cooperative and noncooperative r d in duopoly with spillovers contrary to the usual assumption made in most oligopoly models relations among firms are seldom of a wholly cooperative or noncooperative type in many situations they compete in some fields while they cooperate in others an important example is the case of cooperative research efforts bringing fierce competitors together two types of agreement are observed first r d cooperation can take place at the so called precompetitive stage companies share basic information and efforts in the r d stage but remain rivals in the market place 1 a second type of agreement involves an extended collusion between partners creating common policies at the product level the usual justifications of this extension are the difficulties of protecting intellectual property the idea is then to allow partners who have achieved inventions together to also control together the processes and products which embody the results of their collaboration in order to recuperate jointly their r d investments 2 what could be expected from these types of agreement is a reduction in r d expenditures because of less wasteful duplication and a reduction of total production because of more reprinted from the american economic review 78 5 1133 1137 1988 center for operations research econometrics 1348 louvain la neuve belgium we are grateful to jean

efficient methods of measuring welfare change and compensated income in terms of ordinary demand functions a utility maximizing consumer with a completely known system of ordinary demand functions q h p c is considered let p qo and p q be two arbitrary equilibrium situations the problem is to evaluate in which of the situations the utility is higher without knowing the utility function revealed preference theory tells that the ordinary demand functions which are in principle observable contain enough information to solve the problem remaining difficulties are therefore mainly computational we present how the compensated income c i c p qo and the compensated demand h p cl1 are calculated with arbitrary accuracy using only the ordinary demand system our two efficient algorithms also have interesting interpretations in terms of index numbers and consumer surplus measures

rethinking the global food crisis the role of trade shocks although fundamental factors were clearly responsible for shifting the world to a higher food price equilibrium in the years leading up the 2008 food crisis there is little doubt that when food prices peaked in june of 2008 they soared well above the new equilibrium price numerous arguments have been proposed to explain overshooting including financial speculation depreciation of the united states us dollar low interest rates and reductions in grain stocks however observations that international rice prices surged in response to export restrictions by india and vietnam suggested that trade related factors could be an important basis for overshooting especially given the very tangible link between export volumes and export prices in this paper we revisit the trade story by closely examining monthly data from thailand the largest exporter of rice and the united states the largest exporter of wheat and maize and the third largest exporter of soybeans in all cases except soybeans we find that large surges in export volumes preceded the price surges the presence of these large demand surges together with back of the envelope estimates of their price impacts suggests that trade events played a much larger and more pervasive role than previously thought

the welfare effects of fuel conservation policies in a dual fuel car market evidence from india we estimate a model of vehicle choice and kilometers driven to analyze the long run impacts of fuel conservation policies in the indian car market we simulate the effects of petrol and diesel fuel taxes and a diesel car tax taking into account their interactions with the pre existing petrol fuel tax and car sales taxes at levels sufficient to reduce total fuel consumption by 7 the increased diesel and petrol fuel taxes both yield deadweight losses net of externalities of about 4 2010 rs l however at levels sufficient to reduce total fuel consumption by 2 the increased petrol fuel tax results in a deadweight loss per liter of fuel conserved that is greater than that caused by the diesel fuel tax this reflects both the high pre existing tax on petrol fuel and the high own price elasticities of fuel demand in india a tax on diesel cars that results in the same diesel market share as the large diesel fuel tax actually has a negative deadweight loss per liter of fuel conserved the welfare effects of all three policy instruments are positive once the external benefits of reducing fuel consumption are added to the excess burden of taxation

migration trends and earnings of free agents in major league baseball 1976 1979 this paper is an empirical investigation of the effect of team characteristics on the migration pattern of free agents in major league baseball during the period 1976 1979 the results indicate that high quality free agents tend to leave winning teams and move to teams in cities with large or rapidly growing populations the compensation paid to free agents is shown to depend on these team characteristics as well as the players personal characteristics and market conditions

externalities property rights and the allocation of resources in major league baseball most economists who have analyzed professional baseball have concluded that two distinctive features of its labor market the reserve clause and player draft influence the distribution of wealth between players and owners but do not affect the allocation of playing talent among teams such conclusions which are strongly at variance with laymen s views of such matters are derived from theoretical considerations rather than empirical examinations our paper examines data from the two decades of major league history and concludes that on the basis of that data the empirical generalizations of previous economists do not appear to be justified

tax incidence for fragile financial markets abstract standard tax incidence analysis deals with households and firms that buy and sell consumption goods as opposed to financial institutions that buy and sell financial products this paper develops a framework that allows us to study tax incidence on financial markets and applies it to a financial transactions tax a main result is that the tax may contribute to financial distress moreover if the government has to bail out the debtors of failed financial institutions the tax induced increase in bailout costs may be larger than the increase in tax revenue so that the government s overall fiscal position becomes worse

a simple and efficient method for estimating the magnitude and precision of welfare changes in this article we propose a simple and efficient method of estimating welfare measures in an n equation system we also estimate the variance of these measures the accuracy and convergence properties of our approach are studied the algorithm converges quadratically this is a distinct improvement over the vartia algorithm which converges linearly we demonstrate the method by evaluating the welfare consequences of price changes in the provision of health care the gauss code which is very short is included

can diaries help in improving agricultural production statistics evidence from uganda abstract although good and timely information on agricultural production is critical for policy decisions the quality of underlying data is often low and improving data quality could have high payoff we use data from a production diary administered concurrently with a standard household survey in uganda to analyze the nature and incidence of responses the magnitude of differences in reported outcomes and factors that systematically affect these despite limited central supervision diaries elicited a strong response complemented standard surveys in a number of respects and were less affected by problems of respondent fatigue than expected the diary based estimates of output value consistently exceed that from the recall based production survey in line with reported disposition implications for policy and practical administration of surveys are drawn out

agricultural household models extensions applications and policy this book presents the basic model of an agricultural household that underlies most of the case studies undertaken so far the model assumes that households are price takers and is therefore recursive the decisions modeled include those affecting production and the demand for inputs and those affecting consumption and the supply of labor comparative results on selected elasticities are presented for a number of economies the empirical significance of the approach is demonstrated in a comparison of models that treat production and consumption decisions separately and those in which the decisionmaking process is recursive the book summarizes the implications of agricultural pricing policy for the welfare of farm households marketed surplus the demand for nonagricultural goods and services the rural labor market budget revenues and foreign exchange earnings in addition it is shown that the basic model can be extended in order to explore the effects of government policy on crop composition nutritional status health saving and investment and to provide a more comprehensive analysis of the effects on budget revenues and foreign exchange earnings methodological topics primarily the data requirements of the basic model and its extensions along with aggregation market interaction uncertainty and market imperfections are discussed the most important methodological issues the question of the recursive property of these models is also discussed

measuring the costs of children an alternative approach abstract the cost of a child or the general equivalence scale as it is more commonly known is a concept of considerable importance in matters relating to public policy and welfare it has played a crucial part in numerous theoretical and empirical studies relating to poverty income distribution dietary needs income maintenance programs supplementary and child benefits and other forms of social security payments in a welfare state and in assessing the horizontal equity of income taxation in spite of a long tradition of estimating the scale from observed household budget data there remain severe problems in estimation and interpretation of the scales this paper proposes a new methodology for calculating the scale using a framework which is consistent with utility theory and which overcomes the identification problem without having to enforce the arbitrary prior assumptions of recent studies the proposed method allows easy calculation of not only the basic scale parameter but also how it varies with price and reference utility we illustrate the usefulness of the procedure by estimating on u k budget data at two different levels of aggregation and employing two sets of quite different functional forms the results are plausible compare favourably with one another and hence confirm the robustness and usefulness of the proposed procedure

market integration and price transmission in consumer markets of developing countries abstract world prices for agricultural commodities surged in 2006 08 and then again in 2011 12 in many developing countries consumer prices for staple foods such as bread and rice mirrored these movements this paper examines whether prices in urban consumer markets within developing countries are co integrated with prices in world agricultural commodity markets using a single equation error correction model we examine the response of consumer prices for wheat rice maize and sorghum to changes in world market prices and exchange rates in urban centers of the developing world analyzing over 60 country commodity pairings we find that developing countries consumer markets are co integrated with world markets yet we also find that the transmission of changes in both world prices and real exchange rates to domestic consumer prices is not high and that the movement of domestic consumer prices to new equilibrium with world prices after a shock to the latter is relatively slow

retrospectives x efficiency in a 1966 article in the american economic review harvey leibenstein introduced the concept of x efficiency the gap between ideal allocative efficiency and actually existing efficiency leibenstein insisted that absent strong competitive pressure firms are unlikely to use their resources efficiently and he suggested that x efficiency is pervasive leibenstein of course was attacking a fundamental economic assumption that firms minimize costs the x efficiency article created a firestorm of criticism at the forefront of leibenstein s powerful critics was george stigler who was very protective of classical price theory in terms of rhetorical success stigler s combination of brilliance and bluster mostly carried the day while leibenstein s response to stigler was well reasoned it never resonated with many economists and leibenstein remains undeservedly underappreciated leibenstein s challenge is as relevant today as it ever was

quality quantity and spatial variation of price this paper develops and implements a method for estimating price elasticities of demand using cross sectional household survey data geographically clustered households report unit values which when corrected for quality effects and for measurement error indicate the underlying spatial variation in prices and can be matched to variation in demand patterns a simple model of quality choice is proposed while the correction for measurement error exploits the clustered design of such surveys data from a 1979 household survey from the ivory coast are used to estimate price elasticities for beef meat fish cereals and starches copyright 1988 by american economic association

welfare analysis of tax reforms using household data abstract this paper discusses a methodology for calculating the distribution of gains and losses from a policy change using data for a large sample of households estimates are based on the equivalent income function which is money metric utility defined over observable variables this enables calculations to be standardised and a computer program to compute the statistics presented in the paper is available for a general demand system equivalent income is related to measures of deadweight loss and standard errors are computed for each of the welfare measures an application to u k data for 5 895 households is given which simulates a reform that involves eliminating housing subsidies

measuring the deadweight loss from taxation in a small open economy a general method with an application to sweden the paper develops a simple general equilibrium framework for calculating the marginal deadweight loss from taxation in a small open economy the framework allows a decomposition of the deadweight loss from each tax instrument into the losses stemming from the contraction of the different tax bases the paper describes a method of calibrating the model which exploits the links between the various factor supply elasticities implied by the standard life cycle model it also develops a method of estimating effective tax rates that is consistent with optimising household and firm behaviour to illustrate how the model works it is calibrated to a data set for sweden the quantitative results highlight the importance of accounting for the interaction between the major tax bases when estimating deadweight loss

a quality of play model of a professional sports league assuming that consumers value both the absolute and relative quality of play i compare the choice of ticket prices team qualities and number of games played in a noncooperative outcome versus that chosen by a social planner i find that the nature of consumer preferences regarding the quality of play determines whether the demand for talented players are strategic complements or substitutes a strong preference by fans for a superior team makes players strategic substitutes while a concern for a high quality of play and competitive balance make players strategic complements moreover when fans only value the relative quality of play there is an overemployment of talented players in the noncooperative outcome versus the socially optimal outcome when they only value the absolute quality of play then there is an underemployment of talented players in the noncooperative outcome jel l1 l2 l4 l83

measuring the inefficiences of tax systems abstract the properties of the procedure for measuring inefficiency developed by debreu 1951 1954 are summarised and the advantages of such an input based approach in analysing taxation discussed exact expressions for the debreu measure of deadweight loss are derived and the measure proposed by kay 1980 shown to be a special case the approach is pursued to construct and interpret a measure of the overall welfare loss from taxation which decomposes conveniently into efficiency and distributional components in one special case the corresponding index of total effectiveness is the product of debreu s coefficient of resource utilisation and an atkinson equality index

golden cages for showy birds optimal switching costs in labor contracts under what circumstances do workers sign contracts with high quitting penalties our answer points to market transparency when the worker s performance is privately observed by the incumbent 4rm alternative employers face an adverse selection problem as a result e7cient separations can only take place through involuntary layo8s and there is no role for quitting fees in contrast when performance is public quitting fees are useful devices to appropriate the surplus from workers reallocation separations are amicable and take the form of quitting after downwardly renegotiating the fees qualitative features of contracts are independent of the distribution of ex post bargaining power the impact of switching costs on total welfare and its distribution depends on the degree of market transparency and the ex ante distribution of market power c

three sides of harberger triangles prevailing economic wisdom is highly critical of injudicious tax policies or government regulations uncorrected externalities unchecked monopolistic practices and various other market failures when economists are challenged to quantify the economic costs of associated price distortions it is standard practice and has been since the 1960s to use a small number of assumptions and selected elasticities to estimate areas of the relevant harberger triangles this simple and straightforward exercise has numerous applications and the virtue of producing answers rather than conjectures harberger triangles come in many shapes and sizes figure 1 offers an illustration of such a triangle for the simple case of an excise tax point a of figure 1 at which the demand and supply schedules intersect denotes market equilibrium in the absence of the tax with quantity q1 transacted at price p1 introduction of an excise tax at rate t payable by firms selling the commodity shifts the supply schedule upward by t at the new market equilibrium firms sell q2 units of the commodity at a market price of p2 receiving after tax p3 a p2 0 t market equilibrium at point a in figure 1 has the feature that marginal consumption benefits equal marginal production costs the excise tax drives a wedge between marginal benefits and marginal costs at consumption level q2 consumers are willing to pay any amount up to p2 for additional units of the good and suppliers would readily provide additional units of the good for any price of p3 or greater but these additional transactions do not take place due to the effect of the tax wedge the loss associated

policy reform shadow prices and market prices how should public projects and policy reforms be assessed when market prices give misleading signals revenues and costs at market prices then give distorted measures of social gains and losses and our appraisal should use social opportunity costs or shadow prices we show how shadow prices may be integrated into an analysis of policy reform demonstrate the critical dependence of these prices on government policy and analyse their relations with market prices the model allows for a wide range of sources of impairment of price signals we also discuss key issues in the analysis of price reform and privatisation

economic contests comparative reward schemes contests are situations in which an individual s reward depends on his performance relative to others students are graded on a curve the candidate with the most votes gets the political office the underling who performs best is promoted to the executive position contests are useful in dealing with indivisible rewards reducing monitoring costs and minimizing risks from common uncertainties they are employed to sort potential participants and once they have entered to induce appropriate effort from them with monitoring precision and prize spreads as potential choice variables optimal contest structures are derived for fair and unfair contests among equal and unequal participants the converse problems of climbing low ability individuals enter the contest designed for high ability candidates and slumming are shown to be manageable

cooperative and noncooperative r d in an oligopoly with spillovers this paper examines the positive and normative effects of cooperative r d whereby member firms commit themselves to the joint profit maximizing level of r d in a precompetitive stage but remain fierce competitors in the product market vis a vis noncooperative r d socially first best r d and socially second best r d in the presence of sufficiently large r d spillovers neither noncooperative nor cooperative equilibria achieve even second best r d levels in the absence of spillover effects however while the cooperative r d level remains socially insufficient the noncooperative level may overshoot first and second best levels of r d copyright 1992 by american economic association

food prices wages and welfare in rural india this paper considers the welfare and distributional consequences of higher relative food prices in rural india through the lens of a specific factors general equilibrium trade model applied at the district level the evidence shows that nominal wages for manual labor both within and outside agriculture respond elastically to increases in producer prices that is wages rose faster in rural districts growing more of those crops with large price run ups over 2004 09 accounting for such wage gains the analysis finds that rural households across the income spectrum benefit from higher agricultural commodity prices indeed rural wage adjustment appears to play a much greater role in protecting the welfare of the poor than the public distribution system india s giant food rationing scheme moreover policies like agricultural export bans which insulate producers as well as consumers from international price increases are particularly harmful to the poor of rural india conventional welfare analyses that assume fixed wages and focus on households net sales position lead to radically different conclusions

rising food prices food price volatility and social unrest can food prices cause social unrest throughout history riots have frequently broken out ostensibly as a consequence of high food prices using monthly data at the international level this article studies the impact of food prices food price levels as well as food price volatility on social unrest because food prices and social unrest are jointly determined data on natural disasters are used to identify the causal relationship flowing from food price levels to social unrest results indicate that for the period 1990 2011 food price increases have led to increases in social unrest whereas food price volatility has not been associated with increases in social unrest these results are robust to alternative definitions of social unrest to using real or nominal prices to using commodity specific price indices instead of aggregated price indices to alternative definitions of the instrumental variable to alternative definitions of volatility and to controlling for non food related social unrest

efficient and nearly efficient partnerships this paper shows in two ways that the degree to which free riding diminishes the performance of deterministic partnerships may be less than has been generally thought first a necessary and sufficient condition is provided for a partnership to sustain full efficiency it implies that many non trivial partnerships sustain efficiency such as generic ones with finite action spaces and neoclassical ones with leontief technologies second approximate efficiency is shown to be achievable in a large class of partnerships including ones with smooth and monotonic production and disutility functions approximate efficiency is achieved by mixed strategy equilibria one partner takes with small probability an inefficient action the degree to which efficiency is approximated is restricted only by the amount of liability the partners can bear nonetheless their equilibrium payments are not arbitrarily large

saldos comerciais e taxa de câmbio real uma nova analise do caso brasileiro this article aims to test whether or not there is a stable relation between trade balance and real exchange rate the period covered by the sample goes from 1980 to 2004 the frequency of the data is quarterly it was used the cointegration techniques developed by johansen as econometric methodology the results obtained in this articles show strong evidence in favor of a stable relationship among real exchange rate and trade balance for twenty five years the reason why the studies of the late nineties failed to obtain evidence revista economia

exact consumer s surplus and deadweight loss consumer s surplus is a widely used tool in applied welfare economics both economic theorists and cost benefit analysis often use consumer s surplus despite its somewhat dubious reputation the basic idea is to evaluate the value to a consumer or his willingness to pay for a change in price of a good from say pricep to pricep because price changes affect consumer welfare an evaluation of this effect is often a key input to public policy decisions yet consumer s surplus is probably the most controversial of widely used economic concepts both paul samuelson and ian little conclude that the economics profession would be better off without it it is my feeling of the situation that substantial agreement exists on the correct quantities to be measured the amount the consumer would pay or would need to be paid to be just as well off after the price change as he was before the price change the quantities correspond to john hicks compensating variation measures an alternative measure which takes ex post price change utility as the basis of comparison is hicks equivalent variation the controversy arises in the measurement of these quantities the usual measurement procedure is to use the area to the left of the marshallian market demand curve between two price levels jules dupuit originated this measure of welfare change and alfred marshall and hicks derived appropriate conditions for its use the primary condition for the area to the left of the demand curve to correspond to the compensating variation is to have constant marginal utility of income marshall gave this condition and if it holds the same quantity will be derived as the area to the left of the compensated hicksian demand curve this area to the left of the compensated demand curve is exactly what the compensating variation and equivalent variation measure thus the constant marginal utility of income is a sufficient condition for marshallian consumer s surplus to be equal to hicks consumer s surplus in this case arnold harberger s plea to use the welfare triangle as one half times the product of the price change times the quantity change to measure deadweight loss corresponds to the correct theoretical amount of welfare change in a recent paper robert willig derives bounds for the percentage difference between the correct measure of either the compensating or equivalent variation and the marshallian measure derived form the market demand curve his bounds which depend on the income elasticity of demand for the single good in the region of price change being considered as well as the proportion of the consumer s income spent on the good demonstrate that the marshallian consumer s surplus is often a good approximation to hicks consumer s surplus the fact that the proportion of the consumer s income spent matters as well as the income elasticity was first pointed out by harold hotelling willig contends that the approximation error will be less than the errors involved in estimating the demand curve thus he hopes to remove the need for apology that applied economists often need to give to theorists who remark on the inappropriateness of using marshallian consumer s surplus to measure welfare change however in this paper i show that for the case primarily considered by willig of a single price change which is also the situation in which consumer s surplus is often used in applied work no approximation is necessary professor of economics massachusetts institute of technology and research associate national bureau of economic research i would like to thank peter diamond erwin diewert daniel mcfadden robert merton robert solow hal varian joel yellin and the referees for help and comments research support from the national science foundation is acknowledged the reason that we still have two rather than one of samuelson s six measures of consumer s surplus arises from an index number problem of the correct basis for the welfare comparison i will give both measures but plan to concentrate on the compensating variation

unemployment and other measures of labor market inefficiency a comparison of u k and u s labor markets 1931 96 unemployment is probably the most widely feared phenomenon of our times it represents an enormous waste of human resources reflects an important degree of inefficiency in economic systems and causes a disturbing degree of social distress organisation for economic co operation and development oecd 1994 pp 4 6 i introduction unemployment is undoubtedly one of the most researched areas of economics determinants of the number of unemployed and duration of unemployment the role of unemployment on the depreciation of human capital and on general life satisfaction the interrelationship of unemployment and inflation and unemployment and output okun s law and policies to reduce or even eliminate unemployment are just a few of the areas of research on unemployment the underlying assumption in many studies on unemployment is that there is a very close correspondence between unemployment and labor market inefficiency as witnessed in the quote by the oecd just given although rarely if ever stated there is also the assumption that a given unemployment rate indicates similar levels of inefficiency either across time and or regions or countries unfortunately and somewhat surprisingly this assumption has not been tested thus far 1 given the importance of comparisons of unemployment on the direction of macroeconomic policy of governments it is very important to determine whether unemployment is indeed a good proxy for labor market inefficiency the goal of the article therefore is to examine this issue thus we pose the following key questions 1 to what degree do unemployment rates reflect labor market efficiencies 2 if the goal is to measure relative labor market inefficiency is it meaningful to compare unemployment rates over time and 3 to what degree do differences in unemployment rates across countries reflect differences in labor market inefficiencies basic economic theory shows that inefficiency in any market depends not only on the wedge between supply and demand but also on the elasticities of demand and supply the calculation of so called harberger triangles harberger 1954 of deadweight loss dwl which has a long history in the industrial organization and public finance literatures indicates that for a given wedge between supply and demand the dwl can be very different depending on the elasticities of supply and demand interestingly however studies examining the costs of unemployment do not focus on this basic view of welfare loss studies such as gordon 1973 ahsenfelter 1980 hurd 1980 clark and oswald 1994 murphy and topel 1997 and leslie and blackaby 1999 among others examine the costs of unemployment from an individual perspective but do not measure inefficiency from a market perspective which is the focus of the harberger triangles except for a publication by fortin and bernier 1988 2 we know of no other application of calculating harberger triangles to determine the level of inefficiency in the labor market therefore this article uses labor market data from 1931 to 1996 in the united states and united kingdom to calculate the dwl of unemployment and then compares the estimates of dwl to the unemployment rate to determine how closely related inefficiency and unemployment are 3 the following section investigates the theoretical relationships between unemployment labor supply and demand elasticities and dwl from this discussion we propose two alternative measures of inefficiency the first is the unemployment loss index dwl divided by gross domestic product gdp which indicates how large labor market inefficiency is relative to total output in the economy the second measure is dwl per unemployed person a measure of the potential average gains to employing an unemployed individual section iii outlines the data and methodology used to estimate the elasticities of labor supply and labor demand over time in the united states and united kingdom allowing for changes in the elasticities over time

bidding till bankrupt destructive competition in professional team sports if we don t sign hershiser we ll lose him at the end of the year to an owner who is told by his manager that the club is only one pitcher away from winning it all to win it all some owners will do anything god save us from those owners only one pitcher away los angeles dodger owner peter o malley durslag 1990 i introduction during the labor dispute that delayed the start of the 1990 baseball season team owners raised their usual complaint that free agency will eventually result in a two tier league of have and have not teams to the detriment of league revenues and fan interest but player representatives remained skeptical of the validity of this complaint donald fehr executive director of the major league baseball players association repeatedly pointed out that the owners have never demonstrated a need for radical change in the player compensation system arguing they don t have a basis for it we re looking for the rationale newhan 1990 10 this paper suggests such a rationale in the pursuit of a league championship the talent that turns an average team into a contender makes a disproportionately large contribution to the team s success owners therefore tend to earn most of their quasi rents on the last stars they sign and suffer net losses on much of their infra marginal talent teams with net losses on their overall stock of talent face a shutdown situation and will opt to abandon a competitive market for star athletes reducing the number of remaining participants 1 it is useful to think of athletic talent in the sports industry as a strategic input an input whose productivity for a given user depends on how much of the input is employed by the user s rivals the most well established point about inputs of this type is the tendency to overemploy them in the sports literature this was demonstrated by canes 1974 this paper extends the analysis of strategic inputs in the professional team sports industry to demonstrate how the objective of championship prospects confronts market participants with a persistent shutdown threat of particular concern from an economics perspective the shutdown scenario can result in a credible case of destructive competition in the sense of a competitive process that risks driving at least some participants out of a market even though it is inefficient for them to leave sections ii and iii provide the theoretical basis for the shutdown situation which can emerge in the competition for athletic talent in professional team sports evidence for major league baseball presented in section iv suggests that the theoretical analysis may be empirically relevant section v closes with some implications of the analysis and possible extensions to situations outside the professional sports industry the most important of the implications is the clear potential for welfare reducing effects associated with the shutdown scenario ii team performance criteria and the productivity of athletic talent economists have long recognized that the market for athletic talent is not trouble free researchers such as el hodiri and quirk 1971 demmert 1973 noll 1974 and daly and moore 1981 have discussed the inherent third party externalities of player transactions involving any pair of teams because of the league wide interdependence of relative team performance noll 1974 416 also noted that an unrestricted market for athletic talent can threaten the viability of marginal franchises who rely on rents derived from their players to cover some of their fixed costs and cassing and douglas 1980 modeled the winner s curse phenomenon in the context of an auction market for athletic talent but these analyses do not generate the bleak scenario described by team owners of a free agency environment in which league divisions split sharply into have and have not teams for example the third party externality problem is not specific to free agency it arises regardless of whether players or owners have the marketing rights to player contracts

estimating the short run poverty impacts of the 2010 11 surge in food prices global food prices have increased substantially since mid 2010 as have prices in many developing countries in this study we assess the poverty impact of the price changes between june and december 2010 in twenty eight low and middle income countries this is done by gathering detailed information on individual households food production and consumption levels for thirty eight agricultural and food commodities to assess the impacts on household welfare this study estimates that this sudden food price surge increased the number of poor people globally but with considerably different impacts in different countries the heterogeneity of these impacts is partly related to the wide variation in the transmission of global prices to local prices and partly to differences in households patterns of production and consumption on balance the adverse welfare impact on net buyers outweighs the benefits to net sellers resulting in an increase in the number of poor and in the depth of poverty we estimate that the average poverty change was 1 1 percentage points in low income countries and 0 7 percentage points in middle income countries with a net increase of 44 million people falling below the 1 25 per day extreme poverty line

evaluation of deadweight spending in regional enterprise financing tokila a and haapanen m evaluation of deadweight spending in regional enterprise financing regional studies the problem of deadweight spending has been previously studied using diverse methods however regional variations in deadweight spending have not yet been considered an evaluation of regional business subsidies in finland during 2000 2003 is conducted the analysis reveals regional differences in deadweight spending in proportional and particularly in monetary terms deadweight spending is dependent on many firm project and regional level factors which also largely account for regional differences however there seems to be some regional variation in deadweight spending that originates from differences in the subsidy processes among regions tokila a et haapanen m evaluer les investissements non productifs dans l aide regionale a la creation d entreprise regional studies dans le passe la question des investissements non productifs a ete etudiee a partir de diverses methodes cepend

personalized prices and uncertainty in monopsony abstract we analyze personalized pricing by a monopsonist facing a finite number of ex ante identical capacity constrained suppliers with privately known costs when the distribution of costs is sufficiently smooth and regular the buyer chooses to make the same offer to all suppliers leading to a posted price when demand is sufficiently concave convex this price is lower higher than the classical monopsony price in the limit as the seller capacities tend to zero we obtain the classical monopsony price therefore our model provides a decentralized micro foundation for monopsony

measuring consumer surplus with unknown hicksian demands the objective of this paper to introduce the slutsky demand curve as a tool in welfare analysis it is shown that the compensating or equivalent variation can in most cases be measured to within a fraction of a percent of their true value without any numerical integration techniques two well known examples in the literature are explored a theoretical measure of the accuracy of the slutsky based measure relative to the marshallian measure is developed the approach is locally path independent and can be used to measure the money value of a ration finally it application to models of labour supply is explored an an error in the literature is corrected this abstract was borrowed from another version of this item

the new economics of regulation ten years after the new economics of regulation is an application of the principal agent methodology to the contractual relationship between regulators and regulated firms after a critique of the traditional paradigms of regulation from the point of view of information economics a canonical model of regulation under asymmetric information is developed a survey of the main results obtained in the new economics of regulation is then provided in particular concerning the implementation of optimal contracts by a menu of linear contracts the dichotomy between pricing and cost reimbursement rules the auctioning of incentive contracts the dynamics of contracting under limited commitment and the hierarchical problems in regulation empirical implications are then discussed and avenues of further research are described in the conclusion

an estimate of resource expenditures on transfer activity in the united states this paper details resource expenditures on nonexchange noncharity transfer activity in the united states in 1985 expenditures designed to facilitate and inhibit nonexchange transfers executed privately or through the state are reported the numbers indicate that individuals plausibly invested nearly a trillion dollars in transfer activity that year nominal gnp in 1985 was just over 4 trillion which includes numerous transfer related resource investments that arguably should be subtracted out transfer activity thus apparently constitutes a much larger fraction of all economic activity conducted in the united states than previously recognized

the substantial bias from ignoring general equilibrium effects in estimating excess burden and a practical solution we show that under typical conditions the simple excess burden triangle formula substantially underestimates the excess burden of commodity taxes in some cases by a factor of 10 or more this formula performs poorly because it ignores general equilibrium interactions most important interactions between the taxed commodity and the labor market many prior studies have shown that general equilibrium interactions affect excess burden but have not appreciated the bias associated with ignoring these interactions or the quantitative importance of this bias we derive an implementable alternative to the simple formula this alternative formula captures interactions that the simple formula omits as a result it is both unbiased and usually more accurate

optimal food price stabilization in a small open developing country in poor countries most governments implement policies aiming to stabilize the prices of staple foods which often include storage and trade measures insulating their domestic market from the world market it is of crucial importance to understand the precise motivations and efficiency of those interventions because they can have consequences worldwide this paper addresses those issues by analyzing the case of a small open developing country confronted by shocks to both the crop yield and foreign price in this model government interventions may be justified by the lack of an insurance market for food prices considering this market imperfection the authors design optimal public interventions through trade and storage policies they show that an optimal trade policy largely consists of subsidizing imports and taxing exports which benefits consumers at the expense of producers import subsidies alleviate the non negativity of food storage in other words when stocks are exhausted subsidizing imports prevents domestic price spikes one striking result an optimal storage policy on its own is detrimental to consumers since its stabilizing benefits leak into the world market and it raises the average domestic price by contrast an optimal combination of storage and trade policies results in a powerful stabilizing effect for domestic food prices

the optimal allocation of prizes in contests we study a contest with multiple not necessarily equal prizes contestants have private information about an ability parameter that affects their costs of bidding the contestant with the highest bid wins the first prize the contestant with the second highest bid wins the second prize and so on until all the prizes are allocated all contestants incur their respective costs of bidding the contest s designer maximizes the expected sum of bids our main results are 1 we display bidding equlibria for any number of contestants having linear convex or concave cost functions and for any distribution of abilities 2 if the cost functions are linear or concave then no matter what the distribution of abilities is it is optimal for the designer to allocate the entire prize sum to a single first prize 3 we give a necessary and sufficient conditions ensuring that several prizes are optimal if contestants have a convex cost function

the economic design of sporting contests what is the optimal number of entrants in a race or the optimal number of teams in a baseball league what is the optimal structure of prizes for a golf tournament or degree of revenue sharing for a football championship how evenly balanced should the competing teams be in the nascar or formula one championships what is the maximum number of entrants per nation to the olympic games that should be permitted what quota of qualifying teams to the soccer world cup should be allocated to the developing nations

food prices and poverty do higher food prices help or hinder poverty reduction despite much debate existing research has almost solely relied on simulation models to address this question in this paper world bank poverty estimates are used to systematically test the relationship between changes in poverty and exogenous changes in real domestic food prices the paper uncovers indicative evidence that increases in food prices are associated with reductions in poverty not increases a likely empirical explanation is the relatively strong agricultural supply and wage responses to food price increases and the fact that the majority of the world s poor still heavily rely on agriculture or agriculture related activities to earn a living

a contribution to the theory of welfare accounting a kind of unified theory is proposed as a dynamic generalization of the standard consumer surplus methodology for evaluating welfare changes the unified theory allows rigorous dynamic welfare comparisons to be inferred between any two economic situations from just knowing current incomes and observing a short run market demand schedule essentially the change in present discounted future utility is exactly captured by the formula difference in current income plus consumer surplus this well known formula is thereby shown to cover a far wider class of welfare comparisons than is customarily treated in the textbook static case

anatomy of a crisis the causes and consequences of surging food prices although the potential causes and consequences of recent rising international food prices have attracted widespread attention many existing appraisals are superficial and or piecemeal this article attempts to provide a more comprehensive review of these issues based on the best and most recent research as well as on fresh theoretical and empirical analysis we first analyze the causes of the current crisis by considering how well standard explanations hold up against relevant economic theory and important stylized facts some explanations turn out to hold up much better than others especially rising oil prices the depreciation of the u s dollar biofuels demand and some commodity specific explanations we then provide an appraisal of the likely macro and microeconomic impacts of the crisis on developing countries we observe a large gap between macro and micro factors which when identifying the most vulnerable countries often point in different directions we conclude with a brief discussion of what ought to be learned from this crisis

cereal price shocks and volatility in sub saharan africa what really matters for farmers welfare the lack of information as well as some misperceptions about the distinction between the welfare consequences of higher versus more volatile cereal prices has limited the effectiveness of policy interventions during the recent food crises in many developing countries this article proposes an integrated empirical strategy to investigate and compare the different effects of these two phenomena and tests it using nationally representative household survey data from four sub saharan countries results show that the negative impacts of a cereal price increase substantially outweigh the effects of price volatility on household welfare across the entire income distribution the amplitude and the distribution of those effects depend heavily on specific factors such as the weight of food consumption over total expenditure the budget share devoted to cereals the substitution effect among food groups and the relative number of net sellers versus net buyers accessing the market we also show that volatility mainly harms the poorest quintile of the population

walras retrouve decentralized trading mechanisms and the competitive price we extend the standard analysis of decentralized markets to allow for the possibility that traders interact simultaneously with more than one trader on the opposite side of the market in contrast with the literature we reconcile the walrasian equilibrium with the outcome of decentralized strategic trade we show that there exist generic matching technologies that determine local market conditions such that as market frictions vanish the equilibrium price is the one that would result in the static walrasian market our analysis highlights the importance of local market conditions for the determination of equilibrium prices

exchange rates and fiscal policy in a popular model of international trade this paper develops a reinterpretation of the devaluation analysis in a popular model of international trade developed by charles bickerdike joan robinson and lloyd metzler it has come to be known as the elasticity approach 1 that model developed in terms of independent markets for imports and exports has been criticized for its apparent lack of general equilibrium properties the assumptions underlying the model have remained by and large implicit and vary across users and the integration of this analysis with the absorption approach and macroeconomics has never been demonstrated all this is very much recognized and indeed application of the model is consistently accompanied by appropriate partial equilibrium impact effect or upper bound caveats these shortcomings notwithstanding the model continues to enjoy substantial popularity in policy discussions and interpretations of current events in empirical work and in recent textbooks in the field of international economics the brm model is likely to remain the preferred tool in the analysis of trade balance issues along with the foreign trade multiplier model it is therefore interesting and useful to enquire into its formal general equilibrium implications this paper is concerned with one such interpretation involving a nontraded goods sector and a well defined government policy that makes the analysis consistent with the absorption approach while it may well be possible to generate alternative interpretations the present analysis would seem to have the advantage of simplicity while at the same time pointing out the essential properties that would have to be satisfied by alternative treatments in section i a brief review of the brm approach is offered in section ii that approach is interpreted in terms of a simple model with nontraded goods and constant terms of trade the implicit assumptions of the brm model are brought to the f oreground by an explicit consideration of the market for home goods the equilibrium conditions and the role of the relative price of nontraded goods 3 following that analysis section iii considers the subsidiary issues that are raised by variable terms of trade the notion of total elasticities is given an interpretation in section iv where we return to the composite traded good model to explore alternative assumptions about absorption policies

economic insights required for using lifecycle analysis for policy decisions we develop an analytic and numerical model that integrates land food and fuel markets and is linked with a sectoral emissions model to examine how the amount of biofuel in the economy impacts the lifecycle emissions of a biofuel under different policies our central finding is that the change in ghg emissions due to a unit expansion in biofuel will vary dramatically in the amount of biofuel in the economy and with the policy driving the expansion the emissions from a unit expansion in corn ethanol due to a blend mandate fall from 12 gco2e mj to 3 gco2e mj as the quantity of ethanol in the economy increases from 6 to 15 billion gallons for an input subsidy emissions due to a unit of ethanol increase from 15 gco2e mj to 26 gco2e mj over the same increase in ethanol we discuss the implications of these results for lifecycle analysis

do fundamentals explain the behaviour of the swedish real effective exchange rate this study examines the long run relationship between the real effective exchange rate and its fundamental determinants and derives a real effective equilibrium exchange rate for the swedish krona our results indicate that the krona was severely overvalued in late 1992 when the fixed exchange rate regime was abandoned by the end of 2000 the krona was undervalued by approximately 5 percent given the prevailing economic conditions arithmetic examples of suitable sek eur conversion rates are calculated under various assumptions to provide a guideline if sweden were to adopt the euro in the future

fan welfare maximization as a club objective in a professional sports league abstract motivated by aspects of european soccer club governance members clubs supporters trusts a first formal analysis of fan welfare maximization as a club objective in a sports league is provided with comparisons to objectives studied previously profit and win maximization positive comparisons focus on team qualities ticket prices attendances and the impact of capacity crowds empirically observed ticket black markets and inelastic pricing are consistent only with fan welfare maximization normatively social welfare aggregate league surplus is well served by a league of fan welfare maximizers or sometimes win maximizers but not profit maximizers leagues should not normally make profits

taking time seriously dramatic world change has stimulated interest in research questions about the dynamics of politics we have seen increases in the number of time series data sets and the length of typical time series but three shortcomings are prevalent in published time series analysis first analysts often estimate models without testing restrictions implied by their specification second researchers link the theoretical concept of equilibrium with cointegration and error correction models third analysts often do a poor job of interpreting results the consequences include weak connections between theory and tests biased estimates and incorrect inferences we outline techniques for estimating linear dynamic regressions with stationary data and weakly exogenous regressors we recommend analysts 1 start with general dynamic models and test restrictions before adopting a particular specification and 2 use the wide array of information available from dynamic specifications we illustrate this strategy with data on congressional approval and tax rates across oecd countries

futures prices in supply analysis are instrumental variables necessary citation nathan p hendricks joseph p janzen aaron smith futures prices in supply analysis are instrumental variables necessary american journal of agricultural economics volume 97 issue 1 1 january 2015 pages 22 39 https doi org 10 1093 ajae aau062

food prices and the multiplier effect of trade policy this work studies the relationship between trade policy and food prices we show that when individuals are loss averse governments may use trade policy to shield the domestic economy from large food price shocks this creates a complementarity between the price of food in international markets and trade policy specifically unilateral actions give rise to a multiplier effect when a shock drives up the price of food exporters respond by imposing restrictions while importers wind down protection thus exacerbating the initial shock and soliciting further trade policy activism we test the key prediction of the theory with a new dataset that comprises monthly information on trade measures across 77 countries and 32 food products for the period 2008 11 finding evidence of a multiplier effect in food trade policy these findings contribute to inform the broader debate on the proper regulation of food trade policy within the multilateral trading system

efficiency in partnership structures abstract consider an economy where agents differ in production skills and abilities and are free to form production coalitions or partnerships with each other farrell and scotchmer 1988 showed that if partners are restricted to equal output sharing in equilibrium the partnerships are inefficiently small we elaborate on another possible source of inefficiency which is due to composition rather than size under the equal sharing constraint high ability agents form partnerships with agents of similar ability levels yet mixing of ability levels may be socially efficient we further investigate whether relaxing the equal sharing constraint corrects the inefficiency of equilibrium

are smallholder farmers better or worse off from an increase in the international price of cereals citation nakelse t dalton t j hendricks n p hodjo m 2018 are smallholder farmers better or worse off from an increase in the international price of cereals food policy 79 213 223 https doi org 10 1016 j foodpol 2018 07 006

world supply and demand of food commodity calories between the summers of 2006 and 2008 corn prices more than tripled from roughly 2 50 bushel to nearly 8 00 bushel prices for rice soybeans and wheat rose by similar or greater amounts the exceptionally large and unanticipated rise in prices was attributed to many factors including 1 ethanol subsidies 2 commensurately rising oil prices 3 unexpectedly large demand growth from china and india and 4 weatherrelated factors such as drought in australia while some have argued that the commodity price boom much like earlier housing and stock market booms were due to a

rice prices and income distribution in thailand a non parametric analysis rice is a staple crop in thailand significantly entering both household production and consumption this paper examines the effect of rice prices on the distribution of real income across households taking into account household characteristics and geographical location the data set is a large scale survey of 11 893 households simple nonparametric techniques for regression and density estimation are used these methods depend on few assumptions and generate flexible graphical results that are directly informative about the problem at hand the main results are that higher rice prices should benefit all rural households but the largest benefits accrue to rural households in the middle of the income distribution copyright 1989 by royal economic society

income misattribution under formula apportionment abstract alternatives to the current system of separate tax accounting such as the proposed common consolidated corporate tax base in europe would apportion a firm s worldwide profits using formulas based on the location of employment capital or sales this paper offers a new method of evaluating the accuracy of these apportionment rules and the ownership distortions they create evidence from european company accounts indicates that apportionment formulas significantly misattribute income since employment and other factors on which they are based do a very poor job of explaining a firm s profits for example the magnitude of property employment and sales explains less than 22 of the variation in profits between firms and the prediction estimates from using such a formula exceed half of predicted profits 64 of the time and exceed twice predicted income 11 of the time as a result the use of formulas rewards or punishes international mergers and divestitures by reallocating taxable income between operations in jurisdictions with differing tax rates the associated ownership distortion is minimized by choosing factor weights to minimize weighted squared prediction errors for which based on the european evidence labor inputs should play little if any role in allocation formulas but even a distortion minimizing formula creates large incentives for inefficient ownership reallocation due to the enormous variation in profitability that is unexplained by formulary factors implying that significant resource allocation costs would accompany european adoption of formulary apportionment methods

the value allocation of an economy with differential information we analyze the shapley value allocation of an economy with differential information since the intent of the shapley value is to measure the sum of the expected marginal contributions made by an agent to any coalition that he she belongs to the value allocation of an economy with differential information provides an interesting way to measure the information advantage of an agent this feature of the shapley value allocation is not necessarily shared by the rational expectation equilibrium thus we analyze the informational structure of an economy with differential information from a different and new viewpoint

bidding for talent in sport we present a realistic and novel micro structure for the market for athletes in league sports in our trading mechanism the clubs bid for individual players internalizing the effect that a player not hired might play for the competition for inelastic talent supply our wage minimizing equilibrium supports the coasian results of rottenberg 1956 and fort and quirk 1995 talent allocation is independent of initial ownership and revenue sharing arrangements when talent supply is elastic revenue sharing decreases the aggregate amount of talent hired this negative effect on the talent level may be efficiency enhancing when the competition for talent results in excess talent being hired for the first time in the literature we carry out our entire analysis using a newly formulated unified club objective incorporating both pecuniary and non pecuniary benefits

the measurement of deadweight loss revisited modities such as various consumer goods and labor m fixed factors such as land natural resources and various types of fixed capital and a government which taxes commodities and fixed factors in order to finance various govern ment expenditures it is well known2 that if the government can raise its required revenue by taxing the fixed factors alone then the resulting allocation of resources is pareto optimal no single household s utility or real income can be increased without decreasing the utility of some other household suppose we are at an initial equilibrium where government revenue is being raised by taxing the fixed factors alone then the resulting equilibrium can be rationalized by maximizing a certain weighted sum of utility functions subject to various feasibility constraints now think of the government replacing the taxes on fixed factors with distortionary commodity taxes in section 3 we calculate the second order directional derivative of the above weighted sum of utility functions with respect to any feasible direction of tax change evaluated at the initial equilibrium which is pareto optimal of course the first order directional derivatives of the weighted sum of utility functions with respect to feasible directions of tax change are zero evaluated at this initial equilibrium we obtain a measure of economic loss due to tax distortions which is virtually identical to that of boiteux 3 p 113 and which bears a resemblance to the dead loss of hotelling 22 p 254 the consumer s surplus measures of hicks 19 20 pp 330 3 and the deadweight loss measure of harberger 16 p 61 17 p 788 in section 4 we calculate a measure of welfare loss based on debreu s 4 5 coefficient of resource utilization which is a modification of a measure of loss due to allais 1 2 and we show that under certain conditions the hotelling

winning games versus winning championships the economics of fan interest and team performance championship prospects as distinct from game winning prospects may contribute to a fan s interest in a particular sports team if so then both season length and the structure of championship playoffs help determine the equilibrium allocation of playing skills across the teams of a league evidence from a regression analysis of team attendance in baseball indicates that ticket demand depends in part on perceived flag winning prospects several patterns in the winning percentages of league leaders in the major u s team sports are consistent with the perspective that championship considerations influence the allocation of playing skills

efficiency in partnerships we provide the necessary and sufficient condition for a partnership to be able to sustain efficiency when the output is stochastic when limited liability is imposed we show that only the level of the average liability of the partnership is important the individual levels of liability are irrelevant however the allocation of the total liability among the partners is crucial when additional conditions such as neutrality or individual rationality are imposed

implications of higher global food prices for poverty in low income countries in many poor countries the recent increases in prices of staple foods raise the real incomes of those selling food many of whom are relatively poor while hurting net food consumers many of whom are also relatively poor the impacts on poverty will certainly be very diverse but the average impact on poverty depends upon the balance between these two effects and can only be determined by looking at real world data results using household data for ten observations on nine low income countries show that the short run impacts of higher staple food prices on poverty differ considerably by commodity and by country but that poverty increases are much more frequent and larger than poverty reductions the recent large increases in food prices appear likely to raise overall poverty in low income countries substantially

the peculiar externalities of professional team sports the economics literature has long been divided regarding whether competing sports teams can achieve the same efficient allocation of playing skills that a revenue maximizing league monopolist would choose despite the external effects the teams impose on each other in their pursuit of athletic talent in this article an explicit consideration of the arbitrage incentives that underlie the marketing and pricing of playing skills indicates that decentralized franchises generally fail to allocate talent efficiently for fans concerned about the championship prospects of their preferred team the popular complaint has merit big city teams win too much jel l83 i introduction twenty years before the end of major league baseball s comprehensive reserve clause which assigned to team owners the exclusive right to market player contracts simon rottenberg 1956 p 255 observed that a market in which freedom is limited by the reserve rule such as that which governs the baseball labor market distributes players among teams about as a free market would the subsequent economics literature has been divided regarding whether the distribution of players under the reserve clause and free agency is not just identical but also efficient my analysis suggests that it is not the typical popular view is that competitive balance is achieved when teams at least over time perform equally well as measured by winning percentage or championship frequency economic analysis suggests instead that if team revenues uniformly reflect fan satisfaction then competitive balance is optimal when talent is allocated so as to maximize revenues for the league as a whole the two notions of competitive balance match only when team markets are of equal size either by coincidence or because of freedom of entry and relocation of team franchises under the prevailing circumstances in which market sizes differ superior on field performance by large market teams does not in itself indicate to economists that the existing level of competitive balance is suboptimal the question of interest is whether the dominance of large market teams is excessive thereby reducing total league revenues the next section reviews the debate about the efficiency consequences that result from the external effects that teams impose on each other through their competition for athletic talent the following sections then establish three key points section iii shows that teams generally fail to achieve the league revenue maximizing allocation of talent when the teams acquire players from an external market with a perfectly elastic supply of playing skills section iv turns to the internal marketing of athletic talent for which quirk and el hodiri 1974 have demonstrated that decentralized franchises reach the same allocation of playing skills as a league revenue maximizing monopolist as long as internally marketed skills sell for a uniform price however the analysis of section iv indicates that the arbitrage process that drives the internal marketing of talent does not lead to a uniform price for playing skills but only to an equilibrium set of bilateral transaction prices between each pair of teams as a result decentralized franchises do not end up with an equal marginal revenue product of playing skills across teams and therefore do not achieve the allocation of talent that a league revenue maximizing monopolist would choose section v examines the nature of the discrepancy between the optimal allocation of talent and the allocation achieved by noncooperative franchises linking fan interest to the championship prospects of the fan s preferred team generates an outcome in which unrestricted competition for playing skills by decentralized franchises results in excessive domination by large market teams whose incremental acquisitions of playing skills impose negative externalities on third party rivals appropriate per unit taxes and or subsidies on playing skills can be structured as a first best policy to address this inefficiency

nonparametric estimation of exact consumers surplus and deadweight loss we apply nonparametric regression models to estimation of demand curves of the type most often used in applied research from the demand curve estimators we derive estimates of exact consumers surplus and deadweight loss which are the most widely used welfare and economic efficiency measures in areas of economics such as public finance we also develop tests of the symmetry and downward sloping properties of compensated demand we work out asymptotic normal sampling theory for kernel and series nonparametric estimators as well as for the parametric case the paper includes an application to gasoline demand empirical questions of interest here are the shape of the demand curve and the average magnitude of welfare loss from a tax on gasoline in this application we compare parametric and nonparametric estimates of the demand curve calculate exact and approximate measures of consumers surplus and deadweight loss and give standard error estimates we also analyze the sensitivity of the welfare measures to components of nonparametric regression estimators such as the number of terms in a series approximation

a comment on the welfare impacts of commodity price volatility evidence from rural ethiopia this comment discusses the robustness of the policy implications of bellemare barrett and just s paper the welfare impacts of commodity price volatility evidence from rural ethiopia 2013 bellemare barrett and just present a theoretical and empirical approach to the estimation of willingness to pay for food price stabilization that accounts for the covolatility of prices making a significant contribution to the literature however in the course of applying their model to data from rural ethiopia the authors make an empirical assumption in the treatment of zero valued income households that produces a distortion in the distribution of household budget shares this comment identifies the consequences of this assumption for the estimated relationship of poor and wealthy households willingness to pay for food commodity price stabilization and shows the results one would obtain under a different distribution preserving treatment of zero valued income the key finding is that the distributional benefit incidence of food price stabilization found in bellemare barrett and just 2013 is reversed when the budget share of marketable surplus is calculated over observed as opposed to mean household income where available

identifying supply and demand elasticities of agricultural commodities implications for the us ethanol mandate we present a new framework to identify supply elasticities of storable commodities where past shocks are used as exogenous price shifters in the agricultural context past yield shocks change inventory levels and futures prices of agricultural commodities we use our estimated elasticities to evaluate the impact of the 2009 renewable fuel standard on commodity prices quantities and food consumers surplus for the four basic staples corn rice soybeans and wheat prices increase 20 per cent if one third of commodities used to produce ethanol are recycled as feedstock with a positively skewed 95 percent confidence interval that ranges from 14 to 35 per cent jel q11 q16 q42 q48

collective versus individual sale of television rights in league sports in many countries the collective sale of tv rights by sports leagues has been challenged by the antitrust authorities in several cases however leagues won in court on the ground that sport cannot be considered a standard good in this paper we investigate the conditions under which the sale of tv rights collectively by sports leagues rather than individually by teams is preferred from a social welfare viewpoint we find that collective sale is socially preferable when leagues are small relatively homogeneous in terms of clout and where teams get little performance related revenues

china s electricity market oriented reform from an absolute to a relative monopoly abstract the market oriented reform in electricity industry has become a global trend since 1980s although china s electricity industry has been reformed since 1978 the substantial reform has not been conducted until 1985 before 1985 china s power industry had been absolutely monopolized by the central state owned companies the absolute monopoly has been broken since 1985 when the chinese government opened doors for non central state owned investment entities and foreign investors in power supplies in order to solve the chronic power shortage in 2002 the comprehensive electricity reform plan entitled scheme of the reform for power industry was enacted however implementation of this plan was delayed due to electricity supply shortages even worse a new kind of monopoly has been developed under the background the state advances the private sector retreats in late years in some sense the former absolute monopoly has transformed the current relative monopoly we contend that the relative monopoly has reversed the market oriented reform in china s electric industry if the relative monopoly remains unchanged it will be harmful to public welfare

quadratic engel curves and consumer demand this paper presents a model of consumer demand that is consistent with the observed expenditure patterns of individual consumers in a long time series of expenditure surveys and is also able to provide a detailed welfare analysis of shifts in relative prices a nonparametric analysis of consumer expenditure patterns suggests that engel curves require quadratic terms in the logarithm of expenditure while popular models of demand such as the translog or the almost ideal demand systems do allow flexible price responses within a theoretically coherent structure they have expenditure share engel curves that are linear in the logarithm of total expenditure we derive the complete class of integrable quadratic logarithmic expenditure share systems a specification from this class is estimated on a large pooled data set of u k households models that fail to account for engel curvature are found ro generate important distortions in the patterns of welfare losses associated with a tax increase

where does voucher funding go how large scale subsidy programs affect private school revenue enrollment and prices using a new dataset constructed from nonprofit tax returns this paper explores how vouchers and other large scale programs subsidizing private school attendance have affected the fiscal outcomes of private schools and the affordability of a private education we find that subsidy programs created a large transfer of public funding to private schools suggesting that every dollar of funding increased revenue by a dollar or more turning to the incidence of subsidies and the impact of subsidies on enrollment our findings depend on the type of program introduced programs that restrict eligibility to certain groups of students create large enrollment gains but no change in price while programs that offer unrestricted subsidies lead to price increases but no change in enrollment we calculate elasticities of demand and supply for private schools and discuss welfare effects