disability employment and earnings an examination of heterogeneity this article uses information from an ad hoc module on disability in the 2002 uk labour force survey to identify the heterogeneity that exists within the disabled group and examine its impact on labour market outcomes after controlling for a range of personal characteristics the type severity duration and cause of the disability are found to be important determinants of employment but there is less evidence to support the influence of within group heterogeneity on earnings

optimal pricing and composition of multiple bundles a two step approach abstract this paper analyzes the problem facing a firm that must determine the optimal composition and pricing of multiple bundles it supplies to a single market segment it is assumed the firm s competitors does not react in the short run to its decisions and that their bundles prices and characteristics are known it is further assumed that potential consumers of bundles are rational and maximize a random utility function the problem is modeled as a mixed integer non linear program though such programs are normally hard to solve using traditional methods the difficulties are circumvented here by taking advantage of the problem s mathematical structure to develop a novel two phase solution approach two aspects of the solution are particularly worthy of note 1 we demonstrate that the optimal price of a bundle marketed by a firm depends on the composition of all the firm s bundles and not on their prices and on the composition and price of all the competitors bundles in the market and 2 that if the consumer choice behavior is described by a logit model then the firm s bundles should be very similar to each other

general equilibrium rebound from energy efficiency innovation abstract energy efficiency improvements rebound when economic responses undercut their direct energy savings i show that general equilibrium channels typically amplify rebound by making consumption goods cheaper but typically dampen rebound by increasing demand for non energy inputs to production and by changing the size of the energy supply sector improvements in the efficiency of the energy supply sector generate especially large rebound because they make energy cheaper in all other sectors quantitatively general equilibrium channels reduce rebound in u s consumption good sectors from 39 to 28 but increase rebound in the energy supply sector from 42 to 80

platform pricing in mixed two sided markets when a consumer can appear on both sides of a two sided market such as a user who both buys and sells on ebay the platform may want to bundle the services it provides to two sides i develop a general model for such mixed two sided markets and show that a monopolist platform s incentive to bundle and its optimal pricing strategy are determined by simple formulas using familiar price elasticities of demand which embody the bundling effect and price cost margins adjusted for network externalities which incorporate two sidedness the optimal pricing rule in such markets generalizes the familiar lerner formula

u s household energy consumption and intensity trends a decomposition approach concerns over impacts from u s energy use on the environment the economy and the national security warrant an understanding of the key drivers of energy consumption this paper focuses on decomposing u s household energy consumption changes into several factors that have affected its growth the interval analyzed is based on household surveys conducted by the u s energy information administration from 1980 through 2005 drivers of total household energy consumption total household electricity consumption and natural gas use for space heating are analyzed and contrasted while not definitive sub period analyses split at 1990 show greater reductions in energy intensity in the later sub period and provide prima fascia evidence of the efficacy of u s efforts to promote energy efficiency through various standards and programs

product line design we characterize the product line choice and pricing of a monopolist from the upper envelope of net marginal revenue curves to the individual product demand functions the equilibrium product line constitutes those varieties yielding the highest upper envelope in a generalized vertical differentiation framework the equilibrium line is exactly the same as the first best socially optimal line these upper envelope and first best optimal line findings extend to symmetric cournot oligopoly

immigrant participation in the welfare system this paper presents a systematic analysis of immigrant participation in the us welfare system using the 1970 and 1980 us censuses in contrast to the previous studies the researchers focused on changes in welfare use across immigrant cohorts over time for a single immigrant cohort as it assimilates to the us furthermore it develops a theoretical model of the migration decision that explicitly incorporates the income insurance aspect of the us welfare system the analysis revealed that recent immigrant cohorts use the welfare system more intensively than earlier immigrant waves also the immigrant welfare participation was greater the longer an immigrant household had resided in the us and those characteristics of the immigrants country of origin were important determinants of welfare participation in addition the theoretical model of the migration decision which explicitly incorporated the presence of a welfare system in the destination country and this model could account for some of the ways in which source country characteristics were found to affect immigrant welfare participation

the unemployment experience of male immigrants in england in this paper the unemployment experience of immigrant men in the english labour market is examined using 1993 1994 data from the quarterly labour force survey of the united kingdom hypotheses proposed by chiswick 1982 are investigated for both the claimant count and the ilo measures of unemployment using logistic regression analysis our results show that recent white and nonwhite immigrant men experience much higher levels of unemployment than earlier cohorts for whites this effect is transitory whereas for nonwhites unemployment rates adjust more slowly as the duration of stay increases immigrant unemployment rates also vary considerably with country of birth

the role of the family in immigrants labor market activity an evaluation of alternative explanations comment most research on the labor market outcomes of immigrants has studied the behavior of individuals focusing primarily on the wage assimilation process or the excess returns to experience which immigrants obtain in their destination country s labor market e g barry r chiswick 1978 george j borjas 1985 recently however attention has been directed to analyzing immigrant labor market outcomes in a family context an approach which combines information about an individual s own labor market opportunities and the family context in which labor market decisions take place in a previously published paper in this review michael baker and dwayne benjamin 1997 evaluate alternative explanations for the observed labor supply patterns of canadian immigrants in the 1986 1991 period specifically when immigrant husbands arrive in canada they typically work less than comparable natives however immigrant wives work more than natives other things equal with assimilation the labor supply of immigrant husbands eventually catches up to that of natives while immigrant wives labor supply falls relative to comparable natives and is ultimately overtaken by that of natives the authors take these patterns to be most consistent with a family investment model in this scenario upon arrival husbands invest in their human capital while wives work to provide the family with liquidity during this investment period with increased time in canada husbands labor supply increases rapidly due to their growing skills in the canadian labor market while wives labor supply falls off in part because they originally took dead end jobs upon arrival in order to finance their husbands investments in human capital interestingly while most of the findings reported by baker and benjamin are consistent with the family investment model their estimated wage equations are not although they do not comment on this in discussing the appropriateness of the family investment model specifically they find similar rates of wage assimilation for husbands and wives this finding suggests roughly equal propensities to invest in one s own human capital for both groups this is contrary to the family investment hypothesis and does not match their story of dead end jobs for wives and large human capital investments of their husbands an alternative possible explanation for the patterns observed by baker and benjamin involves a simple price model in which the observed labor supply patterns reflect laborsupply responses to each spouse s wages for example the initially high but eventually falling level of wives labor supply relative to comparable natives could be a response to their husbands initially low but rising wages while this reasoning like the family investment model is broadly consistent with the data the authors conclude that the simple price model cannot be the entire explanation since in order to explain the full labor supply patterns of immigrants it would require unrealistically high labor supply elasticities and further that the assimilation patterns noted above remain even when wages of husband and wife are controlled blau school of industrial and labor relations cornell university 265 ives hall ithaca ny 14853 and nber and cesifo kahn school of industrial and labor relations cornell university 264 ives hall ithaca ny 14853 and cesifo moriarty school of industrial and labor relations cornell university ilr graduate student mailboxes ives hall ithaca ny 14853 souza faculdade de economia administracao e contabilidade university of sao paulo avenida professor luciano gualberto 908 cidade universitaria predio fea 1 sao paulo sp 05508 brazil the authors thank three anonymous referees for helpful comments and suggestions portions of this paper were written while blau and kahn were visiting scholars at the russell sage foundation to which they are grateful for research support

california energy efficiency lessons for the rest of the world or not abstract since the 1970s california s residential electricity consumption per capita has stopped increasing while other states electricity use continued to grow steadily what accounts for california s apparent savings some credit the strict energy efficiency standards for buildings and appliances enacted by california in the mid 1970s they argue that the growing gap between california and other states demonstrates that other states and countries could replicate california s gains by adopting california style regulations and that california should build on its own success by tightening its standards further skeptics might point to three long run trends that differentiate california s electricity demand from other states 1 shifting of the u s population toward warmer climates of the south and west 2 relatively small income elasticity of energy demand in california s temperate climate and 3 evolving differences between the demographics of households in california and other states today differences in climate and demographics account for almost 90 percent of the difference between california s and other states residential electricity use that difference thus provides no lessons for other states or countries considering adopting or tightening their own energy efficiency standards

energy efficiency of residential buildings in the european union an exploratory analysis of cross country consumption patterns abstract despite a common eu directive on energy efficiency in residential buildings levels of energy efficiency differ across european countries this article analyses these differences and investigates the effectiveness of different energy efficiency policies in place in those countries we firstly use panel data methods to explain average yearly energy consumption per dwelling and country by observable characteristics such as climatic conditions energy prices income and floor area we then use the unexplained variation by sorting between country differences as well as plotting within country changes over time to identify better performing countries these countries are analysed qualitatively in a second step we conduct expert interviews and examine the legal rules regarding building energy efficiency based on our exploratory analysis we draw a number of preliminary conclusions first we suggest that regulatory standards in conjunction with increased construction activity can be effective in the long run second the results suggest that carbon taxation represents an effective means for energy efficiency in this regard the scope of the carbon tax plays a crucial role we find evidence that a tax of 30 and a tax of 120 per ton of co2 cause markedly different reductions in energy consumption

measuring the energy savings from home improvement investments evidence from monthly billing data an important factor driving energy policy over the past two decades has been the energy paradox the perception that consumers apply unreasonably high hurdle rates to energy saving investments we explore one possible explanation for this apparent puzzle that realized returns fall short of the returns promised by engineers and product manufacturers using a unique data set we find that the realized return to attic insulation is statistically significant but the median estimate 9 7 is almost identical to a discount rate for this investment implied by a capm analysis we conclude that the case for the energy paradox is weaker than has previously been believed

intertemporal market effect on gender earnings differentials lawyers in canada 1970 80 the conventional methodology for decomposition of cross sectional earnings differentials is extended to include a market effect on intertemporal changes in earnings and to analyse the changes in gender differentials over time the integrated cross sectional and intertemporal methodology is illustrated by a decomposition of the change in the earnings differential that occurred during the 1970s between male and female lawyers in canada an unprecedented rate of growth in the supply of lawyers during the 1970s in canada was associated with changes in the gender earnings differential in the legal profession this rapid supply growth had an almost negligible net impact on female earnings but a negative impact of 15 on the male earnings this explains the narrowing of the earnings differential by almost 30 over the decade although three fifths of the gender differential in 1970 and half of the differential in 1980 were attributable to the differences in the characteristics of the two groups these chang

bundling of substitutes or complements abstract the adams yellen two good bundling framework is generalized to allow the goods to be substitutes or complements general theorems on price change effects are given a monopolist may find it most profitable to offer the goods only as a bundle even if they are imperfect substitutes or to not bundle the goods even if they are complements if one good is competitively sold a monopoly producer of the other good can never increase profits by offering his good only as part of a bundle however such a monopolist might profitably offer his good in both bundled and unbundled form to price discriminate even if the two goods are substitutes

increasing earnings inequality and the gender pay gap in canada prospects for convergence this paper retraces the evolution of canadian women s labour force participation and of the gender earnings ratio across the generations to understand better the prospects for gender convergence in pay using data from the public use labour force surveys lfs and administrative annual earnings data from the longitudinal worker files lwf the paper assesses the role of increasing top earnings inequality in the persistence of the gender pay gap having identified a growing role for the under representation of women among top earners the paper then performs an evaluation and critical analysis of existing gender equality policies centred on horizontal occupational gender segregation and discusses alternative policies for the future

the earnings of male immigrants in england evidence from the quarterly lfs in this paper we estimate earnings functions for native born and foreign born white and non white males in the english labour market using data from the quarterly labour force survey our results highlight the importance of distinguishing between native born and foreign born males when investigating the labour market experience of ethnic minorities furthermore the earnings performance amongst white immigrants varies considerably

intertemporal price discrimination with two products we study the two product monopoly profit maximization problem for a seller who can commit to a dynamic pricing strategy we show that if consumers valuations are not strongly ordered then optimality for the seller can require intertemporal price discrimination the seller offers a choice between supplying a complete bundle now or delaying the supply of a component of that bundle until a later date for general valuations we establish a sufficient condition for such dynamic pricing to be more profitable than mixed bundling so we show that the established no discrimination across time result does not extend to two product sellers under standard taste distributions

comments on gaussian demand and commodity bundling different commodities are often sold together as a bundle e g complete dinners in a restaurant stereo systems in mixed bundling strategies the individual components of the bundle are also offered for sale separately in block booking or pure bundling strategies they are not via simple hypothetical examples of two product firms stigler 1963 and adams and yellen 1976 have demonstrated that these selling practices can increase profit even if there is no cost advantage to bundling and the component products are independent in demand it is obvious from these examples that heterogeneity in consumer tastes especially in relative valuations of the firm s two products is a necessary condition for profitable bundling unfortunately more specific principles to describe concisely the necessary and or sufficient conditions for profitable bundling are not so obvious since consumer demand in the examples is represented by a complete enumeration of consumer reservation prices optimal prices and pricing strategies must be determined by trial and error marginal analysis is inappropriate or uninformative more important these numerical examples do not yield characterizations of profit for each strategy as functions of a small number of parameters that summarize the relevant features of the distribution of reservation prices in the consumer population by assuming that reservation prices for the firm s two products are distributed in the consumer population according to the bivariate normal probability law schmalensee in this issue has constructed a class of examples within which the profitability of bundling can be analyzed as a function of production costs the mean and variance of the reservation price for each commodity and the correlation between the two commodities reservation prices although this analysis is sometimes mathematically complex schmalensee is quite thorough subject to the normality assumption many of the questions suggested by the

persistent trade effects of large exchange rate shocks this paper presents a theoretical basis for the argument that large exchange rate shocks such as the 1980s dollar cycle may have persistent effects on trade flows and the equilibrium exchange rate itself we begin with a partial equilibrium model in which large exchange rate fluctuations lead to entry or exit decisions that are not reversed when the currency returns to its previous level then we develop a simple model of the feedback from hysteresis in trade to the exchange rate itself here we see that a large capital inflow which leads to an initial appreciation can result in a persistent reduction in the exchange rate consistent with trade balance

the effect of literacy on immigrant earnings we examine the impact of literacy on immigrant earnings and the sources of lower returns to education and experience among immigrants we find that the native born literacy distribution dominates that for immigrants however the two groups obtain similar returns to literacy skills contrary to discrimination based explanations for immigrant native born earnings differentials among the university educated literacy differences account for about two thirds of the earnings gap however low returns to foreign experience have a larger impact on this differential among the less educated literacy differences and differences in the returns to experience have similar effects on the earnings differential

social security eligibility and the labor supply of older immigrants the employment rate of native born men falls at a much faster rate than that of immigrants as the two groups approach the age of retirement the author draws on u s census data from 1960 2000 to examine how the eligibility requirements for social security benefits affect immigrants decisions to leave the labor market as they near retirement age because a person needs to have worked in the united states for at least ten years to qualify for benefits newly arrived immigrants may not yet have accumulated the requisite employment credits to do this and thus have greater employment rates than other comparably aged persons the probability that an older immigrant is employed falls once the ten year work rule is satisfied the implication of this finding is that immigration may affect the increase in retirement benefits that will inevitably occur as the baby boom generation retires

interfirm bundling and vertical product differentiation in this paper we study the competitive effects of bundled discounts offered by pairs of independent firms in a setting with vertically differentiated goods where firms decide whether to participate in a discounting scheme before prices are set it is shown that in equilibrium all pairs of firms producing goods of the same quality level offer bundled discounts relative to the no bundling benchmark we find that i all headline prices rise ii all bundle prices net of the respective discount decrease and iii only high quality sellers will obtain higher profits furthermore this equilibrium corresponds to the worst scenario in terms of consumer welfare and it and decreases social welfare

building vintage and electricity use old homes use less electricity in hot weather abstract this paper studies whether electricity use in newer or older residential buildings rises more in response to high temperature in a region of southern california peak electricity demand occurs at the highest temperatures which are predicted to increase due to climate change understanding how newer buildings differ from older buildings improves forecasts of how peak electricity use will grow over time newer buildings are subject to stricter building energy codes but are larger and more likely to have air conditioning hence the cumulative effect is ambiguous this paper combines four large datasets of building and household characteristics weather data and utility data to estimate the electricity temperature response of different building vintages estimation results show that new buildings 1970 2000 have a statistically significantly higher temperature response i e use more electricity than old buildings pre1970 auxiliary regressions with controls for tiered electricity prices number of bedrooms income square footage central air conditioning ownership and type of residential structure partially decompose the effect though california has had extensive energy efficiency building standards that by themselves would lower temperature response for new buildings the cumulative effect of new buildings is an increase in temperature response as new buildings are added aggregate temperature response is predicted to increase

setting the standard a framework for evaluating the cost effectiveness of building energy standards abstract the adoption rate and stringency of building energy standards in the u s have been increasing since the mid 1990s as a result of the energy policy act mandate of 1992 epact current evidence on the energy savings that accrue from commercial building energy standards is based on engineering simulations which do not account for realized behaviour once a standard is actually adopted this paper uses quasi experimental variation in commercial building energy standard adoptions to estimate their effect on realized electricity consumption and cost effectiveness in states induced by epact to adopt an energy standard where all new nonresidential construction was erected under a commercial standard electricity consumption per service worker is lower by about 12 and total commercial electricity consumption is lower by 10 including early adopters and never adopters to the analysis leads to a downward bias in the treatment effect the realized electricity savings in the epact states represent three quarters of predicted simulated savings and electricity saved in 2010 came at a cost of approximately 7 7 cents per kwh

wage mobility of foreign born workers in the united states this paper presents new evidence on whether foreign born workers assimilate while the existing literature focuses on the convergence divergence of average wages this study extends the analysis to the distribution of wages by looking at wage mobility we measure the foreign native gap in year to year transition probabilities from one decile group to another of a wage distribution where the deciles are determined by native samples our results based on the current population survey for 1996 2008 suggest that immigrants in middle and bottom decile groups who are the majority of immigrants tend to fall behind relative to natives in the same decile groups

immigrants minorities and labor market competition this paper investigates the extent of labor market competition among immigrants minorities and the native population an analysis of 1980 u s census data reveals that immigrants tend to be substitutes for some labor market groups and complements for others the effects of shifts in immigrant supply on the earnings of native born men are however very small on the other hand increases in the supply of immigrants do have a sizable impact on the earnings of immigrants themselves an increase of 10 percent in the supply of immigrants for example reduces the immigrant wage by about 10 percent

a more general theory of commodity bundling this paper extends the standard model of bundling as a price discrimination device to allow products to be substitutes and for products to be supplied by separate sellers whether integrated or separate firms have an incentive to introduce a bundling discount when demand for the bundle is elastic relative to demand for stand alone products product substitutability typically gives an integrated firm a greater incentive to offer a bundle discount relative to the model with additive preferences while substitutability is often the sole reason why separate sellers wish to offer inter firm discounts when separate sellers coordinate on an inter firm discount they can use the discount to overturn product substitutability and relax competition

should germany have built a new wall macroeconomic lessons from the 2015 18 refugee wave abstract in 2015 2016 germany experienced a wave of predominantly low skilled refugee immigration we evaluate its macroeconomic and distributional effects using a quantitative overlapping generations model calibrated using german micro data to replicate education and productivity differentials between foreign born and native workers workers are modelled as imperfect substitutes in aggregate production leading to endogenous wage differentials we simulate the dynamic effects of this refugee wave with specific focus on the welfare impact on low skilled natives our results indicate that the small losses this group suffers can be compensated by welfare gains of other parts of the native population

immigrant earnings age at immigration matters a correlation between age at immigration and earnings is observed in canadian census data the evidence supports three underlying sources of the effect first work expe rience in the source country yields virtually no return in the host country second the return to education varies with age at immigration and finally an acculturation effect is observed for immigrants who are visible minorities or whose mother tongue is not english further it is found that educational attainment and relatedly earnings vary systematically across age at immigration with those arriving around age 15 to 18 obtaining fewer years of education

is price adjustment asymmetric evaluating the market share and marketing bottlenecks hypothesis abstract export price adjustment is asymmetric with respect to currency fluctuations in at least two circumstances if firms face capacity constraints in distribution networks or quantitative trade restrictions then pricing to market may be greater during depreciations of the exporter s currency if firms attempt to build market share subject to the threat of trade restrictions then pricing to market may be greater during appreciations of the exporter s currency this paper tests for asymmetries using panel data on german and japanese 7 digit industry exports the data seldom reject the hypothesis of a symmetric response of prices to exchange rates

which demand systems can be generated by discrete choice we provide a simple necessary and sufficient condition for when a multiproduct demand system can be generated from a discrete choice model with unit demands

dynamic incentives of environmental regulations the effects of alternative policy instruments on technology diffusion abstract we develop a framework for comparing empirically the effects of alternative environmental policy instruments on the diffusion of new technology market based and command and control approaches can he quantitatively compared by estimating the economic penalty that firms through their actions reveal to be associated with violation of standards in the context of concerns about global climate change we empirically examine the likely effects of pigouvian taxes technology adoption subsidies and technology standards we employ state level data on the diffusion of thermal insulation in new home construction comparing the effects of energy prices insulation cost and building codes

hyteresis in import prices the beachhead effect this paper shows that temporary real exchange rate fluctuations can have persistent hysteretic effects on trade specifically when market entry costs are sunk sufficiently large exchange rate shocks alter domestic market structure and thereby induce hysteresis this simple result has strong implications for exchange rate theory t rade policy and estimation of trade equations empirical evidence su ggests that the recent dollar overvaluation induced hysteresis in u s import prices namely the aggregate pass through equation of exchange rates to import prices shifted in the 1980s the shift s nature and timing is broadly consistent with the hysteresis hypothesis copyright 1988 by american economic association

asymmetric information in residential rental markets implications for the energy efficiency gap abstract this paper explores whether energy cost information asymmetries exist between landlords and tenants by exploiting variation in which party pays for energy because tenants are always fully informed about their total housing costs in the landlord pay regime the effect of energy cost changes on tenant turnover rents and efficiency investment should differ between the two payment regimes under asymmetric information but not symmetric information using energy cost variation in the form of changes in relative heating fuel prices i find evidence that tenants are uninformed about energy costs this results in higher energy expenditures for tenants and implies that information campaigns or efficiency standards may improve market outcomes

interfirm bundled discounts as a collusive device this paper investigates whether and how firms competing in price with homogeneous goods i e bertrand competitors can achieve supernormal profits using interfirm bundled discounts by committing to offering price discounts conditional on the purchase of a specific brand of other differentiated good the homogeneous good suppliers can separate consumers into distinct groups such brand specific discounts help the firms relax competition and attain a collusive outcome consumers become worse o due to higher effective prices our result shows that in oligopolies it is feasible to leverage other s market power without excluding rivals

credit constraints and the labour supply of immigrant families in canada the hours of work decisions in immigrant and nonimmigrant families are compared using an intertemporal labor supply model estimated over data from the 1981 and 1991 census of canada surveys the family investment hypothesis is evaluated the hypothesis states that the immigrant family is unable to borrow in the first years after migration and that the immigrant wife responds by working longer hours so as to support family consumption and her husband s labor market adjustment the empirical evidence in general supports the hypothesis since credit constraints are found to significantly distort the labor supply decisions of recently arrived immigrant families

the economic situation of first and second generation immigrants in france germany and the united kingdom a central concern about immigration is the integration into the labour market not only of the first generation but also of subsequent generations little comparative work exists for europe s largest economies france germany and the uk have all become perhaps unwittingly countries with large immigrant populations albeit with very different ethnic compositions today the descendants of these immigrants live and work in their parents destination countries this article presents and discusses comparative evidence on the performance of first and second generation immigrants in these countries in terms of education earnings and employment it is widely believed that many european countries have a serious problem with the integration of immigrants and their children leed 2006 many northern european countries have accumulated sizeable populations of immigrants but the lack of longterm strategies and policies to integrate these into societal structures and the labour market is often cited as one reason for social and economic exclusion of the children of these immigrants in the past decade southern european countries such as spain and italy have experienced similar if not larger immigrations than the large northern european economies france germany and the uk in the late 1950s to early 1970s again it seems that there is little thought devoted to long term strategies for immigrants and their descendants the experience of those countries that had large scale immigration in the last half of the twentieth century should be of importance for devising future immigration and integration policies however there is rather little hard evidence in the literature about the relative position of immigrants and their descendants in these countries in a manner that allows comparisons to be made in this article we aim to provide a comparative study of a number of outcomes education earnings and employment of both first and second generation immigrants of different origins in the three largest european economies france germany and the uk

crossing the border self selection earnings and individual migration decisions many empirical studies on the determinants of international migration flows rely exclusively on macro data and do not account for migrants self selection we analyze a very interesting episode in international migration for which we are able to gather individual level data covering all relevant countries namely the exodus of ecuadorians to spain and the us in the aftermath of the economic collapse of 1999 specifically we produce selection corrected predictions of counterfactual individual earnings and use them to estimate a discrete choice migration equation that allows for correlated errors across destinations and a rich structure of migration costs we find that earnings significantly shape individual migration decisions even in an episode in which ecuadorians mostly chose spain where earnings were lower than in the us and they contribute to explaining the observed composition of migration flows moreover our estimates show that changes in earnings at a particular destination have a larger effect on destination choice conditional on migration than on the scale of migration

how much energy do building energy codes save evidence from california houses regulations governing the energy efficiency of new buildings have become a cornerstone of us environmental policy california enacted the first such codes in 1978 and has tightened them every few years since i evaluate the resulting energy savings three ways comparing energy used by houses constructed under different standards controlling for building and occupant characteristics examining how energy use varies with outdoor temperatures and comparing energy used by houses of different vintages in california to that same difference in other states all three approaches yield estimated energy savings significantly short of those projected when the regulations were enacted

optimal bundling and pricing under a monopoly contrasting complements and substitutes from independently valued products we develop an analytical model of contingent valuations and address two questions of import to a monopolist i should a given pair of complements or substitutes be sold separately pure components together pure bundling or both mixed bundling and at what prices ii how do optimal bundling and pricing strategies for complements and substitutes differ from those for independently valued products we find that the combination of marginal cost levels and the degree of complementarity or substitutability determines which of the three bundling strategies is optimal complements and substitutes should typically be priced higher than independently valued products

exchange rate regimes and the price of exchange rate risk abstract we investigate the price of exchange rate risk in the us stock market across exchange rate regimes we find that exchange rate risk is a priced factor and that the sign of the price of risk is affected by the exchange rate regime the results have important implications for risk management policies

a variance equality test of the icapm on philippine stocks post asian financial crisis period the study examines whether fama s discrete version of merton s intertemporal capm icapm can explain the negative market risk premium and the cross sectional variability of philippine stock returns after the onset of the asian financial crisis in july 1997 the change in foreign exchange rate in addition to the change in market risk premium is used as a state variable of hedging concern to investors the relationship of fama s multifactor minimum variance mmv portfolio to the markowitz minimum variance mv portfolio is characterized in terms of the equality of the return variances for the same expected return a test due to basak et al 2002 is then used to verify the equality of the return variance of a derived tangency portfolio along the mmv frontier to an mv portfolio with the same sample mean return the results do not reject the icapm during the period covered by the study thus the model provides a plausible explanation both for the cross sectional variability of stock returns and the nega

valuing new goods in a model with complementarity online newspapers many important economic questions hinge on the extent to which new goods either crowd out or complement consumption of existing products recent methods for studying new goods rule out complementarity by assumption so their applicability to these questions has been limited i develop a new model that relaxes this restriction and use it to study competition between print and online newspapers using new micro data from washington dc i estimate the relationship between the print and online papers in demand the welfare impact of the online paper s introduction and the expected impact of charging positive online prices

assimilation changes in cohort quality and the earnings of immigrants this paper reexamines the empirical basis for two facts that seem to be found in most cross section studies of immigrant earnings 1 the earnings of immigrants grow rapidly as they assimilate into the united states and 2 this rapid growth leads to many immigrants overtaking the earnings of the natives within 10 15 years after immigration using the 1970 and 1980 u s censuses this paper studies the earnings growth experienced by specific immigrant cohorts during the period 1970 80 it is found that within cohort growth is significantly smaller than the growth predicted by cross section regressions for most immigrant groups this differential is consistent with the hypothesis that there has been a secular decline in the quality of immigrants admitted to the united states

third degree price discrimination in oligopoly all out competition and strategic commitment price discrimination by imperfectly competitive firms may intensify competition leading to lower prices for all consumers the tradeoff of consumer groups welfare that is characteristic of monopolistic discrimination need not arise this escalation of competition may make firms worse off and as a result firms may wish to avoid the discriminatory outcome under conditions similar to those in which unambiguous price and welfare effects may arise unilateral commitments not to price discriminate including the adoption of everyday low pricing or no haggle policies may raise firm profits by softening price competition

immigrant and emigrant earnings a longitudinal study this paper analyzes the relationship between earnings and the extent of assimilation cohort quality change and return migration experienced by the foreign born population the study uses the longitudinal data available in the survey of natural and social scientists and engineers the analysis reveals that there was a sizable decline in the skills of this population over the last two decades in addition the study shows that return migration is more likely among immigrants who did not perform well in the u s labor market

do energy efficiency investments deliver evidence from the weatherization assistance program a growing number of policies and programs aim to increase investment in energy efficiency because conventional wisdom suggests that people fail to take up these investments even though they have positive private returns and generate environmental benefits many explanations for this energy efficiency gap have been put forward but there has been surprisingly little field testing of whether the conventional wisdom is correct this article reports on the results of an experimental evaluation of the nation s largest residential energy efficiency program the weatherization assistance program conducted on a sample of approximately 30 000 households in michigan the findings suggest that the upfront investment costs are about twice the actual energy savings furthermore the model projected savings are more than three times the actual savings although this might be attributed to the rebound effect when demand for energy end uses increases as a result of greater efficiency the article fails to find evidence of significantly higher indoor temperatures at weatherized homes even when accounting for the broader societal benefits derived from emissions reductions the costs still substantially outweigh the benefits the average rate of return is approximately 7 8 annually

exchange rate and foreign inflation risk premiums in global equity returns abstract we test for the pricing of exchange rate and foreign inflation risk in equities our tests are motivated by the empirical implications of the models of solnik 1974b solnik b 1974b the international pricing of risk an empirical investigation of the world capital market structure journal of finance 365 377 as revised by sercu 1980 sercu p 1980 a generalization of the international asset pricing model revue de l association francaise de finance 1 91 135 grauer et al 1976 grauer f litzenberger r stehle r 1976 sharing rules and equilibrium in an international capital market under uncertainty journal of financial economics 3 233 256 and adler and dumas 1983 adler m dumas b 1983 international portfolio choice and corporation finance a synthesis journal of finance 38 925 984 both exchange rate and foreign inflation risk factors can explain part of the within country cross sectional variation in returns our results have important implications for hedging exchange rate risk they also demonstrate that home bias at least in us equity portfolios cannot be the result of us investors efforts to hedge their domestic inflation

optimal product bundling with dependent valuations the price of independence abstract in this paper we investigate the tactical problem of pricing a bundle of products when the underlying valuations of the bundle components are dependent we use copula theory to model the joint density of reservation prices and provide analytical derivations for the prices under different bundling strategies and sharp bounds for the profit function we discover that when only the bundle is offered and the marginal costs are relatively small the seller is better off by bundling products that have a negative association between their valuations while the converse is true when the marginal costs are relatively high we also show that the net benefit of offering a full product line containing both the bundle and the components decreases for mild to strong associations between the component valuations compared to offering just the bundle finally we analyze how the typical literature assumption of independence of reservation prices impacts the seller s profitability when in fact the valuations are dependent and find that this gap in profitability which we call the price of independence can be arbitrarily large

energy efficiency and household behavior the rebound effect in the residential sector over the years various efficiency policies have been designed and implemented to reduce residential energy consumption however it is very common that the policy expectations that are based upon engineering calculations do not come true the widely accepted explanation for the gap between expectation and the realization is the change of household behavior as the energy efficiency gains change the perceived cost of energy services and thereby generate shifts in consumption patterns the rebound effect the real controversy about the rebound effect lies in the identification of its magnitude in this paper we estimate the rebound effect in residential energy consumption by comparing the actual gas consumption levels with the ex ante predictions within a sample of well over 600 000 dutch dwellings and households we find a significant deviation between the engineering predictions and the households actual energy consumption a difference which varies by ownership wealth income and the actual gas use intensity our results show a rebound effect of 26 7 percent among home owners and 41 3 percent among tenants moreover we find that these effects are greatest among the lower income wealth groups and among households that tend to use more gas than average

calculating the equity cost of capital using the apt the impact of the erm abstract one of the expected benefits of membership of the exchange rate mechanism erm was a reduction in risk which should lead to a lower cost of capital and foster investment and growth using the apt we investigate the behavior of the equity market risk premium for the london stock exchange prior to and during sterling s membership of the erm we find that prior to and during the first year of membership the equity market risk premium fell quite dramatically however when conflict between domestic and erm policy requirements arose at the turn of 1991 the equity risk premium increased and continued to do so until sterling s exit partially wiping out the benefits of membership of the erm

multiproduct nonlinear pricing typically work on mechanism design has assumed that all private information can be captured in a single scalar variable this paper explores one way in which this assumption can be relaxed in the context of the multiproduct nonlinear pricing problem it is shown that the firm will choose to exclude some low value consumers from all markets a class of cases that allow explicit solution is derived by making use of a multivariate form of integration by parts in such cases the optimal tariff is cost based

are refugees different from economic immigrants some empirical evidence on the heterogeneity of immigrant groups in the united states this paper analyzes how the implicit difference in time horizons between refugees and economic immigrants affects subsequent human capital investments and wage assimilation the analysis uses the 1980 and 1990 integrated public use samples of the census to study labor market outcomes of immigrants who arrived in the united states from 1975 to 1980 i find that in 1980 refugee immigrants in this cohort earned 6 less and worked 14 fewer hours than economic immigrants both had approximately the same level of english skills the two immigrant groups had made substantial gains by 1990 however refugees had made greater gains in fact the labor market outcomes of refugee immigrants surpassed those of economic immigrants in 1990 refugees from the 1975 1980 arrival cohort earned 20 more worked 4 more hours and improved their english skills by 11 relative to economic immigrants the higher rates of human capital accumulation for refugee immigrants contribute to these findings

an assessment of the human capital content of international migrants an application to us immigration mcdowell j m and singell l d jr 1993 an assessment of the human capital content of international migrants an application to us immigration reg studies 27 351 363 numerous studies have examined the flow of international migrants generally these studies measure the extent or magnitude of international migration by use of a simple numerical count this paper extends this analysis by providing a methodology for adding an economic dimension to the measure of the magnitude of international migration an earnings equation approach is used to attach an economic value to immigration applying our methodology to us immigration we find considerable variation across source regions in the value of immigrants moreover we find that simply comparing initial earnings without controlling for differences in the characteristics and migration patterns of immigrants from the various source regions can misrepresent the relative earnings potential or value of migrants mcdowell j m et singell l d jr 1993 un

immigrant earnings relative to what the importance of earnings function specification and comparison points immigrant relative earnings estimates are sensitive to the choice of comparison point and the specification of earnings non sample mean comparisons borjas 1985 understate relative earnings simple earnings specifications linear education quadratic experience overstate relative earnings for both poorly and well educated immigrants specifications which ignore omitted variables understate the relative earnings of poorly educated immigrants and overstate those of well educated ones although measures of assimilation and changes in immigrant quality are insensitive to earnings specification they indicate strong earnings growth for post 1964 immigrants an overall decrease in immigrant quality and an increase in mexican immigrant quality

competition with exclusive contracts and market share discounts we analyze firms that compete by means of exclusive contracts and market share discounts conditional on the seller s share of customers total purchases with incomplete information about demand firms have a unilateral incentive to use these contractual arrangements to better extract buyers informational rents however exclusive contracts intensify competition thus reducing prices and profits and in all pareto undominated equilibria increasing welfare market share discounts by contrast produce a double marginalization effect that leads to higher prices and harms buyers we discuss the implications of these results for competition policy jel d43 d83 d86 k21 l14 l42 in this paper we study firms that compete by means of exclusive contracts or mar ket share discounts i e discounts that depend on the seller s share of a customer s total purchases these are common yet seldom studied forms of competition the literature has mainly focused on incumbents use of exclusive contracts or marketshare discounts to deter new entrants whilst paying less attention to competitors deploying similar pricing strategies we show that exclusive contracts intensify competition reducing equilibrium prices whereas market share discounts have a double marginalization effect and hence result in higher prices these findings have a bearing on the current lively policy debate 1 fueled by the fact that antitrust authorities view competition by means of exclusive contracts or marketshare discounts with some suspicion to say the least the authorities main concern appears to be that a dominant firm can use exclusivity or market share discounts to eliminate not only potential competitors but also existing ones a prime instance of this is the case of intel intel whose main competitor amd has been operating for years in the microchip sector offered electronics manufacturers discounts that depended on their buying a minimum share of their total purchases of microchips from intel some customers to qualify for the discount had to opt for an exclusive supply contract that

the effect of minimum wages on immigrants employment and earnings this study examines how minimum wage laws affect the employment and earnings of low skilled immigrants and natives in the u s minimum wage increases might have larger effects among low skilled immigrants than among natives because on average immigrants earn less than natives due to lower levels of education limited english skills and less social capital results based on data from the current population survey for the years 1994 2005 do not indicate that minimum wages have adverse employment effects among adult immigrants or natives who did not complete high school however low skilled immigrants may have been discouraged from settling in states that set wage floors substantially above the federal minimum jel classifications j23 j38 j15

demand estimation and merger simulations for drugs logits v aids abstract we use adhd drugs sales data from 2000 2003 and compare estimates of elasticities and merger simulations from three different demand models models include logit random coefficients logit and conditional aids demand model with multistage budgeting the magnitude of cross price elasticities is larger in the third model in comparison to the first two and some of the cross price elasticities are estimated to be negative hypothetical merger simulations show larger price effects for the multistage aids model in comparison to the discrete choice models

access to citizenship and the economic assimilation of immigrants immigrants often have lower employment rates and earnings than natives our empirical analysis relies on two reforms generating exogenous variation in the waiting time for citizenship we find that faster access to citizenship improves the economic situation of immigrant women especially their labour market attachment with higher employment rates longer working hours and more stable jobs immigrants also invest more in host country specific skills like language and vocational training faster access to citizenship seems a powerful policy instrument to boost economic integration in countries with traditionally restrictive citizenship policies

new evidence on the economic progress of foreign born men in the 1970s and 1980s this study examines the economic progress of foreign born men in the united states europeans entered the united states with relatively high wages and earned wages comparable to natives over their life course japanese korean and chinese men entered with lower wages but quickly caught up with u s born workers mexicans and central americans entered with low wages and the wage gap between themselves and u s born workers has not shrunk disparities in completed years of education and whether education was received in the united states can explain a large share of the differences in the level of wages for immigrants from some countries it is found that more highly educated men assimilate more quickly the rate of economic progress has not improved for more recent arrivals from any country but this is most problematic among mexicans and central americans because of their relatively low rates of wage growth excerpt

arbitrage pricing theory as a restricted nonlinear multivariate regression model iterated nonlinear seemingly unrelated regression estimates by replacing the unknown random factors of factor analysis with observed macroeconomic variables the arbitrage pricing theory apt is recast as a multivariate nonlinear regression model with across equation restrictions an explicit theoretical justification for the inclusion of an arbitrary well diversified market index is given using monthly returns on 70 stocks iterated nonlinear seemingly unrelated regression techniques are employed to obtain joint estimates of asset sensitivities and their associated apt risk prices without the assumption of normally distributed errors these estimators are strongly consistent and asymptotically normal with the additional assumption of normal errors they are also full information maximum likelihood estimators classical asymptotic nonlinear nested hypothesis tests are supportive of the apt with measured macroeconomic factors

carbon emissions from the commercial building sector the role of climate quality and incentives commercial buildings play a major role in determining u s greenhouse gas emissions yet surprisingly little is known about the environmental performance of different buildings at a point in time or how the same buildings perform over time by exploiting a unique panel of commercial buildings from a major electric utility we study the association between a building s electricity consumption and the physical attributes of buildings lease incentive terms indicators of human capital and climatic conditions we find that buildings that are newer and of higher quality consume more electricity contrasting evidence for the residential sector however using our panel data set we document that newer buildings are most resilient when exposed to hotter weather those buildings that have a building manager on site and whose tenants face a positive marginal cost for electricity also demonstrate a better environmental performance

job search and immigrant assimilation an earnings frontier approach this study examines labor market assimilation by measuring the information utilized by immigrants during job search assimilation is assumed to occur whenever such information increases with length of residence in the united states and repeated job searches the authors assert that information utilized during job search reduces differentials between actual and potential maximum attainable earnings coauthors are henry w herzog jr richard a hofler and alan m schlottmann copyright 1992 by mit press

multiproduct monopoly commodity bundling and correlation of values through what selling strategy can a multiproduct monopolist maximize his profits when his knowledge about individual consumers preferences is limited one possibility extensively studied in the context of a single good monopoly is to use quantity dependent pricing as a means of discriminating among customers with differing tastes see for example oi 1971 and maskin and riley 1984 an alternative technique for price discrimination first suggested by stigler 1968 and analyzed further by adams and yellen 1976 is for the monopolist to package two or more products in bundles rather than selling them separately through a series of examples adams and yellen illustrate that bundling can serve as a useful price discrimination device even when all consumers willingnesses to pay for each of the goods individually are unaffected by whether they are also consuming the other product a typical example is illustrated in figure i adapted from figure iv in adams and yellen where there are two goods three consumers ab c who consume at most one unit of each good with reservation values for each good that are independent of whether the other good is consumed and zero costs of production there a bundle offered at a price of 100 fully extracts all potential surplus which would be impossible pricing the goods independently unfortunately though these authors do not provide any general characterization of the circumstances in which bundling is actually a multiproduct monopolist s optimal strategy their examples however such as figure i create the impression that the profitable use of bundling

hysteresis and the earnings of immigrants in the united states labour market the paper analyses the role of hysteresis in explaining the slow wage convergence between certain immigrant groups and native workers using the 1990 integrated public use microdata samples ipums the analysis reveals that past earnings history in the country of origin has a relatively smaller effect on post migration earnings when compared to past earnings history in the us in addition the paper suggests that the earnings history in the country of origin is more productive in the us labour market for immigrants from advanced economies as compared to those from less developed countries in particular we find that us labour market does not value the past earnings history of mexican immigrants as high as that of other ethnic groups with similar socioeconomic characteristics across successive cohorts

prospect theory and energy efficiency abstract investments in energy efficiency entail uncertainty and when faced with uncertainty consumers have been shown to behave according to prospect theory preferences are reference dependent and exhibit loss aversion and probabilities are subjectively weighted using data from a choice experiment eliciting prospect theory parameters i provide evidence that loss averse people are less likely to invest in energy efficiency then i consider policy design under prospect theory when there are also externalities from energy use a higher degree of loss aversion implies a higher subsidy to energy efficiency numerical simulations suggest that the impact of prospect theory on policy may be substantial

commodity bundling by single product monopolies consider two products that have independent demands in the sense that all individual buyers consider them neither substitutes nor complements then if the two products are priced separately the demand for either is independent of the price of the other in his classic analysis of block booking of feature films george stigler shows that it may be profitable for a monopoly seller of two such products to bundle them by requiring a buyer to take both in order to get either his work provides a rationale for tying arrangements that does not depend on technological or other dependencies among the products involved 2 adams and yellen extend the analysis of multiproduct monopoly with independent demands 3 they discuss two different bundling strategies pure bundling in which the seller only offers the products in fixed proportions and mixed bundling in which buyers may either buy the products separately or purchase a bundle with fixed proportions of each in this note i consider a single product monopoly and investigate the profit and welfare implications of bundling its product for some other

exchange rate exposure hedging and the use of foreign currency derivatives abstract we examine whether firms use foreign currency derivatives for hedging or for speculative purposes using a sample of s p 500 nonfinancial firms for 1993 we find evidence that firms use currency derivatives for hedging as their use significantly reduces the exchange rate exposure firms face we also find that while the decision to use derivatives depends on exposure factors i e foreign sales and foreign trade and on variables largely associated with theories of optimal hedging i e size and r d expenditures the level of derivatives used depends only on a firm s exposure through foreign sales and trade

gender source country characteristics and labor market assimilation among immigrants abstract using 1980 2000 census data to study the impact of source country characteristics on married adult immigrants labor supply assimilation profiles we find that immigrant women from countries with high female labor supply persistently work more than those from low female supply countries while both groups of women work less than comparable natives on arrival women from high female participation countries eventually close the gap with natives entirely and women from low female labor supply countries eliminate most of it men s labor supply is unaffected by source country female participation suggesting that the findings on women reflect notions of gender roles

the impacts of energy efficiency policies meta analysis abstract this paper attempts to quantitatively summarize the existing empirical evidence on the effects of energy efficiency policies on energy demand and on the price of associated durable goods as well as to identify the main factors that systematically affect the estimated impacts to this end a meta regression analysis of the effects of energy efficiency policies is carried out on the basis of an extensive review of the existing literature selecting those studies that analyze the impact of energy efficiency policies with respect to a business as usual setting taking into account the econometric problems associated with this type of analysis intra class correlation cross sectional dependence publication bias in pursuit of robust outcomes the results show that the studies analyzing the effects of energy efficiency policies estimate a significant impact of these policies on energy demand 10 5 8 8 and the price of related durable goods 7 9 6 the main factors that influence results are the policy instrument the targeted sector the type of country the analyzed period the consideration of free riders and the type of analysis data and publication energy demand and the sector and analyzed period price of durables

dosis facit effectum why the size of the carbon tax matters evidence from the swedish residential sector abstract after 25 years of gradually increasing its carbon tax sweden now imposes the world s highest tax on carbon dioxide emissions this paper examines the effect of the swedish carbon tax on residential carbon emissions by using european panel data we employ synthetic control methods scms and perform difference in difference did regressions to evaluate the causal impact of carbon taxation on carbon emissions in the residential sector we provide evidence that early 2000s carbon tax augmentation had a causal effect on residential carbon emissions we find that the reduction of residential carbon emissions stemming from the carbon tax augmentation ranges from 200 kg when compared with other countries with a carbon tax of more than 20 euro to 800 kg when compared with countries without a carbon tax of co2 per capita per year hence the evidence suggests that carbon taxation is an effective tool for reducing residential co2 emissions and in turn mitigating climate change

empirics on the long run effects of building energy codes in the housing market we study the effectiveness of building energy codes taking a long run perspective the focus is on regulation s impact on energy demand in both high and low quality residences in other words the diffusion and the entry of green buildings in the housing market we develop a measure for regulation intensity and apply this to a panel error correction regression model for energy requirements of a large sample of german apartment houses built between 1950 and 2005 we show that regulation is effective in saving energy in particular regulation pushes investors in the low quality housing market segment toward the technological frontier indirectly it also affects the high quality segment jel q41 r52

on the wage growth of immigrants israel 1990 2000 this paper develops a descriptive methodology for the analysis of wage growth of immigrants that is based on human capital theory the sources of the wage growth are 1 the rise of the return to imported human capital 2 the impact of accumulated experience in the host country and 3 the mobility up the occupational ladder in the host country the model implies a nonlinear wage function that includes interactions between imported skills and local wage growth using data on native israelis and immigrants from the former soviet union of israel we estimate wage equations jointly for the two groups we find that upon arrival immigrants receive non return for imported skills in the ten years following arrival wages of highly skilled immigrants grow at 8 percent a year rising prices of skills occupational transitions accumulated experience in israel and an economy wide rise in wages account for 3 4 1 1 1 5 and 1 5 percent each in the long run the return for schooling converges to 0 027 substantially below the 0 069 return for natives we do not reject the hypothesis that the return for experience converges to that of natives and that immigrants receive a higher return for their unmeasured skills we find that there is some downgrading in the occupational distribution of immigrants relative to that of natives moreover the average wages of immigrants approach but do not converge to the wages of comparable natives the main reason for this is the low return to their imported skills jel j24 j31 j60