micro estimates of public spending demand functions and tests of the tiebout and median voter hypotheses responses to questions given to a random sample of michigan households are used to estimate public spending demand functions while income and price elasticities are similar to those obtained from aggregate data positive income elasticities appear to arise because public services are distributed in a prorich manner a relatively small variance in spending demands among urban and suburban communities in metropolitan areas with substantial public service variety suggests that the tiebout mechanism works this interpretation is supported by the fact that actual spending conforms substantially to desired levels in urban areas but less so in rural areas with little public sector choice

the effects of regulation on research and development theory and evidence while other aspects of the effects of regulation on resource allocation have received considerable attention the impact of regulation on the innovative p ropensities of regulated firms has generated only limited and somewha t tenuous evidence accordingly this article investigates the effect s of regulation and firm structure on research and development r d expenditures a simple model of the behavior of a firm under a rate o f return regulation suggests that both the stringency of the allowed rate of return constraint and the inclusion or exclusion of r d in a firm s rate base will be key determinants of firm level r d expenditu res the empirical results strongly support the theoretical model copyright 1988 by the university of chicago

capitalization and the median voter the past decade has witnessed a strong interest among students of local public finance in models of voting with one s feet and in models of actual voting several authors including noel edelson susan rose ackerman and michael lea have recognized that these two types of voting must be considered simultaneously the capitalization of local fiscal variables into house values which is a by product of voting with one s feet influences the decisions of the median voter and the pattern of local services that arises through actual voting influences the allocation of households to communities a full fleged merger of the two types of voting requires an analysis of capitalization in a model that considers both the housing market and the local voting process in a metropolitan area with diverse local governments financed by property taxes previous articles have focused on pieces of this puzzle this paper reviews my attempt to bring these pieces together my analysis reveals that regardless of supply responses capitalization is a feature of long run equilibrium furthermore in the presence of capitalization an efficient pattern of local services cannot be obtained through voting with one s feet but must be obtained instead through actual voting if preferences in a community are not too diverse the median voter will pick the efficient level of services with or without capitalization however the median voter s choice may not be efficient in an extremely heterogeneous community in addition capitalization breaks the link between tax payments and the choice of a community and thereby insures that the property tax is not a benefit tax in other words it insures that housing is underconsumed relative to other goods these results provide a framework for evaluating state and federal policies toward local governments without much heterogeneity within communities one could achieve efficiency by eliminating the property tax or offsetting it with large subsidies to housing these approaches are not realistic however and a second best solution is to cut back local services the form of such a cutback is important i show that tax limitations do not lead to efficiency but that a second best solution could be obtained by redesigning intergovernmental grants

the implications of competition among jurisdictions does tiebout need politics the paper investigates whether compensation among local jurisdiction is by itself sufficient to ensure efficient provision of local public goods jurisdictions have fixed boundaries and each has an entrenched government with the power to tax and supply the public good residents can move costlessly among jurisdictions it is shown that competition among numerous jurisdictions is not sificient to guarantee public sector efficiency though residents can vote with their feet land is immobile hence governments can unsurp some land rents for their own ends increasing the number of jurisdictions limits but cannot completely eliminate the ability to exercise discretionary governmental power

sector choice multiple job holding and wage differentials evidence from poland this article uses data from poland to investigate the role played by wage differentials between the public and private sectors in influencing sector choice and the decision to moonlight standardising for worker characteristics and allowing for sector selection effects we find i a substantial private sector wage premium ii wage differentials are a significant determinant of sector choice and iii the desire to moonlight is particularly strong among those who face the greatest wage gap that is university educated employees

the effect of taxation on labour supply the case of moonlighting the authors provide a simple test of supply side economics by estimating the responsiveness of moonlighting labour supply to changes in the marginal tax rate and the wage rate while standard theory teachers that changes in taxes and wage should have opposite and equal effects on labour supply taxes affect the entire asset position of the household in the short run an adjustment of hours in the second job may be the only option available to an individual in responding to a tax change thus analyses based on after tax wages may understate supply side effects to estimate these effects a tobit procedure is employed the empirical results suggest a backward bending supply curve over thet range of moonlighting hours data consist of a subsample of male blue collar workers from the 1978 cross section of the panel study of income dynamics

capitalization and the theory of local public finance the tiebout literature is incomplete this paper argues because it has not fully accounted for the capitalization of local fiscal variables into house values the paper explains why capitalization arises why it persists in long run equilibrium how it affects both residential location and the outcome of local voting and why it interferes with the efficiency of a system of local governments the analysis which is based on the main tiebout assumptions plus a property tax combines a model of household bids in a housing market with a median voter model of local public service determination

jurisdictional homogeneity and the tiebout hypothesis abstract in this paper an alternative to the capitalization approach to testing the tiebout model is presented the tiebout foot voting mechanism suggests that households will sort and stratify into approximately homogeneous local public goods jurisdictions at a point in time the efficiency of the sort will be positively related to the number of existing jurisdictions using a measure of homogeneity introduced by theil the relationship between stratification homogeneity within jurisdiction and number of jurisdictions is tested for a sample of school districts within 33 smsas the tiebout stratification hypothesis is confirmed

the economics of moonlighting a double self selection model the model proposed here for obtaining the labor supply functions of moonlighters uses a double self selection system to explore the husband s decision to moonlight together with his wife s decision to work subsequently the labor functions are classified under two regimes depending on whether the wife works the model is estimated based on a cross section of 4 448 married couples from the survey of income and program participation wave 2 i find that the household production time of husbands and wives are substitutes and that specific human capital deters moonlighting copyright 1990 by mit press

cost function for a periodic reorder point system with time dependent replenishment costs abstract a single item inventory model with probabilistic demand is considered in this paper the replenishment of items is cyclical and occurs every n periods the order for replenishment can be placed at the end of any period during the cycle replenishment costs setup and unit costs are stated as a function of time the units ordered are set equal to an order quantity q the general expression of this inventory system is formulated by developing the stationary distribution of the inventory position units ordered and the probability of placing an order during any period the expression is stated in terms of the reorder point s and the order quantity q and can be used to locate the optimal solution

the supply of off farm labor a random coefficients approach a joint model of off farm labor decisions for farm operator and spouse is presented attention is given to operator and spouse participation decisions as well as associated problems of multiple sample selectivity biases two stage fixed and random coefficient methods corrected for possible selectivity biases are used to estimate supply function parameters results indicate that supply function parameters are random variation in important supply parameters is investigated results also illustrate the importance of spouse decisions on off farm labor supply function structure

differential capitalization of local public service characteristics analysis of the capitalization of property tax and public service differentials has come a long way since oates s pathbreaking work oates 1969 it is now well established that interjurisdictional differentials in local property tax rates and public service levels are reflected to some degree in house prices heinberg and oates 1970 meadows 1976 mcdougall 1976 king 1977 in addition intrajurisdictional tax capitalization may occur due to local assessment practices church 1974 black 1977 edelstein 1974 bloom ladd and yinger 1980 however there has been little research undertaken exploring the possibility of intrajurisdictional public service capitalization intrajurisdictional tax and publicservice capitalization represents an important extension of the tiebout analysis of the local public sector tiebout 1956 while individuals may respond to differentials in public service levels and tax rates in their mobility and house purchase decisions it is not at all clear that these attributes are valued uniformly for all units within a jurisdiction it may be that the proximity of a unit to a school rather than school quality determines value or capitalization may depend more on structural characteristics such as the size of a house the neglect of this point has been in large part due to data limitations most studies assume either explicitly or implicitly that benefits from public services are uniform within jurisdictions studies using aggregate data on a jurisdiction or census tract unit of observation focus on the impact of interjurisdictional service differentials on the median valued house such data do not permit an exploration of the interrelationship between housing and public service characteristics studies utilizing micro data relate housing prices to jurisdiction wide expenditures or quality measures such as reading scores to test the capitalization hypothesis however these public sector characteristics are seldom related to individual housing characteristics and there has been little systematic study of the possibility of significant interaction between public sector and other housing and location characteristics

tax competition uniform assessment and the benefit principle abstract in previous discussions it has been argued that tax competition between local governments results in a tax burden on business that is less than the cost of public services for business and in suboptimal levels of public expenditures for residents however this conclusion has never been substantiated by a full theoretical treatment here a theoretical model of tax competition is developed between metropolitan areas with labor perfectly immobile and two local public goods one for residents and one for business for plausible parameter values numerical solutions of the optimality conditions are computed by means of a nonlinear programming algorithm

secondary job holding in germany since 2003 the number and ratio of multiple jobholders has more than doubled although the german labour market has been experiencing a strong and sustained upswing this study analyses multiple j

multiple job holding among male workers in greece livanos i and zangelidis a multiple job holding among male workers in greece regional studies this paper studies the incidence of multiple job holding in greece and contributes to the literature by examining its determinants its variance across different regions and the effect of the business cycle on its occurrence the empirical analysis highlights the importance of both pecuniary and non pecuniary motives behind multiple job holding and reveals significant variations in its incidence across regions with areas that have a large primary sector having higher multiple job holding rates finally multiple job holding is found to be pro cyclical with the probability of holding a second job estimated to increase during economic expansion livanos i et zangelidis a les emplois multiples masculins en grece regional studies l article cherche a etudier la frequence des emplois multiples en grece et contribue a la documentation en examinant ses determinants sa variance a travers les diverses regions

ordering policies for the cyclical replenishment problem given leadtime dependent discounts abstract this paper addresses a problem encountered by retailers who experience cyclical replenishment frequently these retailers are provided incentives for placing orders before the end of a cycle and they have to wrestle with the questions of when to order how many times to order and how many units to order the complexity of this problem arises from having to balance the reduction in unit costs with the increases in ordering costs and in some cases deal with storage and shortage costs it is argued that the decrease in unit cost can be directly related to the enhancement of manufacturing efficiency due to longer production leadtimes while the increase in storage and shortage costs is a result of the increase in uncertainty due to a representation and the cost function will be used to derive the parameters i e frequency of orders order level etc that minimize this cost function

job amenity and the incidence of double work abstract the hypothesis that workers in jobs associated with an amenity are more prone to moonlighting is derived and tested if earnings fall for such jobs it is rational to have two jobs while for jobs with no amenity a fall in earnings causes a rational worker to leave the sector altogether an amenity can be expected for instance for workers in primary sectors and evidence that farmers at an increasing rate have double occupations are provided the comparative statics on the models shows among other things that wage increases outside the amenity sector may have different effects than wage decreases inside the sector the models are tested on data on farmers and to some extent the regressions support the theoretical models

the roles of jurisdictional competition and of collective choice institutions in the market for local public goods having discovered and neatly portrayed the conditions for efficient provision of public goods paul samuelson concluded that there was no viable mechanism for eliciting the information about preferences required to determine optimal public goods supply much subsequent theorizing about public finance decisions may be viewed as a quest for some demand revealing mechanism which would refute samuelson s assertion charles tiebout in particular countered with the claim that a viable mechanism did exist for determining the optimal supply of local public goods in his view selfinterested individuals reveal their preferences for local public goods by their choice of jurisdiction tiebout reasoned that each individual adopts from the menu of local fiscal environments that local community which most closely reflects his preferences he further argued that the greater the number and variety of communities the more efficient would the public goods provision be without empirical support this ingenious idea lay dormant for several years the question remained as to whether the mechanism described by tiebout even if it existed operated so that local jurisdictions effectively elicited and satisfied preferences for local public goods fundamental to answering this question was the necessity of designing an experiment which would reveal the result of voting with one s feet no such experiment existed until wallace oates 1969 reasoned that operation of the tiebout mechanism would result in the capitalization of differentials in fiscal variables into property values his test findings indicated that indeed such capitalization was evident at first the results obtained by others who repeated and extended his experiment were generally consistent with his findings and hence his interpretation of the link between the tiebout mechanism and the capitalization of fiscal variables it was not long however before an alternative interpretation was suggested by matthew edel and elliot sclar who argued that in the long run the tiebout mechanism would result in no capitalization of differentials in taxes and public service levels their interpretation was precisely the opposite of that offered by oates and their empirical work which indicated little evidence of capitalization supported their interpretation in retrospect conflicting interpretations of the tiebout hypothesis were almost inevitable given the absence of a formal model embodying the tiebout mechanism in an earlier paper with michael visscher we argue that tiebout s hypothesis is as follows if individuals are able to choose from among a multiplicity of local jurisdictions the result will be a pareto efficient provision of local public goods we present two alternative models which differ in the technology for production of local public goods one embodies the efficiency properties claimed by tiebout the other does not using these models we demonstrate that 1 tax capitalization cannot be tested by the procedure proposed by oates because the tax capitalization parameter is not econometrically identified a possible reason for the contradictory empirical findings of oates and of edel and sclar and 2 a test of capitali associate professor carnegie mellon university and assistant professor tulane university respectively

family composition and off farm participation decisions in israeli farm households this article studies the relationship between the off farm participation behavior of farm operators and their spouses and the demographic composition of the household we focus on farm families without parents siblings or partners and examine the effects of the existence of elderly children of the farm couple we find that both the father and the mother tend to reduce their participation in off farm work as the number of elderly children rises this result holds even after controlling for observed characteristics we also find that the effect of elderly children stems from considerations related to both farm production and household production

liquidity constraints as a cause of moonlighting an investigation of whether some workers respond to liquidity constraints by moonlighting is carried out using a unique large data set it is found that workers are more likely to moonlight if 1 they have low current incomes relative to their educational attainment and 2 they plan to purchase a house or a car during the next six months

multiple job holding in the united kingdom evidence from the british household panel survey this article examines the determinants of multiple job holding in the uk we address these issues using data from the first 11 waves of the british household panel survey bhps which covered the period from 1991 to 2001 evidence from the bhps does not support the hypotheses of main job hours constrained and main job insecurity we argue that the incentive for moonlighting in the uk is due to financial pressures and the desire for heterogeneous jobs the empirical work is carried out separately for men and women

the puzzling pattern of multiple job holding across u s labor markets multiple job holding mjh rates differ substantially across u s regions states and metropolitan areas rates decrease markedly with respect to labor market size these patterns have been largely overlooked despite being relatively fixed over at least the past 20 years this article explores explanations for these persistent differences we account for roughly two thirds of the mean absolute deviation in mjh across local labor markets msas the results suggest that variation in mjh across labor markets is driven by labor market differences in job opportunities and worker preferences most important in explaining variation in mjh are msa industry and occupation structure ancestry shares commute times and to a lesser extent labor market churn

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

a critique of tiebout s theory of local public expenditures the last section of this paper presents a rigorous version of tiebout s theory of local public goods it is shown that equilibria exist and are pareto optimal this rigorous theory follows closely the more rigorous part of tiebout s work this rigorous theory makes a number of very special assumptions which make local public goods essentially private the body of this paper presents a series of examples which show that if one tries to generalize the rigorous version of tiebout s theory in a number of interesting directions then equilibria may no longer exist or may not be pareto optimal the conclusion is that tiebout s idea does not lead to a satisfactory general theory of local public goods the goal of this paper is to point out that tiebout s notion of equilibrium with local governments does not have the nice properties of general competitive equilibrium except under very restrictive assumptions tiebout 39 suggested that there are competitive forces which tend to make local governments allocate resources in a pareto optimal fashion consumers choose to live in those towns with the mix of taxes and public goods they prefer local governments choose this mix so as to attract inhabitants this idea may seem intriguing for it suggests that the invisible hand solves an important part of samuelson s perplexing public goods problem 32 tiebout in fact makes an argument which is nearly rigorous i give a rigorous version of his argument at the end of the paper however in this rigorous version so many restrictive assumptions are made that public goods become essentially private in the body of the paper i give a series of examples with which i try to convince the reader that one is forced to adopt tiebout s restrictive assumptions the idea is that if one changes any of his assumptions then either equilibria may not exist or may not be pareto optimal my examples are presented in the context of a general class of tiebout models i consider several subclasses one of which is the special case considered by tiebout in each of the subclasses except that considered by tiebout i give a counterexample either to the existence of equilibrium or to its pareto optimality the subclasses are so chosen that the difficulties they reveal would be shared by any reasonable tiebout model which differed from his special case i believe that my examples controvert tiebout s suggestion 39 last paragraph that his theory compares favorably with competitive equilibrium theory most of the examples in this paper have already appeared in the literature i cite related work as i go along what is new here is that i assemble the examples in a unified argument

moonlighting multiple motives and gender differences this paper examines the incidence and reasons for moonlighting with a focus on gender differences the study specifies and estimates a bivariate probit model of labour supply and the decision to hold more than one job it is found that the factors leading men and women to moonlight are similar a wage decomposition analysis reveals that 93 percent of the differential between male and female moonlighters wages is not explained by differences in characteristics and little connection is found between an individual s human capital and their moonlighting wage finally it is found that moonlighters are less likely to report their income

utility based estimation of labour supply functions in the regular and irregular sectors recent theoretical work on labor supply has shown that the tax and transfer system can induce some individuals to work in the irregular labor market models designed to represent such behavior are unable to sign unambiguously the impact of the marginal tax rate as well as many key exogenous parameters on the hours supplied in the irregular market except under strong restrictions on preferences in this paper the authors estimate a simultaneous labor supply model that allows testing some of the more common assumptions found in the literature using a unique data set on the underground economy of the metropolitan area of quebec city canada estimates of elasticities with respect to predetermined variables are presented moreover they test and empirically reject the assumptions of perfect substitution between regular and irregular work activities as well as additive separability of the utility function copyright 1992 by royal economic society

the tiebout model bring back the entrepreneurs several recent papers in the literature have reformulltlated the nature of equilibrium in ifiebout mo lels by alssliuim ing an exogenous number of communities inflexible commullity l ou alaries anti in pirticular inactive lantlowners and developers ihis paper argues that these assumptions are unwarranted and resul1t iin in eterminate solutions and incorrect analyses determinate lon1g run1 solutions require equilibrium in intercommui land markets which in turn require giving lantlowners and or entrepreneurial leveloelers an active role in the models the role of politics in these models and its juxtaposition with entrepreneurial activities are also analyzed

a time series analysis of labour absence in australia the authors find evidence from australian time series data supporting two hypotheses about the determination of labor absence first labor absence modeled in a utility maximizing framework that stresses the opportunity cost of labor absence receives considerable support from the data variables that change the slope and or shift the budget constraint facing workers affect labor absence secondly the authors find tentative evidence that coercive or difficult work environments which apparently affect job satisfaction adversely affect labor absence in particular it appears that labor absence is a leading indicator of a deteriorating industrial relations environment characterized by increased industrial disputation copyright 1989 by mit press

fiscal migration and the london boroughs an amended version of the aronson schwartz model and a more detailed econometric model are used to test the proposition that population movements within the london metropolitan area are related to the value for money provided by local authorities both approaches reveal evidence of a significant relationship which has a variety of implications for policy towards local government finance

wage differentials and moonlighting by civil servants evidence from cote d ivoire and peru as part of their efforts to reduce fiscal deficits many governments have allowed public sector salaries to erode often on the assumption that government workers are overpaid vis a vis those in the private sector that assumption is tested by analyzing public private pay differentials in cote d ivoire and peru switching regressions models are estimated using full information maximum likelihood fiml and the results are compared to those obtained using ordinary least squares ols techniques the ols yields seriously biased estimates of the pay structure suggesting that public wages are higher than private wages the fiml estimates show the opposite our probit analysis also shows that the wage disadvantage of civil servants is a determinant of the greater prevalence of moonlighting among public than private employees the evidence suggests that reductions in employment rather than pay while being less palatable in the short term will be more effective in the long run

optimal centralized ordering policies in multi echelon inventory systems with correlated demands this paper treats a depot warehouse system in which demand occurs at the warehouse or retail level this work differs from a number of other studies in that we allow item demands to be correlated both across warehouses and also correlated in time our motivation for this generalization arises from our experience with an actual system of this type used by a major national producer and distributor of consumer products we observed both high correlations between successive monthly demands around 0 7 and correlations between demands for an item at different locations also about 0 7 in a given time period we derive an explicit expression for the optimal safety stock as a function of the level of correlation through time the analysis requires two assumptions 1 the allocation assumption and 2 the equal coefficient of variation assumption similar assumptions have been used by other researchers finally numerical evaluations are included to illustrate the impact of the various magnitudes of correlation

is it all about money an examination of the motives behind moonlighting multiple job holding is an important labour market phenomenon in this article we examine individuals motives for multiple job holding specifically we estimate an empirical model of the motivation for moonlighting assuming that individuals hold a second job for either financial or for nonpecuniary motives our results contribute to a better understanding of multiple job holding we find that multiple job holding is used by individuals as a way to deal with the financial difficulties or the increased financial commitments in their household individuals are more likely to moonlight for money in the early stages of their adult life finally individuals with more labour market experience are more likely to moonlight for pecuniary than nonpecuniary reasons

optimal jurisdictional fragmentation and mobility abstract tiebout s hypothesis is examined in a model with the continuum of income classes and no economies of scale of population in public output provision any efficient allocation of resources can be achieved in this model by a system of jurisdictions each containing a separate income class and each using a local property tax to finance local public output however in general at most one such allocation will be an equilibrium if residents can vote with their feet conditions are derived under which higher income residents will locate in jurisdictions providing a higher level of public output these are shown necessary given a separable utility function for any optimal allocation to be sustainable as an equilibrium when residents are mobile

the shadow margins of labor market slack we use a mix of new and existing data to develop the aggregate hours gap ahg a novel measure of labor market underutilization our measure differentiates individuals by detailed categories of labor market participation and uses data on their desired work hours as a measure of their potential labor supply we show that desired hours vary widely by demographics and detailed labor force status and that the gap between desired and actual work hours is strongly positively correlated with reported search effort the aggregate hours gap suggests a more sluggish labor market recovery since the great recession than either the official unemployment rate or alternative measures of labor market underutilization modest amounts of underutilization among the part time employed and a substantial degree of underutilization among those out of the labor force account for the disparity the aggregate hours gap also does well in accounting for wage movements over our sample period

trade in a tiebout economy the purpose of this paper is to explore both the positive and normative aspects of commodity trade in a tiebout economy by tiebout economy i mean an economy with a large number of small regions for example communities or states and no impediments to the mobility of individuals between these regions this type of economy has received widespread attention since the appearance of charles tiebout s classic 1956 article on local public goods in part because it bears a close relation to the standard competitive model this relation suggests that tiebout economies may serve as an

tanzanian formal sector workers participation in informal production a theoretical model is developed explaining formal sector workers participation in the informal sector a reduced form informal sector participation function is derived from a specific utility function a specific informal sector production function and a specific informal sector earnings function the participation function can be estimated consistently and provides a solution to the problem that informal sector wages in developing countries are hard to observe a sample of tanzanian formal sector workers is used to estimate the participation function a majority of tanzanian formal sector workers participate in informal production participation in informal production is inversely related to household income to living in dar es salaam and to being a mother with small children participation is positively related to age and multiple job holding seems to play a very different role in the transition from work to retirement in tanzania compared to industrialized countries