explaining cross cohort differences in life cycle earnings abstract college educated workers entering the labor market in 1940 experienced a 4 fold increase in their labor earnings between the ages of 25 and 55 in contrast the increase was 2 6 fold for those entering the market in 1980 for workers without a college education these figures are 3 6 fold and 1 5 fold respectively why are earnings profiles flatter for recent cohorts we build a parsimonious model of schooling and human capital accumulation on the job and calibrate it to earnings statistics of workers from the 1940 cohort the model accounts for 99 of the flattening of earnings profiles for workers with a college education between the 1940 and the 1980 cohorts 52 for workers without a college education the flattening in our model results from a single exogenous factor the increasing price of skills the higher skill price induces i higher college enrollment for recent cohorts and thus a change in the educational composition of workers and ii higher human capital at the start of work life for college educated workers in the recent cohorts which implies lower earnings growth over the life cycle

generalized travel cost model and water quality benefits a reconsideration with federal agencies required to conduct benefit cost analyses for each new major regulation analyses of water quality changes are likely to be an increasingly important part of the policymaking process a revised version of the travel cost demand model and illustrations show the importance of these revisions for the model s estimates although the magnitude of the difference in benefit estimates between the original and new versions of the model varies with the specific recreation site selected the findings indicate that the original model generally implied estimated benefits from three to over 30 times as large as the revised model this implies that judgment can play an important role in the definition and use of economic models as well as the need for better information on households recreation decisions and more complete description of recreation site characteristics 15 references 4 tables

a hedonic travel cost analysis for valuation of multiple components of site quality the recreation value of forest management abstract one benefit of managing forests is that one can alter the qualities of sites the value of changing site qualities however is generally not known this paper develops a formal hedonic travel cost model which can be used to estimate the value of both marginal and non marginal changes to sites the approach accommodates multiple simultaneous changes in site characteristics estimating this model using a set of permits from wilderness areas leads to revealed preference estimates of the recreational value of clear cuts old growth and nine other wilderness attributes

budget balancing incentive mechanisms abstract a p xepapadeas j environ econom management20 113 26 1991 developed a pollution abatement incentive mechanism that both reduces the information requirements of a regulator and is budget balancing drawing only on the social gains from pollution abatement to encourage firm compliance this paper demonstrates that contrary to xepapadeas the budget balancing system of random penalties cannot be used to induce compliance with the regulator s objectives if firms are risk neutral however the mechanism can be successfully applied if firms are sufficiently risk averse e rasmusen rand j econom 18 428 435 1987

sources of lifetime inequality is lifetime inequality mainly due to differences across people established early in life or to differences in luck experienced over the working lifetime we answer this question within a model that features idiosyncratic shocks to human capital estimated directly from data as well as heterogeneity in ability to learn initial human capital and initial wealth we find that as of age 23 differences in initial conditions account for more of the variation in lifetime earnings lifetime wealth and lifetime utility than do differences in shocks received over the working lifetime jel d31 d91 j24 j31 to what degree is lifetime inequality due to differences across people established early in life as opposed to differences in luck experienced over the working lifetime among the individual differences established early in life which ones are the most important a convincing answer to these questions is of fundamental importance first and most simply an answer serves to contrast the potential importance of the myriad policies directed at modifying or at providing insurance for initial conditions e g public education against those directed at shocks over the working lifetime e g unemployment insurance second a discussion of lifetime inequality cannot go too far before discussing which specific type of initial condition is the most critical for determining how one fares in life third a useful framework for answering these questions should also be central in the analysis of a wide range of policies considered in macroeconomics public finance and labor economics we view lifetime inequality through the lens of a risky human capital model agents differ in terms of three initial conditions initial human capital learning ability and financial wealth initial human capital can be viewed as controlling the intercept of an agent s mean earnings profile whereas learning ability acts to rotate

on the intergenerational transmission of economic status we present a model in which human capital investments occur over the life cycle and across generations a la becker and tomes the human capital technology features multiple stages of childhood investments college and life cycle accumulation the model can explain a wide range of intergenerational relationships while remaining empirically consistent with cross sectional inequality much of the latter is determined by early investments in children so that borrowing constraints faced by young parents are important for understanding the persistence of economic status across generations education subsidies especially early on can significantly reduce the intergenerational persistence of economic status

the opportunity cost of travel time in recreation demand models deciding how to allocate forage among animals is a fundamentally important process in range management the wisdom of these decisions can be enhanced by estimating the marginal value of forage needed by competing species we present a method for

natural resource economics and conservation contributions of agricultural economics and agricultural economists research by agricultural economists on natural resources has been distinguished by an interdisciplinary emphasis and a dynamic perspective it has recognized technological and institutional constraints has been oriented toward solving concrete resource management and policy problems and has emphasized empirical and quantitative analysis agricultural economists have introduced methods for evaluating natural resource conservation efforts for predicting adoption of resource conservation technologies and for designing efficient and sustainable resource management policies they have identified ways of improving land management and preventing land degradation proposed reforms of institutions governing water allocation and water quality and introduced policies for balancing environmental and efficiency considerations in the management of pests biodiversity and livestock diseases their research has had substantial impacts on the formulation of resource conservation policies

are ideas getting harder to find in many growth models economic growth arises from people creating ideas and the long run growth rate is the product of two terms the effective number of researchers and their research productivity we present a wide range of evidence from various industries products and firms showing that research effort is rising substantially while research productivity is declining sharply a good example is moore s law the number of researchers required today to achieve the famous doubling every two years of the density of computer chips is more than 18 times larger than the number required in the early 1970s across a broad range of case studies at various levels of dis aggregation we find that ideas and in particular the exponential growth they imply are getting harder and harder to find exponential growth results from the large increases in research effort that offset its declining productivity

illegal landings an aggregate catch self reporting mechanism to solve the problem of illegal landings this article proposes a new tax mechanism based on the regulator s own aggregate catch estimates and ex ante self reports of planned catch by fishermen we show that the mechanism avoids illegal landings while ensuring nearly optimal exploitation and generating nearly correct entry and exit incentives finally we simulate the mechanism for the danish cod fishery in kattegat to obtain a rough indicator of the size of the tax it turns out that the average tax payment as a percentage of profit is surprisingly low

self selecting agri environmental policieswith an application to the don watershed we consider a model of regulation for nonpoint source water pollution through non linear taxation subsidization of agricultural production farmers are heterogenous along two dimensions their ability to transform inputs into final production and the available area they possess asymmetric information and participation of farmers to the regulation scheme put constraints on the optimal policy that we characterize we show that a positive relationship between size of land and ability may exacerbate adverse selection effects we calibrate the model using data on a french watershed and we simulate the optimal second best policy and characterize the allocation of the abatement effort among the producers

voluntary threat approaches to reduce ambient water pollution this article considers the regulation of nonpoint source water pollution through the use of a voluntary threat approach which allows a polluter group to meet a standard voluntarily but imposes an ambient tax upon noncompliance in particular we develop an endogenous voluntary threat approach that can be parameterized to induce compliance as a unique subgame perfect nash equilibrium and eliminate zero abatement equilibria experimental evidence on the proposed approach as well as the exogenous approach of segerson and wu 2006 suggests that the severity of the threatened tax and the opportunity for communication are critical in determining policy outcomes

performance of the ambient tax does the nature of the damage matter the ambient tax is often considered as an efficient instrument to achieve a first best outcome of ambient pollution when the regulator cannot observe individual emissions or when monitoring costs are prohibitive while this view is supported to a large extent by experimental findings there remains several hurdles that hinder the implementation of the ambient tax in the field one of these hurdles is the nature of the damage experimental findings suggest that the efficiency of the ambient tax is higher under external damage i e if ambient pollution affects non polluters spraggon in j public econ 84 427 456 2002 than under internal damage i e if ambient pollution affects polluters themselves cochard et al in environ resour econ 30 393 422 2005 but this result rests on very different experimental settings therefore we designed a new experiment that allows to compare external and internal damage within a common setting our main finding is that the ambient tax is equally efficient under internal and external damage

efficiency of nonpoint source pollution instruments an experimental study in nonpoint source pollution problems the regulator does not observe each polluter s individual emission which prevents him from using the conventional policy instruments therefore new instruments have been designed to regulate this type of pollution in an experiment we compare the efficiency of some of these instruments an input based tax an ambient tax subsidy an ambient tax and a group fine we assume that polluters themselves are affected by environmental damages a control session without any regulation is also carried out in order to study the status quo situation our experimental data show that the input tax and the ambient tax are very efficient and reliable and the group fine is fairly efficient and reliable these instruments improve social welfare with respect to the status quo on the contrary the ambient tax subsidy decreases social welfare with respect to the status quo and its effect is very unreliable

the gift of the dying the tragedy of aids and the welfare of future african generations this paper simulates the impact of the aids epidemic on future living standards in south africa i emphasize two competing effects on the one hand the epidemic is likely to have a detrimental impact on the human capital accumulation of orphaned children on the other hand widespread community infection lowers fertility both directly through a reduction in the willingness to engage in unprotected sexual activity and indirectly by increasing the scarcity of labor and the value of a woman s time i find that even with the most pessimistic assumptions concerning reductions in educational attainment the fertility effect dominates the aids epidemic on net enhances the future per capita consumption possibilities of the south african economy

the hedonic travel cost model a view from the trenches accessible to them consequently it is reasonable to expect that economic models of these decisions will recognize the role of recreation sites characteristics for individual demands and that they will allow for the possibility that the individual s optimal choices may not involve interior solutions in all the available recreation sites in response to these expectations the recent literature has seen a number of innovations in recreation demand models one of these models is based on a fundamen

a damage based tax mechanism for regulation of non point emissions in a recent paper segerson 1988 proposed a novel incentive mechanism for stochastic non point emissions based on ambient pollution concentrations in nature for specification of the mechanism when the damage function is nonlinear the regulator must know polluters cost and emission functions the mechanism also gives incentives to form coalitions among polluters which if they are formed render the mechanism inefficient in this paper we propose a revised mechanism which eliminates the need for knowledge of polluters cost and emission functions and reduces the probability of coalition forming a standards and pricing version of the revised mechanism with both properties mentioned is also developed

the regulation of non point source pollution under imperfect and asymmetric information abstract this paper develops a bayesian framework for discussing the role of information in the design of non point source pollution control mechanisms an ambient concentration tax is examined allowing for spatial transport among multiple zones imposition of the tax requires costly measurement of concentrations in selected zones and the selection of zones for measurement must be undertaken without perfect information regarding several parameters of the problem potentially crucial information issues discussed include a the impact of asymmetric priors regarding fate and transport b the cost of measuring ambient concentration and c the optimal acquisition of information regarding fate and transport

nonpoint source pollution taxes and excessive tax burden if a regulator is unable to measure firms individual emissions an ambient tax can be used to achieve the socially desired level of pollution with this tax each firm pays a unit tax on aggregate emissions in order for the tax to be effective firms must recognize that their decisions affect aggregate emissions when firms behave strategically with respect to the tax setting regulator under plausible circumstances their tax burden is lower under an ambient tax relative to the tax which charges firms on the basis of individual emissions firms may prefer the case where the regulator is unable to observe individual firm emissions even if this asymmetric information causes the regulator to tax each firm on the basis of aggregate emissions

selection and recreation demand increased use of on site and user group surveys to estimate travel cost demand models e g caulkins bishop and bowes smith and desvousges has raised inevitable questions about the significance of relying on demand estimates derived solely from surveys of users many of the questions relate to selection effects that is the potential for specification errors and bias caused by an inability to reflect the decisions of nonusers with these types of surveys this issue has received some attention in the recreation literature brown et al bockstael and mcconnell but specific empirical evidence on the implications of alternative approaches for estimating demand models from on site surveys does not exist this article reports the first such evidence using a data set based on a general population sample to compare five methods for estimating travel cost demand models with microdata the findings suggest that the differences in the demand and in the benefit estimates raised by treating the problem using models with either single heckman or double selection catsiapis and robinson ham poirier effects are small however the effects of using alternative estimators for site demands are not these findings are limited because they apply to only one site nonetheless they do highlight the importance of the assumptions used to consider the behavior of nonusers consequently they provide direct motivation for more detailed conceptual and empirical work on the choice processes underlying recreation decisions

environmental policy under imperfect information incentives and moral hazard abstract when net emissions of individual polluters cannot be efficiently monitored then emissions charges controls on emissions levels or subsidies for emissions reduction are not effective as environmental policy instruments this paper proposes instruments that can be applied in such limited information situations these instruments take the form of contracts between a pollution control agency and individual polluters the contracts include a combination of fines and subsidies that induces dischargers to follow optimal environmental policies in the absence of individual monitoring

human capital and the wealth of nations we reevaluate the role of human capital in determining the wealth of nations we use standard human capital theory to estimate stocks of human capital and allow the quality of human capital to vary across countries our model can explain differences in schooling and earnings profiles and consequently estimates of mincerian rates of return across countries we find that effective human capital per worker varies substantially across countries cross country differences in total factor productivity tfp are significantly smaller than found in previous studies our model implies that output per worker is highly responsive to changes in tfp and demographic variables jel e23 i25 j24 j31 o47 no question has perhaps attracted as much attention in the economics literature as why are some countries richer than others much of the current work traces back to the classic work of solow 1956 solow s seminal paper suggested that differ ences in the rates at which capital is accumulated could account for differences in output per capita more recently following the work of lucas 1988 human capital disparities were given a central role in the analysis of growth and development however the best recent work on the topic reaches the opposite conclusion klenow and rodriguez clare 1997 hall and jones 1999 parente and prescott 2000 and bils and klenow 2000 argue that most of the cross country differences in output per worker are not driven by differences in human capital or physical capital rather they are due to differences in a residual total factor productivity tfp in this paper we revisit the development problem in line with the earlier view we find that factor accumulation is more important than tfp in accounting for relative incomes across countries the key difference between our work and previous analyses is in the measurement of human capital the standard approach largely inspired by the work of mincer 1974 takes estimates of the rate of return to schooling as building blocks to directly measure a country s stock of human capital implicitly this method assumes that the marginal contribution to output of one additional year

estimating recreation preferences using hedonic travel cost and random utility models over the last decade several authors have questioned the validity of the hedonic travel cost model arguing instead that the random utility model is a superior method for valuing recrea tional site attributes this paper demonstrates that the two methods emanate from a similar utility theoretic framework yet in practice these methods differ in the assumptions made in their appli cation constraining the underlying utility functions to be consistent both models are applied to the valuation of recreational site attributes in the southeastern united states the way in which each method estimates preferences for site attributes is shown to depend critically on the method and the functional form of the underlying utility function micro economic theory began as an attempt to describe predict and value the demand and supply of consumption goods quality was largely ignored in initial theoretical treatises goods were assumed to be homogeneous over the last two decades however economists have started to address quality within the theory of demand environmental economists have extended the theory further to value the quality of recreational sites an important component of land management two distinct approaches for incorporating quality into recreational analyses have emerged the hedonic travel cost method htc and the discrete choice random utility methods rum the hedonic method views site attributes as though they were individual goods which are bundled together in a single purchase the random utility model treats quality as an index which is estimated by examining a discrete choice of alternative sites facing a consumer because the mathematical derivations for the hedonic rosen 1974 and random utility models mcfadden 1978 are quite different many practitioners do not recognize that both models are based on a common utility theoretic foundation in the first section of this paper we show how the hedonic and random utility methods are consistent with the same utility framework

ambient based pollution mechanisms a comparison of homogeneous and heterogeneous groups of emitters abstract over the last two decades ambient based tax mechanisms have been offered as a potential solution to the problem of nonpoint source water pollution previous theoretical analyses suggest that the performance of ambient based tax mechanisms does not depend on firm characteristics such as size whilst policy discussions advocate that such mechanisms are best suited for regulating relatively homogeneous firms using controlled laboratory experiments we provide empirical evidence that the distribution of firm sizes does have a significant impact on observed group decision making and further that heterogeneity has the potential to generate both some relatively desirable outcomes as well as some outcomes that are not attractive these results suggest that richer theoretical models that capture important strategic interactions and social preferences are needed to better describe laboratory behavior and by extension behavior in potential policy settings

regulation of non point emissions a variance based mechanism non point emission problems such as pesticide nitrate and phosphorus pollution of lakes and ground water are often characterised by a small number of polluters convex damage functions and stochastic emissions some regulatory mechanisms proposed in the literature for stochastic non point emissions implement the optimal abatement vector in dominant strategies ensuring that non nash conjectures cannot be rationalized however specification of these mechanisms requires firm level information and differentiated rates when the damage function is convex other mechanisms eliminate the need for firm level information and rate differentiation but only implement optimum in nash strategies where non nash conjectures that cause equilibrium to stray from optimum can be rationalized in this paper we propose a mechanism which eliminates the need for firm level information and rate differentiation while retaining implementation in dominant strategies

ambient taxes when polluters have multiple choices economic research on environmental policy design has largely been concerned with the merits of emissions based economic incentives e g emissions charges emissions reduction subsidies transferable discharge permits ambient based tax subsidy schemes have drawn considerable interest in nonpoint pollution literature as alternatives to emissions based instruments expanding especially on segerson s seminal article this article examines the optimal design and budget balancing properties of ambient tax subsidy schemes under more realistic assumptions about the dimensions of firms choice sets than prior research

the baby boomers and the productivity slowdown abstract the entry of baby boomers into the labor force in the late 1960s and 1970s slowed growth for physical and human capital per worker because young workers have little of both thus the baby boom could have contributed to the productivity slowdown i build and calibrate a model a la huggett et al 2011 with exogenous population growth life expectancy retirement and tfp to evaluate this theory the baby boom alone accounts for 53 of the slowdown in the period 1964 69 18 in 1970 74 and 6 in 1975 79

modeling recreation demand within a random utility framework abstract this paper develops a single site single trip random utility model for describing recreation behavior the model is applied to a 1981 survey of households in the pennsylvania monongahela river basin hicksian benefit estimates derived from it are compared with those from a more conventional travel cost model estimated from the same survey

combining farrell frontier and hedonic travel cost models for valuing estuarine quality a 1992 survey of tennessee anglers was used to determine who is fishing and how often the species they fish for and how anglers perceive the regulatory structure the results are based on telephone interviews with 450 active licensed an glers nearly 81 of the anglers visited a tennessee reservoir in 1992 while 41 fished warm water streams 28 farm ponds and 22 trout streams over 60 pre ferred separate regulations for reservoirs active reservoir fishermen were more likely to support individual regulations the participants were evenly split on whether a proposed regulation which has public support should be imposed even if the manage ment agency does not feel the fishery would benefit eighty percent of the anglers indicated that existing fishing regulations were not complicated proc annu conf southeast assoc fish and wildl agencies 47 767 774 proper administration of fishery resources requires management authorities to have knowledge of the angler population served by the management agency specifically authorities should be aware of the type and intensity of angler activi ties and understand angler preferences concerning existing and proposed management alternatives to the degree that certain types of fishermen are less likely to support management policies authorities should target educational pro grams specifically at non supportiv e anglers to gain greater public support for biologically viable management strategies this study uses data gathered from a survey of tennessee anglers to deter mine who is fishing and how often the species they are targeting and how anglers perceive the regulatory structure we report the demographic factors of anglers which exhibit statistically significant relationships to angler support for the current

a comparison of user benefits and costs of nature conservation at three nature reserves willis k g and benson j f 1988 a comparison of user benefits and costs of nature conservation at three nature reserves reg studies 22 417 228 benefits from conserving wildlife at three sites of special scientific interest are estimated using a travel cost method recording demand in terms of actual site visits these benefits are compared to the costs of nature conservation both the financial cost which is or could be incurred under the wildlife and countryside act 1981 and also the social costs of the agricultural output forgone after protective tariffs and subsidies of the common agricultural policy have been removed willis k g et benson j f 1988 une comparaison des avantages et des couts de la defense de l environnement aux usagers a trois reserves naturelles reg studies 22 417 228 on estime les avantages de la protection de la faune a trois sites d inter t scientifique special a partir d une methode qui calcule les frais de trajet enregistrant la demande en fonction des visi

human capital prices productivity and growth separate identification of the price and quantity of human capital has important implications for understanding key issues in labor economics and macroeconomics price and quantity series are derived and subjected to robustness checks the human capital price series associated with dierent education levels are highly correlated and exhibit a strong secular trend three result

estimating the structural equations of implicit markets and household production functions whenever marginal prices are nonconstant as in most hedonic and household production function markets ordinary least squares estimates of the price elasticities of structural equations will be biased a two stage least squares estimation procedure is developed and applied to estimate hedonic and potentially household production function demand functions when price gradients are nonlinear

research issues in nonpoint pollution control research on nonpoint pollution control instruments has focused primarily on incentives applied either to production inputs that affect nonpoint pollution or to ambient pollution concentrations both approaches may in theory yield an efficient solution however input based incentives will generally have to be second best to make implementation practical design issues include which inputs to monitor and the rates to apply to them the limited research indicates that second best input based incentives can be effective in adjusting input use in environmentally desirable ways alternatively ambient based incentives have theoretical appeal because efficient policy design appears to be less complex than for input based incentives these incentives have no track record nor close analogues that demonstrate potential effectiveness however research on how households and firms might react in response to ambient based incentives is needed before these instruments can be seriously considered

human capital and earnings distribution dynamics abstract earnings heterogeneity plays a crucial role in modern macroeconomics we document that mean earnings and measures of earnings dispersion and skewness all increase in us data over most of the working life cycle for a typical cohort as the cohort ages we show that i a human capital model can replicate these properties from the right distribution of initial human capital and learning ability ii differences in learning ability are essential to produce an increase in earnings dispersion over the life cycle and iii differences in learning ability account for the bulk of the variation in the present value of earnings across agents these findings emphasize the need to further understand the role and origins of initial conditions

non point source regulation a self reporting mechanism abstract information feasible regulatory mechanisms that do not require the regulator to acquire firm level information have been proposed long ago for stochastic non point emission problems these mechanisms do not take polluter cooperation and firm entry exit incentives simultaneously into account nor are these issues addressed in an informationally efficient way in this paper we propose an informationally feasible self reporting mechanism that is robust to cooperation among polluters while giving participating firms correct abatement incentives as well as giving entry exit incentives that are correct to a first order approximation

individual travel cost method estimation and benefit assessment with a discrete and possibly grouped dependent variable the trip visit variable in the individual travel cost method is often regarded as discrete furthermore it is often reported in surveys as a grouped variable the number of visits reported falling into one of several classes this paper develops a travel cost model which takes account of discreteness and grouping in both demand and benefit estimation a case study and associated simulations are then reported which indicate the potential extent of bias that may arise from ignoring discreteness grouping in demand and benefit estimation the information loss involved in varying the size of visit classes is also examined

reversing property rights practice based approaches for controlling agricultural nonpoint source water pollution when emissions aggregate nonlinearly nonpoint source water pollution remains a major issue despite decades of research and sizable conservation programs we suggest that by taking advantage of contemporary modeling and optimization approaches good approximations to physical relationships can be constructed so that even in the presence of unobservable field emissions and nonlinear fate and transport relationships standard economic tools of command and control requirements performance standards and trading can be implemented the boone river watershed in the u s state of iowa is used for empirical demonstration although the approach can be used to construct voluntary conservation policies the described policies involve imposing requirements on agricultural polluters rather than relying on voluntary actions alone