markets for pollution control when firms are noncompliant the problem of noncompliance and enforcement in transferable discharge permit tdp markets has not received much attention this paper examines the consequences of noncompliance for a tdp market given fairly general assumptions about the characteristics of the enforcement policy in place the analysis reveals that when firms are noncompliant tdp markets retain their efficiency property only under some fairly stringent conditions the effect of noncompliance on the equilibrium permit price raises some important questions about the ability of a tdp market to achieve and remain in equilibrium when firms are noncompliant

effects of welfare reform on illicit drug use of adult women exploiting changes in welfare policy across states and over time and comparing relevant population subgroups within an econometric difference in differences framework we estimate the effects of welfare reform on adult women s illicit drug use from 1992 to 2002 the period during which welfare reform unfolded in the u s the analyses are based on all available and appropriate national datasets each offering unique strengths and measuring a different drug related outcome we investigate self reported illicit drug use from the national household surveys on drug abuse and national surveys on drug use and health drug related prison admissions from the national corrections reporting program drug related arrests from federal bureau of investigation uniform crime reports and drug related emergency department episodes from the drug abuse warning network we find robust evidence that welfare reform led to a 10 21 decline in illicit drug use among women at risk of relying on welfare as well as associated declines in drug related arrests 6 7 drug related hospital emergency department episodes 7 11 and possibly drug related prison admissions 11 19 the findings indicate that an appropriately designed system with sufficient job opportunities for those are able to work can result in both increases in employment and decreases in drug use

labor supply at the extensive and intensive margins the eitc welfare and hours worked some previous studies have emphasized differences between labor supply responses on the extensive margin participation and intensive margin hours worked e g james j heckman 1993 jean kimmel and thomas j kniesner 1998 recent tax and welfare policy changes provide a potentially more convincing way of identifying these responses than is available in other nonexperimental data the earned income tax credit eitc changes during the 1990 1996 period sharply altered the budget sets of single mothers over a short period of time these changes in incentives are likely to be unrelated to differences across individuals in the desire to work and thus are likely to be exogenous to labor supply decisions this lack of exogeneity is harder to claim for wage differences across people which are the main alternative source of identifying variation in addition to preference heterogeneity wages are driven by supply and demand factors that one must account for to obtain valid estimates using wage variation the eitc unequivocally encourages single parents to work at least some hours during a year because it shifts out the budget set at all positive hours points this first prediction is clearly confirmed by the data in addition theory implies that the eitc will decrease hours worked among those already working because most recipients are on the plateau or phase out portions of the credit schedule for these recipients the eitc reduces or does not affect the after tax wage while at the same time discouraging work through the income effect of the credit payment however recent hours worked patterns for eitc eligible individuals do not appear to fit this second prediction hours and weeks worked by likely recipient groups have not fallen this paper analyzes this puzzling finding building on earlier work by nada eissa and jeffrey liebman 1996 and meyer and dan t rosenbaum 1999 this study shows that nearly all of the laborsupply adjustment of single mothers occurs at the extensive margin not the intensive margin this finding raises the issue of what model features are needed to explain both participation and hours but leaves the answer to be provided in future work this finding also suggests that the large literature simulating alternative policies for low wage workers such as the eitc may be misleading because nearly all work has used models that imply similar responses on participation and hours margins

the effects of welfare and tax reform the material well being of single mothers in the 1980s and 1990s abstract the tax and welfare programs that provide income and in kind benefits to single mothers have changed dramatically in recent years these changes began as far back as the mid 1980s and culminated with the 1996 welfare law that ended welfare as we knew it these tax and welfare changes have sharply increased the employment of single mothers and cut welfare rolls however little is know about the effects of these policy changes on the material well being of single mothers and their children studies of those leaving welfare have found that a substantial percentage have problems paying rent purchasing enough food and paying utility bills other studies found a decline in income among the worst off single mothers after 1994 or 1995 the goal of this paper is to examine the material well being of single mothers and their families before and after recent welfare and tax reforms using data from two nationally representative household surveys we examine the consumption patterns of single mothers and their families from 1984 2000 we find that the material conditions of single mothers did not decline in recent years either in absolute terms or relative to single childless women or married mothers this pattern holds for the average single mother as well as for low educated single mothers at both the 15th and 25th percentiles of the consumption distribution in most cases our evidence suggests that the material conditions of single mothers have improved slightly

food insecurity and public assistance this paper examines if welfare programs reduce the probability that vulnerable households experience food deprivation because of financial constraints although the 1996 welfare reform legislation specifically limited the eligibility of immigrant households to receive assistance many states chose to protect their immigrant populations by offering state funded aid to these groups i exploit these changes in eligibility rules to examine the link between food insecurity and public assistance the evidence indicates that a 10 percentage point cut in the fraction of the population that receives public assistance increases the fraction of food insecure households by about 5 percentage points

accounting for the decline in afdc caseloads welfare reform or the economy we use state level monthly panel data to assess the relative contributions of the macroeconomy and welfare reform in accounting for the 1993 96 decline in aid to families with dependent children afdc caseloads our results suggest that the decline in per capita afdc caseloads is attributable largely to the economic conditions in states and not to waivers from federal welfare policies nationwide we attribute 66 percent of the decline to the macroeconomy however we do find substantial heterogeneity in the impact and timing of alternative waivers on afdc caseloads states with waivers impacting parental responsibilities experienced greater caseload declines than states with waivers that made work more attractive overall our model predicts that had it not been for the influence of economic factors welfare reform would not have led to any decrease in aggregate caseloads

the effect of safety net programs on food insecurity we investigate to what extent major safety net program benefits affect food insecurity in families we impute program eligibility and benefits in each state for 2001 2009 accounting for cross program eligibility rules we use simulated eligibility and benefits for a nationally representative sample as instruments for imputed eligibility and potential benefits among nonimmigrant low income single parent families 1 000 in potential cash or food benefits reduces the incidence of food insecurity by 1 1 percentage points on a base of 33 percent cash and food both reduce food insecurity the results highlight the importance of jointly considering a full range of safety net programs

the connection between public transfers and private interfamily transfers abstract this paper investigates the anti poverty effectiveness of public transfers taking private transfer responses into account widespread altruistically motivated private transfers would neutralize the distributional impact of public transfers but exchange motivated transfers can reinforce the effects of public transfers on the distribution of economic well being the common technique for gauging anti poverty effectiveness subtracting public transfers from other income and measuring the poverty rate counterfactual yields results that are close to a more complex procedure that takes private transfer responses into account and some of the empirical findings suggest an exchange rather than altruistic motive for private transfers indicating that the effects of public transfers can be magnified by private behavior this is an exact reversal of the prediction that public transfers merely supplant private ones

alternative approaches to valuing intangible health losses the evidence for multiple sclerosis abstract this study uses both risk risk and risk dollar approaches to assess intangible health losses associated with multiple sclerosis ms using an estimation approach that adjusts for potential perceptional biases that may affect the expressed risk tradeoffs we estimated parameters of the utility function of persons with and without ms as well as the degree of subjects overestimation of the probability of obtaining ms the sample included subjects from the general population and persons with ms we found that marginal utility of income is lower in the state with ms than without it however the difference in marginal utility in the two states was greater for persons without ms than for those with the disease persons with ms overestimated the probability of acquiring ms to a greater extent than did persons within ms correcting for overestimation of this probability the value of intangible loss of a statistical case of ms derived from responses of the general population was us 350 000 to us 500 000 persons with ms were willing to pay somewhat more than this d80 i18 j17

changes in the consumption income and well being of single mother headed families there is a long standing debate over how the material well being of the disadvantaged has changed over time in the united states this debate has intensified in light of notable increases in income inequality in the 1970s and 1980s and during the 1990s dramatic changes in welfare and tax policies that target poor families including expansions in the earned income tax credit eitc welfare waivers and the passage of the personal responsibility and work opportunity reconciliation act prwora while some championed these changes as catalysts for self sufficiency others predicted that these reforms would lead to severe deprivation 1 a large body of research has shown that these changes were associated with a dramatic fall in welfare receipt and increases in work and earnings 2 there is little consensus however on how material well being has changed during this period particularly for the most disadvantaged families such as those at the bottom of the income or consumption distribution in this paper we analyze changes in material well being between 1993 and 2003 for single mother headed families a group that has been the target of these recent changes in tax and wel fare policy for these families we analyze changes in income and total consumption as well as changes in disaggregated consumption time use and health insurance coverage we describe the underlying trends in well being for disadvantaged families during this dynamic period rather than identifying the causal effects of individual policies or macroeconomic conditions we begin by briefly documenting the recent trends in income and consumption for single mother headed families for income the trends differ sharply for different deciles of single moth ers for example between 1993 1995 and 1997 2000 reported income in the bottom decile falls by about 16 percent while reported income rises by more than 17 percent in the third fourth and fifth deciles the trends for reported consumption on the other hand tell a very different story these data show neither the sharp decline at low percentiles nor the large increases at the remaining percentiles in the bottom half of the distribution of single mothers rather we find a modest about 7 to 12 percent rise in consumption throughout the entire distribution while we do not examine the reasons for the sharp differences in income and consumption changes in this paper we do argue that consumption is a better measure of material well being for those at the bottom of the distribution

pressure and the division of a public budget this paper considers the division of a public budget among competing interests the planner determines the optimal allocation by maximizing a weighted social welfare function these weights reflect society s attitudes to different recipient groups and are not constrained to be constant by exerting pressure the recipients can attempt to manipulate the weights and hence influence the division of the budget the amount of resources used on pressure and the effects on the preference weights are calculated an important parameter in the model is the elasticity of pressure for which an appropriate estimate is presented from the case of competition for a share of a health services budget in norway

incentive based policy design for pollution control and biodiversity conservation a review this paper provides a succinct review of the main developments in the literature on incentive based policy mechanisms in the contexts of pollution control and biodiversity conservation dating from the early beginnings of the science in the 1960s a focal point in the review is on the design features of these policy mechanisms key developments in policy design were originally established in controlling externalities arising from pollution and have since been extended to policy design tailored towards biodiversity conservation special emphasis is given to the spatial characteristics of the environmental problems underlying both pollution control and biodiversity conservation the paper concludes by drawing some lessons and setting out elements of a future research agenda in both policy domains

a new approach to valuing a life abstract because the issue of how to put a monetary value on a life will always be controversial this paper presents an alternative approach that can in certain circumstances avoid the use of monetary values the alternative approach uses time as the numeraire this numeraire can handle both the ex ante and ex post approaches to valuing a life after showing how a simple two period consumer choice problem can be translated into terms of time the paper considers an application that involves reformulating the data used to evaluate the 55 mph speed limit decision in the united states

using rank data to estimate health state utility models in this paper we report the estimation of conditional logistic regression models for the health utilities index mark 2 and the sf 6d using ordinal preference data the results are compared to the conventional regression models estimated from standard gamble data and to the observed mean standard gamble health state valuations for both the hui2 and the sf 6d the models estimated using ordinal data are broadly comparable to the models estimated on standard gamble data and the predictive performance of these models is close to that of the standard gamble models our research indicates that ordinal data have the potential to provide useful insights into community health state preferences however important questions remain

welfare for the elderly the effects of ssi on pre retirement labor supply abstract this paper studies pre eligibility age labor market disincentives created by the supplemental security income ssi program asset and income limits might induce individuals nearing the eligibility age to work less we exploit states supplementation of federal ssi benefits to estimate the effects of ssi on pre retirement labor supply using sipp data we find some evidence that generous ssi benefits reduce the pre retirement labor supply and earnings of men who are likely to participate in ssi after retirement as they near the eligibility age especially men who are eligible for early social security benefits which may be used to offset their reduced labor income

viewpoint further results on measuring the well being of the poor using income and consumption we evaluate the relative merits of income and consumption based measures of well being our results provide evidence that consumption better captures well being for those with few resources the bottom deciles of expenditures exceed those of income suggesting under reporting of income the under reporting rate for government transfers is high and rising overall non response is more severe in u s income data than in expenditure data furthermore a consumption data set requires fewer observations than an income data set to obtain the same level of precision for typical estimates finally very low consumption is more strongly related to other bad outcomes than very low income on evalue les merites relatifs des mesures de bien etre fondees sur le revenu et la consommation les resultats montrent que la consommation mesure mieux le bien etre de ceux qui ont peu de ressources les deciles au bas de la distribution des depenses depassent les deciles de la distribution des revenus ce qui suggere qu il y aurait des revenus non rapportes le taux de sous declaration des transferts gouvernementaux est eleve et croissant le taux global de non reponses est plus important aux etats unis pour les revenus que pour les depenses de plus les bases de donnees sur la consommation requierent moins d observations que celles sur le revenu pour obtenir le meme degre de precision des evaluations typiques finalement une tres basse consommation est plus fortement co reliee a d autres mauvaises conditions qu un tres bas niveau de revenu

income inequality tax policy and economic growth we investigate how the reduction of income inequality through tax policy affects economic growth taxation at different points of the income distribution has heterogeneous impacts on households incentives to work invest and consume using us state level data and micro level household tax returns over the last three decades we find that reducing income inequality between low and median income households improves economic growth however reducing income inequality through taxation between median and high income households reduces economic growth these asymmetric economic growth effects are attributable both to supply side factors i e changes in small business activity and labour supply and to consumption demand

willingness to pay for publicly financed health care how should we use the numbers this paper addresses the question of how willingness to pay wtp values in health care evaluation can be used by policy makers the way in which wtp values are used depends on from whom values are elicited and whether the good concerned is privately financed or publicly financed through taxation thus four possible uses of wtp values are identified the focus is on the two uses which arise in the publiclyfinanced situation conventional use of wtp values where the decision as to whether or not to provide a service depends upon whether or not wtp values are greater than total cost applies only in the privately financed and not publiclyfinanced situations the situations with publicly financed goods are more complex the use of wtp values for publicly financed goods is justified and illustrated

assessing the performance of conservation auctions an experimental study this work uses controlled laboratory experiments to investigate the budgetary and the economic performance of competitive tenders for allocating conservation contracts to landholders experiments have been replicated in two different countries to check for robustness of results we find that auctions outperform the more traditional fixed price programs only in the one shot setting with repetition the auctions quickly lose their edge the budget constrained auction performs similarly to the target constrained in the one shot setting but appears more robust to repetition our results suggest that previous estimates of conservation auction performance are too optimistic and we propose a method for improving such estimates

poverty and the distribution of material hardship public concern with poverty derives in large part from the assumption that low income families cannot afford necessities yet official poverty statistics focus on measuring income not on measuring material hardship two surveys of chicago residents measure whether families could afford food housing and medical care a family s official income to needs ratio explained 24 percent of the variance in the amount of material hardship it reported adjustments for family size age health noncash benefits home ownership and access to credit explain another 15 percent variations in permanent income explain almost none of the remaining variance in hardship among families with the same official income toneeds ratio material hardship varies by age family size and composition

mathematical programming for the efficient allocation of health care resources previous discussions of methods for the efficient allocation of health care resources subject to a budget constraint have relied on unnecessarily restrictive assumptions this paper makes use of established optimization techniques to demonstrate that a general mathematical programming framework can accommodate much more complex information regarding returns to scale partial and complete indivisibility and program interdependence methods are also presented for incorporating ethical constraints into the resource allocation process including explicit identification of the cost of equity

cash welfare as a consumption smoothing mechanism for divorced mothers abstract while there has been considerable research on the disincentive effects of cash welfare under the aid to families with dependent children afdc program there is little evidence on the benefits of the program for single mothers and their children one potential benefit of this program is that it provides short run consumption insurance for women at the point that they become single mothers this is only true however to the extent that the program is not crowding out other sources of support such as own savings labor supply or transfers from others i assess the importance of this insurance mechanism by measuring the extent to which afdc smooths the consumption of women who transition to single motherhood through marital dissolution i use longitudinal data on family structure and consumption expenditures on food and housing from the panel study of income dynamics psid matched to information on the welfare benefits available in each state and year over the 1968 1985 period i find that raising potential benefits by one dollar raises the food and housing consumption of women who get divorced and their families by 28 cents this estimate implies that for each dollar of afdc received by this population their consumption of these categories of goods rises by up to 51 cents this is roughly the share of food and housing in the consumption bundle of divorced mothers and their families suggesting little crowdout of other sources of support

the menu setting problem and subsidized prices drug formulary illustration the menu setting problem msp determines the goods and services an institution offers and the prices charged it appears widely in health care from choosing the services an insurance arrangement offers to selecting the health plans an employer proffers the challenge arises because purchases are subsidized and consumers or their physician agents may make cost ineffective choices the intuitively comprehensible msp model readily solved by computer using actual data helps structure thinking and support decision making about such problems the analysis uses drug formularies lists of approved drugs in a plan or institution to illustrate the framework

an experimental investigation of the explosive effect in almost common value auctions abstract with only two bidders a slight private value advantage in a common value auction is predicted to have an explosive effect on the allocation and revenue of the auction when using a second price and or english clock mechanism this paper uses the wallet game in an english clock mechanism with two players to test these predictions the results show that the effect is proportional not explosive confirming the results of past experiments a behavioral model with two types of players naive and sophisticated is developed and tested against the experimental data in the model naive players use a rule of thumb bidding function while the sophisticated players are fully rational and when forming their strategy choosing the best response correctly account for the probability that a rival is naive or sophisticated we use cluster analysis to classify the players in the symmetric auctions as naive or sophisticated and a strict win lose criteria to classify players in the asymmetric auctions we find that those players classified as sophisticated are more aggressive in responding to high signals or advantaged status than their naive counterparts but do not lower their bids relative to the naive players when receiving low signals or when regular

a laboratory study of auctions for reducing non point source pollution abstract non point source pollution such as nutrient runoff to waterways from agricultural production is an environmental problem that typically involves asymmetric information land use changes to reduce pollution incur opportunity costs that are privately known to landholders but these changes provide environmental benefits that may be more accurately estimated by regulators this paper reports a testbed laboratory experiment in which landholder sellers in sealed offer auctions compete to obtain part of a fixed budget allocated by the regulator to subsidize abatement in one treatment the regulator reveals to landholders the environmental benefits estimated for their projects and in another treatment the regulator conceals the potential projects environmental quality the results show that sellers offers misrepresent their costs more for high quality projects when quality is revealed so total abatement is lower and seller profits are higher when landholders know their projects environmental benefits this suggests that concealing this information may improve regulatory efficiency

effective policy for reducing poverty and inequality the earned income tax credit and the distribution of income we examine the effect of the eitc on the poverty and income of single mothers with children using a quasi experimental approach that leverages variation in generosity due to policy expansions across tax years and family sizes we find that the income increasing effects of the eitc are concentrated between 75 and 150 percent of income to poverty with little effect at the lowest income levels and at levels of 250 percent of poverty and higher we use these results to show that by failing to capture the indirect effects of the credit on earnings static calculations of the antipoverty effects of the eitc may be underestimated by almost 50 percent abstract from author

emissions variability in tradable permit markets with imperfect enforcement and banking abstract in this laboratory experiment on emissions trading subjects face exogenous random emissions shocks after making production and emission control plans in some sessions subjects can bank their unused permits for future use after a reconciliation trading period following the shock realization subjects report their emissions to the regulatory authority and are placed in different inspection groups depending on their compliance history we identify important interactions between banking compliance and enforcement banking smoothes out the price variability arising from imperfect emissions control price stability comes at a cost however since noncompliance and emissions are significantly greater when banking is allowed

how does public assistance affect family expenditures the case of urban china summary using recent national household survey data and a propensity score matching method this study examines the effects of urban china s primary public assistance program minimum living standard assistance mlsa on family expenditures an important yet understudied indicator of family material well being we find that families receiving mlsa prioritized human capital investment i e paying for education and health rather than making the ends meet e g paying for food clothing rent and utilities the policy implications of these findings are discussed

conservation auctions and compliance theory and evidence from laboratory experiments many agri environmental conservation programs are faced with the problem of imperfect monitoring this provides farmers with an incentive for noncompliance because they can receive subsidies without implementing the conservation scheme in this paper bidding behavior and auction performance are compared for discriminatory price and uniform price auctions in an imperfect monitoring environment our theoretical analysis suggests that auction performances are equalized between the discriminatory price and uniform price auctions however laboratory experiments reveal that although the discriminatory price auction has an advantage in terms of reducing policy costs it is more likely to cause adverse selection as a result the uniform price auction tends to have higher efficiency and cost effectiveness when compliance behavior is taken into account

the effects of time limits the eitc and other policy changes on welfare use work and income among female headed families of all of the welfare reforms that were implemented during the 1990s time limits may represent the single greatest break from past policy this paper expands on what is known about this important welfare reform measure by exploiting the predictions from grogger and michalopoulos 2003 to estimate the effects of time limits on welfare use employment labor supply earnings and income among female headed families results based on data from the march current population survey suggest that time limits have had important effects on welfare use and work accounting for about one eighth of the decline in welfare use and about 7 of the rise in employment since 1993 they have had no significant effect on earnings or income however the analysis also shows that the collective effects of other reforms have had important impacts on employment and labor supply furthermore it identifies the earned income tax credit eitc as a particularly important contributor to both the recent decrease in welfare use and t

cost effectiveness utility analyses do current decision rules lead us to where we want to be despite the growing literature on economic evaluation of health care programmes little attention has been paid to the theoretical foundations of cost effectiveness and cost utility analyses and the validity of the decision rules adopted as methods of achieving the stated goals we show that although applications of the techniques can be used to pursue some managerial objectives in the context of highly constrained environments such applications are inconsistent with both welfare economic objectives and the interpretations of the findings of these applications alternative strategies are identified as potential and practical methods for pursuing welfare economic objectives

structural reliability of conjoint measurement in health care an empirical investigation this paper is concerned with the structural reliability of conjoint measurement when applied in a health care setting the clinical context was the diagnosis and treatment of knee injuries a conjoint measurement study was conducted which used the pairwise choice approach to preference elicitation each choice included two scenarios a conventional treatment approach to management arthroscopy and an approach using magnetic resonance imaging in order to test for structural reliability two separate conjoint measurement exercises were conducted exercise a where scenarios were defined in terms of three attributes and exercise b where scenarios included all four attributes the assessment of structural reliability involved a comparison of two random effects probit models for exercises a and b data were collected on a total of 176 students of sports science the results strongly indicate that the models for the two exercises are different although the instability is limited to the constant term and a sin

measuring the well being of the poor using income and consumption we examine the relative merits of consumption and income as measures of the material well being of the poor consumption offers several advantages over income because consumption is a more direct measure of well being than income and is less subject to underreporting bias measurement problems with income are problematic for analyses of changes in well being of the poor because the biases appear to have changed over time and are correlated with government policies on the other hand income is often easier to report and is available for much larger samples providing greater power to test hypotheses we begin by considering the conceptual and pragmatic reasons why consumption might be better or worse than income then we employ several empirical strategies to examine the quality of income and consumption data first we compare income and consumption reports for those with few resources as well as their assets and liabilities to examine measurement errors and under reporting second we examine other evidence on the internal consistency of reports of low income or consumption third we compare how well micro data in standard datasets weight up to match aggregates for classes of income and consumption that are especially important for low resource families fourth we validate income and consumption measures by comparing them to other measures of hardship or material well being although the evidence tends to favor consumption measures our analyses suggest that both measures should be used to assess the material well being of the poor

the economic consequences of absent parents we examine the effects of family structure on economic resources controlling for unobservable family characteristics in the year following a divorce family income falls by 41 percent and family food consumption falls by 18 percent six or more years later the family income of the average child whose parent remains unmarried is 45 percent lower than it would have been if the divorce had not occurred marriage raises the long run family income of children born to single parents by 45 percent these estimates are substantially smaller than the losses that are implied by cross sectional comparisons across family types

a laboratory comparison of uniform and discriminative price auctions for reducing non point source pollution auctions allow regulators to identify land management changes with substantial environmental benefit and low opportunity cost this paper reports an experiment in which seller subjects compete in sealed offer auctions to obtain part of a fixed budget allocated by the experimenter regulator to subsidize pollution abatement one treatment employs uniform price auction rules whereas another treatment employs discriminative price auction rules we find that most offers in the uniform price auction are within 2 of cost whereas most offers in the discriminative price auction are at least 8 greater than cost nevertheless the discriminativeprice auction has superior overall market performance

equivalence scales and the costs of disability abstract the impact of disability on household welfare is estimated by equivalence scales using data from the 1986 1987 fes disability survey three methods of identifying scales from cross section data are considered these imply a series of restrictions that are tested on quadratic logarithmic engel curves the results indicate that there are substantial consumption costs associated with physical disability

applications of cost benefit analysis to health care departures from welfare economic theory in applying the principles of cost benefit analysis to real world problems of resource allocation particular care must be taken to ensure that the welfare economic theory which underlies the cost benefit technique is adhered to major problems arise where costs and benefits are used interchangeably to represent the good and bad attributes of a programme furthermore in the presence of mutually exclusive projects focussing attention upon the net benefits or cost benefit ratios of individual projects as opposed to the net benefits of the use of budgeted resources can lead to biased estimates of the shadow price of projects and consequently errors in analysts conclusions as a result economic appraisals of individual projects are not directly relevant for choosing between mutually exclusive projects of different sizes both types of problem are illustrated by reference to both simple examples and published economic appraisals of health care techniques integer programming is proposed and demonstrated as a method of selecting between mutually exclusive projects

what causes public assistance caseloads to grow this paper uses state panel data to investigate changes in public assistance caseloads through the end of the afdc program in 1996 with particular attention to the rapid increase in caseloads between 1990 and 1994 previous research has focused on total caseloads with attention to economic and policy variables and does a relatively poor job of explaining this caseload increase this paper utilizes a much richer set of control variables to investigate the causes of caseload change it separates afdc caseloads into three subcomponent programs separately investigating changes within the afdc up program afdc child only cases and the remaining core afdc cases with benefits paid to single mothers and their children and it explores whether this caseload rise was driven by changes in takeup rates versus in eligibility the results indicate a large unexplained rise in total afdc caseloads even with a very rich specification a good share of this is due to sharp increases in child only cases driven by program and demographic shifts to a lesser extent this rise was caused by the expansion of afdc up to all states these two factors explain half of the overall rise and all of the unexplained rise in afdc caseloads the remaining increase in core afdc cases benefits received by single mothers and their children is well explained within the model and is the result of economic demographic political and policy changes these variables appear to have increased eligibility among the core afdc population in the early 1990s during the economic slowdown takeup rates also increased during this time period but not by a large amount

taxes and time allocation evidence from single women and men the classic model of becker 1965 suggests that labor supply decisions should be analyzed within the broader context of time allocation and market good consumption choices but most empirical work on policy has focused exclusively on measuring impacts on market work this paper examines how income taxes affect time allocation during the entire day and how these time allocation decisions interact with expenditure patterns using the panel study of income dynamics from 1975 to 2004 we analyze the response of single women s housework labor supply and other time to variation in tax and transfer schedules across income levels number of children states and time we find that when the economic reward to participating in the labor force increases market work increases and housework decreases with the decrease in housework accounting for approximately two thirds of the increase in market work analysis of repeated cross sections of time diary data from 1975 to 2004 shows that home production decreases substantially when market hours of work increase in response to policy changes data on expenditures from the consumer expenditure survey from 1980 to 2003 show some evidence that expenditures on market goods likely to substitute for housework increase in response to a greater incentive to join the labor force the baseline estimates imply that the elasticity of substitution between consumption of home and market goods is 2 61 the results are consistent with the becker model meanwhile single men show little response to changes in tax policy and we are able to rule out an elasticity of substitution between home and market goods for this group of more than 1 52

on the aggregation of health status measures in the present paper we address the problem of finding conditions under which aggregation of individual health status measurements e g qalys is meaningful in the sense that there is a universal unit of measurement for health the problem is studied in a model where different aspects of health take the form of lancasterian characteristics to be produced by the individuals using commodities obtained in the market for a meaningful unit of measurement to exist marginal rates of substitution between different aspects of health should not differ among individuals and for this to happen in an equilibrium of the economy considered certain assumptions of separability of technology and or preferences must be satisfied this means that universal measures of health will be meaningful only if there are not too many spillovers in achieving different aspects of health

auctions for initial sale of annual catch entitlement we use a laboratory experiment calibrated to a representative new zealand fishery to assess three sealed bid multi unit demand auction mechanisms under consideration for allocating quota for species being introduced into the quota management system these auctions allocate the k units to the k highest bids but prices are determined according to discriminative kth price and k 1st price rules in our experiment the auctions are equally efficient but revenue is highest in the discriminative auction and lowest in the k 1st price auction results are robust to industry subjects and subjects are responsive to the across unit bidding incentives present in multi unit demand auctions

using a discrete choice experiment to estimate health state utility values in this study we explored a novel application of the discrete choice experiment dce that resembles the time trade off tto task to estimate values on the health utility scale for the eq 5d the dce was tested in a survey alongside the tto in a sample of english speaking canadians recruited by a market research company the study found that the dce is able to derive logical and consistent values for health states valued on the full health dead scale the dce overcame some issues identified in the version of tto currently used to value eq 5d notably allowing for fewer data exclusions and incorporating values considered worse than dead without introducing a separate valuation procedure this has important implications for providing robust values that represent the preferences of all respondents

why is the rate of single parenthood lower in canada than in the u s a dynamic equilibrium analysis of welfare policies a critical question in the design of welfare policies is whether to target aid according to household composition as was done in the u s under the aid to families with dependent children afdc program or to rely exclusively on means testing as in canada restricting aid to single mothers for instance has the potential to distort behavior along three demographic margins marriage fertility and divorce we contrast the canadian and the u s policies within an equilibrium model of household formation and human capital investment on children policy differences we consider are eligibility dependence of transfers on the number of children and generosity of transfers our simulations indicate that the policy differences can account for the higher rate of single parenthood in the u s they also show that canadian welfare policy is more effective for fostering human capital accumulation among children from poor families interestingly a majority of agents in our benchmark economy prefers a welfare system that targets single mothers as the u s system does yet does not unlike the u s system make transfers dependent on the number of children

models of quality adjusted life years when health varies over time survey and analysis quality adjusted life year qaly models are widely used for economic evaluation in the health care sector in the first part of the paper we establish an overview of qaly models where health varies over time and provide a theo retical analysis of model identification and parameter estimation from time trade off tto and standard gamble sg scores we investigate deterministic and probabilistic models and consider five different families of discounting functions in all the second part of the paper discusses four issues recurrently debated in the literature this discussion includes questioning the sg method as the gold standard for estimation of the health state index re examining the role of the constant proportional trade off condition revisiting the problem of double dis counting of qalys and suggesting that it is not a matter of choosing between tto and sg procedures as the combination of these two can be used to disen tangle risk aversion from discounting we find that caution must be taken when drawing conclusions from models with chronic health states to situations where health varies over time one notable difference is that in the former case risk aversion may be indistinguishable from discounting models of quality adjusted life years qalys are widely used as health related quality of life measures for economic evaluation in the health care sector in its simplest form the qaly approach assumes that the utility of a profile of health states over time may be estimated by adding the values of the constituent health states in the health profile in more sophisticated models health events occurring in the future may be discounted or risk adjusted

measurement of health state utilities for economic appraisal health status measurement for use in economic appraisal of health care programmes is reviewed in this paper with particular emphasis on utility measurement a framework for economic appraisal is presented displaying the various components that must be measured and showing how the three forms of analysis cost effectiveness analysis cost benefit analysis and cost utility analysis relate to the framework and to each other one of the components in the framework is health status it can be measured using ad hoc numeric scales willingness to pay receive or health state utilities the determination of health state utilities is reviewed covering the following issues alternative sources of utilities health state descriptions multi attribute utility approach determination of appropriate subjects utility aggregation and accuracy three measurement techniques for health state utilities are described in detail rating scale standard gamble and time trade off the use of these methods is described for both chronic and temporary health states and for both health states considered better than death and those considered worse than death

discriminatory versus uniform treasury auctions evidence from when issued transactions abstract we use when issued transactions data to assess the treasury s current experiment with uniform auctions when issued volume is higher under uniform as compared to discriminatory auctions suggesting a higher information release which should reduce pre auction uncertainty and the winner s curse under uniform auctions when issued volatility falls after the auction and again after the outcome announcement the pattern is the opposite for discriminatory auctions this is further evidence that uniform auctions increase pre auction information and lower the short squeeze a direct comparison of markups in uniform and discriminatory auctions yields mixed results

incorporating psycho social considerations into health valuation an experimental study abstract this study used multiple elicitation question modes and group discussions to value psycho social considerations associated with public perceptions of health risks values for saving 100 statistical lives in six different policy contexts varied by 50 largely due to psycho social considerations of choice and control a currency effect was found value of life differentials were smaller when questions were framed directly in the currency of lives saved rather than willingness to pay or public spending to save lives discussions reduced but did not eliminate inconsistencies and slightly increased the relative valuations of health interventions involving less choice and control by those at risk

gaining ground poverty in the postwar united states official measures of poverty in the united states are compiled by the bureau of the census by comparing a household s income level to a prespecified threshold from a theoretical perspective it is more appropriate to evaluate the level of poverty using a consumption based measure of household welfare in this paper i evaluate the level of poverty using expenditure data from the consumer expenditure survey i find that consumption based poverty rates are much lower than those based on income the trend in the poverty rate in the united states is sensitive to the price index and equivalence scales used to adjust the poverty thresholds

viewpoint measuring the well being of the poor with income or consumption a canadian perspective there is a long tradition of using consumption measures derived from statistics canada s household expenditures surveys to study material well being inequality and poverty we offer an introduction to this research income and consumption measures give different pictures of the patterns of material well being in canada but the differences are not as large as in the us we also provide a comparison to meyer and sullivan s results on data quality canadian expenditure surveys are of high quality unique aspects of these surveys variation in quality control measures over time and the possibility of comparing to income tax data provide important insights into the quality of survey data on income and consumption il existe une longue tradition d utilisation de mesures de consommation derivees de l enquete des depenses des menages de statistiques canada pour mesurer le bien etre materiel l inegalite et la pauvrete les auteurs presentent ces recherches les mesures de revenus et de consommation donnent des portraits differents des patterns de bien etre materiel au canada mais les differences ne sont pas aussi importantes qu aux etats unis on presente une comparaison avec les resultats de meyer et sullivan sur la qualite des donnees les enquetes sur les depenses sont de haute qualite au canada certains aspects uniques de ces enquetes variation dans les mesures de controle de qualite dans le temps et possibilite de comparer les donnees derivees des rapports d impot sur le revenu fournissent des apercus importants sur la qualite des donnees d enquetes sur le revenu et la consommation canadian economics association

why did the ssi disabled program grow so much disentangling the effect of medicaid the number of participants in the ssi program grew by 1 1 million from 1987 to 1993 this paper examines the role of medicaid on the ssi participation decision i use the rapid growth in average medicaid expenditure as a proxy for its value ols estimates of medicaid s effect may be biased because of omitted variables bias and measurement error i therefore apply two stage least squares to estimate medicaid s effect using average medicaid expenditure for blind ssi recipients as an instrument these estimates show that rising medicaid expenditure significantly increased ssi participation among adults with low permanent incomes explaining 20 of the growth

welfare the earned income tax credit and the labor supply of single mothers during 1984 1996 welfare and tax policy were changed to encourage work by single mothers the earned income tax credit was expanded welfare benets were cut welfare time limits were added and welfare cases were terminated medicaid for the working poor was expanded as were training programs and child care during this same time period there were unprecedented increases in the employment and hours of single mothers we show that a large share of the increase in work by single mothers can be attributed to the eitc and other tax changes with smaller shares for welfare benet cuts welfare waivers training programs and child care programs