to perceived mortality risks and that the estimated effect of water risks is greater than 3 times higher when using approaches that correct for endogeneity compared to models that do not

erratum to competition incentives and public school productivity abstract when competition increases it is often presumed that public schools will be forced to become more efficient this paper challenges that presumption showing that in well defined circumstances rent seeking public schools find it optimal to reduce productivity when a voucher is introduced this occurs for incentive reasons alone more generally the productivity effects of vouchers are shown to be non uniform varying systematically according to household and community characteristics and the form the voucher takes when the voucher is targeted perverse productivity outcomes do not arise the analysis has relevance to the policy issue of voucher design

mobility targeting and private school vouchers simulations are derived from a three district model of low middle and highincome school districts calibrated to new york data with housing stocks that vary within and across districts in this model it is demonstrated that school district targeted vouchers are similar in their impact to nontargeted vouchers but vastly different from vouchers targeted to low income households furthermore strong migration effects are shown to significantly improve the likely equity consequences of voucher programs jel 122 128 h73 persistent frustration with the perceived low quality of public education exacerbated by concerns over the inherently unequal levels of public school quality across school districts has caused policy makers courts and researchers to investigate modifications and alternatives to the current public school system one idea that has received increasing academic and public attention is that of private school vouchers with proponents arguing that the competitive pressures of voucher programs would cause improvements in the efficiency of the publicschool system while at the same time addressing equity concerns if vouchers can be targeted to low income households or low income school districts but aside from a few limited experiments in some u s cities our experience with vouchers in the united states remains virtually nonexistent this limits the amount of information researchers can derive from standard empirical analysis in that it forces them to rely on only current nonvoucher induced differences in competition despite important suggestive results such work may not anticipate all the impacts from a large scale policy such as the voucher policies currently under discussion at the same time theoretical models of school finance are also limited in that they often either focus on only one particular aspect of the general equilibrium school finance problem or they are too rich and complex to yield crisp predictions

flexible functional form estimation of willingness to pay using dichotomous choice data abstract this paper introduces fully flexible semi nonparametric methods for calculating willingness to pay wtp bounded between zero and the respondent s income for dichotomous choice contingent valuation a method to estimate median wtp using fully flexible functional forms is also presented finally the numerical illustration demonstrates the importance of considering jensen s inequality in calculating wtp with nonlinear models

ends against the middle determining public service provision when there are private alternatives abstract public provision of a service coexists with private market provision the quality of public provision is determined by majority vote preferences are not single peaked owing to the presence of private alternatives we identify two cases in one majority voting equilibrium always exists and the median income voter is pivotal in the other a necessary condition for equilibrium indentifies the pivotal voter who must have income below the median when equilibrium exists a coalition of middle income households who consume the public alternative will be opposed by a coalition of rich and poor households with the rich choosing private consumption

tiebout choice and universal school vouchers abstract this paper examines who is likely to gain and who is likely to lose under a universal voucher program following epple and romano d epple r e romano competition between private and public schools vouchers and peer group effects american economic review 88 1998 33 62 d epple r e romano neighborhood schools choice and the distribution of educational benefits in c m hoxby ed the economics of school choice the univ of chicago press chicago 2003 pp 227 286 and nechyba t j nechyba mobility targeting and private school vouchers american economic review 90 2000 130 146 t j nechyba introducing school choice into multidistrict public school systems in c m hoxby ed the economics of school choice the univ of chicago press chicago 2003 pp 145 194 we focus on the idea that gains and losses under a universal voucher depend on two effects changes in peer group composition and changes in housing values we show that the direction and magnitude of each of these effects hinge critically on market structure i e the amount of school choice that already exists in the public sector in markets with little or no tiebout choice potential changes in peer group composition create an incentive for high socioeconomic ses households to vote for the voucher and for low ses households to vote against voucher in contrast in markets with significant tiebout choice potential changes in housing values create an incentive for high ses households to vote against the voucher and for low ses households to vote for the voucher using data on vote outcomes from california s 2000 voucher initiative we find evidence consistent with those predictions

valuing public goods a comparison of survey and hedonic approaches although the theory of public goods has progressed rapidly since paul samuelson s seminal article the empirical measurement of the value of demand for public goods only recently has received increased attention perhaps the best known and most widely accepted empirical approach has been the use of hedonic prices wherein for example it is assumed that either wages or housing values reflect spatial variation in public good characteristics of different communities this indirect approach based on theoretical work of charles tiebout kelvin lancaster sherwin rosen and others has proven quite successful among public goods or bads which have been valued using the hedonic approach are climate i hoch air pollution robert anderson and thomas crocker d harrison and d rubinfeld social infrastructure r cummings et al and other community characteristics such as noise level j nelson and ethnic composition ann schnare an alternative approach is to directly ask households or individuals to state their willingness to pay for public goods using survey techniques despite arguments that strategic bias will invalidate survey results there exists the need for an alternative to the hedonic approach as an example consider the case of a remote and unique scenic vista valuable to recreators which is threatened by air pollution from a proposed coal fired plant a typical situation in the western united states although it is possible in principle to impute the value of clean air and visibility from the relative decline in local visitation which might follow construction of a power plant information on the value of visibility at the site is needed prior to construction for socially optimal decision making on plant location and pollution control equipment the hedonic approach is unavailable both because the scarcity of local population as opposed to recreators makes use of wage or property value data impossible and because scenic vistas may themselves be unique for these reasons a randall et al first applied survey methods for valuing visibility and other environmental effects of large coal fired power plants in the four corners region of new mexico since this initial application the survey approach has been widely used to value environmental commodities where market data for hedonic analysis is difficult to acquire see for example brookshire ives and schulze rowe et al brookshire et al other early attempts to value public goods using the survey approach include r davis peter bohm and j hammack and g brown although results of using the survey approach for estimating the value of public goods appear to be internally consistent replicable and consistent with demand theory see schulze et al little work on external validation has been reported thus the purpose of this paper is to report on an experiment designed to validate the survey approach by direct comparison to a hedonic property value study the los angeles metropolitan area was chosen for the experiment because of the well defined air pollution problem and be assistant professor university of wyoming assistant professor university of missouri rolla associate professor university of wyoming and professor university of wyoming respectively the research reported here was funded under a grant methods development for assessing air pollution control benefits from the u s environmental protection agency we would like to give special thanks to alan carlin and shelby gerking for their helpful suggestions and contributions additional helpful comments were received from a myrick freeman iii john tschirhart and james murdoch all conclusions are of course our sole responsibility

problems in valuing the benefits of biodiversity protection this paper considers two problems in valuing the benefits of biodiversity protection these are firstly that preferences for biodiversity protection may be lexicographic rather than utilitarian the more individuals for whom this is true the less is cost benefit analysis validated as a means of decision making for biodiversity protection since lexicographic preferences are incompatible with the kaldor hicks compensation test secondly people may be poorly informed about the meaning of biodiversity complicating the use of contingent valuation as a means of measuring preservation benefits this paper first discusses the meaning of biodiversity and trends in diversity over time we offer some empirical evidence with regard to lexicographic preferences consider the implications of having poorly informed consumers and then report the results of a contingent valuation study of biodiversity protection with varying levels of information we find that willingness to pay for biodiversity protection increases with the level of information provided

educational vouchers welfare effects and voting abstract we analyze the welfare effects and voting equilibrium with vouchers for private schools the analysis shows that vouchers like tuition tax credits martinello and west 1988 frey 1983 may improve the welfare of all families including families whose children remain in public schools if public educational quality is unchanged and publicly financed educational expenditures decrease thus voters will approve a voucher only if it reduces taxes when public educational quality is endogenous a voucher may increase quality by reducing the tax cost of quality and will be approved if it reduce taxes at the pre voucher public education level and increases quality

evaluating change in objective ambiguous mortality probability valuing reduction in ambiguity size and risk level this article develops a valuation model to evaluate mortality probability changes under objective ambiguity where multiple mortality probabilities are exogenously given we construct the valuation model based on upalpha maxmin expected utility to evaluate the reduction in ambiguity size and risk level as well as estimate the subjects ambiguity attitude our model can bring an interesting policy implication if the subjects are ambiguity averse a reduction in ambiguity size with a constant risk level can increases welfare thus even if risk level cannot be lowered reduction in ambiguity size can also be used as a measure toward increasing welfare our model can empirically estimate this welfare change resulting from the reduction in ambiguity size to demonstrate how our model works we apply it to survey data on a public program that reduces mortality probability in accidents caused by wildlife

valuing the incremental benefits of groundwater protection when exposure levels are known both economic theory and psychological research indicate that benefit functions for reductions in health risk exposures may be conditional on current exposures using nitrates found in household wells it is demonstrated that perceptions of health risks across exposure levels are affected by the individual s current exposure level thus providing support for a conditional benefits function approach functions of conditional incremental benefits are estimated from a contingent valuation study of households that had been informed of their water test results incremental benefits reach a peak at an intermediate level of nitrates and then decline possible explanations for this non convexity are provided

expanding contingent value sample estimates to aggregate benefit estimates current practices and proposed solutions a mail survey was administered to a panel of colorado consumers to obtain estimates of willingness to pay wtp for preserving union park detailed socioeconomic data for all surveyed individuals was available a priori we develop and employ the multiple

uncertainty and measurement error in welfare models for risk changes abstract most welfare models of environmental or mortality risk reductions assume that risks are exogenously determined and known with certainty however a growing body of research suggests that uncertainty about risks can affect choices over risky prospects i present a decision weighted random utility model that decomposes welfare losses into those attributable to an increase in the deterministic component of risk and those attributable to uncertainty about risk i apply the model to an illustrative dataset of subjects perceived mortality risk and willingness to accept the risk of nuclear waste transport i estimate the model using lewbel s 2000 strictly exogenous regressor approach to account for endogeneity bias and measurement error subjects display aversion to both risk and uncertainty about the risk of a transport accident so that increases in either leads to social welfare losses roughly 12 of the external cost of nuclear waste transport is attributable to the public s uncertainty about transport risk

choice under uncertainty problems solved and unsolved ffifteen years ago the theory of choice under uncertainty could be considered one of the success stories of economic analysis it rested on solid axiomatic foundations it had seen important breakthroughs in the analytics of risk risk aversion and their applications to economic issues and it stood ready to provide the theoretical underpinnings for the newly emerging information revolution in economics 1 today choice under uncertainty is a field in flux the standard theory is being challenged on several grounds from both within and outside economics the nature of these challenges and of our profession s responses to them is the topic of this paper

public provision of private goods government may provide a good that can if legally permitted be supplemented by private purchases policy is determined by majority rule under standard assumptions on preferences a majority voting equilibrium exists a regime of positive government provision with no restriction on private supplements is shown to be majority preferred to a regime of either only market provision or only government provision combined public and private expenditure on the good is higher under this dual provision regime than under either of the alternatives under some preference configurations the median income voter is pivotal under others a voter with income below the median is pivotal

evaluating the effect of alternative risk communication devices on willingness to pay results from a dichotomous choice contingent valuation experiment two versions of a contingent valuation questionnaire that differ only in the device used to communicate risks from hazardous waste were sent to california households both risk communication devices provide wtp functions which vary in a statistically significant fashion with the absolute risk reduction however these empirical results also demonstrate that different risk communication devices produce statistically different logit equations and hence estimates of willingness to pay wtp for reductions in exposure to hazardous waste the pros and cons of using each risk communication device in cvm surveys is also discussed