do better schools matter parental valuation of elementary education the evaluation of numerous school reforms requires an understanding of the value of better schools given the difficulty of calculating the relationship between school quality and student outcomes i turn to another method and use house prices to infer the value parents place on school quality i look within school districts at houses located on attendance district boundaries houses then differ only by the elementary school the child attends i thereby effectively remove the variation in neighborhoods taxes and school spending i find that parents are willing to pay 2 5 percent more for a 5 percent increase in test scores this finding is robust to a number of sensitivity checks

industrial actions in schools strikes and student achievement many jurisdictions ban teacher strikes on the assumption that they negatively affect student achievement but there is surprisingly little research on this question the majority of existing studies make cross section comparisons of the achievement of students who do or do not experience a strike they conclude that strikes do not have an impact i present new estimates of this impact of strikes using an empirical strategy that controls for fixed student characteristics at the school cohort level and a sample of industrial actions by teachers in the province of ontario the results indicate that teacher strikes in grades 5 or 6 have a negative statistically significant impact on test score growth between grade 3 and grade 6 the largest impact is on math scores 29 of the standard deviation of test scores across school grade cohorts greves dans les ecoles greves et resultats scolaires plusieurs juridictions prohibent les greves de professeurs a partir du postulat qu elles affectent negativement les resultats des etudiants mais il y a et c est surprenant peu de recherches sur cette question la plupart des etudes qui existent font des comparaisons transversales des resultats des etudiants qui ont et n ont pas subi de greves on conclut que ces greves n ont pas d impact l auteur presente de nouvelles evaluations de cet impact des greves a partir d une strategie empirique qui normalise pour certaines caracteristiques fixes des etudiants au niveau de la cohorte et qui porte sur un echantillon de greves par des professeurs dans la province de l ontario les resultats montrent que les greves de professeurs en 4e et 5e annee ont un impact statistiquement significatif sur la progression dans les tests standardises entre la 3e et la 6e annee l impact le plus important est en mathematique de l ordre de 29 dans l ecart type des resultats des tests pour les cohortes d ecole niveaux

the role of fees in patent systems theory and evidence this paper reviews the economic literature on the role of fees in patent systems two main research questions are usually addressed the impact of patent fees on the behavior of applicants and the question of optimal fees studies in the former group confirm that a range of fees affect the behavior of applicants and suggest that a patent is an inelastic good studies in the latter group provide grounds for both low and high application or pre grant fees and renewal or post grant fees depending on the structural context and policy objectives the paper also presents new stylized facts on patent fees of 30 patent offices worldwide it is shown that application fees are generally lower than renewal fees and renewal fees increase more than proportionally with patent age 2012 john wiley sons ltd

the double marginalization problem of transfer pricing theory and experiment in this paper we find that the idea of using optional two part tariffs as a basis for tariff renegotiations in a bilaterally monopoly setting is a solution to the double marginalization problem that theoretically 1 creates a stable equilibrium 2 at the overall efficient level 3 without the presence of a central management through experimental testing we find that the efficiency of this mechanism is significantly higher than the efficiency of simple direct negotiation both under symmetrically and asymmetrically distributed information

how teachers unions affect education production this study helps to explain why measured school inputs appear to have little effect on student outcomes particularly for cohorts educated since 1960 teachers unionization can explain how public schools simultaneously can have more generous inputs and worse student performance using panel data on united states school districts i identify the effect of teachers unionization through differences in the timing of collective bargaining especially timing determined by the passage of state laws that facilitate teachers unionization i find that teachers unions increase school inputs but reduce productivity sufficiently to have a negative overall effect on student performance union effects are magnified where schools have market power

managing channel profits a channel of distribution consists of different channel members each having his own decision variables however each channel member s decisions do affect the other channel members profits and as a consequence actions a lack of coordination of these decisions can lead to undesirable consequences for example in the simple manufacturer retailer consumer channel uncoordinated and independent channel members decisions over margins result in a higher price paid by the consumer than if those decisions were coordinated in addition the ensuing suboptimal volume leads to lower profits for both the manufacturer and the retailer this paper explores the problems inherent in channel coordination we address the following questions what is the effect of channel coordination what causes a lack of coordination in the channel how difficult is it to achieve channel coordination what mechanisms exist which can achieve channel coordination what are the strengths and weaknesses of these mechanism what is the role of nonprice variables e g manufacturer advertising retailer shelf space in coordination does the lack of coordination affect normative implications from in store experimentation can quantity discounts be a coordination mechanism are some marketing practices actually disguised quantity discounts we review the literature and present a simple formulation illustrating the roots of the coordination problem we then derive the form of the quantity discount schedule that results in optimum channel profits this article was originally published in marketing science volume 2 issue 3 pages 239 272 in 1983

teachers unions and wages in the 1970s unionism now pays this paper provides evidence that confirms the results of previous studies that teacher unionism produced relatively small wage gains during the early 1970s but it also shows that union gains increased substantially in the late 1970s the evidence is based on an application of two complementary research designs cross section wage level regressions and cross section wage change regressions to national samples of teacher data for 1974 75 and 1977 78 the authors conclude that the union nonunion wage differential among teachers reached 12 to 22 percent by the late 1970s and during the period 1974 78 the real wages of unionized teachers increased while those of nonunionized teachers declined they offer several possible explanations for these trends

union nonunion wage differentials in the public administration educational and private sectors 1970 1983 over the past thirty years union membership and bargaining activity in the united states has been declining in the private sector and rising in the public sector the authors use two large micro databases to estimate changes in the union wage premium among public administration education and private sector workers for the decade of the 1970s and early 1980s their empirical analysis indicates that the union relative wage effects continue to be lower in the public sector than in the private sector despite the relative gains in public sector union membership and bargaining activities copyright 1987 by mit press

the grace period in international patent law and its effect on the timing of disclosure abstract the paper applies a novel methodology to us and epo patent data to assess how often the general grace period exception is used in the usa and the likely impact of international patent regulations that almost invariably deny such use on the pace of new disclosures in academia comparisons of average publication delays of european academic inventors show that the grace period accelerates knowledge communication and that variations are likely to depend on a lack of harmonisation of international legal systems transaction costs and the presence of a firm among patent assignees

nonunion wage rates and the threat of unionization i investigate how the threat of union organization affects the wage paid to nonunion workers i start by outlining the standard model of wage determination by a nonunion employer when faced with the threat of union organization the model suggests that the nonunion wage will be directly related and the union wage gap will be inversely related to the threat i use repeated cross section data from the cps from 1977 2002 to develop a measure of the threat as the predicted probability of union membership i use this measure to estimate earnings functions that use several sources of variation in the likelihood of union membership to identify the threat effect in a manner that reduces the likelihood of omitted variable bias finally i investigate two cases where there has arguably been a change in the likelihood of union organization that is not correlated with changes in the demand for labor these include the wage changes surrounding the introduction of rightto work rtw laws in two states during the period studied and wage changes surrounding deregulation of key industries in the late 1970s and early 1980s the results are mixed the preferred estimates from the analysis using predicted probability of unionization as the threat measure imply very little relationship between either nonunion wages or the union wage gap and the threat the estimates that rely on the introduction of rtw laws show a significant relationship between nonunion wages and the introduction of rtw laws in one of the two states stronger evidence of threat effects is found in the experience of deregulated industries where regulation was a central factor in union strength

cost based transfer pricing under r d risk aversion in an integrated supply chain abstract this paper examines the economic role of transfer pricing for a vertically integrated supply chain when a risk averse production division manager faces uncertainty on the outcomes from r d investment in particular we compare two representative cost based transfer pricing methods full cost and variable cost pricing we construct an economic model based on the assumption that r d investment reduces the expected fixed costs of a production factor as well as the variable production costs we show that a firm s profit under full cost transfer pricing is greater than that under variable cost transfer pricing under certainty contrary to this benchmark result variable cost pricing becomes more profitable than full cost pricing when the risk averse manager bears relatively high risk

union effects on nonunion wages evidence from panel data on industries and cities the authors test for threat and crowding effects of unions on non union wages at the industry and city levels using panel data on the percent organized and nonunion industry and city wage differentials constructed from current population surveys over the period 1973 89 at the industry level increases in the percent organized were associated with decreases in the nonunion industry wage differential suggesting that crowding effects were the predominant union effect on nonunion industry wage differentials in contrast at the city level increases in the percent organized were associated with increases in the nonunion city wage differential suggesting that threat effects predominated the authors also find evidence of negative cross occupation union effects on nonunion industry wage differentials supporting their hypothesis that the industry level results were partly driven by complementarity between union and nonunion labor

evidence on the validity of cross sectional and longitudinal labor market data this article investigates error properties of survey reports of labor market variables we use the panel study of income dynamics psid validation study a two wave panel survey of workers employed by a large firm that shared its detailed payroll records individuals reports of annual earnings are fairly accurate errors are negatively related to true earnings reducing bias due to measurement error when earnings are used as an independent variable biases are moderately larger for changes in earnings earnings per hour are less reliably reported than annual earnings biases in estimating earnings functions are relatively small but those in labor supply functions may be important

a survey of the economics of patent systems and procedures the last several decades have seen increases in patenting activity worldwide as well as growing issues related to patent quality in response to these quality issues a recent patent literature has emerged that investigates the behavior and incentives of patent examiners applicants and third parties in this paper we provide an overview of patent procedures patent systems and a survey of the new economic literature on patent systems both theoretical and empirical papers are considered policy implications coming from this literature are presented

the effect of teachers unions on education production evidence from union election certifications in three midwestern states using a unique data set on teachers union election certifications from iowa indiana and minnesota i estimate the effect of teachers unions on school district resources and on student educational attainment my empirical strategy allows for nonparametric leads and lags of union age i find no impact on teacher pay or per student district expenditures but that unions increase teacher employment by 5 i find no class size effect because of enrollment increases in unionized districts and i estimate that unions have no net effect on high school dropout rates these findings highlight the importance of correctly measuring unionization status

unions and nonunion wage dispersion previous research has found that union standard rate policies lower the dispersion of union wages and that unions indirectly raise nonunion wage levels as firms weigh the probability of unionizing and wage costs these two findings imply that unions lower the dispersion of nonunion wages since for a given payroll a nonunion firm can achieve the greatest reduction in the probability of unionism by giving raises to those who would benefit most from a union this hypothesis is confirmed on current population survey data taking into account the endogeneity of unionism ceteris paribus nonunion wage dispersion is lower in more highly unionized industries copyright 1987 by mit press

bargaining laws as a cause and consequence of the growth of teacher unionism this study analyzes state level data for 1959 78 to determine whether the rapid growth of teacher unionism during those years was primarily a result or a cause of the public sector bargaining laws adopted during the same period the author finds contrary to the view of some scholars that the enactment of laws requiring public sector employers to bargain with majority representatives of their employees was the single most important cause of the growth in the proportion of teachers covered by union contracts although the growth in teacher unionism in turn encouraged the adoption of some new or stronger bargaining laws this effect was relatively weak more important predictors of new bargaining laws included the extent of political patronage in a state and the bargaining laws adopted by neighboring states

economic impacts of new unionization on private sector employers 1984 2001 economic impacts of unionization on employers are difficult to estimate in the absence of large representative data on establishments with union status information estimates are also confounded by selection bias because unions could organize at highly profitable enterprises that are more likely to grow and pay higher wages using multiple establishment level data sets that represent establishments that faced organizing drives in the united states during 1984 1999 this paper uses a regression discontinuity design to estimate the impact of unionization on business survival employment output productivity and wages essentially outcomes for employers where unions barely won the election e g by one vote are compared with those where the unions barely lost the analysis finds small impacts on all outcomes that we examine estimates for wages are close to zero the evidence suggests that at least in recent decades the legal mandate that requires the employer to bargain with a certified union has had little economic impact on employers because unions have been somewhat unsuccessful at securing significant wage gains

gray market trade with product information service in global supply chains abstract this paper investigates the economic effects of a product information service when potential consumers who are segmented by their taste exist in gray markets specifically we construct an economic model that considers a multinational firm mnf who expands business to a country and chooses whether to provide information service regarding product characteristics if receiving the information consumers in a specific segment whose taste suits the characteristics have positive utility from consuming the product while those in other segments have no utility by contrast consumers in all segments have positive expected utility before consuming the product without information with these settings we demonstrate that there arises the equilibrium that the mnf provides no information service when gray market trade i e parallel trade is allowed in the country leading to lower consumer welfare than when it is prohibited a primary finding in the equilibrium is that such a situation arises especially when potential consumers are less segmented in this situation the regulator in the country should ban the parallel imports so as to enhance consumer welfare the result is counterintuitive and notable because one might intuitively infer that gray market trade is less desirable when customers are more minutely segmented and the product information service is thus more specific and necessary

transfer pricing mechanisms an experimental investigation abstract this study evaluates in a laboratory setting the performance of the ronen and mckinney 1970 and the ronen 1992 transfer pricing schemes both mechanisms possess in theory the property of inducing efficient production and truth telling while decision making autonomy is maintained the ronen mckinney scheme however allows for multiple nash equilibria and if the divisions managers coordinate their messages they are expected to exploit the mechanism at the expense of the overall profitability of the firm the ronen 1992 scheme was designed to prevent this towards this end a penalty factor was incorporated into the original ronen mckinney scheme to make truth telling and optimal production a unique equilibrium the basic results are that under the ronen mckinney scheme and with coordination of messages being allowed subjects collude and earn significantly higher profits than amounts implied by the overall optimal solution without the penalty factor subjects seemed not to converge towards the efficient level of transacting at the end of the experiment it is not clear whether with additional trials such conversion would have occurred the inclusion of the penalty factor however eliminated the collusive behaviour in fact most of the pairs implementing the ronen mechanism reached the efficiency predicted by the theory whether or not coordination of messages was allowed

applicant behaviour in patent examination request lags abstract one component of the duration of pending patents why applicants choose to delay the examination process is modelled we use a matched sample of 9597 patent applications to examine this issue controlling for differences between patent offices we find evidence that applicants create investment uncertainty by delaying decisions to request patent examination

double marginalization and cost pass through weyl fabinger and cowan meet spengler and bresnahan reiss consider the classical double marginalization problem of single product successive monopolies we show that the ratio of the cost pass through at the final sale relative to that at the wholesale level is characterized by the curvature of inverse demand in the final market we also apply cowan s 2012 method which utilizes the idea of pass through in an analysis of third degree price discrimination to compare consumer surplus under vertical integration and separation

intrafirm trade arm s length transfer pricing rule and coordination failure abstract this paper demonstrates that uniform imposition of the arm s length principle on transfer pricing leads to coordination failure among countries in terms of economic welfare if the countries trade products in the form of intrafirm transactions by multinational firms mnfs to highlight this implication we first show that imposition of the arm s length principle on an mnf induces it to transfer a product among subordinate divisions at marginal cost i e the competitive price which is consistent with the purpose of the principle nonetheless if regulators in each country impose the principle on mnfs all of the following economic welfare measures decrease compared with the situation where the principle is not imposed 1 consumer welfare in each of the trading countries 2 profit of each mnf and thus 3 total world economic welfare this result indicates that it is possible that enforcement of the principle has no positive effect at all in the world because economic welfare of all economic agents deteriorates when the principle is imposed a numerical analysis demonstrates that this possibility arises in a broad range of circumstances even including the situation where a giant economic world power and a small underdeveloped country mutually trade products in these circumstances an agreement among trading countries that no country imposes the arm s length principle may encourage pareto improvement of the world economy

the effect of unionism on fringe benefits this study analyzes the impact of unionism on fringes paid to production workers using data on individual establishments it compares fringe expenditures in establishments having the same level of compensation per hour and finds that unionism raises the share of compensation allotted to fringes particularly to pensions vacation pay and life accident and health insurance in addition since unionism also raises the straight time wage rate itself a prime determinant of expenditures on fringes unionism has a very sizeable impact on total fringe expenditures as well as on the fringe share of compensation the union fringe effect exceeds in percentage terms the union wage effect and is sufficiently large to suggest that standard union wage studies understate the union effect on total compensation the study also compares the fringe expenditures of production and non production workers within the same establishment controlling for within establishment pay policies the findings suggest that the pres

the impact of new unionization on wages and working conditions this study investigates the impact of union organization on the wages and labor practices of establishments newly organized in the 1980s it uses a research design in which establishments are paired with their closest nonunion competitor it finds that unionism had only a modest effect on wages in the newly organized plants which contrasts sharply with the huge union wage impact found in cross section comparisons of union and nonunion individuals but unionism substantially alters several personnel practices creating grievance systems greater seniority protection and job bidding and posting that newly organized establishments adopt union working conditions but grant only modest wage increases suggests that collective voice rather than monopoly wage gains is the key to understanding new unionism

asymmetric information incentives and price cap regulation a regulatory incentive mechanism is presented in which the regulated firm has superior information about both cost and demand compared to the regulator the mechanism leads to truthful revelation of the demand function and extracts all rents due to private demand information in a nondistorting way the scheme assumes that the regulator can observe lagged expenditures by the firm this mechanism leads to efficient pricing operating and investment behavior by the firm finally it is shown that the mechanism is closely related to recent proposals for price cap regulation and that under certain assumptions simple modifications of these proposals will lead to the mechanisms discussed herein

teacher pay and school productivity exploiting wage regulation abstract the impact of teacher pay on school productivity is a central concern for governments worldwide yet evidence is mixed in this paper we exploit a feature of teacher labour markets to determine the impact of teacher wages teacher wages are commonly set in a manner that results in flat wages across heterogeneous labour markets this creates an exogenous gap between the outside labour market and inside regulated wage for teachers we use the centralised wage regulation of teachers in england to examine the effect of pay on school performance we use data on over 3000 schools containing around 200 000 teachers who educate around half a million children per year we find that teachers respond to pay a ten percent shock to the wage gap between local labour market and teacher wages results in an average loss of around 2 in average school performance in the key exams taken at the end of compulsory schooling in england

an economic analysis of deferred examination system evidence from a policy reform in japan we investigate how a deferred patent examination system promotes ex ante screening of patent applications which reduces both the number of granted patents and the use of economic resources for examinations without reducing the return from r d based on a real option theory we develop a model of examination request behaviors exploiting the responses of japanese firms to recent policy reform we find that the shortening of the allowable period for an examination request significantly increases both eventual and early requests controlling for the blocking use of a pending patent application this effect is stronger in technology areas with higher uncertainty these results support the importance of uncertainty for an applicant and of ex ante screening

state collective bargaining laws and public sector pay using the public use microdata sample from the 2005 to 2015 american community survey the authors provide new evidence on how state collective bargaining laws affect public sector wages to isolat

teacher unions and the cost of public education do teacher unions affect the cost of public education based upon data from two national surveys and holding measures of educational output and other factors constant the authors of this paper find that teacher unions raise costs by 7 to 15 percent the estimated differential is not reduced by treating unionization as endogenous by distinguishing between large and small districts or by distinguishing between districts in large and small cities the union effect on cost works through teacher compensation production technology and factor use and is borne primarily by taxpayers with little or no effect on average student achievement

the scope of bargaining and bargaining outcomes in the public schools this study examines state to state variations in the legality of bargaining over class size in public schools to determine first whether these variations in the legal scope of bargaining bear any relationship to actual class sizes and second whether these variations are indirectly associated with teachers salaries using a model of the quality of education to analyze data from the 1977 census of governments on 4 851 independent school districts the author concludes that restrictions on class size bargaining are associated with both larger student teacher ratios and higher teachers salaries he also finds that the availability of voluntary arbitration and the limited right to strike are related to lower student teacher ratios

quality choice and vertical integration abstract we show that despite coordination in the quality level of the components that they provide independent vertically related disintegrated monopolists will provide products of lower quality level than a sole integrated monopolist further the integrated monopolist achieves higher market coverage higher consumer surplus and higher profits we establish these results for any distribution of preferences in the standard model of quality differentiation despite the lower quality we also show that for a wide class of cost functions price will be higher in a market of independent vertically related monopolists all results are the effects of the interaction of double marginalization occurring in the market of independent monopolists with the choice of quality