energy price disparity and public welfare abstract the differences in the price of energy to economic sectors are linked to a number of system parameters and to public welfare there are large disparities in energy prices within states when comparing residential and industrial prices although neoclassical economics predicts one price in markets the large disparities between the two sectors across states negatively affects the efficiency of resource allocation creates subsidies for those getting the cheap energy and results in unequal access to energy these in turn lead to inefficient partitioning of energy between products and waste higher pollution leakage of wealth and poorer energy use efficiency i e high energy intensity states with large energy price disparities between sectors have statistically higher poverty lower incomes more pollution and use more energy but with less efficiency higher energy price disparities also result in higher throughput per unit of output thus reducing the chances for sustainability and lower public welfare

women business owners a source of stability during the great recession during the period of the great recession previous research has found that women owned firms were less likely to lay off workers than were firms owned by men given that the individual firm behavio

estimating the firm s labor supply curve in a new monopsony framework school teachers in missouri in the context of certain dynamic models it is possible to infer the elasticity of labor supply to the firm from the elasticity of the quit rate with respect to the wage using this property we estimate the average labor supply elasticity to public school districts in missouri we leverage the plausibly exogenous variation in prenegotiated district salary schedules to instrument for actual salary these estimates imply a labor supply elasticity of about 3 7 suggesting that school districts possess significant market power the presence of monopsony power in this teacher labor market may be partially explained by its institutional features

excess capacity as a barrier to entry an empirical appraisal this paper examines excess capacity barriers to entry and investment dynamics in a sample of thirty eight chemical product industries logit and log linear models of investment behavior are estimated and specific case examples are considered the results show that incumbents rarely built excess capacity pre emptively in an effort to deter entry in general entrants and incumbents exhibited similar investment behavior

on measuring economic diversification reply professors wasylenko and erickson s comment on our article regarding the measurement of economic diversification hackbart and anderson 1975 focuses on two issues 1 that the entropy measure yields diversity rankings for regional economies that are almost identical to those derived with the ogive index and 2 that the entropy measure is an inadequate measure for examining industrial diversity either among regions or for a particular region over a period of time concerning the first issue wasylenko and erickson indicate that the

weakly relative poverty prevailing measures of relative poverty are unchanged when all incomes grow or contract by the same proportion this property stems from seemingly implausible assumptions about the disutility of relative deprivation and the cost of social inclusion the authors propose weakly relative lines that relax these assumptions on calibrating our measures to national poverty lines and survey data we find that half the population of the developing world in 2005 lived in poverty only half of whom were absolutely poor the total number of poor rose over 1981 to 2005 despite falling numbers of absolutely poor with sustained economic growth the incidence of relative poverty became less responsive to further growth the number of relatively poor rose just as the numbers of absolutely poor fell

reputation and imperfect information abstract a common observation in the informal literature of economics and elsewhere is that is multistage games players may seek early in the game to acquire a reputation for being tough or benevolent or something else but this phenomenon is not observed in some formal game theoretic analyses of finite games such as selten s finitely repeated chain store game or in the finitely repeated prisoners dilemma we reexamine selten s model adding to it a small amount of imperfect or incomplete information about players payoffs and we find that this addition is sufficient to give rise to the reputation effect that one intuitively expects

capacity signals and entry deterrence abstract if potential entrant firms are well informed they will generally not believe incumbent s threats to expand output when experiencing entry but this expectation underlies most excess capacity models we demonstrate an asymmetric information equilibrium in which potential entrants rationally fear output expansion by oligopolists with excess capacity less effective collusive oligopolies may be destabilized expanding output upon entry one symptom of less effective collusion is excess capacity hence excess capacity becomes a signal of the potential for output expansion in a rational expectations equilibrium this signal may also be mimicked by oligopolies which would not otherwise carry excess capacity

predicting us county economic resilience from industry input output accounts resilience is defined as a system s ability to initially resist and then recover from a shock here we apply this concept to examine the performance of u s counties during the great recession the

preying for time the recent antitrust policy literature which seeks to define predatory pricing contains a flood of proposals which have pervasively transformed an entire body of law 1 one theme of this literature is that a readily anticipatable standard should be established so that firms will not fear being sued for normal competitive responses another is that since predation is presumed to be rare the standard should be lax so as to minimize the possibility of stifling competition in the overwhelming majority of more competitive markets perhaps the most striking feature of these arguments is the omission of any analysis of predatory behavior when business firms are sophisticated and rational mcgee i980 pp 295 6 for example points out that predation only pays if the present discounted value of future high prices exceeds the costs of suffering today s low prices but if this is so for the monopolist then why not for the competitor

surviving the great recession the influence of income inequality in us urban counties abstractsurviving the great recession the influence of income inequality in us urban counties regional studies while there has been extensive research on the role of income inequality in economic growth there has been less investigation as to the role of income inequality on economic resilience this paper addresses the relationship between income inequality and resilience by evaluating the vulnerability of urban counties in the united states entering recession between 2006 and 2010 and tests whether income inequality contributes to their probability of recession survival a cox proportional hazards model is used to determine factors contributing toward urban counties resilience to the external shock of the great recession the research is focused on the relationship between the level of income inequality in a county and its recession risk it is found that areas with increased income inequality entered recession earlier

export sectors and rural development the export base hypothesis is that a region s growth is led by export demand given perfectly elastic factor supplies it is a rationale for sector based rural development policies and it is formalized by input output models but it is contested by modern trade migration and growth theories and there is little research about its empirical relevance we investigate the hypothesis for contemporary u s rural development by estimating the influence of export sector employment on subsequent rural development outcomes the results reject the hypothesis that emphasizing traditional export employment results in rural growth reject the assumption of perfectly elastic factor supply and support alternative explanations copyright 2009 oxford university press

effects of spatial density on veterinarian income where are all of the veterinarians with increased numbers of veterinarians in the market it is critical to understand how this increased competition affects income potential at multiple levels this study presents an empirical appr

increasing regional disparities in the 1990s the finnish experience kangasharju a and pekkala s 2004 increasing regional disparities in the 1990s the finnish experience reg studies38 255 267 this paper investigates why regional disparities in finland started to grow in the early 1990s after a decades long period of convergence the analysis focuses on per capita gdp and its subcomponents particularly labour productivity jobs and population the results show first that the evolution of labour productivity and the number of jobs account for the regional divergence of per capita gdp second even though interregional migration and fertility tend to have a convergent effect on regional per capita gdp its effect was not strong enough the divergence of productivity and jobs dominated third among divergent factors productivity and jobs primary production contributed the most to the divergence of per capita gdp during the recession of the 1990s and private services during the subsequent recovery one reason for divergence of the primary production sector may

did regional economic diversity influence the effects of the great recession using data for u s counties from 2005 to 2012 we test whether higher levels of economic diversity mediated the effects of the great recession via four measures of stability spatial spillover effects are modeled by the use of the spatial durbin estimator with heteroscedastic errors the data generally support the central hypothesis that higher levels of diversity within a county are associated with enhanced employment stability across all counties as well as subsets of metro and nonmetro counties results for wage stability however appear to contradict our other findings we suggest that underlying labor elasticities can bridge these apparent contradictory results jel r11 r12 o47

excess capacity as a barrier to entry in the us titanium industry abstract the purpose of this paper is to construct and empirically test a model designed to determine the impact if any of expected excess capacity on the probability of entry the analysis is conducted within the context of a single oligopoly specifically the us titanium metal industry using time series data an empirical model is developed and estimated in order to determine expected values of the components of excess capacity capacity and production by disentangling the components of excess capacity and estimating them separately it is possible to separate any incumbent actions that may preempt entry from the effects of underlying cycles in demand and production these predicted values are utilized in a logit model generating results which indicate that expected levels of capacity expansion appear to diminish the probability of firm entry into the titanium industry

measuring the effects of economic diversity on growth and stability the role of economic diversity in regional stability and growth is examined contrary to conventional wisdom the empirical literature has been unable to confirm the link between diversity and economic performance traditional notions of diversity tend to be defined narrowly usually emphasizing the distribution of employment across industries these approaches are inadequate because they do not capture elements of inter industrial linkages an alternate approach to conceptualizing diversity based on a regional input output model is described and computed for the 50 states empirical results suggest that diversity within the theoretical construct of input output is associated with higher levels of stability and growth

strategic entry deterrence in analyzing deterrence of large scale entry two classes of entry barriers may be distinguished an innocent entry barrier is unintentionally erected as a side effect of innocent profit maximization in contrast a strategic entry barrier is purposely erected to reduce the possibility of entry two types of innocent barriers may also be distinguished a postentry absolute advantage has the property that if entry did occur the established firm would be at a profit advantage over the entrant examples are superior technology or product design patents and lower input prices a preentry asymmetry advantage arises from the fundamental preentry asymmetry between established firm and potential entrant before the entrant makes his entry decision the established firm has already committed resources this prior existence gives first move advantages the preentry asymmetry is independent of symmetry or asymmetry in the rules the equilibrium concept of the postentry game that might ensue even if the postentry game will be played according to nash cournot or entrant as leader rules the preentry leadership

a model of dynamic limit pricing with an application to the airline industry we develop a dynamic limit pricing model where an incumbent repeatedly signals information relevant to a potential entrant s expected profitability the model is tractable with a unique equilibriu

collusion and predation under almost free entry abstract this study investigates the degree of cooperation that firms can support in the absence of significant barriers to entry a free entry subgame perfect equilibrium is defined by q n where q is the collusive output rate and n is the number of active firms such that there is no incentive for an active firm to deviate output from q and there is no incentive for a potential entrant to enter the industry it is shown that for all n 1 if the discount factor is sufficiently high there exists a free entry equilibrium in which active firms sustain a non trivial degree of cooperation cooperation is supported by active firms credibly threatening to respond to entry with a period of aggressive competition

growth inequality and poverty looking beyond averages the evidence is compelling that the poor in developing countries do typically share in the gains from rising aggregate affluence and in the losses from aggregate contraction but how much do poor people share in growth do they gain more in some settings than others do some gain while others lose does pro poor growth mean more or less aggregate growth recent theories and evidence suggest some answers but deeper microeconomic empirical work is needed on growth and distributed change only then will we have a firm basis for identifying the specific policies and programs needed to complement and possibly modify growth oriented policies

regional economic instability and industrial diversification in the u s comparative advantage and the division of labor make geographic concentration of production within a nation profitable and cause many cities to be specialized in one or a few main industries specialized cities however suffer greater unemployment risk

economic diversity development capacity and sustainable development of china abstract china s economic growth over the past several decades has been among the highest in the world it has been fueled by cheap fossil fuel energy so energy consumption has risen rapidly but there are signs that negative feedbacks in the form of waste and inefficiency may affect future development if energy throughput exceeds the capacity of the environment to process the inevitable waste from production then the development may not be sustainable we calculate economic diversity using an energy flow network analysis method to explore the relationships of development policy energy use efficiency and sustainable development china and its provinces are presented as a case study and the development status of each province in china is presented china s development policy does not appear to be sustainable over the period 1985 1998 because of unsustainable energy consumption trends and declining economic diversity an energy consumption tax is proposed for increasing diversity and dealing with increasing energy consumption in china

the dispersion of us state unemployment rates the role of market and non market equilibrium factors partridge m d and rickman d s 1997 the dispersion of us state unemployment rates the role of market and nonmarket equilibrium factors reg studies 31 593 607 european nations particularly the uk have been observed to have persistent dispersion in regional unemployment rates the dispersion is often hypothesized to be caused by centralized collective bargaining and government policies that limit regional labour market adjustments although the us labour market is considered more exible possessing higher rates of labour mobility and less government mandates there also is persistent dispersion in us state unemployment rates this paper investigates the factors that underlie the persistent dispersion in us state unemployment rates the factors examined include amenities crime education home ownership and residency patterns industry composition and international migration partridge m d et rickman d s 1997 la dispersion des taux de chomage aux etats unis sur le plan des etats l importa

local economic instability and business location the case of maine this paper investigates the effects of local economic instability on business location in maine instability is represented by the quarterly six month and annual persistence of employment in maine municipalities and seasonal spikes in local employment regression results suggest that businesses are attracted to areas with high short term and seasonal stability but that annual fluctuations in local employment are not a significant deterrent to new business activity services businesses are particularly sensitive to local employment fluctuations presumably because they are often highly integrated into the economy findings suggest that policymakers can jointly pursue the objectives of local economic growth and stability

predation reputation and entry deterrence abstract economists often argue that predatory practices are irrational since there exist cheaper or more certain means to gain or maintain a monopoly our gametheoretic equilibrium analysis suggests that if a firm is threatened by several potential entrants then predation may be rational against early entrants even if it is costly when viewed in isolation because it yields a reputation which deters other entrants asymmetric information plays a crucial role in our analysis since it provides the rationale for entrants to base their expectations of the firm s future behavior on its past actions the analysis also suggests methods to treat general reputational phenomena

the role of multiple potential entrants sequential entry in noncooperative entry deterrence a number of authors have recently considered whether the free rider problem is exhibited in models characterized by multiple potential entrants sequential entry bernheim 1984 and eaton and ware 1987 find that the free rider problem is not an important factor while mclean and riordan 1989 find that it is in this article i identify a general property whose presence is important for whether a model of noncooperative entry deterrence exhibits a free rider problem and in this way help clarify why the above mentioned authors reach these diverse conclusions the article also demonstrates that quite plausible changes in the specifications of both bernheim and eaton and ware lead to incumbent firms underinvesting in entry deterrence

graduate education in ecological economics abstract interest in graduate education in ecological economics is increasing however no formal plan of study for a phd in ecological economics has been disseminated the lack of a formal plan is problematic as the field of ecological economics matures interest grows and new programs are being developed this paper attempts to fill a void by creating a program of study addressing the proficiencies a graduate student in ecological economics should have upon completion of his her phd based on the us educational system the plan of study presented in this paper has been developed to make the graduate of an ecological economics program as competitive on the labor market as students awarded traditional economics degrees the plan i describe is created to meet the requirements necessary for a phd in ecological economics further fields of specialization are suggested to complement the core of an ecological economics program to enhance the education process and to give the student with an ecological economics degree a higher level of marketability

excess capacity and limit pricing an empirical test entry may be inhibited by expectations that incumbents have lower marginal costs incumbents may be able to use limit pricing or excess capacity to further this expectation we construct an empirical model of oligopoly capacity and pricing decisions and of entrant responses the results support the hypothesis that both lower prices and greater excess capacity inhibit entry they further support limit pricing but provide no evidence that oligopolies deliberately install excess capacity to deter entry the results suggest however that limit pricing firms may exploit the entry inhibiting effects of unintended excess capacity by raising their limit prices

environmental effects of shipping imports from china and their economic valuation the case of metallic valve components this paper aims to consider the total cost including polluting environmental emissions of imports from china to europe of five valve components in aluminium steel and iron these are compared with locally produced alternatives to investigate whether internalising such external costs affects their price competitiveness seaborne trade represents 90 of international trade and is growing faster than the world s economy but marine pollution emissions are not reflected in market prices chinese aluminium iron and steel production are about 2 5 times more polluting than their european counterparts but this is also not reflected in prices in this paper both types of extra emissions are calculated valued and added to the cost of the components analysed for comparison with locally produced alternatives the locally produced components generally remain uncompetitive with chinese imports for all likely values of external cost except for heavy aluminium components under high external cost assumptions the chinese iron components analysed are simply too low in cost for european in this case spanish equivalents to be competitive even allowing for environmental costs while the stainless steel ones are so small and light that transport cost even including externalities is not significant while these specific results are of limited generalizability they provide insight into an issue of considerable and growing importance some suggestions are offered for further research

on measuring economic diversification comment since many individuals are immobile between city labor markets in the short run the industrial structure of cities plays an important role in determining the national rate of unemployment this paper argues that a city s frictional unemployment rate

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

the role of amenities and quality of life in rural economic growth a structural model of regional economic growth is estimated using data for 2243 rural u s counties five indices designed to capture specific amenity and quality of life characteristics are constructed using fifty four separate indicators results suggest that amenity characteristics can be organized into consistent and meaningful empirical measures that move beyond ad hoc descriptions of amenities in addition to insights into the influence of local characteristics ranging from tax burdens to income distribution on regional economic growth results suggest that predictable relationships between amenities quality of life and local economic performance exist

a test of the regional growth instability frontier using state data the application of the portfolio framework to the economy predicts the existence of a convex growth instability frontier using two data sets on gross state product for the states of the united states this hypothesis is tested the tests confirm the existence of a convex frontier for economic growth and instability the shape of the frontier is estimated and growth adjusted measures of economic instability based on the frontier are computed over long periods of time economic instability is negatively correlated with a range of measures of economic diversity providing further support for the portfolio view of economic growth

can china afford to commit itself an emissions cap an economic and political analysis as the world s second largest carbon emitter china has long been criticised as a free rider enjoying benefits from other countries efforts to abate greenhouse gas emissions but not taking due responsibilities of its own china has been singled out as one of the major targets at the subsequent negotiations after the kyoto curtain had fallen by analysing the historical contributions of inter fuel switching energy conservation economic growth and population expansion to china s co2 emissions during the period 1980 1997 this article first demonstrates that the above criticism cannot hold its ground next we analyse what the economic effects would be if china s carbon emissions in 2010 were cut by 20 and 30 respectively relative to the baseline we found that china s gnp losses under the two less restrictive carbon limits are in the same range as the often reported estimates for industrialised countries under very restrictive carbon limits then the article envisions some efforts and commitments that could be expected from china until its per capita income catches up with the level of middle developed countries by emphasising the win win strategies these efforts and commitments could be unlikely to severely jeopardise china s economic development and at the same time would give the country more leverage at the post kyoto climate change negotiations finally the article is concluded with the argument that combating global climate change is in china s interest it will be beneficial to a more sustainable development of the chinese economy as well as to the global climate

ethnic inequality and poverty in malaysia since may 1969 part 2 poverty abstract over the last 50 years malaysia has seen one of the fastest rates of income poverty reduction in the world this came alongside falling overall income inequality due in large part to a national policy effort to address ethnic inequalities in the wake of tragic race riots in 1969 the first paper in the two part series examined various measures of ethnic inequality this second paper assesses the role that changes in between group inequality played in malaysia s success against poverty to address this question a new decomposition method is applied to survey data spanning 50 years the results indicate that ethnic redistribution helped reduce poverty but it was not as important as within group redistribution or mean income growth a pure ethnic redistribution effect is defined and isolated empirically sizable potential gains to the country s poor from ethnic redistribution are revealed in the 1970s suggesting that the early policy effort made sense the absolute gains have faded over time and are now small though the elasticity of national poverty to ethnic redistribution remains quite high

a note on population size industrial diversification and regional economic instability this study investigates the relationships among city size economic stability and various measures of industrial diversification it was prompted by the conflicting findings of previous researchers concerning the above relationships it finds different relationships between city size and various diversification measures therefore part of the past disagreement may be due to the use of different definitions of diversification the study also shows that a portfolio measure of diversification is highly significant in explaining instability instability can also be partly explained by measures of the equality of employment distribution finally holding diversification measures constant instability decreases with larger city size

optimal oligopoly pricing and the threat of entry in earlier work we tested stochastic dynamic limit pricing using u s data we replicate these tests using canadian data the results are weak but consistent with the earlier tests along the way we deal with several methodological problems how does the new rational limit pricing relate to the test how might oligopoly influences be integrated into limit pricing how should existing concentration affect entrant behavior might factors which suppress industry profitability not ceteris paribus deter entry what might one do with correlated proxy variables should weak results be interpreted the same in a replication test as in a de novo test

urban diversity and economic growth at the risk of some simplification it is possible to identify four periods of intense study of cities by economists each of these has led to an increased understanding of the economics of urban areas and the unique role played by cities in the modem economy the first of these periods occurred in the decade after world war i only about ten years after the truck revolutionized the transport of goods within urban areas this period included the first systematic empirical analysis of the forces affecting the location of firms and households within cities robert murray haig 1926 and a number of other microeconomists at columbia analyzed the spatial pattems of manufacturing activity in lower manhattan and in the rest of new york city haig jmd his colleagues devoted considerable attention to where things belong in an urban area p 402 providing the first systematic economic analysis of urban spatial structure for example they analyzed the garment industry concluding that it was destined by nature to disperse north of 14th street and predicting that it would follow the estabhshed spatial pattem of the cooperage barrelmaking industry standardization in size and quality of barrels had meant that identical barrels could be made throughout the new york metropolitan area even in new jersey and the introduction of the truck meant that they could be transported cheaply throughout the region and exported the second of these periods though not in chronological order began in the mid 1960s it formalized many of the insights about location incentives within urban areas which had been uncovered a half century before mixed them with the logic of heinrich von thunen s 1826 ancient theories about agricultural crops and land values and applied them to the hotisehold sector the works of william alonso 1964

assessing industry linkages using regional input output tables midmore p munday m and roberts a 2006 assessing industry linkages using regional input output tables regional studies 40 329 343 the regional policy literature has shown renewed interest in the promotion of industries with the potential to embed themselves into regional economies unfortunately analysis of sectors within strategy led documents often fails to tie the identification of key industries to any specific methodology the paper demonstrates the use of several alternative methods of evaluating inter industry linkages using input output tables in particular and following the work of dietzenbacher 1992 it uses financial information from welsh input output tables for 1995 to derive a measure giving specific insights into regional industry interdependency and the presence of relatively self contained groups of activity this is the first time that this more complex measure has been applied to a regional transactions table in the uk with the method shown to be of direct relevance to a

unemployment volatility and regional specialization in the european union ezcurra r unemployment volatility and regional specialization in the european union regional studies this paper examines the link between unemployment volatility and the sectoral composition of economic activity in the regions of the european union over the period 1980 2004 to that end different spatial econometric techniques are used that allow the investigation of the role played in this context by spatial effects and geographical spillovers the results show that unemployment volatility is positively related to regional specialization in the european union this finding does not depend on the use in the analysis of absolute or relative specialization measures ezcurra r l instabilite du chomage et la specialisaiton regionale dans l union europeenne regional studies cet article cherche a examiner le lien entre l instabilite du chomage et la structure sectorielle de l activite economique dans les regions de l union europeenne entre 1980 et 2004 dans ce but on emploie diverses techniques econome

employment stability and the role of sectoral dominance in rural economies rural development has received renewed attention particularly in the west where there are opportunities for enhancing tourism in communities once reliant on extractive resources the historical focus of rural development has been on economic growth with little concern about the sustainability or socioeconomic impacts of such growth this study analyzes and discusses the employment dynamics of rural economies with varying employment bases to illustrate some possible impacts of targeting specific employment sectors as part of a rural economic development strategy the empirical research focuses on the rural counties of utah where the trade and service sectors associated with increased tourism and retirement communities have been rapidly expanding throughout the past two decades

energy diversity and development in economic systems an empirical analysis abstract as economic systems develop over time they tend to become more complex with more structure and greater throughputs assuming favorable conditions energy use increases as more economic sectors develop and more channels for flow are opened economic diversity as measured by the number of economic sectors using energy and the equatability of flows between them generally increases as diversity increases the efficiency of generating outputs with a given amount of energy also increases development capacity the product of system energy throughput and diversity of flows is a measure of the potential system output and is calculated for selected countries capacity changes over time are shown to relate to changes in economic output in selected countries two distinct development strategies become evident one which promotes energy use and one which emphasizes diversity and the sustainability of each is examined while most countries utilize a mix of the two developing countries generally rely more on increasing energy use to increase output while developed countries tend to become more diverse as a means of increasing outputs sustainability is enhanced by strategies which promote diversity and resource use efficiency in economic systems

cross country evidence on the link between volatility and growth this paper presents empirical evidence against the standard dichotomy in macroeconomics that separates growth from the volatility of economic fluctuations in a sample of ninety two countries as well as a sample of oecd countries the authors find that countries with higher volatility have lower growth the addition of standard control variables strengthens the negative relationship the authors also find that government spending induced volatility is negatively associated with growth even after controlling for both time and country fixed effects copyright 1995 by american economic association