wages and work conditions as determinants for physicians work decisions it is not uncommon that publicly employed physicians also have income from work outside the hospital sometimes termed moonlighting there is little empirical evidence of such activity in this article we investigate which factors that may influence physicians choice of work between the public hospital sector and elsewhere an exceptionally high wage increase in 1996 for one group of hospital physicians physician assistants serves as a natural experiment and we analyse whether wages in general and this reform in particular have affected physicians external earnings for physician assistants we find that higher wages at public hospitals affect negatively both the decisions to earn income externally and level of income once active for chief physicians on the other hand there was no such response to the wage increase several hospital specific factors representing job specific work characteristics also matter for physicians decisions to earn income externally

the second best core an economy with a single output and input is considered for the case of economies of scale in production equilibria are studied for a cooperative game of joint production in which goods are allocated by a price system the paper proposes a second best core in which allocations that are feasible for a coalition must be attainable by a price system existence is examined and properties of second best core allocations are analyzed copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

inverted block or lifeline rates and micro efficiency in the consumption of electricity abstract recent evidence indicates that the marginal cost of electricity exceeds average electricity rates a model is presented in this paper to investigate the conditions under which inverted block or lifeline rates could contribute to minimizing the deadweight loss associated with electricity consumption although conditions exist where inverted block rates might aggravate deadweight loss empirical evidence is presented suggesting that inverted block rates would in fact improve the efficiency of electricity consumption

the ramsey problem for congestible facilities abstract in recent years a new set of models drawing on vickrey 1969 has been developed to analyze the economics of congestible facilities these models are structural in that they derive the cost function from consumers time of use decisions and the congestion technology standard models in contrast simply assume the general form of the cost function we apply the new approach to analyze the ramsey problem for a congestible facility and show that the solution generally entails cost inefficiency standard models have failed to reveal this result because they treat the cost function as completely determined by technology

utility maximization individual production and market equilibrium the theory of the utility maximizing owner operator firm has been well known for years because of income effects the firm s short run product supply curve can be negatively sloped and its input demand curve may be positively sloped what is not well known is whether these results hold for the industry in the long run with entry the answer to this question has serious policy implications consider for example the physicians services sector in the early 1960s 70 percent of physicians were practicing solo there was an excess demand for physician services and the ama was pretty much acting as a cartel through a variety of policies the federal government 1 increased the demand for medical services 2 induced medical schools to double their capacity in a decade and 3 heavily subsidized education entry costs for new doctors health policymakers were amazed to observe that during the 1970s the price of physician services rose faster than the overall cpi moreover the number of patients seen per week per physician fell during this period one reaction to this set of events was that due to asymetrical information physicians must have been inducing increases in the demand for their services we show that under increasing factor costs reductions in entry costs can lead to increases in market price this finding is not possible to reach by looking at the short run theory of the firm alone in addition the result does not require a negative sloped product supply curve or similar perverse results there are many other sectors primarily comprised of small firms that are owned and operated by the same individual farming homebuilding restaurants small stores hairdressers travel agencies and consulting firms many of these sectors have obtained special tax breaks and subsidies from the federal government to encourage increases in supply using the standard theory of the firm these policies seem plausible in both the short and long run in this paper we demonstrate that the efficacy of such policies are questionable when one considers the special nature of these firms in the long run the literature on the utility maximizing owner operator began with scitovsky 13 who argued that utility and profit maximization may not be equivalent in the short run in the most

estimating the choice behavior of self employed business proprietors an application to dairy farmers the vast majority of business concerns operating in contemporary market oriented economies are owned and controlled by a single individual and perhaps family members yet little work has been performed in the area of estimating the choice behavior of self employed business proprietors particularly under conditions where production and consumption decisions are interdependent lau lin and yotopolous 16 barnum and squire 2 and others have developed models to analyze and estimate the complete choice behavior of farm households in developing nations these analyses invariably separate production and consumption decisions so that the sole link between the two sides of the model lies in the impact of farm profit on the household budget constraint this type of separability implicitly assumes the existence of perfect markets for all goods and inputs while this assumption may be a valid approximation for many farm households in developing economies it is not generally applicable to self employed proprietors especially those operating in more advanced economies 8 19 21 26 to my knowledge only two prior empirical studies have been performed which attempt to analyze the choice behavior of self employed business proprietors under conditions where production and consumption decisions are interdependent brown and lapan 4 employ aggregate u s time series data to estimate physician labor and output supply responses to changes in output price their estimation procedure centers on a single reduced form output supply equation parameter estimates are interpreted in the context of the theoretical framework assuming constant returns to scale technology and homothetic preferences they conclude that while the physician labor supply curve is backward bending the output supply curve is positively sloped lopez 19 formulates a model analyzing the interdependent production and labor supply decisions of households that own and operate a farm his framework integrates output input and labor supply choices and allows for differences in preferences between on farm and off farm work imposing constant returns to scale and using cross section canadian data aggregated by census division he jointly estimates output supply input demand on farm and off farm labor

the labor market impact of immigration a quasi experiment exploiting immigrant location rules in germany with the fall of the berlin wall ethnic germans living in eastern europe and the former soviet union were given the opportunity to migrate to germany within 15 years 2 8 million individuals had done so upon arrival these immigrants were exogenously allocated to different regions to ensure an even distribution across the country their inflow can therefore be seen as a quasi experiment of immigration i analyze the effect of these inflows on skill specific employment rates and wages the results indicate a displacement effect of 3 1 unemployed workers for every 10 immigrants that find a job but no effect on relative wages

the welfare effects of different pricing schemes for electricity distribution in finland the main components of electricity prices can be divided into the wholesale price the price of network operations and taxes even if the wholesale price is determined efficiently total welfare can be significantly disturbed if network operations are priced inefficiently in this study we calculate network prices based on four alternative methods these are marginal cost pricing ramsey pricing fdc pricing and optimal two part tariffs the welfare effects on the prevailing pricing system are compared we show that potentially significant improvements in welfare can be achieved by using marginal cost prices or optimal two part tariffs also ramsey pricing indicates that prevailing prices are inefficient

rural infrastructure transactions costs and market participation in kenya abstract we develop a conceptual framework for quantifying fixed transactions costs facing semisubsistence households using household survey data from a sample of 324 kenyan maize farmers we jointly estimate household supply and demand schedules and transactions costs econometric results indicate that on average the ad valorem tax equivalent of fixed transactions costs for households in our sample is 15 additional analysis indicates that economic isolation is positively associated with the size of transactions costs to the best of our knowledge ours are the first empirical estimates of the magnitude of fixed transactions costs for agricultural households in developing countries

optimal departures from marginal cost pricing focuses on departures from marginal cost pricing optimal allocation or resources level of tax revenue that will be collected by the government theorems developed for resource allocation ebsco

caveat emptor cross country data on education and the labor force abstract cross country data on education and the labor force frequently are used to describe important dimensions of development and to estimate models of economic growth and growth determinants the impact of education and related phenomena this investigation finds 1 there are serious intertemporal and inter country comparability problems with these data that may importantly affect inferences about labor force size trends and productivity and schooling investments and impact 2 data gaps are systematically related to levels of development and literacy and 3 conclusions about the determinants or consequences of development based on constructed data that have been made available to fill data gaps can be seriously misleading

optimum tariffs for vertically differentiated products with an application to indian tea exports optimum export tariffs are typically related to the elasticity of demand for exports in homogeneous goods markets in this paper we set up a simple model for large exporters of quality differentiated products and estimate optimum tariffs based on the quality of the good restrictions on demand parameters implied by the theoretical model are used in estimating demands for different qualities of indian tea exports we use the estimated model to find optimum tariffs for two qualities of indian tea exports and find that optimum export tariffs for high quality teas should on average be 14 higher than the tariff on low quality tea exports

the impact of the 1962 repatriates from algeria on the french labor market this paper uses census data to examine the impact on the french labor market of the 900 000 people repatriated from algeria in 1962 repatriates settled in regions culturally and climatically simil

estimating labor supply and production decisions of self employed farm producers abstract this paper proposes a model oriented towards integrating farm households production and consumption decisions into a unified theoretical and econometric framework it is argued that in contrast with other forms of economic organization farm households utility and profit maximization decisions are not likely to be independent econometric estimation of a farm household model using canadian data suggests that utility and profit maximizing decisions are not indeed independent and moreover that there are significant gains in explanatory power and efficiency by estimating the consumption and production equations jointly

two part tariffs as regulatory constraints abstract this paper introduces a regulatory two part monopoly pricing mechanism with desirable properties assuming that firm managers are informed about cost and demand functions no detailed prior information of the regulator about the regulated firm and its environment is required also subsequent observations of the regulator are restricted to verifiable bookkeeping data nevertheless the pricing formula is simple and easily interpreted the firm may freely choose the variable price of the two part tariff as long as the fixed part obeys a constraint the firm will then in every period receive an approximation to the welfare change caused by its price changes over the last period contrary to most other suggestions for incentive pricing the current approach requires no government subsidies

long term impacts of droughts on labour markets in developing countries evidence from brazil abstract climate shocks have well documented impacts on the short term welfare of rural households in developing countries we investigate the impact of droughts on brazilian labour markets we find long term rural wage losses beyond the immediate impact of the drought with affected workers taking five years to catch up with their peers findings are robust to model specification the severity of the losses varies with the dependence on agricultural income supporting the notion of diversifying portfolio strategies in rural areas to reduce climate related income risk

an exact solution method for binary equilibrium problems with compensation and the power market uplift problem abstract we propose a novel method to find nash equilibria in games with binary decision variables by including compensation payments and incentive compatibility constraints from non cooperative game theory directly into an optimization framework in lieu of using first order conditions of a linearization or relaxation of integrality conditions the reformulation offers a new approach to obtain and interpret dual variables to binary constraints using the benefit or loss from deviation rather than marginal relaxations the method endogenizes the trade off between overall societal efficiency and compensation payments necessary to align incentives of individual players we provide existence results and conditions under which this problem can be solved as a mixed binary linear program we apply the solution approach to a stylized nodal power market equilibrium problem with binary on off decisions this illustrative example shows that our approach yields an exact solution to the binary nash game with compensation we compare different implementations of actual market rules within our model in particular constraints ensuring non negative profits no loss rule and restrictions on the compensation payments to non dispatched generators we discuss the resulting equilibria in terms of overall welfare efficiency and allocational equity

physician labor supply do income effects matter this paper estimates a model of physician labor supply focusing on the impacts of wage and non wage income we find evidence of significant income effects for male physicians the income effect of a wage change on labor supply is negative with an elasticity of 0 26 the pure substitution effect of a wage change increases labor supply a 1 increase in wages leads to a 0 49 increase in labor supply controlling for income effects the results also suggest that the labor supply decisions of females are more responsive to variations in their earnings than are those of males

virtual prices and a general theory of the owner operated firm theories of entrepreneurial behavior for owner operated firms have a long history in economics these models treat the owner operator as both a producer and consumer of goods production and consumption choices result from utility maximization a preponderance of the work performed in this area has addressed two theoretical issues the consistency of utility and profit maximization and comparative static behavior of the entrepreneur scitovszky s seminal paper 29 demonstrates that under certain circumstances the entrepreneur may trade off income for leisure giving rise to the possibility of income effects on production and inconsistency of utility and profit maximization building on scitovszky s work graaff 14 clower 6 auster and silver 3 and lapan and brown 18 analyze the comparative static behavior of the utility maximizing owner operator and how this differs from the traditional neoclassical profit maximizing firm emphasis is on the possibility of income effects on production and how they may result in seemingly uneconomic behavior a shortcoming of this literature is the focus on special cases based on strong restrictions on technology constant returns to scale and the market for the entrepreneurial input no such market exists as of yet a general analysis of the comparative static behavior of the entrepreneur has not been undertaken scitovszky s work also initiated a vigorous debate concerning the consistency of utility and profit maximization for owner operated firms this debate centers on two principal questions does utility maximization imply profit maximization if not can a utility maximizing owner operated firm survive through time piron 25 olsen 23 24 and hannon 15 conclude that in competitive long run equilibrium utility maximizing entrepreneurs necessarily maximize profit and must do so to remain viable ladd 17 auster and silver 3 feinberg 8 9 10 and schlesinger 28 conclude that utility and profit maximization may diverge moreover these writers maintain that non profit maximizing owner operated firms can survive through time more re

the regulation of multiproduct firms part i theory abstract this paper develops a normative model of the regulation of a multiproduct firm with private information about its technology and cost reducing activity it first characterizes the optimal regulatory scheme and illustrates it through examples it then derives necessary and sufficient conditions for the pricing incentive dichotomy to hold i e conditions under which the cost reimbursement rule but not pricing is used to provide incentives last the paper studies the regulation of the multiproduct firm in a general equilibrium framework both to assess the validity of the partial equilibrium approach and to formalize the notion of taxation by regulation

the simple economics of extortion evidence from trucking in aceh this paper tests whether the behavior of corrupt officials is consistent with standard industrial organization theory we designed a study in which surveyors accompanied indonesian truck drivers on 304 trips during which they observed over 6 000 illegal payments to police soldiers and weigh station attendants using plausibly exogenous changes in the number of checkpoints we show that market structure affects the level of illegal payments we further show that corrupt officials use complex pricing schemes including third degree price discrimination and a menu of two part tariffs our findings illustrate the importance of considering the market structure for bribes when designing anticorruption policy

the labour supply behaviour of self employed solo practice physicians this paper investigates the empirical labour supply behaviour of self employed solo practice physicians the specification of the empirical labour supply equation is based on a model of constrained utility maximizing behaviour that recognizes the physician makes work leisure choices based on an endogenous shadow wage and faces a nonlinear budget constraint the findings suggest that the typical self employed solo practice male physician operates on the upward sloping portion of the labour supply curve and is relatively unresponsive to changes in marginal hourly medical practice earnings and non practice income

shadow prices consistency and the value of life this paper examines the consequences of inconsistent shadow pricing the principal example of such inconsistency is the value of life safety second best shadow pricing policy is shown to depend upon how public sector budgets are allocated and the principle that public sector decision makers should agree to a consistent shadow price is shown to require information unlikely to be available a weaker consistency principle requiring minimal information is then developed

consumption smoothing migration and marriage evidence from rural india a significant proportion of migration in low income countries particularly in rural areas is composed of moves by women for the purpose of marriage we seek to explain these mobility patterns by examining marital arrangements among indian households in particular we hypothesize that the marriage of daughters to locationally distant dispersed yet kinship related households is a manifestation of implicit interhousehold contractual arrangements aimed at mitigating income risks and facilitating consumption smoothing in an environment characterized by information costs and spatially covariant risks analysis of longitudinal south indian village data lends support to the hypothesis marriage cum migration contributes significantly to a reduction in the variability of household food consumption farm households afflicted with more variable profits tend to engage in longer distance marriage cum migration the hypothesized and observed marriage cum migration patterns are in dissonance with standard models of marriage or migration that are concerned primarily with search costs and static income gains

native internal migration and the labor market impact of immigration this paper presents a theoretical and empirical study of how immigration influences the joint determination of the wage structure and internal migration behavior for native born workers in local labor markets using data from the 1960 2000 decennial censuses the study shows that immigration is associated with lower in migration rates higher out migration rates and a decline in the growth rate of the native workforce the native migration response attenuates the measured impact of immigration on wages in a local labor market by 40 to 60 per cent depending on whether the labor market is defined at the state or metropolitan area level

development a study of the indian manufacturing industry if infrastructure tends to generate spillover externalities as has been the assumption in much of the development literature one may reasonably look for evidence of such indirect effects in the accounts of manufacturing industries empirical support for this assumption has so far been ambiguous this analysis of indian data however reveals substantial externality effects from the states infrastructure to manufacturing productivity the analysis separates the direct effects of roads and electricity as mediated by the infrastructure services purchased by manufacturing industries along with other intermediate inputs from the indirect effects as measured by the impact of infrastructure capacity on the solow productivity residual in the 20 years from 1972 to 1992 growth of road and electricity generating capacity seems to have accounted for nearly half the growth of the productivity residual of india s registered manufacturing

the impact of mass migration on the israeli labor market mass migration from the former soviet union increased the israeli population by 12 in the first half of the 1990s this exodus was precipitated by the lifting of emigration restrictions in an unstable ussr and by the open immigration policy of israel toward soviet jews who faced more restrictive entry policies elsewhere i use this natural experiment to study the impact of immigration on the labor market outcomes of native israelis ols yields significant reductions in wages and small reductions in employment however ols is biased if the distribution of immigrants across occupations in israel was not exogenous to relative wage and employment conditions i instrument for the entry of russians into an occupation in israel using information on their former occupations in the ussr there is a significant positive correlation between the former presence of the immigrants in an occupation in the ussr and their presence in that occupation in israel but the previous occupational choices of russians abroad were independent of israeli wage and employment growth subsequent to their migration iv estimates indicate that immigration did not have an adverse impact on native israeli labor market outcomes

optimal two part pricing in a carbon offset market a comparison of organizational types author affiliation murray fulton johnson shoyama graduate school of public policy diefenbaker building university of saskatchewan saskatoon sk s7n 5b8 canada e mail murray fulton usask ca corresponding author james vercammen food and resource economics and sauder school of business 2053 main mall university of british columbia vancouver bc v6t 1z2 canada e mail james vercammen ubc ca acknowledgment the authors would like to thank tom ross and ralph winter for valuable comments on an early version of this article as well as the southern economic journal editor and two anonymous reviewers the usual caveats apply 1 introductionone of the consequences of the kyoto protocol kp and the increased focus on the role of greenhouse gases ghgs in climate change is that market based approaches to reducing ghg emissions are being actively developed in europe the european union eu operates an emissions trading scheme ets 1 while in the united states the chicago climate exchange ccx trades carbon offsets among exchange members 2 in canada a number of provinces have announced plans for carbon trading schemes four of them have joined the western climate initiative wci a consortium of canadian provinces and states developing a regional cap and trade system wci 2008 the wci and the regional greenhouse gas initiative rggi a consortium of northeastern and mid atlantic states see rggi 2008 are part of the international carbon action partnership a group of countries and regions from around the world that has formed to actively pursue the development of mandatory cap and trade systems in carbon 3the agriculture and forestry sectors are likely to be important suppliers of carbon offsets to the carbon market both through carbon sequestration activities for example the storing of carbon in the soil or in trees and through activities that reduce ghg emissions for instance estimates made by the united states at the time the kp was being negotiated projected that forest cropland and grazing land management sinks could have accounted for about half of u s reduction commitments u s department of state 2002 in canada the federal government estimated that agricultural and forestry sinks could provide in the order of 15 20 million metric tons of carbon offsets relative to a total of 270 300 million metric tons of reductions required under the kp government of canada 2005 food and agricultural organization fao estimates indicate that dryland soils in the world could sequester somewhere in the range of 12 000 16 000 million metric tons of carbon fao 2004 in the case of agriculture since carbon offsets are sold in units that are much larger than most individual farmers can supply carbon sequestration from a number of producers must be aggregated to fulfill contracts 4 as a consequence market intermediaries or aggregators as they are known are emerging to perform this economic function some of these aggregators are organized as for profit firms while others are organized by farmers associations examples of for profit firms are as follows c green aggregators ltd a privately owned company that contracts with farmers in manitoba saskatchewan and alberta for carbon sequestration the carbon they acquire is sold on the ccx c green aggregators 2008 and agcert international an irish company founded to generate emission reductions from livestock farms agcert international 2008 much of agcert s sales of carbon credits has been direct to individual emitters on the producer association side the iowa farm bureau has created agragate climate credits corporation to aggregate carbon credits for sale on the ccx agragate climate credits corporation 2008 agragate administers the project transacts trades on the exchange and distributes earnings to project participants

a gravity model of immigration this paper develops a gravity model of immigration tests of the model using panel data for 16 oecd countries for 1991 2000 confirm the model s high explanatory power and examples illustrate its usefulness for testing other hypothesized determinants of immigration

regulation and distrust in a cross section of countries government regulation is strongly negatively correlated with social capital we document this correlation and present a model explaining it in the model distrust creates public demand for regulation while regulation in turn discourages social capital accumulation leading to multiple equilibria a key implication of the model is that individuals in low trust countries want more government intervention even though the government is corrupt we test this and other implications of the model using country and individual level data on social capital and beliefs about government s role as well as on changes in beliefs and in trust during the transition from socialism

income maximization and the selection and sorting of international migrants abstract two prominent features of international labor movements are that the more educated are more likely to emigrate positive selection and more educated migrants are more likely to settle in destination countries with high rewards to skill positive sorting using data on emigrant stocks by schooling level and source country in oecd destinations we find that a simple model of income maximization can account for both phenomena results on selection show that migrants for a source destination pair are more educated relative to non migrants the larger is the absolute skill related difference in earnings between the destination country and the source results on sorting indicate that the relative stock of more educated migrants in a destination is increasing in the absolute earnings difference between high and low skilled workers we use our framework to compare alternative specifications of international migration estimate the magnitude of migration costs by source destination pair and assess the contribution of wage differences to how migrants sort themselves across destination countries

labor market consequences of internal migration in turkey abstractduring the past 30 years turkey has undergone profound economic and social transformations including fundamental shifts from a state oriented economy to a market oriented economy large scale modernization investments in telecommunication and transportation services and low intensity ongoing armed conflict concentrated in the country s southeastern region for such a period using the 1990 and 2000 turkish censuses i evaluated the labor market consequences of internal migration that might have been sparked by such significant economic and social changes overall the results suggest that provinces with a higher share of recent migrants may observe decreases in their native population s labor market opportunities while this adverse impact of the recent migrant inflows remains robust it exhibits heterogeneity with respect to the skill level of natives as well as for the labor market outcomes of different native and migrant groups

defining unemployment in developing countries evidence from trinidad and tobago the international labour organisation ilo argues for relaxing the standard definition of unemployment in developing countries by eliminating the requirement that a person be actively searching for a job we examine whether such an extension of the standard definition is appropriate in the case of trinidad and tobago t t specifically we use the trinidad and tobago labour force survey to examine whether active job search is important in determining the labour market transitions of the non employed our results indicate that in trinidad and tobago males who under the standard criteria would be considered out of the labour force because they report willingness to work but are not currently searching for a job are appropriately classified as unemployed further evidence suggests that this may be because job search may not be as meaningful in rural as it is in urban areas c 2003 elsevier b v all rights reserved

multiple job holding the artist s labour supply approach this article analyses a labour supply model in which individuals maximize a utility function that depends on leisure time consumption and time devoted to an activity that is termed artistic this activity may generate income that depends nonlinearly on hours dedicated to it the individual can also work in the labour market an activity that does not increase utility by itself in exchange for an hourly wage and obtain income not related to hours conditions are obtained that sort individuals into two groups part time and full time artists deriving their labour supply functions in both activities the predictions of the model are tested empirically using a sample of musicians from a uruguayan performing rights society increases in outside wages drive part time artists out of the labour market but no significant increase in arts hours is detected higher nonlabour income also reduces nonarts work time of part time artists but does not have a significant impact in their arts hours conversely arts

fee for service payment and consultation length in general practice a work leisure trade off model for french gps this article presents an adaptation of the labour supply model applied to the independent medical sector first we model simultaneous general practitioner gp decisions on both the leisure time and the consultation length for two payment schemes fixed fees and unregulated fees the objective of this econometric study is to validate the theoretical prediction that doctors under unregulated fees may make choices about the length of patient consultations independent of their personal leisure decision indeed according to our empirical results the bidirectional link between leisure choice and consultation length verified with fixed fees does not hold any longer under unregulated fees our findings can be seen as a necessary but not a sufficient condition to legitimize unregulated fees in general practice

migration and economic mobility in tanzania evidence from a tracking survey this study explores the extent to which migration has contributed to improved living standards of individuals in tanzania using longitudinal data on individuals the authors estimate the impact of migration on consumption growth between 1991 and 2004 the analysis addresses concerns about heterogeneity and unobservable factors correlated with both income changes and the decision to migrate the findings show that migration adds 36 percentage points to consumption growth during a period of considerable growth in consumption these results are robust to numerous tests and alternative specifications unpacking the findings the analysis finds that moving out of agriculture is correlated with much higher growth than staying in agriculture although growth is always higher in any sector if one physically moves economic mobility is strongly linked to geographic mobility the puzzle is why more people do not move if returns to geographic mobility are high the evidence is consistent with models in which exit barriers are set by home communities through social and family norms that prevent migration of certain categories of people

the effect of weather induced internal migration on local labor markets evidence from uganda relying on census data collected in 2002 and historical weather data for uganda this paper estimates the impact of weather induced internal migration on the probability for non migrants living in the destination regions to be employed consistent with the prediction of a simple theoretical model the results reveal a larger negative impact than the one documented for developed countries they further show that this negative impact is significantly stronger in ugandan regions with lower road density and therefore less conducive to capital mobility a 10 percentage points increase in the net in migration rate in these areas decreases the probability of being employed of non migrants by more than 10 percentage points

shadow wages and peasant family labour supply an econometric application to the peruvian sierra a striking feature of developing economies is the large proportion of the work force that is self employed lack of widespread labor market participation in the agricultural sector can pose a major obstacle to the empirical implementation of economic models of the peasant household whether because wage data are simply not available or because the assumptions required to make use of wage data stretch the bounds of credulity this paper develops a methodology for estimating a structural labor supply model for primarily self employed peasant households which holds under a general agricultural technology and set of labor market conditions the unique feature of the approach is that the opportunity cost of time or shadow wage of household workers is explicitly estimated from an agricultural production function and is subsequently used to identify a set of structural labor supply parameters recent household survey data from rural peru is employed to estimate and perform various diagnostic tests on the model the empirical findings lend support to the hypothesis that peasant households allocate their members time as if to maximize a family utility function and moreover demonstrate the tractability of the shadow wage methodology and its usefulness in estimating more elaborate time allocation models

a brief review of some problems in using national accounts data in level of output comparisons and growth studies abstract after an initial burst of enthusiasm for establishing their national accounts 30 or 40 years ago some countries have made continuous improvements while others have done little to maintain even their initial system presently most developing countries make their basic estimate of gdp from the production side and most do not have adequate surveys to permit a consistency check of their production and expenditure side estimates the base surveys for expenditures and production are typically over ten years old and the lags in basic surveys for constructing constant price estimates are frequently longer a number of countries estimate their growth from a weighted average of volume indexes and make no attempt at direct deflation many of those that do deflate their current expenditure estimates do so at a very aggregate level users of national accounts should be aware of the varying quality of the estimates across countries and hopefully continual questioning of the numbers will help to encourage improvement

pricing efficiency under rate of return regulation some empirical evidence for the electric utility industry the authors test quasi optimal pricing rules for rate of return regulation for a sample of electric utilities they estimate the regulated cost function and demand equations by class of customer for the sample to yield the cost and demand parameters required to assess the utility rate structures the results indicate that the price structure of electricity by class of customer is not quasi optimal and that welfare improvement might be possible under alternative prices searching for the price structure which satisfies the criteria they find that commercial users rates have been too high relative to residential and to a lesser extent industrial rates they note that commercial uses tend to be less organized and more poorly represented in the rate making process 16 references 8 tables

measuring the labor market impacts of hurricane katrina migration evidence from houston texas hurricane katrina made landfall on the us gulf coast as a category three storm on the morning of august 29 2005 with winds reach ing speeds of 130 miles per hour and storm surges as high as 27 feet katrina caused unprec edented damage along the coasts of alabama mississippi and louisiana unofficial estimates suggest that 100 000 to 150 000 evacuees moved to the houston texas metropolitan area repre senting a 3 to 4 percent increase in the population adrian campo flores 2005 some anecdotal evidence suggests that many evacuees expect to stay in the houston metro area indefinitely 2 katrina disproportionately affected minorities and the disadvantaged thomas gabe et al 2005 find that the evacuees who were most acutely affected by the storm were significantly more likely to be black poor and unemployed and were significantly less educated compared to other evacuees and compared to the nation on average in this paper i examine the effect of the migration of katrina evacuees on the houston metropolitan area labor market using current population survey cps data from september 2000 to august 2006 to quantify the effect of hurricane katrina migration i compare wages and employment before and after the storm among nonevacuees residing in houston or native houstonians and in other metro areas that were not directly or indirectly affected by the storm in addition i allow the effects to vary by gender education and race and ethnicity the existing studies of the effect of immigra tion on the labor market outcomes among native born workers provide a good point of comparison for this analysis see rachel m friedberg and jennifer hunt 1995 and david card 2005 for reviews of this literature in a study similar to this one adriana kugler and mutlu yuksel 2006 find negative employment effects among low educated native workers and positive wage effects among highly educated workers in the us border states after hurricane mitch struck central america in october 1998 more gener ally there are numerous studies that examine the impact of an unexpected increase in the local labor supply due to immigration including papers by card 1990 hunt 1995 william carrington and pedro de lima 1996 and friedberg 2001 collectively these studies find small and insig nificant effects of immigration on local labor market outcomes for native workers other studies estimate the effect of immi gration on local labor markets using varia tion across receiving areas and across time in the immigrant share of the labor force and these studies produce conflicting results card 2001 2005 finds that local labor market out comes for unskilled natives are only marginally affected by immigration while george j borjas 2006 shows that the wage effect of immigra tion increases when the labor market is defined at the national level instead of at the local level since workers are more likely to migrate between localities than between countries in response to increased labor market competition due to immigration however gianmarco i p ottaviano and giovanni perri 2006 argue that by ignoring capital mobility and by assuming that immigrant and native workers are perfect substitutes in the labor market borjas overstates the size of the effect industrial relations section firestone library prince ton university princeton nj 08544 e mail mfifer princeton edu i am grateful to henry f rber elizabeth fussell alan krueger michael rothschild jesse rothstein and cecilia rouse for their guidance and leandro carvalho jason deparle matthew ericson jane fortson and participants at the princeton university graduate labor lunch and public finance working group and at the tulane university disaster and migration conference for helpful comments and suggestions i am responsible for the contents and for all remaining errors 1 jason de parle katrina s tide carries many to hope ful shores new york times april 23 2006 2 susan saulny putting down new roots on more solid ground new york times september 7 2005 simon romero shelters grow empty as apartments open up new york times september 8 2005

electricity demand and basic needs empirical evidence from china s households an increasing block tariff ibt has been implemented nationwide in the residential sector in china since 2012 however knowledge about ibt design is still limited particularly how to determine the electricity volume for the first block of an ibt scheme assuming the first block should be set based on some measure of electricity poverty we attempt to model household electricity demand such that the range of basic needs can be established we show that in chinese households there exists a threshold for electricity consumption with respect to income which could be considered a measure of electricity poverty and the threshold differs between rural and urban areas for rural urban families electricity consumption at the level of 7th 5th income decile households can be considered the threshold for basic needs or a measure of electricity poverty since household electricity demand in rural urban areas does not respond to income changes until after 7th 5th income decile accordingly the first ibt block for some provinces e g beijing appears to have been set at a level that is too high over time however given continued rapid growth the ibt will begin to better reflect actual basic needs

the impact of 1970s repatriates from africa on the portuguese labor market this paper examines the labor market effect of the retornados who immigrated to portugal from angola and mozambique in the mid 1970s following portugal s loss of its african colonies the retornados increased the portuguese labor force by roughly 10 in just three years two analyses suggest contrasting conclusions first comparisons of portugal with spain and france indicate that any adverse effect of the retornados was quantitatively swamped by the europe wide downturn in labor market conditions in the 1970s second comparisons between districts within portugal indicate that the retornados may have had a strong adverse effect on portuguese wages suggesting that immigration may be considerably more harmful than previous case studies have concluded the authors however regard the results of the within portugal analysis as less reliable than those of the comparison across countries

a meta analytic assessment of the effect of immigration on wages in our increasingly interconnected and open world international migration is becoming an important socio economic phenomenon for many countries since the early 1980s many studies have been undertaken of the impact of immigration on host labour markets borjas 2003 noted that the estimated effect of immigration on the wage of native workers varies widely from study to study and sometimes even within the same study in addition these effects cluster around zero such a small effect is a rather surprising outcome given that in a closed competitive labour market an increase in labour supply may be expected to exert a downward pressure on wages we revisit this issue by applying meta analytic techniques to a set of eighteen papers which altogether generated 348 estimates of the percentage change in the wage of a native worker with respect to a one percentage point increase in the ratio of immigrants over native workers while many studies in our database employ us data estimates are also obtained from germany the netherlands france norway austria israel and australia our analysis shows that results vary across countries and are inter alia related to the type of modelling approach technical issues such as publication bias and quality of the estimates are addressed as well

labour market responses to immigration evidence from internal migration driven by weather shocks we study the labour market impact of internal migration in indonesia by instrumenting migrant flows with rainfall shocks at the origin area estimates reveal that a one percentage point increase in the share of migrants decreases income by 0 97 and reduces employment by 0 24 percentage points these effects are different across sectors employment reductions are concentrated in the formal sector while income reduction occurs in the informal sector negative consequences are most pronounced for low skilled natives even though migrants are systematically highly skilled we suggest that the two sector nature of the labour market may explain this pattern

first and second best pricing with uncertain demand as has been well known since at least the work of hotelling 6 marginal cost pricing is the ideal regulatory policy in a simple certainty setting however when economies of scale exist in production such a policy will in general entail a revenue shortfall for the firm ideally the regulator should meet such a short fall by raising lump sum taxes but that solution is liable to prove infeasible ramsey pricing popularized by baumol and bradford 4 examines the second best pricing policy when firms receive no tax subsidy so prices must exceed marginal costs the celebrated inverse elasticity rule shows that with demands for the various goods independent goods whose elasticity of demand is proportionately less should have their price exceed marginal cost proportionately more further complications arise when one takes into account the uncertainty involved in economic decisions in recognition of this there has recently been considerable discussion of first best pricing with stochastic demand 5 the general conclusion of this discussion is that marginal cost pricing continues to be the first best policy in order to reach this conclusion however the literature has in effect assumed that regulators are risk neutral compared to this large literature on stochastic first best pricing the only two papers known to us that treat second best pricing with stochastic demand are by sherman visscher 11 and by wecker upton 15 both these treatments assume the marginal utility of income of the regulator is constant and so also require that there be risk neutrality in this work on the other hand we will consider both first and second best pricing policies when the regulator is explicitly allowed to be risk averse in the former case we will be interested in whether marginal cost pricing will continue to be the first best policy whereas in the latter case we will examine whether the simple inverse elasticity rule can hold despite considerations of risk and the risk behavior of regulators finally we will directly relate the results of our first best analysis to our study of the second best problem in much of the paper the source of demand uncertainty will be arbitrary we will

is the new immigration really so bad this article reviews the recent evidence on us immigration focusing on two key questions 1 does immigration reduce the labour market opportunities of less skilled natives 2 have immigrants who arrived after the 1965 immigration reform act been successfully assimilated overall evidence that immigrants have harmed the opportunities of less educated natives is scant on the question of assimilation the success of the us born children of immigrants is a key yardstick by this metric post 1965 immigrants are doing reasonably well even children of the least educated immigrant origin groups have closed most of the education gap with the children of natives

the hazards of small firms in southern africa small enterprises are a ubiquitous feature of the economies of many developing countries this study is the first to examine the duration of their survival using economic theory and modern econometric techniques using data sets from surveys conducted in four southern african countries i estimate a proportional hazards model describing the closure rates of a sample of approximately 21 000 firms there is an inverse relationship between enterprise growth rates and the closure hazard the sector where it operates influences the hazard as does its location in some countries female headed firms are at a survival disadvantage compared to their male counterparts

government organization and power i introduction economists have systematically examined the economics of government finance and long ago established that the means of financing government creates inefficiencies in the market for instance see baumol and bradford 1970 and diamond and mirrlees 1971a 1971b what may be less well examined and understood is that apart from the distortions that arise from the means of government finance government officials can have an incentive to provide a combination of services and taxes that are nonoptimal as in niskanen 1997 the ability of government to exercise coercive and pricing power creates these incentives a growing number of articles explore the effect of government power on its size for example anderson and tollison 1988 and rogers and rogers 1995 examine the implications of pricing power for government size in his work on bureaucracy niskanen 1971 considered the implications of coercive power for government size olson 1991 mcguire and olson 1996 niskanen 1997 and mcguire 2001 examine the implications of the joint exercise of coercive and pricing powers by an autocratic government to our knowledge however no previous work explicitly distinguishes between the coercive and pricing powers of government and none systematically examines all the possible combinations of coercive and pricing powers in the present analysis we develop a simple theoretical framework that allows us to examine on an integrated basis the exercise of government power the framework abstracts from any distortions in the means of government finance and separates government power into two dimensions pure coercive power and pure pricing power pure coercive power is the ability of a government to compel consumers to accept more of the public good than they desire at each tax price through fiat coercive power typically arises when citizens are unable to exit a jurisdiction costlessly and the government is able to push citizens beyond what they would accept in a voluntary relationship pure pricing power is the government s ability to restrict output along a given demand curve and earn rents by doing so pricing power typically arises when the government has limited competition and faces a downward sloping demand curve for its services we consider four polar combinations of coercive and pricing power in comparison to the social optimum lindahl democracy monopoly niskanen bureaucracy and autocracy as shown in figure 1 the government in lindahl democracy exercises neither coercive nor pricing power a monopoly government is able to restrict its output and exercise pricing power to earn rents in a traditional monopolistic fashion but it cannot engage price discrimination or expropriation to obtain any remaining consumer surplus from its citizens a niskanen bureaucracy can exact all of the surplus that consumers obtain from the public goods it provides but it must use the surplus in the production of public goods it cannot exercise pricing power and restrict output to obtain rents as a monopoly would an autocracy exercises both coercive and pricing power in practice democratic governments are likely to have both coercive and pricing powers rather than to conform to the lindahl ideal our analytical framework allows us to clarify and reconcile the differences between some of the previous contributions to the literature on government power and size in democracy a government can simultaneously use its coercive power to grow too large and its pricing power to restrict its output and earn rents furthermore government size or rents alone may be poor indicators of the extent to which government fails to achieve optimality in its provision of services government power may be used to generate rents provide too much government service or a combination of both ii social optimum consider a jurisdiction or economy with n identical individuals and two goods a purely public good and a purely private good

optimal pricing of local telephone service although payment for nearly all other goods and services including toll long distance telephone calls increases with greater consumption nearly 90 percent of the residential telephone subscribers and more than half the business subscribers in the united states now pay a flat monthly rate for local calls see larry garfinkel recently however the telephone companies and regulatory commissions have been moving cautiously toward imposing usage charges for local telephone calls there is renewed interest in what is currently termed usage sensitive pricing t usp it is due to the combined forces of inflation increased local usage and competition from independent firms that sell telephone terminal equipment and supply private toll lines to business customers under usp the pricing of such services as telephone installation directory assistance and minutes of calling is based on incremental rather than average costs since world war ii technological advances have benefited long distance far more than local telephone calling development in microwave communications coaxial cable satellites and waveguides have dramatically lowered the costs of long distance transmission in contrast the costs of local service have moved upward since the late 1960 s at a rate not far below the general price index see at t 1975 faced with a continuing stream of requests for local telephone rate increases state regulatory commissions are finding the concept of tying prices to usage increasingly attractive at t and some of the independent telephone carriers are beginning to test usp plans in several cities with flat rate tariffs increases in local calling add to carrier costs but not to their revenues the local calling rate per subscriber has increased by an average of 2 percent for the past seven years at t s chairman has stated we are moving more and more in the direction of usage sensitive pricing see washington star news p a12 and according to newspaper accounts of at t management documents the bell system plans to phase out flat rate telephone service and begin charging for each local call in major metropolitan areas in 1978 80 see seattle postintelligencer pp 1 10 still regulatory commissions consumer groups and the carriers themselves remain cautious about requiring usage sensitive tariffs for all subscribers the prospective gains from prices more closely related to costs are at least partially offset by the added costs of metering equipment and billing most telephone subscribers prefer flat rates according to bell system marketing surveys see garfinkel p 28 and it is by no means clear which groups of subscribers will be helped and which harmed by such revisions in local tariff structures will the poor end up paying more because they use their phones more should different prices be charged for calls at different times of day on what bases should the monthly and per call rates be determined the purpose of this paper is to sort out some of the questions of economic efficiency and equity that arise when changes are considered in the methods of pricing local telephone services in section i i construct a department of economics the rand corporation and the international institute of management berlin this study was supported under a grant from the john and mary r markle foundation i am indebted to walter s baer for numerous contributions to this paper to s c littlechild and patricia munch and to the managing editor and a referee of this review for critical and constructive review of a draft i have benefited as well from the comments and suggestions of james h alleman stanley m besen william s comanor john m drew leland l johnson john a kay edward d lowry carl pavarini john rolph ralph turvey and chris witze bryant mori assisted with the computer programming see my 1976 paper for a more extensive version of this paper which also discusses optimal flat rate and optimal peak load tariffs

networks in the modern economy mexican migrants in the u s labor market this paper attempts to identify job networks among mexican migrants in the u s labor market the empirical analysis uses data on migration patterns and labor market outcomes based on a sample of individuals belonging to multiple origin communities in mexico over a long period of time each community s network is measured by the proportion of the sampled individuals who are located at the destination the united states in any year we verify that the same individual is more likely to be employed and to hold a higher paying nonagricultural job when his network is exogenously larger by including individual fixed effects in the employment and occupation regressions and by using rainfall in the origin community as an instrument for the size of the network at the destination

the effect of internal migration on local labor markets american cities during the great depression the great depression offers a unique laboratory to investigate the causal impact of migration on local labor markets we use variation in the generosity of new deal programs and extreme weather events to instrument for migrant flows to and from u s cities in migration had little effect on the hourly earnings of existing residents instead in migration prompted some residents to move away and others to lose weeks of work or access to relief jobs for every 10 arrivals we estimate that 1 9 residents moved out 2 1 were prevented from finding a relief job and 1 9 shifted from full time to part time work

are remittances insurance evidence from rainfall shocks in the philippines several facts motivate this study first life in developing countries is prone to many kinds of risk such as crop and income loss due to natural disasters weather insect infestations and fire and civil conflict second international migration and remittance flows are substantial and growing between 1965 and 2000 individuals living outside their country of birth grew from 2 2 to 2 9 percent of the world population totaling 175 million people in 2000 the remittances that these migrants send to their countries of origin are an important but poorly understood type of international financial flow this article examines a mechanism for coping with shocks ex post on which previous micro level studies have not focused remittances from family members overseas at the international level it is commonly posited that remittance flows from overseas buffer economic shocks in migrants home countries but there have been relatively few empirical tests of this claim with micro level household data related research on the role of domestic migration in pooling risk within extended families includes lucas and stark 1985 rosenzweig and stark 1989 and paulson 2000

estimation of complete demand systems from household budget data the linear and quadratic expenditure systems in this paper we explore two issues in empirical demand analysis the estimation of complete systems of demand equations using household budget data section i and the incorporation of demographic characteristics into such systems section ii although there are numerous studies which use time series data to estimate complete demand systems and many which estimate engel curves from household budget data there are virtually none which combine budget data from different periods to estimate complete systems since each budget study corresponds to a single price situation one might conjecture that estimation of complete systems would not be possible unless budget studies were available from a large number of periods this is incorrect in section i we argue that interesting complete demand systems can be estimated from a small number of budget studies despite the limited price variability represented in such data to demonstrate this we use budget study data for two periods to estimate a pair of related demand systems the familiar linear expenditure system les and a quadratic expenditure system qes a generalization of les in which the demand equations are quadratic in total expenditure the inclusion of demographic variables in the analysis of household consumption patterns is desirable because there are likely to be systematic differences in the consumption behavior of households with different demographic characteristics but the effects of demographic characteristics have seldom been studied within the framework of complete demand systems in section ii we propose translating as a general method for incorporating demographic variables into complete systems of demand equations this method has not previously been discussed as a general technique for bringing demographic variables into demand systems although it has been employed in several studies to improve the estimates of the les and the qes presented in section i we reestimate these two systems using translating to incorporate family size

regional characteristics and the location of foreign firms within poland this article investigates the location determinants of firms with foreign capital participation within poland using the regional data set from 1993 to 1998 it is found that the concentration of foreign economic activity is positively related to industry and service agglomeration and the road network and negatively to the unemployment rate traditional regional characteristics such as gdp wage rate and education often regarded as important location determinants are not robust with respect to the specification of the estimating equation the special economic zone variable is not found to be statistically significant in any specification estimated geographic location dummies confirm that foreign firms prefer central and south western regions over eastern parts of poland having controlled for their characteristics

wage effects of labour migration with international capital mobility wage effects of immigration are investigated in a setting with international capital mobility which eliminates two thirds of the native wage effects of immigration without international capital mobility overall gains from migration in the immigration region are only a small fraction of total losses to native workers but with perfect international capital adjustment overall gains are larger than total losses to native workers two alternative tax policies to eliminate the negative wage effects of immigration on low skilled native workers are evaluated