working wives and major family expenditures replication and extension this paper updates and replicates an earlier study comparing purchases by working wives employed outside the home and nonworking wives and the amounts spent for time saving durables other durables and hobby and recreation items using a 1977 data base similar to one gathered a decade earlier wife s labor force behavior was again found not to be significantly related to either purchase or expenditure decisions for time saving durables when income stage of life cycle and other situational variables were held constant

premia for correlated default risk abstract using data on corporate default experience in the u s and market rates of cdx index and tranche swaps of various maturities we estimate reduced form models of correlated default timing in the cdx high yield and investment grade portfolios under actual and risk neutral probabilities the striking contrast between the estimated processes followed by the actual and risk neutral arrival intensities of defaults and between the parameters governing the actual and risk neutral dynamics of the risk neutral intensities indicates the presence of substantial default risk premia in cdx swap market rates the effects of risk premia on swap rates covary strongly across maturities and depend on general stock market volatility and several measures of credit spreads large moves in the effects of these premia on swap rates have natural interpretations in terms of economic and financial market developments during the sample period april 2004 to october 2007 our results suggest that a large portion of the movements in cdx swap market rates observed during the sample period may be caused by changing attitudes toward correlated default risk rather than changes in the economic factors affecting the actual risk of clustered defaults which ultimately governs swap payoffs

international trade and air pollution damages in the united states abstract this paper investigates the health and economic consequences of trade due to various air pollutants embodied in exports and imports we compare the us emissions generated for us exports and those that were avoided by importing an input output framework of the us economy is employed together with a comprehensive database on damages expressed in monetary terms generated by pollutants as estimated by muller et al 2011 we find that damages associated with international trade in 2002 were considerable the net result is that damages were avoided through trade and that these avoided damages amounted to 2 7 of the us trade deficit and 3 4 of the us value added associated with trade moreover the computed damage to value added ratios differed greatly across industries exports in some industries are so hazardous that more than half of the value added gained from extra exports disappeared due to environmental damages these findings imply that the us might benefit more from trade by increasing its exports more in low damage intensive products than in high damage intensive products

measuring the damages of air pollution in the united states abstract this paper measures the damages due to emissions of air pollution in the united states an integrated assessment model is used to calculate the marginal damage associated with emitting an additional ton of pollution from nearly 10 000 sources in the u s the total damage produced by a source is the marginal damage of an emission its shadow price times the total tons emitted from a specific source adding total damages across all sources yields gross annual damages gad which is a green accounting parallel to gross domestic product gdp gad in 2002 varies between 71 billion and 277 billion 0 7 2 8 of gdp the range of values depends largely on the value of health and the concentration response function relating exposures to fine particulate matter pm 2 5 to adult mortality rates source location also matters urban emissions constitute 52 of total emissions by weight yet they cause nearly three quarters of the gad

environmental accounting for pollution in the united states economy this study presents a framework to include environmental externali ties into a system of national accounts the paper estimates the air pollution damages for each industry in the united states an inte grated assessment model quantifies the marginal damages of air pol lution emissions for the us which are multiplied times the quantity of emissions by industry to compute gross damages solid waste com bustion sewage treatment stone quarrying marinas and oil and coal fired power plants have air pollution damages larger than their value added the largest industrial contributor to external costs is coal fired electric generation whose damages range from 0 8 to 5 6 times value added jel e01 l94 q53 q56

environmental constituent interest green electricity policies and legislative voting abstract research in political economy has traditionally sought to disentangle the effects of legislative ideology and constituent interest in explaining policy decisions frequently proxy variables are used to measure constituent interest however these measures do not adequately reflect true constituent interest which is based upon the costs and benefits of the policies under consideration incorporating the scope of the policies using haiku a detailed model of the us electricity sector and taf an integrated assessment model of pollution pathways and valuation i construct economic measures of constituent interest at the state level as well as for federal policy i then use these measures to analyze state adoption of more stringent green electricity policies and congressional roll call voting on federal environmental policy previous studies that use proxy measures of constituent interest typically find that the legislator ideology matters more while my study shows that both ideology and constituent interest are significant factors

working wives and expenditure on services the major focus of this research is the relationship between a wife s employment and expenditure on time saving services multiple regression analysis of data from the 1972 1973 consumer expenditure survey indicates that two measures of the extent of a wife s participation in the labor force were influential in determining monetary outlay on services that are expected to be sensitive to the value of time other factors such as family income education and stage of the family life cycle also exert an impact on expenditure findings indicate that family expenditure on services is a complex process influenced by many factors besides a wife s employment

how economic contractions and expansions affect expenditure patterns in this study we attempt to understand how household budget allocations across various expenditure categories change when the economy is in recession or expansion the common assumption is that a household s tastes would not change as a function of economic conditions and therefore any adjustments in expenditure patterns during economic contractions expansions would simply be due to changes in the consumption budget standard economic models translate these budgetary effects into lateral movements along a set of fixed engel curves which relate category expenditure shares to total expenditures we propose and test a conceptual framework based on the notion of relative consumption which prescribes that for any given total consumption budget expenditure shares for positional goods services will decrease during a recession while shares for nonpositional goods services will increase i e shifting the entire engel curve upward or downward depending on the nature of the expenditure category and the economic conditions

fiscal federalism and interjurisdictional externalities new results and an application to us air pollution abstract the economics of fiscal federalism has identified two book end departures from first best provision of a public good local governments may respond to local conditions but ignore inter jurisdictional spillovers alternatively central governments may internalize spillovers but impose uniform incentives ignoring local heterogeneity we provide a simple model that demonstrates that the choice of pricing policy also depends crucially on a third factor the shape of marginal costs of providing the public good if marginal costs are convex then marginal abatement cost elasticities will be higher around the local policies this increases the deadweight loss of those policies relative to the centralized policy ceteris paribus if they are concave then the opposite is true using a detailed simulation model of the us electricity sector we then empirically explore these tradeoffs for us air pollution we find that us states acting in their own interest lose about 31 5 of the potential first best benefits whereas the second best uniform policy loses only 0 2 of benefits the centralized policy outperforms the state policy for two reasons first inter state spillovers are simply more important that inter state heterogeneity in this application second because of the convexity of the marginal cost functions elasticities are much lower over the range relevant to the centralized policy dampening the distortions

estimating the implied cost of carbon in future scenarios using a cge model the case of colorado abstract using colorado as a case study we develop a state level computable general equilibrium cge model that reflects the roles of coal natural gas wind solar and hydroelectricity in supplying electricity we focus on the economic impact of implementing colorado s existing renewable portfolio standard updated in 2013 this requires that 25 of state generation come from qualifying renewable sources by 2020 we evaluate the policy under a variety of assumptions regarding wind integration costs and assumptions on the persistence of federal subsidies for wind specifically we estimate the implied price of carbon as the carbon price at which a state level policy would pass a state level cost benefit analysis taking account of estimated greenhouse gas emission reductions and ancillary benefits from corresponding reductions in criteria pollutants our findings suggest that without the production tax credit federal aid the state policy of mandating renewable power generation rps is costly to state actors with an implied cost of carbon of about 17 per ton of co2 with a 3 discount rate federal aid makes the decision between natural gas and wind nearly cost neutral for colorado

the effects of changes in household demographics and employment on consumer demand patterns this study examines to what extent changes in consumer demand patterns over the last two decades in the netherlands can be attributed to changes in household demographics employment and total expenditures the dominating changes in consumer demand are decreasing budget shares of food beverages and clothing footwear and increasing budget shares of housing and services the changes in households composition away from the traditional one earner family with children together with the increase in household total expenditures account for about one third of the decrease in the budget share of food beverages half of the increase in the budget shares of services and only a minor part of the increase in housing once controlled for budget effects the quadrupling of the proportion of employed women with young children accounts for about one third of the increase in the budget shares of personal health care including childcare and food away holidays entertainment

are there environmental benefits from driving electric vehicles the importance of local factors we combine a theoretical discrete choice model of vehicle purchases an econometric analysis of electricity emissions and the ap2 air pollution model to estimate the geographic variation in the environmental benefits from driving electric vehicles the second best electric vehicle purchase subsidy ranges from 2 785 in california to 4 964 in north dakota with a mean of 1 095 ninety percent of local environmental externalities from driving electric vehicles in one state are exported to others implying they may be subsidized locally even when the environmental benefits are negative overall geographically differentiated subsidies can reduce deadweight loss but only modestly

your money or your life green growth policies and welfare in 2050 this paper proposes a simple index of economic progress that weighs in the monetary cost induced by climate change mitigation policies as well as the health benefits arising from the reduction in local air pollution the shadow price of pollution is calculated indirectly through its impact on life expectancy taking into account the health benefits of mitigation policies significantly reduces their monetary cost in china and india as well as in countries with large fossil based energy producing sectors australia canada and the united states

an assessment of two environmental and economic benefits of cash for clunkers abstract this research aims to provide a more comprehensive life cycle accounting of two categories of environmental and economic benefits associated with the 3 billion us cash for clunkers vehicle scrappage program first using a life cycle emissions methodology developed in lenski et al 2010 we find that about 29 000 metric tons of criteria pollutant emissions were avoided for a benefit of about 23 million avoided carbon dioxide emissions by comparison provided a benefit worth 90 million second we compare the market value of scrapped vehicles to the rebates provided calculating the consumer surplus or gift to participants to be up to 2 billion about 2000 to 3000 per vehicle this is significantly more than offered in previous vehicle scrappage programs and suggests opportunities to get more environmental and economic bang for the buck finally these two categories of benefits are found to be heavily concentrated geographically around urban centers about 2 of us counties 50 counties received 50 and 30 of the aggregate benefits from avoided criteria pollutant emissions and consumer surplus from the rebates respectively

breakfast lunch and dinner expenditures away from home in the united states abstract this study investigates the differentiated effects of economic and socio demographic variables on food away from home fafh expenditures by type of meal among different types of households in the united states using data from the 2008 and 2009 consumer expenditure surveys the systems of expenditures on breakfast lunch and dinner are estimated with a multivariate sample selection procedure statistical significance of error correlations among equations justifies estimation of the sample selection systems income work hours race education geographic region and household composition are important determinants of fafh expenditures income contributes to fafh expenditures of all meal types implying that the future of fafh industry is tied to macroeconomic conditions more education is associated with increased expenditures for fafh lunch and dinner effects of the supplemental nutrition assistance program snap are negligible

the derivation of discount rates with an augmented measure of income abstract most developed economies invest in public goods such as national defense education infrastructure and the environment discount rates used to evaluate such projects should reflect the rate of return on the current mix of investment opportunities rates derived from the productivity of private capital neglect returns beyond the market boundary the present paper derives discount rates using an augmented measure of national income inclusive of non market goods in an empirical application focusing on air pollution and climate damages in the united states economy the paper reports that the difference between augmented and market discount rates averages 0 3 percentage points from 1999 to 2014

sulfur dioxide emission reduction of power plants in china current policies and implications abstract electricity generation by conventional fossil fuel power plants have caused severe environmental problems worldwide besides greenhouse gas emissions which has global impacts on the climate there are also pollutant emissions like sulfur dioxide which endanger the local environment in particular for developing countries who often highly rely on coal for power generation due to their resource endowment and the competitive costs of coal the issue of environment pollution caused by coal fired power plants is getting increasingly severe therefore various solutions should be combined and implemented to address the issue including environmental regulation and economic and financial incentives this study conducted an industry survey in 7 coal fired power plants in china to collect detailed data in the field to examine the costs and benefits of flue gas desulfurization currently coal fired power plants in china which install and properly operate flue gas desulfurization equipment can receive 15 yuan mwh premium tariff on top of their on grid tariffs however this study shows that this incentive is insufficient to cover the flue gas desulfurization costs of most of the sample plants more solutions both regulatory and market based should be considered to address this issue firstly under china s current regulated power plants dispatch scheme allocating generation hour based on the pollutant emission would provide strong incentive for sulfur dioxide mitigation secondly it is suggested to provide more supportive financial environment for flue gas desulfurization industry by fiscal supports diverse financing accesses and innovation financial and business models thirdly more environmental regulation tools such as emission cap and emission discharge fees should be set properly and examined carefully to optimize their impacts on economy society and environment finally the analysis and results of this study can also be applied in other fields such as denitration and dedusting of coal fired power plants

dynamic asset pricing theory with uncertain time horizon abstract this paper addresses the problem of pricing and hedging a random cash flow received at a random date in a general setup with a random time that is not a stopping time of the filtration generated by asset prices we first provide an explicit characterization of the set of equivalent martingale measures we also present price bounds consistent with perfect replication in the absence of arbitrage as is often the case such bounds are too wide to be of any practical use and we consider several choices for narrowing down to one the number of equivalent martingale measures

green net value added as a sustainability metric based on life cycle assessment an application to bounty paper towel abstract sustainability measurement in economics includes assessment of environmental and economic effects in an integrated manner in this study system level economic data are integrated with environmental impacts determined from a life cycle assessment lca of a common product we adopt a costing methodology that captures conventional costs but additionally incorporates externality costs to present a convenient easily interpretable metric green net value added gnva is a type of full cost accounting that incorporates total revenue the cost of production depreciation and environmental externalities we present externality costs disaggregated by upstream sectors full cost of production and gnva to evaluate the relative sustainability of bounty paper towels manufactured at two production facilities we found that the longer running more established line had a higher gnva the predominant components contributing to externality costs come from the stationary sources in the supply chain electricity generation 27 35 refineries 20 21 pulp and paper making 15 23 health related externalities from particulate matter pm2 5 and carbon dioxide equivalent co2e emissions are to a great extent driven by electricity usage and emissions by the facilities followed by pulp processing and transport supply chains for other facility purchases product distribution and end of life management contribute the least to the environmental health related costs

household consumption of food away from home total expenditure and by type of food facility consistent with prior expectations based on household production theory household income time value size and composition and the environment in which production and consumption occurred were all important determinants of total household expenditures on food away from home however the importance of these factors varied by type of food facility conventional restaurants fast food facilities and other commercial establishments decomposition of the tobit elasticities indicated the differential importance of market participation effects of household size income and time value by level of the variable and by type of food facility

systematic equity based credit risk a cev model with jump to default we use equity as the traded primitive for a detailed analysis of systematic default risk default is parsimoniously represented by equity value hitting the zero barrier so that unlike in reduced form models the explicit linkage to the firm s capital structure is preserved but unlike in structural models restrictive assumptions on the structure are avoided default risk is either jump like or diffusive the equity price can jump to default in line with recent empirical evidence on the jump to default risk price we highlight how reasonable choices of the pricing kernel can imply remarkable differences in the equity price dependent status between the objective default intensity and the risk neutral intensity as equity returns experience negative diffusive shocks their cev type local variance increases and boosts the objective and risk neutral probabilities of diffusive default a parsimonious version of our general model simultaneously enables analytical credit risk management and analytical pricing of credit sensitive instruments easy cross asset hedging ensues

estimating mortality and economic costs of particulate air pollution in developing countries the case of nigeria the value of statistical life is an essential parameter used in ascribing monetary values to the mortality costs of air pollution in health risk analyses however this willingness to pay estimate is virtually non existent for most developing countries in the absence of local estimates two major benefit transfer approaches lend themselves to the estimation of the value of statistical life the value transfer method and the meta regression analysis using nigeria as a sample country we find that the latter method is better tailored than the former for incorporating many characteristics that vary between study sites and policy sites into its benefit transfer application it is therefore likely to provide more accurate value of statistical life predictions for very low income countries employing the meta regression method we find nigeria s value of statistical life estimate to be 489 000 combining this estimate with dose response functions from the epidemiological literature it follows that if nigeria had mitigated its 2006 particulate air pollution to the world health organisation standards it could have avoided at least 58 000 premature deaths and recorded an avoided mortality related welfare loss of about 28 billion or 19 of the nation s gdp for that year

wind coal and the cost of environmental externalities abstract we compare the cost of generating electricity with coal and wind in chile on average we estimate that the levelized cost of coal including externalities is 84 mwh it is efficient to abate air pollutants so x no x and pm 2 5 but not co 2 with abatement the cost wrought by environmental externalities equals 23 mwh or 27 of total cost depending on the price of coal the levelized cost may vary between 72 and 99 mwh the levelized cost of wind is 144 mwh with capacity factor of 24 this cost includes backup capacity to maintain lolp which equals 13 mwh or 9 of total cost the levelized cost of wind varies between 107 mwh with capacity factors of 35 to 217 mwh with capacity factors of 15 wind is competitive only with capacity factors around 35 and very high coal prices alternatively a carbon price of 73 tco 2 268 tc would make coal and wind equally costly but this value implies a marginal damage at the 98th percentile of the distribution deduced from tol s 2011 estimates rather far from the mean 16 tco 2 59 tc

the private and public economics of renewable electricity generation generating electricity from renewable sources is more expensive than conventional approaches but reduces pollution externalities analyzing the tradeoff is much more challenging than often presumed because the value of electricity is extremely dependent on the time and location at which it is produced which is not very controllable with some renewables such as wind and solar likewise the pollution benefits from renewable generation depend on what type of generation it displaces which also depends on time and location without incorporating these factors cost benefit analyses of alternatives are likely to be misleading other common arguments for subsidizing renewable power green jobs energy security and driving down fossil energy prices are unlikely to substantially alter the analysis the role of intellectual property spillovers is a strong argument for subsidizing energy science research but less persuasive as an enhancement to the value of installing current renewable energy technologies

working wives and the marginal propensity to consume food away from home contrary to predictions from the new household economics theory and heuristic thought income earned by wives working full time did not increase the marginal propensity to consume food away from home tobit estimates of the same propensity from other income sources in married u s households in 1978 showed that income earned by part time working wives and children asset income and transfer payments increased this propensity above that from husband s labor income whites had higher expenditures higher marginal propensities to consume and lower income elasticities for food away from home than nonwhites

durables and wives employment yet again the literature examining the relationship between consumer durables expenditures and wives employment is analyzed several deficiencies in the literature are corrected in a revised model that is estimated with data from the 1977 1978 survey of consumer expenditures this article concludes that durables expenditures and wives employment time are complements

buying time and saving time strategies for managing household production time buying strategies used more often by employed wife families than nonemployed wife families were purchase of child care meals away from home and disposable diapers time saving strategies used by employed wives were preparing fewer meals at home reduced time in household production and reduced time in leisure wife s employment made no difference in time spent in household production by other family members

expenditure elasticities of the demand for leisure services although some research has already focused on the analysis of expenditure elasticities of leisure demand some shortcomings with regard to the content and the underlying theoretical model as well as the applied methods exist this article aims at avoiding these problems to provide consistent derivatives of leisure service expenditure elasticities therefore a regular demand system is derived from microeconomic duality theory to implement leisure specific demand factors i e demand and supply based sports and recreational opportunities as well as sports and recreational preferences while still being consistent with neoclassical demand theory the basic model is extended by applying the demographic translation framework data of the continuous household budget survey n 7724 from germany is used for the estimation of the derived demand system it is shown how sensitive the results are depending on the applied censored regression model 16 out of 18 analysed services are indicated as luxury goods b

common failings how corporate defaults are correlated we test the doubly stochastic assumption under which firms default times are correlated only as implied by the correlation of factors determining their default intensities using data on u s corporations from 1979 to 2004 this assumption is violated in the presence of contagion or frailty unobservable explanatory variables that are correlated across firms our tests do not depend on the time series properties of default intensities the data do not support the joint hypothesis of well specified default intensities and the doubly stochastic assumption we find some evidence of default clustering exceeding that implied by the doubly stochastic model with the given intensities why do corporate defaults cluster in time several explanations have been explored first firms may be exposed to common or correlated risk factors whose co movements cause correlated changes in conditional default probabilities second the event of default by one firm may be contagious in that one such event may directly induce other corporate failures as with the collapse of penn central railway in 1970 third learning from default may generate default correlation for example to the extent that the defaults of enron and worldcom revealed accounting irregularities that could be present in other firms they may have had a direct impact on the conditional default probabilities of other firms our primary objective is to examine whether cross firm default correlation that is associated with observable factors determining conditional default probabilities the first channel on its own is sufficient to account for the degree of time clustering in defaults that we find in the data

using non market valuation to inform the choice between permits and fees in environmental regulation the purpose of this short note is to open an exploration regarding the use of non market valuation to help guide the selection of economically efficient pollution control instruments as long as non market valuation techniques can correctly estimate the slope of the marginal benefit of abatement curve this information along with engineering cost estimates of the unit costs or slope of the marginal abatement cost will provide useful information to policy makers in choosing between fees and permits an illustrative review of the literature suggests that both stated and revealed preference methods have estimated slopes of marginal benefit functions for reducing several pollutants to investigate the efficiency of permits versus fees an illustrative review of corresponding marginal abatement costs is also made for air pollutants affecting visibility the slope of the marginal benefit curve is far greater than the slope of the marginal abatement costs suggesting permits as the efficient instrument for nitrates in groundwater used for drinking the marginal benefit curve is flatter than the rather steep marginal abatement cost suggesting fees taxes would be a more efficient economic instrument we hope this note stimulates more emphasis in non market valuation on estimating the slope of the marginal benefit function to enhance environmental economists ability to make policy recommendations regarding the choice of pollution instruments for specific pollutants

efficient pollution regulation getting the prices right this paper argues for efficient environmental regulations that equate the mar ginal damage of pollution to marginal abatement costs across space the paper estimates the source specific marginal damages of air pollution and calculates the welfare gain from making the current sulfur dioxide allowance trading pro gram for power plants more efficient the savings from using trading ratios based on marginal damages are between 310 and 940 million per year the potential savings from setting aggregate emissions efficiently and from includ ing more sources of air pollution are many times higher jel h23 q53 q58

risk analysis of collateralized debt obligations collateralized debt obligations which are securities with payoffs that are tied to the cash flows in a portfolio of defaultable assets such as corporate bonds play a significant role in the financial crisis that has spread throughout the world insufficient capital provisioning due to flawed and overly optimistic risk assessments is at the center of the problem this paper develops stochastic methods to measure the risk of positions in collateralized debt obligations and related instruments tied to an underlying portfolio of defaultable assets it proposes an adaptive point process model of portfolio default timing a maximum likelihood method for estimating point process models that is based on an acceptance rejection resampling scheme and statistical tests for model validation to illustrate these tools they are used to estimate the distribution of the profit or loss generated by positions in multiple tranches of a collateralized debt obligation that references the cdx high yield portfolio and the risk capital required to support these positions

the public perceptions and willingness to pay from the perspective of the smog crisis in china the deteriorating air quality which is linked to human actions related to energy resources has become an urgent global problem china s air pollution has reached the hazardous level since 2000s in consideration of the serious health and social problems residential demand for clean air is increasing this paper applies the contingent valuation method to estimate public s willingness to pay wtp for reducing air pollution in the urban area of china open ended scenarios through face to face surveys are used to elicit public s wtp the two part model is employed for the estimation the probit model is used to estimate the probability of respondents who have positive wtp values and the interval regression model is employed to estimate the specific wtp level of those with nonzero wtp values the results show that nearly 90 of the respondents are willing to pay for reducing air pollution and the average amount of wtp per individual is 382 6rmb per year household income is found to be positively correlated with people s wtp and those who trust the government are more willing to share the cost of reducing air pollution this study recommends designing some effective mechanisms to tap the potentially available source of money for smog mitigation and improving the transparency of smog governance to enhance the government credibility as solutions to cope with smog crisis

determinants of household expenditures for services data from the bureau of labor statistics consumer expenditure surveys were used to investigate factors influencing household expenditures for services in the united states there were significant differences between families with full time and part time working wives in expenditures on child care food away from home and total services household production variables had a significant impact on service expenditures in most instances while the effects of other variables such as family life cycle education race and geographic location varied by service category and employment status of wife

anticipation and environmental regulation abstract when agents expect a change in regulation to change the relative price of new durable goods they may shift purchases forward to avoid compliance costs in the context of new vehicle emission standards prior analyses have not considered this adjustment margin we model the effects of anticipation on sales and retirements of durable goods and test our theory s predictions empirically using the 2007 implementation of heavy duty emission standards we find evidence that anticipation caused a sales spike just before the policy took effect and a symmetric sales slump after implementation which resulted in 31 164 more freight truck sales ahead of the new standard and as much as 118 million in environmental damages over the lifetimes of those vehicles