welfare criteria from choice an axiomatic analysis abstract we propose an axiomatic approach to the problem of deriving a linear welfare ordering from a choice function admissibility requires that the ordering assigned to a rational choice function is the one that rationalizes it neutrality states that the solution covaries with permutations of the alternatives persistence stipulates that the ordering assigned to two choice functions is also assigned to every choice function in between we prove that these properties characterize the sequential solution the best alternative is the alternative chosen from the universal set the second best is the one chosen when the best alternative is removed and so on we also discuss some alternative axioms and solutions

commuting patterns and firm decentralization since most employed individuals must travel between home and work on a daily basis work place commuting has provided the point of departure for the monocentric model of residential location alonso 1964 mills 1972 muth 1969 one of the major behavioral assumptions of the monocentric model is that consumers prefer less commuting to more all else equal hence the model predicts that workers will take advantage of any opportunity to reduce their commutes in the monocentric situation in which all employment is located at the central business district cbd no such opportunity arises however decentralized firm location enables workers to shorten their commutes as firms have left the cbd to move into the residential area the monocentric model thus predicts that if firms have decentralized workers should have very short commutes in longrun equilibrium however significant commuting persists in the face of large scale firm decentralization such commuting leads to the belief that frictions with respect to residential and job mobility exist which prevent workers from achieving the long run equilibrium solution predicted by the monocentric model in this paper i hypothesize that individuals with greater job and residential mobility will have shorter commutes given decentralized firm location residential and job mobility are further hypothesized to be functions of socio economic and employment characteristics the results show sex income race household responsibilities and job mobility to be important in determining commuting behavior the monocentric model is based on a separation of the house and work place theoretically this separation can be measured either in terms of commuting time or distance however most tests of the monocentric model have used commuting distance hamilton 1982 blackley and follain 1987 the time vs distance issue is explicitly addressed in this paper by using both measures in the estimations the results

on the job search behavior the importance of commuting time using search theory we show that job search effort is increasing and under some conditions convex in commuting time we show that the effect of commuting time on job search effort levels may be small in case of uncertainty caused by future job and residential moving behavior thus we provide a microeconomic explanation for the finding that commuters behave as if they are footloose our empirical analysis supports the behavioral implications of the model for the netherlands surprisingly we do not find any evidence that the effect of commuting time on search behavior depends on the commuters socioeconomic characteristics

a bivariate duration model for job mobility of two earner households abstract in recent years we have observed an increasing interest in the job mobility patterns of employed persons a new issue in this context is the mutual dependence of job mobility choice of workers who belong to the same household in the present paper we focus on bivariate duration models of stock sampled data in which dependence is induced through mixing we apply the estimation method on the basis of an empirical study on the mutual dependence of job mobility of workers belonging to a two earner household in the netherlands an interesting empirical result is that the marginal willingness to pay for a reduction in commuting time in a two wage earner household is higher than that usually found for single earner workers

an experiment on the pure theory of consumer s behaviour by checking whether consumer demand satisfies the axioms of revealed preference one can test the empirical validity of the neoclassical theory of consumer behaviour however applying the axioms to actual consumer purchase data is difficult if not impossible since it poses serious problems of both a methodological and a practical nature after commenting on the few existing empirical studies in this field we summarise the results from an experimental approach to revealed preference theory data were obtained through a controlled experiment that involved real consumption of the goods chosen we find that most subjects violated the axioms

well being and or quality of life in eu countries through a multidimensional index of sustainability abstract the aim of my paper is to demonstrate that sen s theory of well being can be applied to make the concept of sustainable human development operational through the building of a multidimensional index of sustainability which takes into account at the same time economic social and environmental variables this index may be considered an alternative to the current measures of welfare sustainability since not only conventional measures such as gdp but also multi attribute indices such as human development index hdi genuine savings index of sustainable economic welfare isew etc are found to be inadequate to make the concept of sustainable development operational therefore the limitations of these measures of welfare sustainability justify the search for a new index of sustainability this index will show at the operational level how sen s theory of well being can be useful to sustainable development it was applied to eu countries using the standardised deviation methodology being the closest and most suitable methodology to be adopted for building multidimensional indices the factor analysis methodology will also be used in my paper lastly the comparison between sen s trend of sustainability and gdp trend index number which are both of them applied to italy will show how much the criticisms and the limitations directed towards the indicator of gdp are founded

inequality aversion versus risk aversion inequality aversion and risk aversion are widely assumed in economic models however existing economic literature fails to distinguish between the two this paper presents methodology and a laboratory experiment which separates inequality aversion from risk aversion in a set of laboratory experiments subjects had to choose between two risky alternatives which pay meaningful prizes with the same individual risk but different levels of egalitarianism thus the choice of the more egalitarian alternative implies a higher level of inequality aversion the experiment was conducted among children some of whom live on a communal system kibbutz and some in the city

the chicago fire of 1871 a bottom up approach to disaster relief can bottom up relief efforts lead to recovery after disasters conventional wisdom and contemporary public policy suggest that major crises require centralized authority to provide disaster relief goods using a novel set of comprehensive donation and expenditure data collected from archival records this paper examines a bottom up relief effort following one of the most devastating natural disasters of the nineteenth century the chicago fire of 1871 findings show that while there was no central government relief agency present individuals businesses corporate entities and municipal governments were able to finance the relief effort though donations the chicago relief and aid society a voluntary association of agents with a stake in relief outcomes leveraged organizational assets and constitutional rules to administer aid

the economics of water conserving technology adoption in tunisia an empirical estimation of farmer technology choice economic theory tells us that increases in the relative prices of natural resources should cause farmers to switch to techniques that use fewer farming resources the adoption of resource conserving technology is one possible response that can lead toward a more environmentally sustainable outcome do farmers respond to changes in natural resource prices and quality by adopting available resource conserving technology this article investigates a case study of decisions made by tunisian farmers as to whether or not they should invest in water conserving drip irrigation technology as a function of natural resource prices and quality along with farm and farmer characteristics in contrast to many studies of technology adoption this work uses both the standard revealed preference analysis of who adopts and a direct elicitation of the reasons for adoption or nonadoption by farmers by reviving an ancient methodology the direct question to elicit real preferences from farmers the research goes beyond the restrictive assumptions of the commonly used random utility models the combination of these techniques allows triangulation on the causes of technology adoption and helps insure that the results are more than a statistical artifact excerpt

government clubs and constitutions abstract this paper analyzes constitutional effectiveness the degree to which constitutions can be enforced in the system of government vs the system of clubs i argue that clubs have residual claimants on revenues generated through constitutional compliance operate in a highly competitive environment and permit individuals to sort themselves according to their governance needs these features make their constitutional contracts self enforcing government lacks these features so its constitutional contract is not institutional augmentations that make government more club like such as federalism democracy and limited government scope improve government s constitutional effectiveness but constitutional effectiveness remains superior in the system of clubs

sentimental fools a critique of amartya sen s notion of commitment abstract commitment is problematic because one sometimes pursues it against one s interest to solve it the paper proposes a distinction between non binding and binding commitments non binding commitment is about ambition such as becoming a great chef which bolsters welfare in the pecuniary sense as well as self respect in contrast binding commitment is about honesty while it diminishes welfare it augments self integrity the neoclassical view reduces both commitments to interest while the multiple self approach separates both commitments from interest the separation permits the confusion of sentimental fools who enter commitments without regard to interest with rational sentimentalists who take interest into consideration

is there a local knowledge advantage in federations evidence from a natural experiment in economics the local knowledge advantage is arguably one of the key arguments in favor of decentralizing the public sector however empirical investigations of this particular effect have been scarce this paper tests the existence of the local knowledge advantage in a real world setting specifically it looks at the variation in local knowledge across regions based on the origins and careers of regional politicians assuming that politicians who have spent more time in a particular region possess more and better knowledge of that region than outsiders to avoid the reverse causality problem the paper investigates how local origins affected the performances of politicians in a natural experimental environment studying the responses of regional governors in russia to disastrous forest fires in 2010 we confirm that local knowledge improves gubernatorial performance in a highly centralized federation such as russia though the effect is dependent on access to federal resources obtainable through close ties to the federal center we also discuss alternative interpretations of the local origins of politicians and test whether the effects found are indeed more plausibly explained by local knowledge

valuing health care using willingness to pay a comparison of the payment card and dichotomous choice methods this paper compares willingness to pay wtp estimates generated from the dichotomous choice dc and payment card pc approaches in a split sample wtp experiment concerned with allocating scarce health care resources across three health care interventions the dc approach is shown consistently to generate larger welfare estimates than the pc observed difference between pc and dc experiments cannot be explained by the inclusion of non demanders or methods of statistical analysis but may be partly explained by yea saying no evidence of range bias or mid point bias was found with pc responses data were also collected on respondents ordinal rankings of the three interventions and person trade offs ptos neither of these approaches converged with wtp future work must address the decision heuristics individuals employ when responding to valuation experiments

voluntary donations and public expenditures in a federal system proponents of the new federalism argue that nonprofit organizations and local governments will fully offset federal social service expenditure cutbacks the author analyzes this proposition as a competitive game in which donations are motivated by private and public good considerations the author characterizes the response of political economic equilibrium to exogenous changes in federal expenditures when local voters are cognizant of donor reactions partial replacement is the most likely outcome though others are possible copyright 1987 by american economic association

migration and job change a multinomial logit approach abstract a multinomial logit model of residence and job change is developed and estimated both housing demand and job search characteristics are found to be significant determinants of the decision to migrate it is also found that both equilibrium and disequilibrium forces induce migration and job change finally the data do not appear to be ordered with respect to job and residence change contingencies with the exception of changing neither job nor residence relative to all other contingencies

indifference or indecisiveness choice theoretic foundations of incomplete preferences abstract a commonly held belief in economics is that an individual s preferences that are revealed by her choices must be complete this paper takes issue with this position by showing that one may be able to distinguish between indifference and indecisiveness of an agent upon observing her choice behavior we relax the standard weak axiom of revealed preferences warp and show that a potent theory of individual choice with and without risk can be founded on this weaker axiom when it is coupled with some other standard postulates the most notable features here are that an agent is allowed to be indifferent between certain alternatives and indecisive about others moreover an outside observer can identify which of these actually occur upon examining the observable choice behavior of the decision maker as an application we also show how our theory may be able to cope with the classical preference reversal phenomenon

contextual inference in markets on the informational content of product lines context can influence decisions this malleability of choice is usually invoked as evidence that people do not maximize stable preference orderings in a market equilibrium however context conveys payoff relevant information to consumers consequently these consumers rationally violate naive formulations of standard choice theoretic principles i identify informational asymmetries under which apparently anomalous behaviors namely the compromise effect and choice overload arise as market equilibria firms respond to consumers contextual inference in case of the compromise effect a firm may introduce premium loss leaders expensive goods of overly high quality that increase the demand for other goods

are patient regarding preferences stable evidence from a laboratory experiment with physicians and medical students from different countries abstract we quantify patient regarding preferences by fitting a bounded rationality model to data from an incentivized laboratory experiment where chinese medical doctors german medical students and chinese medical students decide under different payment schemes we find a remarkable stability in patient regarding preferences when comparing subject pools and we cannot reject the hypothesis of equal patient regarding preferences in the three groups the results suggest that a health economic experiment can provide knowledge that reach beyond the student subject pool and that the preferences of decision makers in one cultural context can be of relevance in a very different cultural context

testing the standard urban model of residential choice an implicit markets approach abstract important implications of the standard economic model of urban residential choice have failed dramatically to survive empirical tests in recent studies these results however do not distinguish between failure of the model s behavioral foundations a trade off of access to jobs and housing costs and failure of auxiliary assumptions needed to derive testable hypotheses from the model from an implicit markets model of the housing market we derive a test that better isolates the predictive power of access and housing cost as determinants of residential decisions and find substantial improvement in the model s empirical performance compared with other recent work

internal consistency of choice internal consistency of choice has been a central concept in economics decision theory and social choice this idea is essentially confused we cannot determine whether a choice function is consistent without referring to something external to choice e g objectives values the standard results have to be reexamined in this light kenneth j arrow s general possibility theorem is extended in this paper without demanding any internal consistency of social choice or any notion of social rationality copyright 1993 by the econometric society

citizens and wetlands evaluating the ely citizens jury abstract a citizens jury cj is a method to aid decision making by public bodies and is loosely based on the idea of a criminal jury ordinary members of the public acting in their capacity as citizens concerned with the public good rather than consumers concerned with private interest are drawn together to reach a public decision the jury is independent and its verdict is expected to carry some authority derived from an understanding that the jury is representative and the deliberation is satisfactory a cj was organised as part of a larger uk study which also conducted a contingent valuation survey on broadly the same valuation issue land use in a former wetland region in cambridgeshire uk a major aim of the study was to investigate whether cjs allow views of a different kind to those captured by contingent valuation surveys to be expressed views couched in terms of public benefits right and wrong and the common good if this is true cjs offer a promising forum for articulating views and even recommending decisions about public goods including environment features

dynamic learning and context dependence in sequential attribute based stated preference valuation questions a hybrid stated preference model is presented that combines the referendum contingent valuation response format with an experimentally designed set of attributes a sequence of valuation questions is asked to a random sample in a mailout mail back format econometric analysis shows greater discrimination between alternatives in the final choice in the sequence and the vector of preference parameters shifts lead and lag choice sets have a structural influence on current choices and unobserved factors induce positive correlation across the responses these results indicate that people learn about their preferences for attributebased environmental goods by comparing attribute levels across choice sets

commuting in search of jobs and residences abstract this paper introduces a model which includes residential job moving and commuting behavior when labor and housing markets are characterized by market imperfections imperfect information and moving costs we examine the consequences of these market imperfections on commuting behavior an empirical analysis of commuting behavior indicates that workers commute less if they receive more job offers

an empirical analysis of the commute to work patterns of males and females in two earner households the purpose of this paper is to empirically investigate the proposition that residential decisions are made with reference to the male head of household s job location disadvantaging females in the labor market a sample of approximately 50 000 adults in two earner households in urban areas distributed across the united states is selected from public use microdata from the 1980 census and used to estimate a simultaneous model to explain commute to work behavior of men and women the model is estimated separately for households that did and did not change residences in the past year the impacts of the new residences on the commute times of both male and female workers holding other variables constant are compared we conclude that residential selection does favor males relative to females although there is evidence that this advantage is eliminated as the ratio of female to male earnings in the same household narrows

a comparison of two methods for eliciting contingent valuations of colorectal cancer screening willingness to pay wtp is being used increasingly in health technology assessment although a number of methodological issues remain unresolved using data obtained from a randomised questionnaire survey we investigated the metrical properties of two wtp formats the open ended question versus the payment scale in the context of screening for colorectal cancer approximately 2800 responses were analysed household income attitudes toward health promotion and personal risk perceptions were the principal determinants of the nature and value of response in comparison with the open ended format the payment scale achieved a higher completion rate and generated higher valuations we believe that a framing effect is the most plausible explanation for these differences in performance in contrast to previous findings we do not find subjects perceptions of the resource cost of interventions to be a convincing explanation for either their wtp values or inconsistencies between values and preferences although a proportion of respondents protested at the notion of valuation the majority offer positive valuations although typically of a lower value that non protesters

rationalizing choice with multi self models this paper studies a class of multi self decision making models proposed in economics psychology and marketing in this class choices arise from the set dependent aggregation of a collection of utility functions where the aggregation procedure satises some simple properties we propose a method for characterizing the extent of irrationality in a choice behavior and use this measure to provide a lower bound on the set of choice behaviors that can be rationalized with n utility functions under an additional assumption scale invariance we show that generically at most ve reasons are needed for every mistake

constitutions and the growth of government abstract i examine the role of a constitution in limiting government when citizens can observe the exercise of power by government easier than the net benefits of an action constitutional prohibitions conserve citizens scarce capacity to monitor government and increase the benefit from use of the remaining powers factors affecting the desirability of limited government are analyzed i present evidence that expansions in the scope of government in the united states preceded growth in the size of government which is consistent with my model of a constitution as conserving monitoring capacity

when more alternatives lead to less choice this paper shows that when the alternatives offered to consumers span the preference space as it would be chosen by a firm search or evaluation costs may lead consumers not to search and not to choose if too many or too few alternatives are offered if too many alternatives are offered then the consumer may have to engage in many searches or evaluations to find a satisfactory fit this may be too costly and result in the consumer avoiding making a choice altogether if too few alternatives are offered then the consumer may not search or choose fearing that an acceptable choice is unlikely these two forces result in the existence of a finite optimal number of alternatives that maximizes the probability of choice

procedural analysis of choice rules with applications to bounded rationality i study how limited abilities to process information affect choice behav ior i model the decision making process by an automaton and mea sure the complexity of a specific choice rule by the minimal number of states an automaton implementing the rule uses to process informa tion i establish that any choice rule that is less complicated than utility maximization displays framing effects i then prove that choice rules that result from an optimal trade off between maximizing utility and minimizing complexity are history dependent satisficing procedures that display primacy and recency effects jel d01 d03 dil d83 in 1981 an internal study by american airlines found that travel agents booked the first flight that appeared on their computer screen 53 percent of the time and a flight that appeared somewhere on the first screen almost 92 percent of the time this provided an incentive for american to manipulate the order in which flights were listed on american s sabre computer reservation system which domi nated the market for electronic flight booking allegations by smaller airlines that american and united airlines which owned the second largest computer reserva tion system apollo engaged in such manipulations led the us federal govern ment to regulate screen display in computer reservation systems 1 this example in which the order of the alternatives affects decision making is by no means unique in elections for example being listed first on the ballot increases the likelihood of winning office mainly at the expense of candidates listed in the middle of the ballot 2 in competitions judges tend to award higher

self governance polycentrism and federalism recurring themes in vincent ostrom s scholarly oeuvre abstract this paper addresses vincent ostrom s treatment of self governance polycentrism and federalism through which he has generated a coherent vision of political economy after examining some ontological and epistemological presuppositions that are central to his work the rest of the paper explores four topical areas 1 his examination of knowledge belief and the requisites for good civic practice 2 his conceptualization of a polycentric public economy 3 his articulation of the problem of public administration through his conceptualization of a municipal services industry 4 his treatment of federalism as a compound republic rather than simply a form of administrative decentralization

why women work closer to home this paper analyzes the extent to which differences in labor force status in household composition and in household roles account for sex differences in workplace residence separation modelling work trip length as the outcome of the choice of household residential and individual job locations equilibrium work trip length is estimated empirically as a function of labor market housing and household characteristics for male and female employees in seven different household categories data from the 1976 panel survey of income dynamics are used the study concludes that while sex differences in job tenure work hours and wages are in themselves sufficient to fully account for observed sex differences in workplace residence separation sex differences in household roles i e responses to spouses characteristics are of even greater importance in influencing women to work closer to home

tests of locational equilibrium in the standard urban model the standard urban economic model was developed during the 1960s as economists sought to provide an economic explanation for important trends in urban spatial structure the principal works include alonso 1965 mills 1967 1972 muth 1969 and meyer kain and wohl 1965 the distinctive features of the model are the explicit introduction of spatial considerations and the concept of locational equilibrium an urban household achieves locational equilibrium when the marginal benefits of moving farther from the city center equal the marginal costs proponents of the standard model use it to argue that the urban decentralization observed in the u s is consistent with rational economic behavior