tastes skills and local public goods abstract this paper analyzes optimal club configurations in an economy where different types of labor are complementary in the production of private goods extending the work of berglas journal of public economics 6 409 423 1976 the analysis shows that when labor types are nonessential in production a homogeneous club configuration may be optimal despite the presence of labor complementarity the assumption that inputs are essential precluded this outcome in berglas model it is shown that homogeneous clubs are optimal when complementarity is weak or when preferences are substantially different

heterogeneity within communities a stochastic model with tenure choice standard explanations for the income heterogeneity within neighborhoods rely on differences of preferences across households and heterogeneity of the housing stock we propose an alternative and complementary explanation we construct a stochastic equilibrium sorting model where 1 income is the sole dimension of household heterogeneity 2 households form state contingent housing location plans that may involve moves over their lifetimes 3 households choose whether to own or rent depending on the housing expenditure risk associated with each tenure mode and 4 there is a probability that newcomer households move in and compete for homes with native households income mixing within neighborhood arises for two reasons first allowing natives to form state contingent housing location plans breaks the indivisibility of housing consumption implicit in the literature where households choose their location once and for all second natives can insure themselves against rent fluctuations by buying their home prior to the realization of the population shock newcomers cannot as a result poorer natives stay in the more desirable communities and only richer newcomers move in these communities evidence from u s metropolitan areas supports the effects predicted by the model

neighborhood externality risk and the homeownership status of properties in contrast to corporate and institutional investors single owner occupiers cannot adequately diversify housing investment risk consequently homeownership should be relatively less likely in places with higher housing investment risk using the american housing survey it is documented that neighborhood externality risk a major component of housing investment risk substantially reduces the probability that a housing unit is owner occupied even when controlling for housing type and numerous location and household specific characteristics the effects are quantitatively meaningful and change in change estimates suggest that the effects are causal

testing the stochastic structure of production a flexible moment based approach conventional production function specifications are shown to impose restrictions on the probability distribution of output that cannot be tested with the conventional models these restrictions have important implications for firm behavior under uncertainty a flexible representation of a firm s stochastic technology is developed based on the moments of the probability distribution of output these moments are a unique representation of the technology and are functions of inputs large sample estimators are developed for a linear moment model that is sufficiently flexible to test the restrictions implied by conventional production function specifications the flexible moment based approach is applied to milk production data the first three moments of output are statistically significant functions of inputs the cross moment restrictions implied by conventional models are rejected

estimating the general equilibrium benefits of large changes in spatially delineated public goods the purpose of this article is to report a new approach for measuring the general equilibrium willingness to pay for large changes in spatially delineated public goods such as air quality we estimate the parameters of a locational equilibrium model and compute equilibria for alternative scenarios characterizing the availability of public goods within a system of communities welfare measures take into consideration the adjustments of households in equilibrium to nonmarginal changes in public goods the framework is used to analyze willingness to pay for reductions in ozone concentrations in southern california between 1990 and 1995

convergence scale and the relative productivity performance of canadian us manufacturing industries this research is a comparative investigation of productivity performance within the manufacturing sectors of canada and the united states labour and multifactor productivity levels and growth rates are measured and analysed for an exhaustive sample of two digit level manufacturing industries an aggregate analysis is conducted by grouping industries in accordance with their degree of capital intensity the findings generally suggest that productivity in canadian manufacturing industries initially converged upon but has more recently diverged from those level displayed by their us counterparts an empirical analysis focuses on the convergence hypothesis and scale effects in explaining differences in measured productivity growth rates

growth in a dual economy abstract growth and structural transformation of the manufacturing sector in developing countries are sometimes considered to be the result of the expansion of the modern large scale sector relative to the traditional small scale sector examining the sources of labor productivity growth in mexican manufacturing however does not provide support for such a conclusion although we find that labor productivity levels vary almost in direct relation to establishment size labor productivity growth shows no systematic variation by size class in fact small establishments have had the same rate of labor productivity growth as larger ones partly because of the exit effect i e the exiting of low productivity small plants moreover most of the variation in labor productivity across plant class sizes is found to be due to differences in capital intensity the variation in total factor productivity tfp levels across size classes tends to be small

clubs local public goods and transportation models a synthesis abstract clubs local public goods and transportation models are analyzed within a unified model the emphasis is on the derivation of optimal allocation pricing and the size of the sharing group we derive the conditions under which optimal prices will yield surplus or deficit as well as those under which competitive provision will be efficient given heterogeneous tastes we prove that segregation according to tastes is generally efficient although several cases where this result does not hold are also discussed we show that the existing literature is unnecessarily restrictive and that the unified approach suggested here considerably extends the existing analysis of clubs local public goods and the transportation problems

mobility targeting and private school vouchers simulations are derived from a three district model of low middle and highincome school districts calibrated to new york data with housing stocks that vary within and across districts in this model it is demonstrated that school district targeted vouchers are similar in their impact to nontargeted vouchers but vastly different from vouchers targeted to low income households furthermore strong migration effects are shown to significantly improve the likely equity consequences of voucher programs jel 122 128 h73 persistent frustration with the perceived low quality of public education exacerbated by concerns over the inherently unequal levels of public school quality across school districts has caused policy makers courts and researchers to investigate modifications and alternatives to the current public school system one idea that has received increasing academic and public attention is that of private school vouchers with proponents arguing that the competitive pressures of voucher programs would cause improvements in the efficiency of the publicschool system while at the same time addressing equity concerns if vouchers can be targeted to low income households or low income school districts but aside from a few limited experiments in some u s cities our experience with vouchers in the united states remains virtually nonexistent this limits the amount of information researchers can derive from standard empirical analysis in that it forces them to rely on only current nonvoucher induced differences in competition despite important suggestive results such work may not anticipate all the impacts from a large scale policy such as the voucher policies currently under discussion at the same time theoretical models of school finance are also limited in that they often either focus on only one particular aspect of the general equilibrium school finance problem or they are too rich and complex to yield crisp predictions

buying a home with a resale value location location location we develop a dynamic multiregion model where a household s choice of housing location depends on its current wealth and its current type and involves both consumption and investment considerations the relative strength of the consumption motive and the investment motive determines the equilibrium pattern of residential sorting a strong investment consumption motive implies sorting according to household type wealth the model predicts that large house price fluctuations are associated with a low degree of sorting by type this prediction is consistent with evidence from us metropolitan areas when income education and age are used as proxies for household type

labor income housing prices and homeownership abstract this paper tests the intuition that households whose incomes covary relatively strongly with housing prices should own relatively little housing among us households a one standard deviation in covariance between income and home prices is associated with a decrease of approximately 7500 in the value of owner occupied housing this result arises in the presence of controls for the level and distribution of home prices the generally positive correlations between income and home prices suggests that households enter financial markets with a greater exposure to risk than is typically modeled

specialization and size of technological activities in industrial countries the analysis of patent data abstract the determinants and direction of the technological specialization of advanced countries are investigated in this paper using patent counts and citations as technology indicators during the 1980s international patenting increased more rapidly than the resources devoted to r d indicating a globalization of technology markets paralleled by a growing degree of sectoral specialization of countries innovative activities a clear cut inverse relationship between countries technological size measured by cumulative r d expenditure and degree of specialization has been found only large countries can afford to spread their activities across most technological fields while small and medium sized countries are to some extent forced to specialize in more narrow niches some methodological aspects in the use of patenting as an internationally comparable indicator are also discussed considerable differences emerged between patent specialization profiles in the internal and in external markets firms tend to protect their internal market through patenting also in fields where they do not excel at the international level leading to a smoother specialization profile

on crop biodiversity risk exposure and food security in the highlands of ethiopia this paper investigates the effects of crop genetic diversity on farm productivity and production risk in the highlands of ethiopia using a moment based approach the analysis uses a stochastic production function capturing mean variance and skewness effects welfare implications of diversity are evaluated using a certainty equivalent measured as expected income minus a risk premium reflecting the cost of risk we find that the effect of diversity on skewness dominates its effect on variance meaning that diversity reduces the cost of risk the analysis also shows that the beneficial effects of diversity

equity and efficiency in human capital investment the local connection a general model of community formation and human capital accumulation with social spillovers and decentralized school funding is used to analyse the causes of economic segregation and its consequences for equity and efficiency significant polarization arises from minor differences in endowments preferences or access to capital markets this makes income inequality more persistent across generations but the same need not be true for wealth equilibrium stratification tends to be excessive resulting in low aggregate surplus whether state equalization of school resources can remedy these problems hinges on how purchased social and family inputs interact in education and in mobility decisions

convergence of industry labor productivity among advanced economies 1963 1982 data are used for thirteen industrialized countries to investigate convergence of labor productivity levels in individual manufacturing industries over the 1963 82 period the authors find convergence in virtually every manufacturing industry among these countries the co efficient of variation of industry labor productivity declined in all but one of twenty eight industries however productivity convergenc e is stronger for all manufacturing than within individual industries especially heavy and high technology industries also variation in employment mix among countries plays little role in explaining cross country differences i n aggregate manufacturing productivity nor have changes in employment mixes been an important source of convergence copyright 1988 by mit press

estimating housing demand with an application to explaining racial segregation in cities we present a three stage nonparametric estimation procedure to recover willingness to pay for housing attributes in the first stage we estimate a nonparametric hedonic home price function in the second stage we recover each consumer s taste parameters for product characteristics using first order conditions for utility maximization finally in the third stage we estimate the distribution of household tastes as a function of household demographics as an application of our methods we compare alternative explanations for why blacks choose to live in center cities while whites suburbanize

comparing supply side specifications in models of global agriculture and the food system this article compares the theoretical and functional specification of production in partial equilibrium pe and computable general equilibrium cge models of the global agricultural and food system included in the agmip model comparison study the two model families differ in their scope partial versus economy wide and in how they represent technology and the behavior of supply and demand in markets the cge models are deep structural models in that they explicitly solve the maximization problem of consumers and producers assuming utility maximization and profit maximization with production cost functions that include all factor inputs the pe models divide into two groups on the supply side 1 shallow structural models which essentially specify area yield supply functions with no explicit maximization behavior and 2 deep structural models that provide a detailed activity analysis specification of technology and explicit optimizing behavior by producers while the models vary in their specifications of technology both within and between the pe and cge families we consider two stylized theoretical models to compare the behavior of crop yields and supply functions in cge models with their behavior in shallow structural pe models we find that the theoretical responsiveness of supply to changes in prices can be similar depending on parameter choices that define the behavior of implicit supply functions over the domain of applicability defined by the common scenarios used in the agmip comparisons in practice however the applied models are more complex and differ in their empirical sensitivity to variations in specification comparability of results given parameter choices is an empirical question to illustrate the issues sensitivity analysis is done with one global cge model magnet to indicate how the results vary with different specification of technical change and how they compare with the results from pe models

industrial structure and manufacturing growth during japan s bubble and post bubble economies kobayashi n 2004 industrial structure and manufacturing growth during japan s bubble and post bubble economies reg studies 38 429 444 this paper considers the effects of changing industrial structure and region specific factors on the regional increase decrease of manufacturing shipments during the bubble and post bubble economies in japan although industrial structure affected performance during the bubble economy and was closely related to location it became less clearly linked in the 1990s specialization in materials and consumer goods industries had negative effects on growth electronics industries dramatically changed their component mix during the 1990s and regions that successfully implemented these changes enjoyed sustainable growth

neighborhood income distributions this paper studies the distribution of income within neighborhoods and contrasts it with the national income distribution it relies on a unique feature of the american housing survey whose 1985 1989 and 1993 waves of interviews provide data for small residential neighborhoods these consist of a dwelling unit and up to ten of its nearest neighbors most previous work on neighborhoods has used information for much larger groupings of the population such as census tracts the paper employs a variety of parametric and nonparametric econometric tools to study income sorting across us residential neighborhoods it documents the patterns of dependence among neighbors income and imperfect sorting with moderate but very significant correlation among incomes of neighbors and of considerable income mixing in u s neighborhoods

saving in developing countries theory and review in the literature on economic development much of the interest in saving has been focused on the relation between saving and growth but saving is not only about accumulation it is about smoothing consumption in the face of volatile and unpredictable income and helping to ensure the living standards of poor people whose lives are difficult and uncertain this paper develops a model of households which cannot borrow but which accumulate assets as a buffer stock to protect consumption when incomes are low such households dissave as often as they save do not accumulate assets over the long term and have on average very small asset holdings but their consumption is markedly smoother than their income much of the evidence is as consistent with this view of saving as it is incosistent with standard views of smoothing over the life cycle and with explanations of the link between saving and growth in terms of life cycle saving behavior consumption smoothing is also a useful way of thinking about government policy where volatility in the world prices of taxed commodities can generate sharp fluctuations in government revenues as well as reallocations of revenue between the private and public sectors many important policy issues in developing countries hinge on issues of consumption and smoothing and research on these issues is currently likely to be more productive than work on the relation between saving and growth

heterogeneity stratification and growth macroeconomic implications of community structure and school finance this paper examines how socioeconomic stratification and alternative systems of education finance affect inequality and growth agents interact through local public goods or externalities school funding neighborhood effects and economywide linkages complementary skills knowledge spillovers sorting families into homogeneous communities often minimizes the costs of existing heterogeneity but mixing reduces heterogeneity faster integration therefore tends to slow down growth in the short run yet raise it in the long run a move to state funding of education presents society with a similar intertemporal trade off local and global complementarities play major roles in determining the efficient social and educational structures copyright 1996 by american economic association

convergence of south korean productivity on west german levels 1966 1978 abstract south korean labor productivity in manufacturing converged rapidly on the productivity level in west german manufacturing during the period 1966 1978 achieving two thirds of the german level by 1978 this convergence was more rapid at the industry level than for all manufacturing the capital labor ratio and total factor productivity in south korean manufacturing also converged on west german levels during this period with the former accounting for two thirds and the latter one third of the labor productivity convergence the source of labor productivity convergence however differed greatly across industries with capital deepening the dominant source in heavy industries and total factor productivity tfp convergence the main source in light industries

a discrete choice equilibrium approach to valuing large environmental changes abstract this study develops a discrete choice locational equilibrium model to evaluate the benefits of the air quality improvements that occurred in the los angeles area following the 1990 clean air act amendments caaa the discrete choice equilibrium approach accounts for the fact that air quality improvements brought about by the 1990 caaa will change housing choices and prices the study also provides new evidence for the distributional welfare impacts of the 1990 caaa in the los angeles area findings suggest that the air quality improvements that occurred in the los angeles area between 1990 and 2000 provided substantial general equilibrium benefits to households the analysis reveals noticeable differences between partial and general equilibrium welfare gains demonstrating that ignoring equilibrium effects will likely misrepresent the benefits of large environmental changes in addition we find that the equilibrium welfare impacts of the 1990 caaa in the los angeles area varied significantly across income groups