does marriage really make men more productive this paper presents new descriptive evidence regarding marital pay premiums earned by white males longitudinal data indicate that wages rise after marriage and that cross sectional marriage premiums appear to result from a steepening of the earnings profile data from a company personnelfile that includes information on job grades and supervisor performance ratings reveal large marital status pay differences within a narrow range of occupations managers and professionals and environments a single firm married workers tend to be located in higher paying job grades there are very small pay differentials within grades married men receive higher performance ratings than single men as a result they are much more likely to be promoted controlling for rated performance however eliminates the promotion differential sanders korenman is an assistant professor of economics and public affairs at princeton university and is a faculty associate of the office of population research at princeton university and a research affiliate of the national bureau of economic research nber david neumark is an assistant professor of economics at the university of pennsylvania and a research affiliate of the nber korenman wishes to acknowledge the hewlett foundation and the harvard university center for population studies for financial support the authors are grateful to james medofffor making available an extract from the company personnelfile questions regarding data availability should be directed to professor james

the behavior of prices and inflation an empirical analysis of disaggregat price data this paper analyzes the effects of inflation on the dispersion of prices as well as other aspects of price behavior using disaggregated data on prices of foodstuffs in israel during 1978 84 we find that the effect of expected inflation on intramarket price variability is stronger than the effect of unexpected inflation we show that even in times of high inflation price quotations are not trivially short and price changes are not synchronized across firms these facts taken together confirm that there is some staggering in the setting of prices we find that the distribution of real prices is far from being uniform as many menu cost based models assume or conclude in fact as inflation increases to very high levels this distribution is not even symmetric when the annual inflation rate reaches 130 percent there are equal chances of finding real prices above or below the market average but upward deviations in the real price are further away from zero than downward ones furthermore as the annu

price changes in the euro area and the united states some facts from individual consumer price data prices of goods and services do not adjust immediately in response to changing demand and supply conditions this paper characterizes the average frequency and size of price changes in the euro area and its member countries investigates the determinants of the probability of price changes and compares the evidence for the euro area with available u s results the facts documented in this paper are based on evidence from individual price data recorded at the store level in all euro area countries except ireland and greece that is in datasets covering austria belgium finland france germany italy luxembourg the netherlands portugal and spain which together account for around 97 percent of euro area gdp the data used are the monthly price records underlying the computation of national consumer price indices and harmonized consumer price indices these data cover a large number of products selected on the basis of extensive household budget surveys

modeling conditional yield densities given the increasing interest in agricultural risk many have sought improved methods to characterize conditional crop yield densities while most have postulated the beta as a flexible alternative to the normal others have chosen nonparametric methods unfortunately yield data tends not to be sufficiently abundant to invalidate many reasonable parametric models this is problematic because conclusions from economic analyses which require estimated conditional yield densities tend not to be invariant to the modeling assumption we propose a semiparametric estimator that because of its theoretical properties and our simulation results enables one to empirically proceed with a higher degree of confidence copyright 2003 oxford university press

understanding the family gap in pay for women with children as the gender gap in pay between women and men has been narrowing the family gap in pay between mothers and nonmothers has been widening one reason may be the institutional structure in the united states which has emphasized equal pay and opportunity policies but not family policies in contrast to other countries that have implemented both the authors now have evidence on the links between one such family policy and women s pay recent research suggests that maternity leave coverage by raising women s retention after childbirth also raises women s levels of work experience job tenure and pay

patterns of retail price variation we examine retail price variation across a range of goods and regions of the united states we find that the typical grocery product has a regular price and stays at that price at least 50 of the time and that most deviations from that regular price are downward temporary discounts or sales while infrequent account for 20 to 50 of the annual variation in retail prices for most product categories although existing models of retail sales yield predictions consistent with some aspects of the retail pricing distributions all of these models fail to explain other important aspects of retail pricing identified here

the value of ideal contingency markets in agriculture an incomplete markets equilibrium in which no contingency markets are available is compared to a complete markets equilibrium formed by introducing a futures market and a crop insurance market the two regimes are compared using comparative static and welfare analyses numerical examples highlight important characteristics of the model and illustrate how the effects of introducing contingency markets can be quantified the main conclusions are that contingency markets in agriculture increase economic efficiency but there is no guarantee that farmers and consumers both benefit it is found that futures and crop insurance markets may reduce farmer welfare when the demand for farm products is price inelastic

automakers short run responses to changing gasoline prices abstract we provide empirical evidence that automobile manufacturers use cash incentives to offset how gasoline price fluctuations affect the expected fuel expenses of automobile buyers regressions based on a database of incentives over 2003 to 2006 suggest that on average manufacturers offset 40 of the change in relative fuel costs between vehicles due to gasoline price fluctuations the results highlight that carbon taxes and emissions trading programs likely would generate substantial substitution within vehicle classes and studies that ignore manufacturer discounting likely underestimate consumer demand for fuel economy the results also have implications for the optimal design of feebate programs

are crop yields normally distributed the evidence for nonnormality of crop yields is reassessed three methodological problems are identified in typical yield distribution analyses i misspecification of the nonrandom components of yield distributions ii missreporting of statistical significance and iii use of aggregate timeseries ats data to represent farm level yield distributions one or more of these problems infect virtually all evidence against normality to date the positive contribution of the article is a set of principles that must be followed in any valid investigation of yield normality

heterogeneity in consumer price stickiness we examine heterogeneity in price stickiness using a large original set of individual price data collected at the retail level for the computation of the french consumer price index for that purpose we estimate at a very high level of disaggregation a piecewise constant hazard model as well as competing risks duration models that distinguish between price increases price decreases and product replacements the main findings are the following a at the product outlet type level the baseline hazard function of a price spell is nondecreasing b cross product and cross outlet type heterogeneity is pervasive both in the shape and the level of the hazard function as well as in the impact of covariates c there is strong evidence of state dependence especially for price increases d there is an asymmetry because determinants of price increases differ from those of price decreases

crop insurance valuation under alternative yield distributions considerable disagreement exists about the most appropriate characterization of farm level yield distributions yet the economic importance of alternative yield distribution specifications on crop insurance valuation has not been well documented the results of this study demonstrate that large differences in expected payouts from popular crop insurance products can arise solely from the parameterization chosen to represent yield distributions the results suggest that the frequently unexamined yield distribution specification may lead to economically significant errors in crop insurance policy rating and assessment of expected payouts from policies

identification results for duration models with multiple spells the purpose of this paper is to investigate the identifiability of duration models with multiple spells we prove that the results of elbers and ridder 1982 and heckman and singer 1984 can be generalized to multi spell models with lagged duration dependence we also prove that without lagged duration dependence the identification result does not depend on moment conditions or tail conditions on the mixing distribution this result is in contrast to ridder s 1990 result for single spell models

menu costs and the neutrality of money a model of endogenous price adjustment under money growth is presented firms follow s s pricing policies and price revisions are imperfectly synchronized in the aggregate price stickiness disappears and money is neutral the connection between firm price adjustment and relative price variability in the presence of monetary growth is also investigated the results contrast with those obtained in models with exogenous fixed timing of price adjustment

income and wealth effects on private label demand evidence from the great recession we measure the causal effects of income and wealth on the demand for private label products prior research suggests that these effects are large and in particular that private label demand rises during recessions our empirical analysis is based on a comprehensive household level transactions database matched with price information from store level scanner data and wealth data based on local house value indices the great recession provides a key source of the variation in our data showing a large and geographically diverse impact on household incomes over time we estimate income and wealth effects using within variation of income at the household level and wealth at the zip code level our estimates can be interpreted as income and wealth effects consistent with a consumer demand model based on utility maximization we establish a precisely measured negative effect of income on private label shares the effect of wealth is negative but not precisely measured however the estimated effect sizes

nonparametric estimation of crop yield distributions implications for rating group risk crop insurance contracts we use nonparametric density estimation procedures to evaluate county level crop yield distributions implications for rating area yield crop insurance contracts are discussed the procedures developed are used to measure yield risk and calculate insurance premium rates for wheat and barley in the 1995 96 group risk program

u s soybean yields estimation and forecasting with nonsymmetric disturbances national average soybean yields are skewed with a relatively high chance of low yields maximum likelihood estimates support this hypothesis revised forecasts which account for skewed yields are positioned higher than forecasts based on the illusion of a symmetric distribution also yield instability has been increasing steadily the standard deviation of the soybean yield distribution is twenty five percent higher in the late 1980s than it was in the early 1970s

marriage and divorce changes and their driving forces the family is not a static institution in recent decades marriage rates have fallen divorce rates have risen and the defining characteristics of marriage have changed the economic approach to the family seeks to explain these trends by reference to models that can also explain how and why families form gary becker s 1981 treatise on the family proposed a theory based on production complementarities in which husband and wife specialize in the market and domestic spheres respectively production complementarities also arise in the production and rearing of one s own children however production complementarities at least as initially described are decreasingly central to modern family life increased longevity and declining fertility mean that most of one s adult life is spent without one s own children in the household also the rise in marital formation at older ages including remarriage means that many families form with no intention of producing children moreover increases in female labor force participation suggest that household specialization has either declined or at least taken on a different meaning these changes have come about as what is produced in the home has been dramatically altered both by the emergence of labor saving technology in the home and by the development of service industries that allow much of what was once provided by specialized homemakers to be purchased in the market the availabil

five facts about prices a reevaluation of menu cost models are price decreases 3 the frequency of price increases covaries strongly with inflation whereas the frequency of price decreases and the size of price increases and price decreases do not 4 the frequency of price change is highly seasonal it is highest in the first quarter and then declines 5 we find no evidence of upwardsloping hazard functions of price changes for individual products we show that the first second and third facts are consistent with a benchmark menu cost model whereas the fourth and fifth facts are not

are all the good men married uncovering the sources of the marital wage premium a longstanding and yet unsettled question in labor economics is does marriage cause men s wages to rise cross sectional wage studies consistently find that married men earn significantly higher wages than do men who are not currently married however it is well known that inferring causal relationships from crosssectional analysis is inappropriate because of the biases introduced by unobserved heterogeneity as a means of circumventing this problem this paper uses data on identical twins to control for unobserved heterogeneity our estimates suggest that marriage increases men s wages by as much as 27 and that little if any of the cross sectional relationship between marriage and wages is due to selection in addition we find little evidence that the marital wage premium is a consequence of household specialization

forecasting gasoline prices in the presence of edgeworth price cycles abstract forecasting is a central theme in economics the ability to forecast prices enables economic agents to make optimal decisions for the present and future in this article we investigate if and how gasoline prices can be forecast in retail gasoline markets that are subject to high frequency asymmetric price cycles known as edgeworth price cycles we examine a series of purchase timing decision rules and a series of feasible forecasting algorithms for updating those rules over time we find that in the presence of cycles agents in our five australian markets can systematically reduce purchase prices below market average the equivalent of 11 to 15 u s cents per gallon using simple decision rules and feasible forecasting algorithms

inflation and price setting in a natural experiment abstract we analyze the behavior of price setters in poland during the transition from a planned to a market economy using a large disaggregated data set the size and frequency of price changes as well as relative price variability all increase as inflation rises the effect of expected inflation on relative price variability is much stronger than the effect of unexpected inflation despite the unusual economic environment the results are qualitatively identical and quantitatively stronger than those in lach and tsiddon 1992 journal of political economy 100 349 389

the dynamics of markups and inventories in retailing firms this paper is concerned with the interaction between price and inventory decisions in retailing firms and its implications for the dynamics of markups and the existence of sales pro motions we consider a model where a monopolistically competitive retailer decides price and inventories and assumes lump sum costs when placing orders or changing nominal prices tn this model the existence of stockout probabilities and fixed ordering costs generate a cyclical price behaviour characterized by long periods without nominal price changes and short periods with very low prices i e sales promotions we estimate this model using a unique longitudinal dataset with information about retail and wholesale prices inventories orders and sales for several brands in a supermarket chain based on the estimated model we perform several counterfactual experi ments that show the important role that inventories and fixed ordering costs play in the dynamics of retail prices and the frequency of sales promotions in this dataset

incomplete markets and government agriculture policy this paper investigates the welfare effects of several stereotypical agricultural policies in an economy with production risk and incomplete contingent claim markets the policies analyzed include target price deficiency payment programs the brannan plan production controls the cochrane plan and land set asides when there is no trading in contingent claims and when economic parameters take on values characteristic of staple food markets the paper finds that ajoint brannan plan production control program is often welfare increasing however production controls on their own tend to be welfare decreasing in addition land set asides are generally welfare reducing even in the presence of a brannan plan these results are derived analytically in a simple equilibrium model they are illustrated with a numerical example which demonstrates that welfare benefits from typical agricultural policy interventions can be large

the role of information in retail gasoline price dispersion abstract collecting information on prices is a costly endeavor the cost depends on the relative ease with which those prices can be collected and in many retail gasoline markets there is a substantial divide in the ease of collecting information with regular grade gasoline on one side of the divide and midgrade and premium grade gasoline on the other regular grade prices are prominently displayed on large signboards in front of gasoline stations while the prices of higher octane grades except where required by law are rarely displayed in this article the effects of differential by grade price information on search and gasoline price dispersion are examined a rank reversal test is used to test whether the observed grade specific price dispersion is consistent with search or non search related causes and finding the former a series of tests are presented to test for the effect of price information and other leading hypotheses a significantly concave curvature in the price dispersion coefficients across the three grades supports a price information hypothesis detailed socioeconomic data on consumers spatially matched to the stations they are most likely to patronize shows that income is a secondary factor implications for policy are discussed

nonparametric estimation of crop insurance rates revisited with the crop insurance program becoming the cornerstone of u s agricultural policy recovering accurate rates is of paramount interest lack of yield data presents by far the most fundamental obstacle to recovery of accurate rates thisarticle employsnew methodology to estimate conditional yield densities and derive the insurance rates in our application we find the nonparametric kernel density estimator requires an additional twenty six years of yield data to estimate the shape of the conditional yield dens itiesasaccurately asthe recently developed empirical bayesnonparametric kernel density estimator such methodological improvements can significantly aid in ameliorating the data problem recovering accurate premium ratesis paramount to the actuarial soundness of the crop insurance program a program which hasgained prominence in the overall u s agricultural policy agenda the 1996 federal agricultural improvement and reform fair act signaled a new policy environment under which farmerswould be s to market forces under this policy regime crop insurance remains in some respects one of the only government subsidized income stabilizing mechanisms available to agricultural producers in addition it appears that current political forcesare in the proces sof fashioning crop insurance as the cornerstone of u s agricultural policy consider the 1999 state of the union address in which the president stated

why are products sold on sale explanations of pricing regularities this paper reports on interesting changes in markdown pricing practices over time and differences in the pricing within a product line the price discrimination and the uncertainty hypotheses appear to better explain the data than the peak load hypothesis fashion has become more important over time and appears to explain the greater seasonal variation in retail apparel prices in recent years differences in uncertainty also explains differences in the pricing of different types of men s dress shirts

the timing of sales this paper presents a model of intertemporal price discrimination a fixed number of sellers produce a homogeneous good consumers with different preferences enter the market in each period and leave when they make a purchase the sellers typically vary their prices over time charging a high price in most periods but occasionally cutting the price to sell to a large group of customers with a low reservation price in some equilibria all stores lower their price at the same time and to the same level

quality perceptions and asymmetric switching between brands rotating indifference curves are used to induce an income effect that favors superior brands at the expense of inferior brands in a discrete choice model when calibrated on scanner panel data the model yields an objective measure of brand quality which is related to the rate of rotation the model also leads to asymmetric responses to price promotions where switching up to high quality brands is more likely than switching down the model is capable of nesting the standard logit model and is similar to a nested logit model when there exists clusters of brands of like quality the model is used to explore a product line pricing decision where profits are maximized subject to the constraint that consumer utility is maintained

evolution of the marriage earnings gap for women abstract using survey of income and program participation sipp panels linked to social security earnings records we examine the earnings gap associated with marriage for cohorts of women born between 1936 and 1975 we compare ordinary least squares and fixed effect estimates we find that among women who work the marital earnings gap has all but disappeared in fixed effects estimates for recent birth cohorts in fact among women without children married women earn more than single women implying a diminished role for specialization when children are not present in contrast the motherhood earnings gap remains large even for recent birth cohorts

the implicit costs of motherhood over the lifecycle cross cohort evidence from administrative longitudinal data it is well known that the explicit costs of raising a child have grown over the past several decades less well understood are the implicit costs of having a child and how they have changed over time in this article we are the first to examine the evolution of the implicit costs of motherhood over the lifecycle and across generations using high quality administrative data we estimate that the lifetime labor market income gap between mothers and women who never have children never mothers decreases from around 350 000 to 280 000 between women born in the late 1940s and late 1960s gaps tend to increase monotonically over the lifecycle and decrease monotonically between cohorts our evidence suggests that changes in the gaps are caused by changing labor force participation rates

toward a normative theory of crop yield skewness while the preponderance of empirical studies point to negative crop yield skewness in a wide variety of contexts the literature provides few clear insights on why this is so the purpose of this paper is to make three points on the matter we show formally that statistical laws on aggregates do not suggest a normal yield distribution we explain that whenever the weather conditioned mean yield has diminishing marginal product then there is a disposition toward negative skewness in aggregate yields this is because a high marginal product in bad weather states stretches out the left tail of the yield distribution relative to that of the weather distribution turning to disaggregated yields we decompose unconditional skewness into weather conditioned skewness plus two other terms and study each in turn

spatial pattern of yield distributions implications for crop insurance crop insurance is similar to flood and hurricane insurance in that spatially correlated weather tends to cause violations of the independence assumption ideally one would seek to pool uncorrelated risk drawn from the same distribution in crop insurance this article proposes a testing procedure for the cross sectional pooling of group units and empirically analyzes whether the proposed test improves out of sample rating performance we utilize a balanced panel of u s county level corn yields for 510 counties and the results of an out of sample crop insurance rating performance exercise provide economic significance to the proposed pooling methodology and results

state dependent pricing and the general equilibrium dynamics of money and output economists have long suggested that nominal product prices are changed infrequently because of fixed costs in such a setting optimal price adjustment should depend on the state of the economy yet while widely discussed statedependent pricing has proved difficult to incorporate into macroeconomic models this paper develops a new tractable theoretical state dependent pricing framework we use it to study how optimal pricing depends on the persistence of monetary shocks the elasticities of labor supply and goods demand and the interest sensitivity of money demand

spatio temporal modeling of agricultural yield data with an application to pricing crop insurance contracts this article presents a statistical model of agricultural yield data based on a set of hierarchical bayesian models that allows joint modeling of temporal and spatial autocorrelation this method captures a comprehensive range of the various uncertainties involved in predicting crop insurance premium rates as opposed to the more traditional ad hoc two stage methods that are typically based on independent estimation and prediction a panel data set of county average yield data was analyzed for 290 counties in the state of parana brazil for the period of 1990 through 2002 posterior predictive criteria are used to evaluate different model specifications this article provides substantial improvements in the statistical and actuarial methods often applied to the calculation of insurance premium rates these improvements are especially relevant to situations where data are limited

investigating income effects in scanner data do gasoline prices affect grocery purchases there is much discussion in the popular press about how consumers adjust their purchase decisions for items from lattes and restaurant meals to which type of meat to purchase for dinner during times of rising fuel prices 1 while analysts ascribe declines in retail sector profits when fuel prices rise to changes in demand elasticity most empirical analysis of consumer choice for such daily items abstracts from inter temporal income effects instead fuel prices are used in demand estimation as exogenous shifters of production costs and therefore valid instruments for identifying demand parameters though introspection and popular press suggest that sharp changes in fuel costs may shift price sensitivity in nonfuel purchases through an income effect little empirical work has been done to estimate or quantify this effect 2

relaxing heteroscedasticity assumptions in area yield crop insurance rating this article focuses on the effect of differing heteroscedasticity assumptions on derived premium rates of area yield crop insurance tests of the proportional and absolute heteroscedasticity assumptions are conducted using both in sample and out of sample measures our results suggest that arbitrarily imposing a specific form of heteroscedasticity or homoscedasticity in insurance rate calculations limits actuarial soundness our results have practical implications for the federal crop insurance programs as we reject the traditional rating assumptions for many cotton regions and lower yielding higher risk corn and soybean counties but not in the heart of the cornbelt copyright 2011 oxford university press

shopping around how households adjusted food spending over the great recession over the great recession real wages stagnated and unemployment increased concurrently food prices rose sharply outstripping growth in food expenditure and leading to a reduction in calories purchased this has led to concern about rising food poverty we study british households to assess how they adjusted to changes in the economic environment we show they switched to cheaper calories implying food consumption was smoother than expenditure we use longitudinal data to quantify the way households lowered their per calorie spending and show they done this in part by increasing shopping eort and without lowering the nutritional quality of