how does advertising depend on competition evidence from u s brewing the relationship between market structure and advertising has been extensively studied but has generated sharply opposing theoretical predictions as well as inconclusive empirical findings likely because of severe endogeneity concerns we exploit the 2008 merger of miller and coors in the u s brewing industry to examine how changes in local concentration affect firms advertising behavior well established regional preferences over beer brands and the sharp increase in concentration from the merger make this an excellent setting to analyze this question we find a significant positive effect of local market concentration on advertising expenditures a 100 point increase in the herfindahl hirschmann index measure of concentration increases advertising per capita by about 5 our findings shed light on how and when firms choose to deploy advertising the online appendix is available at https doi org 10 1287 mnsc 2017 2889 this paper was accepted by eric anderson marketing

non monotonic effects of market concentration on prices for residential solar photovoltaics in the united states abstract emerging renewable energy markets may become more concentrated over time as the most efficient firms accumulate market share the effects of this market concentration on prices are tested using a rich dataset of residential solar photovoltaic pv systems in the united states a novel hypothesis is explored that the effects of market concentration may be non monotonic prices may decline in market concentration due to efficiency gains associated with returns to scale but increase in concentration in already concentrated markets due to increasing market power the results of an econometric model provide evidence to support the non monotonic hypothesis however the data suggest that the relationship between prices and firm scale is nuanced and that both large and small scale pv installers may wield efficiency advantages

can entry or exit event studies inform horizontal merger analysis evidence from grocery retailing this study estimates how prices change following the entry and exit of grocery retailers we estimate the effects of entry exit by comparing affected markets to a set of unaffected markets using both a difference in difference estimator and a synthetic control estimator we find that entry typically results in reduced prices more surprisingly we find that exit is frequently associated with falling prices our estimated effects of entry on grocery prices are similar in magnitude to estimates of merger price effects in the supermarket industry this finding suggests that entry event studies may be a useful tool for horizontal merger analysis jel l11 l4 l81

labor market returns to two and four year college the paper examines labor market returns to a two and four year college education analysis of the 1972 national longitudinal survey of youth observation that the average person who attended a two year college earned about 10 percent more than those without any college education comparison with the wages of those who attended a four year college education

the role of application assistance and information in college decisions results from the h r block fafsa experiment growing concerns about low awareness and take up rates for government support programs like college financial aid have spurred calls to simplify the application process and enhance visibility we present results from a randomized field experiment in which low income individuals receiving tax preparation help were also offered immediate assistance and a streamlined process to complete the free application for federal student aid fafsa for themselves or their children treated participants were also provided with aid estimates that were compared against tuition cost amounts for nearby colleges the combined assistance and information treatment substantially increased fafsa submissions and ultimately the likelihood of college attendance persistence and aid receipt in particular high school seniors whose parents received the treatment were 8 percentage points more likely to have completed two years of college going from 28 to 36 during the first three years following the experiment families who received aid information but no assistance with the fafsa did not experience improved outcomes the findings suggest many other opportunities for using personal assistance to increase participation in programs that require filling out forms to become eligible jel codes i2 h4 j24 copyright 2012 oxford university press

are ghettos good or bad spatial separation of racial and ethnic groups may theoretically have positive or negative effects on the economic performance of those groups we examine the effects of segregation on outcomes for blacks in schooling employment and single parenthood we find that blacks in more segregated areas have significantly worse outcomes than blacks in less segregated areas we control for the endogeneity of location choice using instruments based on political factors topographical features and residence before adulthood a one standard deviation decrease in segregation would eliminate one third of the black white differences in most of our outcomes

entry exit and performance in airline markets abstract data from the airline industry indicate that 1 entry generally is not induced by price levels substantially above the norm 2 entry reduces fares and increases output and exit increases fares and reduces output and 3 incumbents cut price and maintain output in response to entry and survivors increase both price and output in response to exit these findings cast doubt on the ability of entry to prevent or reverse price increases from anticompetitive mergers

competitive outcomes in product differentiated oligopoly structure firms anticipate the competitive effects of market structure when making their entry and product type decisions the market structure variables used to explain the observed outcomes therefore derive from the related entry and product choice stage of the game as a result it is crucial to allow for correlation between unobserved factors that affect the entry and product type decisions of firms and unobservables in the outcome regressions to correct for the potential bias caused by this correlation an econometric model of equilibrium market structure is employed as a selection equation in a two step estimation procedure the second step outcome regressions are modified to reflect the market structure selection this alternative approach emphasizes the logical relationship among firms entry and product choice behavior market structure and price competition following this introduction i provide some background for the analysis of competitive outcomes in motel oligopolies section iii presents the two step estimation procedure developed to measure the effects of concentration and differentiation on outcomes this procedure is used to analyze the observed outcomes of motels located along interstate highways the data are outlined in section iv in section v i present the estimation results evidence from the analysis of these outcomes help demonstrate why motel firms find differentiation a profitable product choice strategy section vi provides some concluding remarks

oil industry consolidation and refined product prices evidence from us wholesale gasoline terminals abstract our objective in this paper is to quantify the impact of petroleum industry consolidation on refined product prices controlling for other important factors that could also impact prices our empirical analysis focuses on the us petroleum refining industry using data on industry consolidation and wholesale gasoline prices collected over the interval 2000 2008 we match refinery units to wholesale city terminal gasoline markets and then estimate pooled cross section time series regressions to quantify the impact of petroleum industry consolidation on wholesale gasoline prices at city specific terminals the results of the empirical analysis of mergers are mixed showing that some petroleum industry mergers resulted in statistically significant increases in refined product prices others resulted in statistically significant declines and still others had no statistical impact at all our analysis of the effects of measures of market concentration one at the level of city specific wholesale terminals and another at the level of regional spot markets found evidence that less concentrated markets are associated with lower price levels

fiscal interactions of central city and suburbs the case of zurich one possible explanation for the migration from the central city to fiscally independent suburbs is a lack of equivalence between taxation and perceived benefits from local public goods spill outs to suburbs add to this process and may lead to fiscal erosion of the central city piecemeal evidence is presented that this problem applies to the city of zurich various possible remedies are discussed one of which has been applied in zurich though not successfully it is shown theoretically and empirically why this failure occurred alternative countermeasures are suggested and an account of how zurich government officials reacted is supplied

negative intergroup externalities and market demand in this paper the authors suggest and analyze an aggregate demand curve with a positively sloped section that derives from negative consumption externalities between groups their analysis suggests a new interpretation of the demand pattern for some veblen type goods copyright 1996 by the london school of economics and political science

roy model sorting and nonrandom selection in the valuation of a statistical life roy model sorting and the vsl wage hedonics is used to recover the value of a statistical life vsl by exploiting the fact that workers choosing riskier occupations are compensated with a higher wage roy oxford economic papers 3 1951 135 46 suggests that observed wage distributions will be distorted if individuals choose jobs according to idiosyncratic returns we describe how this type of sorting biases wage hedonic vsl estimates and implement two new estimation strategies that correct that bias using data from the current population surveys we recover vsl estimates that are three to four times larger than those based on the traditional techniques statistically significant and robust to a wide array of specifications

building the stock of college educated labor half of college students drop out without completing a degree this paper establishes a causal link between college costs and degree completion i use quasi experimental methodology to analyze two state scholarship programs the programs increase the share of the exposed population with a college degree by three percentage points with stronger effects among women a cost benefit analysis indicates that the programs are socially efficient at rates of return to schooling as low as 5 percent even with the offer of free tuition many students continue to drop out suggesting tuition costs are not the only impediment to college completion

location choice by households and polluting firms an evolutionary approach this paper examines several policy regimes to deal with the problem of households suffering from environmental damage by firms in the same region we employ an evolutionary framework to analyze migration movements in the course of time since firms and households will not relocate immediately in response to payoff differentials we show that taxation gives firms and households an incentive to stay away from each other laissez faire compensation only gives households firms an incentive to stay away from firms households we find that taxation creates the right incentives to reach a local welfare maximum however when there are multiple local maxima circumstances may arise under which compensation leads to a better outcome than taxation c 2004 elsevier b v all rights reserved

productivity gains from geographic concentration of human capital evidence from the cities abstract based on recent theoretical developments the argument is made that the average level of human capital is a local public good cities with higher average levels of human capital should therefore have higher wages and higher land rents after conditioning on the characteristics of individual workers and dwellings this prediction is supported by data for standard metropolitan statistical areas smsas in the united states where the smsa average levels of formal education and work experience are used as proxies for the average level of human capital the alternative explanations of omitted smsa variables and self selection are evaluated an estimate of the effect of an additional year of average education on total factor productivity is computed

estimating ethnic preferences using ethnic housing quotas in singapore there are many policies around the world aimed at integrating groups gender ethnic national in education employment immigration and housing in the case of housing since prices may not internalize externalities in residential location choices we need to know preferences for welfare analysis this paper estimates people s taste for living with own ethnic groups ethnic preferences using unique policy variation from the ethnic housing quotas in singapore my approach combines policy induced variation commonly used in reduced form settings with a non parametric identi cation strategy in a structural demand estimation framework a la berry levinsohn and pakes 1995 i nd that all groups have strong preferences to live with at least some other

prices and endogenous market structure in office supply superstores we consider the relationship between prices and market structure for office supply superstores in the u s which was central to the federal trade commission s opposition to the merger of staples and office depot due to potential biases in a standard regression we employ a two stage approach in which a model of endogenous market structure provides correction terms for a second stage price regression using a cross section of data on market structures and staples prices we find that excluding the correction term substantially distorts the importance of competitors as the two stage model yields stronger negative relationships between prices and market structure variables

voluntary export restraints on automobiles evaluating a trade policy the authors evaluate the voluntary export restraint that was initially placed on exports of automobiles from japan in 1981 they evaluate the impact this policy had on u s consumer welfare firm profits and foregone tariff revenue from its initiation through 1990

are private markets and filtering a viable source of low income housing estimates from a repeat income model while filtering has long been considered the primary mechanism by which markets supply low income housing direct estimates of that process have been absent this has contributed to doubts about the viability of markets and to misplaced policy i fill this gap by estimating a repeat income model using 1985 2011 panel data real annual filtering rates are faster for rental housing 2 5 percent than owner occupied 0 5 percent vary inversely with the income elasticity of demand and house price inflation and are sensitive to tenure transitions as homes age for most locations filtering is robust which lends support for housing voucher programs jel r21 r31 r38

coexistence and segregation of two groups in a metropolitan area through externalities abstract this paper proposes to regard the population distributions of two groups in a metropolitan area as equilibrium solutions of systems of ordinary differential equations this approach an extension of the miyao s single subarea model to a many subarea case allows us to incorporate the effect of fiscal pecuniary neighborhood externalities into the classic alonso mills muth model this paper investigates its three typical cases and obtains one coexistent and two segregated solutions consideration on these cases leads to the conclusion that substantial neighborhood externalities other than simple tax redistribution exist between the groups in the united states as by products of this analysis it is also shown that positive bid gradients and discontinuities of bid prices are realized under suitable conditions

mortgage lending in boston interpreting hmda data the home mortgage disclosure act was enacted to monitor minority and low income access to the mortgage market the data collected for this purpose show that minorities are more than twice as likely to be denied a mortgage as whites yet variables correlated with both race and creditworthiness were omitted from these data making any conclusion about race s role in mortgage lending impossible the federal reserve bank of boston collected additional variables important to the mortgage lending decision and found that race continued to play an important though significantly diminished role in the decision to grant a mortgage copyright 1996 by american economic association

job information networks neighborhood effects and inequality this paper explores the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends relatives and acquaintances during job search and its consequences for the job market it also addresses the role of network structure and size the resource endowments of contacts and nature of the links between contacts to explain differences in the effects of job information networks in doing so the paper also turns to the sociology literature on job information networks and provides an economic perspective on such sociological concepts as strong versus weak ties inbreeding distance from structural holes etc the paper distinguishes between models of exogenous job information networks that is where individuals obtain job related information through a given social structure and endogenous job information networks which are social networks that result from individuals uncoordinated actions the paper pays special attention to such issues as physical and social proximity and sharing of information and discusses them in the context of the recent social interactions and neighborhood effects literature finally the paper outlines a model that integrates job information networks where interactions occur in business cycle frequencies with the dynamics of human capital formation which include the joint effects of parental community and neighborhood human capital and are set in life cycle frequencies for the purpose of organizing suggestions for future research and examining earned income inequality

old homes externalities and poor neighborhoods a model of urban decline and renewal abstract this paper investigates urban decline and renewal in the united states using three panels that follow neighborhoods on a geographically consistent basis over extended periods of time findings indicate that change in neighborhood economic status is common averaging roughly 13 percent per decade roughly two thirds of neighborhoods studied in 1950 were of quite different economic status fifty years later panel unit root tests for 35 msas indicate that neighborhood economic status is a stationary process consistent with long running cycles of decline and renewal in philadelphia county a complete cycle appears to last up to 100 years aging housing stocks and redevelopment contribute to these patterns as do local externalities associated with social interactions lower income neighborhoods appear to be especially sensitive to the presence of individuals that provide social capital many of the factors that drive change at the local level have large and policy relevant effects

structure conduct and performance a simultaneous equations investigation for the brazilian manufacturing industry the article investigated structure conduct performance scp relationships in the context of the brazilian manufacturing industry in 1996 for that purpose it considered a system with four equations pertaining concentration advertising r d and profitability that was estimated with simultaneous equation models in addition to the usual explanatory variables proxying barriers to entry and demand conditions the article considered organizational practices and incentive schemes variables the evidence indicated an important role for variables related to barriers to entry in affecting market structure an important and nonlinear effect of concentration on advertising a relevant impact of firm size on the propensity to exert r d effort and finally a significant positive impact of concentration on profitability and were similar to the previous evidence for developed countries additionally no important roles were detected for organizational practices and incentive schemes on the scp relationships

interjurisdictional housing prices in locational equilibrium abstract in this study we discuss how to construct interjurisdictional housing price indexes that are consistent with locational equilibrium theory in theoretical models housing is assumed to be homogeneous which provides problems in empirical analysis we provide conditions that allow us to treat heterogeneous housing as if it were homogeneous the same conditions that allow us to develop a quantity index for housing also imply that we can estimate interjurisdictional housing price indexes using hedonic price regressions locational equilibrium models impose a number of restrictions regarding the co movement of housing price indexes local public goods and mean income levels we propose to use these properties of locational equilibrium models to evaluate the different price index estimates we estimate a variety of price indexes using a unique panel data set of housing transactions in southern california our empirical results by and large support our approach

the dynamics of intraurban quantile house price indexes estimating price indexes for different quantiles shows how prices vary for homes that are in different stages of the filtering process the paper describes a filtering model and its implication for the dynamic interaction of housing prices at these various stages a time series analysis of quantile price indexes for three municipalities near chicago supports the predictions of the filtering model

a hedonic approach to residential succession a model of neighborhood turnover drawn from bond and coulson 1989 is proposed the type of turnover process that is obtained is shown to depend mainly on the hedonic bid functions for housing and neighborhood quality a demand system of four hedonic attributes is estimated the main results are that the traditional model of filtering by age of unit does not occur and that filtering by housing size does tipping due to changes in median neighborhood income is also quite possible tipping through changes in racial composition appears less likely copyright 1990 by mit press

residential segregation and socioeconomic outcomes when did ghettos go bad abstract cutler and glaeser 1997 show that urban residential segregation has a strong adverse effect on labor market and social outcomes of young african americans relative to whites we show that this effect is a fairly recent historical phenomenon there is little evidence of such an effect from 1940 to 1970 rather it emerged between 1970 and 1980 and it grew stronger during the 1980s

discrete choice with social interactions this paper provides an analysis of aggregate behavioural outcomes when individual utility exhibits social interaction effects we study generalized logistic models of individual choice which incorporate terms reflecting the desire of individuals to conform to the behaviour of others in an environment of noncooperative decisionmaking laws of large numbers are generated in such environments multiplicity of equilibria in these models which are equivalent to the existence of multiple self consistent means for average choice behaviour will exist when the social interactions exceed a particular threshold local stability of these multiple equilibria is also studied the properties of the noncooperative economy are contrasted with the properties of an economy in which a social planner determines the set of individual choices finally a likelihood function based on the theoretical model is given and conditions for the econometric identifiability of the model are established

pricing and market concentration in oligopoly markets this paper investigates the relationship between prices and market concentration in the auto rental industry we assemble an original database that includes the number of auto rental operators and other exogenous demand and cost conditions at every commercial airport in the country the data are interesting because we observe a large variation in market structure ranging from more than 100 monopoly and duopoly markets to several competitive airports with more than eight firms in addition we collect daily rental prices in each market that are regressed against the number of operating firms and other control factors due to potential biases in treating market participants as exogenously assigned we employ a two stage estimation procedure in which an equilibrium model of endogenous market structure provides correction terms for the second stage price regression results show that ignoring the endogeneity of market structure severely underestimates the impact of additional competitors on prices with the

estimating marginal returns to education this paper estimates marginal returns to college for individuals induced to enroll in college by different marginal policy changes the recent instrumental variables literature seeks to estimate this parameter but in general it does so only under strong assumptions that are tested and found wanting we show how to utilize economic theory and local instrumental variables estimators to estimate the effect of marginal policy changes our empirical analysis shows that returns are higher for individuals with values of unobservables that make them more likely to attend college we contrast our estimates with iv estimates of the return to schooling

does it pay to attend an elite private college cross cohort evidence on the effects of college type on earnings although a substantial and rising labor market premium is associated with college attendance in general little is known about how this premium varies across institutions of different types and across time in this paper we explicitly model high school students choice of college type characterized by selectivity and control based on individual and family characteristics including ability and parental economic status and an estimate of the net costs of attendance we estimate selectivity corrected outcome equations using data from both the national longitudinal study of the high school class of 1972 and high school and beyond which permit us to determine the effects of college quality on wages and earnings and how this effect varies across time even after controlling for selection effects strong evidence emerges of a significant economic return to attending an elite private institution and some evidence suggests this premium has increased over time

estimating the demand for the characteristics of housing a hstract estimates of the demand for the characteristics contained in a differentiated product such as housing can be based on hedonic regressions however previous studies have not dealt with several potential problems in such estimation a more appropriate framework for the estimation is provided in this paper also data from a number of cities are used to eliminate the identification problem and the endogeneity of the marginal prices derived from non linear hedonic equations is considered in the estimation the results on own and cross price elasticities expenditure elasticities and the effects of socio economic vafiables accord well with expectations

dynamic instability of a mixed city in the presence of neighborhood externalities it has been often asked whether a city currently accommodating a variety of economic social and racial groups will continue to be a mixed city or will become exclusively occupied by a single group particularly poor blacks with all other groups moving out of the city in the long run in order to answer this question properly it seems essential to develop a long run dynamic model of a city with emphasis on socioeconomic factors like neighborhood externalities within or among various groups of residents as well as spatial factors like the individual choice of residential space and location it might be safely said that in the literature the only theoretical work which employs a long run dynamic approach to this kind of problem is a paper on dynamic models of segregation by thomas schelling 197 1 although his socioeconomic analysis has revealed some of the dynamic properties of a racially mixed area with neighborhood externalities his model itself is quite unsatisfactory from the economic point of view since it lacks individual utility functions and thereby disregards the aspect of the individual choice of space and location within the city 2 as a result he failed to analyze the effect of spatial segregation within the city on the long run nature of the residential composition of the city in this paper i develop a long run dynamic model of an open city which accommodates two groups of households for example blacks and whites rich and poor young and old with their utility functions depending on a consumption good and residential space i also assume two kinds of neighborhood externalities the first is called negative intergroup externalities that is the utility level of a typical household in one group is adversely affected by an increase in the number of households in the other group living in the city the second is called positive intragroup externalities that is the utility level of a typical household in one group is positively affected by an increase in the size of its own group in in the city first i define a mixed city equilibrium as a long run equilibrium which allows the two groups to coexist in the city in the long run and then introduce a dynamic adjustment process of household movement into and out of the city it is proved that the mixed city equilibrium is always unstable in the presence of negative intergroup externalities and or positive intragroup externalities if residential land is perfectly homogeneous and there is no differential transport cost incurred within the city it turns out however that in the case of a monocentric city with positive transport cost the mixed city equilibrium may be stable or unstable depending on the degree of neighborhood externalities because of the stabilizing effect of spatial segregation between the two groups within the city

hedonic markets and sorting equilibria bid function envelopes for public services and neighborhood amenities abstract hedonic regressions with house value as the dependent variable are widely used to study public services and neighborhood amenities this paper builds on the theory of household bidding and sorting across communities to derive bid function envelopes which provide a form for these regressions this approach allows for household heterogeneity and multiple amenities yields estimates of the price elasticity of amenity demand directly from the hedonic without a rosen two step procedure and provides tests of hypotheses about sorting an application to cleveland area data from 2000 yields price elasticities for school quality and neighborhood ethnic composition and supports the sorting hypotheses

measuring the business stealing cannibalization and market expansion effects of entry in the u s motion picture exhibition market using a large and comprehensive theater level database covering over 18 billion in theater revenues over a five year period i document the extent and nature of business stealing revenue cannibalization and market expansion that occurred during the height of the 1990 s boom in movie theater construction

estimation of a model of entry in the airline industry this paper considers the effect of an airline s scale of operation at an airport on the profitability of routes flown out of that airport the empirical methodology uses the entry decisions of airlines as indicators of underlying profitability the results extend the empirical literature on airport presence by providing a new set of estimates of the determinants of city pair profitability these estimates imply that city pair profits increase in airport presence and decrease rapidly in the number of entering firms the literature on empirical models of oligopoly entry is also extended via a focus on the role of differences between firms

market structure and price cost margins in a paper that has become a standard reference in the structure conductperformance approach to industrial economics cowling and waterson 1976 developed a theoretical rationale for expecting industry profitability to be positively correlated with the level of concentration their model based on a simple algebraic description of oligopoly behaviour has been interpreted as providing a justification for the common empirical practice of cross industry regression analysis of price cost margins in terms of concentration levels in the present paper we show that on further examination this model implies a joint determination of margins and concentration this provides some interesting comparative static results of relevance to inter industry differences in concentration levels equally however it leads to various cautionary insights concerning the meaning of price cost margin versus concentration regressions

expectations and the timing of neighborhood change abstract we study the role of expectations when agents have a preference for segregation and households face moving frictions in a fixed environment there are multiple equilibria agents expectations determine whether an ethnic transition occurs however the outcome is unique if there is a deterministic trend that gradually makes the neighborhood more appealing to the outside group it is also unique if the relative payoff from living in the neighborhood is subject to small shocks in both cases the insiders must leave at the first possible moment when the outsiders would outbid them if an immediate ethnic transition were expected

competition and price discrimination evidence from the parking garage industry we study the relationship between competition and price discrimination through an empirical examination of hourly price schedules in the parking garage industry we find that the degree of price schedule curvature decreases with competition implying a greater proportionate drop in low end prices than in high end prices when competition intensifies our findings suggest that competition constrains a firm s capacity to exercise price discrimination confirming the classic textbook theory we also offer possible explanations for our findings including a search cost explanation for which we find some support in the data

a spatial temporal model of human capital accumulation abstract we develop an overlapping generations model of human capital accumulation and analyze its spatial and temporal properties the interplay between local spillovers of human capital and global market participation partitions the society into socio economic classes we focus upon stationary equilibria and show that a large class of them are locally stable stationary equilibria can be homogeneous where the human capital distribution is degenerate or stratified with a distinct spatial pattern of human capital distribution we provide several examples and specify conditions under which equilibria are sensitive to the spatial structure of the society we illustrate our results by numerical simulations journal of economic literature classification numbers d90 i21 j24 o15

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

paying a premium on your premium consolidation in the us health insurance industry we examine whether and to what extent consolidation in the u s health insurance industry is leading to higher employer sponsored insurance premiums we make use of a proprietary panel dataset of employer sponsored healthplans enrolling over 10 million americans annually between 1998 and 2006 to explore the relationship between premium growth and changes in market concentration we exploit the differential impact of a large national merger of two insurance firms across local markets to estimate the causal effect of concentration on market level premiums we estimate real premiums increased by approximately 7 percentage points in a typical market due to the rise in concentration during our study period we also find evidence that consolidation facilitates the exercise of monopsonistic power vis a vis physicians whose absolute employment and relative earnings decline in its wake

a pecuniary reason for income mixing abstract empirical studies have found a high degree of income mixing in american neighborhoods we give a new explanation of this phenomenon that is based on consumer search a low price for a given good benefits high valuation buyers more than low valuation buyers but with search the probability of obtaining a low price is increasing in the proportion of low valuation buyers this gives high valuation buyers an incentive to live near low valuation buyers with many goods a buyer has an incentive to live near neighbors whose valuations are uncorrelated with hers

stigmatized asset value is it temporary or long term stigma is a negative attribute of real estate acquired by environmental contamination and reflected in its value elliot jones 1996 using a model of neighborhood turnover with external economies we show that both temporary stigma and long term stigma are possible equilibrium outcomes after the discovery and cleanup of a hazardous waste site the existence and duration of stigma are examined using hedonic price techniques with data from housing sales prices in dallas county texas we find that results depend critically on distance from the hazardous waste site neighborhood turnover due to changes in the level of poverty also appears likely

the competitive impact of hypermarket retailers on gasoline prices abstracthypermarkets are large retail suppliers of general merchandise or grocery items that also sell gasoline often at very low margins this paper estimates the impact of hypermarkets on average state level retail gasoline prices and margins the empirical results indicate an economically and statistically significant price decreasing effect of increased hypermarket competition the estimations also suggest that refiners lower the delivered wholesale prices charged to their affiliated lessee dealer and open dealer stations in response to increased hypermarket competition which in turn translates to lower retail street prices the adoption of sales below cost laws may lessen the price reducing effects from hypermarket competition

general equilibrium benefits for environmental improvements projected ozone reductions under epa s prospective analysis for the los angeles air basin abstract this research demonstrates how locational equilibrium models can be used for benefit measurement with the detail required to match epa s benefit analysis for the first prospective analysis using the projected changes in ozone concentrations for 2000 and 2010 together with the sieg et al int econ rev forthcoming estimates for household preferences for housing education and air quality this paper measures general equilibrium willingness to pay for the policy scenarios developed for the prospective study as they relate to households in the los angeles area benefits are evaluated taking account at the household level of initial air quality conditions relocation based on changes in ozone and price changes the framework generalizes the partial equilibrium general equilibrium comparisons available with conventional computable general equilibrium and property capitalization models estimated general equilibrium gains from the policy range from 33 to 2400 annually at a household level in 1990 dollars

do prices and attributes explain international differences in food purchases food purchases differ substantially across countries we use detailed household level data from the united states france and the united kingdom to i document these differences ii estimate a demand system for food and nutrients and iii simulate counterfactual choices if households faced prices and nutritional characteristics from other countries we find that differences in prices and characteristics are important and can explain some difference e g united states france difference in caloric intake but generally cannot explain many of the compositional patterns by themselves instead it seems an interaction between the economic environment and differences in preferences is needed to explain cross country differences jel d12 i12 l11 l66 q11 food purchases differ across countries within countries over time and across demographic groups these differences seem to be correlated with rates of excess weight gain and diet related illness economists tend to attribute the difference in food purchases across markets to differences in prices an alternative explanation is that they are due to inherent differences in preferences and eating habits in this article we study the differences in food purchases and nutritional outcomes across countries focusing on the united states united kingdom and france we start by systematically documenting the differences in food purchases for consumption at home between the united states united kingdom and france we show that us households purchase different foods from french and uk households for example us households purchase more calories per person a greater percentage of those calories comes in the form of carbohydrates and a lower share in the form of proteins a higher share of expenditure is on drinks and prepared foods and

reducing income inequality in educational attainment experimental evidence on the impact of financial aid on college completion income inequality in educational attainment is a long standing concern and disparities in college completion have grown over time need based financial aid is commonly used to promote equality in college outcomes but its effectiveness has not been established and some are calling it into question a randomized experiment is used to estimate the impact of a private need based grant program on college persistence and degree completion among students from low income families attending 13 public universities across wisconsin results indicate that offering students additional grant aid increases the odds of bachelor s degree attainment over four years helping to diminish income inequality in higher education

job relocation and the racial gap in unemployment in detroit and chicago 1980 to 1990 the spatial mismatch hypothesis argues that residential segregation and job decentralization combine to adversely affect the employment opportunities of minorities while employment is increasingly located outside of central cities residential segregation prevents minorities from moving closer to suburban jobs although this hypothesis has intuitive appeal there is little consensus regarding its empirical validity this study 1 constructs detailed geographic measures of changes in employment opportunities 2 estimates a fixed effects model of changes in the unemployment rate over time and 3 accounts for spatial correlation in the error term neighborhood level employment data from 1980 and 1990 are used to measure changes in the distance to jobs from census tracts in the detroit and chicago metropolitan areas in both cities the decentralization of employment and the loss of manufacturing jobs resulted in substantial changes in the spatial distribution of employment the empirical results indicate that a decline in the spatial proximity to employment is associated with an increase in the unemployment rate for blacks

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

are neighbourhoods self stabilising exploring endogenous dynamics summary this study investigates how neighbourhoods respond when they are upset by transient exogenous shock s do they quickly revert to their original stable state gradually return to this stable state permanently settle into another stable state diverge progressively from any steady state or evince no discernable pattern of response a self regulating adjustment process promoting stability appears the norm based on econometric investigations of multiple annually measured indicators from census tracts in five us cities stability quickly re established at the original state characterises most of the indicators analysed rates of tax delinquency low weight births teenage births and home sales volumes violent and property crime rates also evince endogenous stability at the original state but take considerably longer than the other indicators to return to it when the exogenous shock is sizeable moreover this crime adjustment process is considerably slower in neighbourhoods with higher poverty rates

interactive property valuations this paper estimates models of social interactions within residential neighborhoods using data on neighborhood clusters for standard metropolitan areas in the united states from the american housing survey for 1985 and 1989 it examines eects of social interactions in the form of reaction functions for homeowners valuation of their properties at the level of the immediate residential neighborhood with neighborhoods consisting of a randomly chosen dwelling unit and about ten nearest neighbors the paper identifies the eect of endogenous social interactions to be significant and large ranging from 0 587 to 0 770 and much more important then the dynamic autoregressive structure of the model when both variables are present and both are significant the interactive regressions that it reports improve upon commonly used hedonic regressions as well the paper provides empirical support for the notion common in the real estate world of the importance of neighboring properties in property valuations

the transition to home ownership and the black white wealth gap this paper analyzes differences in the likelihood that black and white families become homeowners by following a sample of black and white renters over time we are able to separately study racial differences in the likelihood of applying for a mortgage and in the likelihood that a mortgage application is accepted although its effect on the race gap in housing transitions is small we find strong evidence that black applicants are almost twice as likely as comparable white households to be rejected even when credit history proxies and measures of household wealth are accounted for we show that the housing transition gap exists primarily because blacks are less likely to apply for mortgages in the first place the analysis suggests that differences in income family structure and in the ability and willingness of parents to provide down payment assistance are the primary reasons for this applications gap we speculate that the portion of the gap that remains unexplained after controlling for income d

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

weighting recent performance to improve college and labor market outcomes abstract there is a great deal of policy interest in reducing college dropout rates increasing graduation rates and improving labor market outcomes to this end individual colleges and state university systems use high school grade point averages and class rankings in an effort to offer admission and scholarships to students who are most likely to achieve long run success however a significant fraction of students exhibit steep positive or negative performance trends during high school this study shows that academic performance in later grades is given no greater weight in admissions but is the best predictor of college and labor market outcomes greatly exceeding prior grades and entrance exam scores placing greater weight on later grades and extending application deadlines to allow the consideration of 12th grade performance is shown to significantly alter which students are admitted to college and to improve their expected long run outcomes importantly weighting recent performance does not appear to affect college diversity evidence is presented that the predictive power of later grades is driven primarily by students who experience large negative performance trajectories during high school

combining revealed and stated preference data to estimate preferences for residential amenities a gmm approach we show how stated preference information obtained from a choice experiment and revealed preference information based on housing market transactions can be combined via generalized method of moments gmm estimation specifically we use a moment condition matching the predicted marginal willingness to pay wtp from a first stage hedonic model to the marginal wtp formula implied by the choice experiment utility function this is coupled with other moments from the choice experiment to produce gmm based estimates of parameters that reflect the strengths of each data source our application values remediation of a contaminated site in buffalo new york and we find evidence in support of estimates arising from our approach jel q51 q53

the effects of market structure on prices of clothing and household furnishings abstract in this paper prices of clothing and household furnishings are explained using commuting variables and market concentration of department stores the concentration variable has a strong effect on prices of both product types the commuting variables only affect furnishings prices a result that is in keeping with expectations

on money and motivation a quasi experimental analysis of financial incentives for college achievement abstract programs linking college aid to academic achievement could work either by lowering the cost of college or by inducing additional student effort i examine the promise program in west virginia which offers free tuition to students who maintain a minimum gpa and course load using administrative data i exploit discontinuities in the eligibility formula and the timing of implementation to estimate causal effects i find robust and significant impacts on key academic outcomes impacts are concentrated around the annual requirements for scholarship renewal suggesting that the program works via incentives for academic achievement not simply by relaxing financial constraints

the intergenerational conflict over the provision of public education abstract we study the intergenerational conflict over the provision of public education this conflict arises because older households without children have weaker incentives to support the provision of high quality educational services in a community than younger households with school age children we develop an overlapping generations model for households in a system of multiple jurisdictions this model captures the differences in preferred policies over the life cycle we show that the observed inequality in educational policies across communities is not only the outcome of stratification by income but is also determined by the stratification by age and a political process that is dominated by older voters in many urban communities with low quality of educational services the mobility of older households creates a positive fiscal externality since it creates a larger tax base per student this positive tax externality can dominate the negative effects that arise because older households tend to vote for lower educational expenditures as a consequence sorting by age can reduce the inequality in educational outcomes that is driven by income sorting

the effect of credit constraints on the college drop out decision a direct approach using a new panel study a serious difficulty in determining the importance of credit constraints in education arises because standard data sources do not provide a direct way of identifying which students are credit constrained this paper differentiates itself from previous work by taking a direct approach made possible by unique longitudinal data from the berea panel study the results from our study of berea college students suggest that while credit constraints likely play an important role in the drop out decisions of some students the large majority of attrition of students from low income families should be primarily attributed to reasons other than credit constraints jel i21 i22

hedonic prices and implicit markets estimating demand and supply functions for differentiated products in choosing the level of quality to purchase the buyer of a differentiated product also chooses a point on the marginal price schedule for that product hence in general the demand functions for product characteristics cannot be consistently estimated by ordinary least squares market equilibrium results in a matching of characteristics of demanders and suppliers this matching restricts the use of buyer and seller characteristics as instruments when estimating demand and supply functions for product characteristics the paper develops these issues a stochastic structure for hedonic equilibrium models is then proposed identification results are presented and estimation procedures are outlined

simulating the longitudinal effects of changes in financial aid on student departure from college we use the estimates from a hazard model of college student departure to simulate how changes in financial aid packaging affect students departure decisions over time we find that changing loans to scholarships as princeton has recently done has a large impact on retention and that frontloading aid has a more modest impact our results also suggest that financial aid represents more to the student than just the dollar value of the aid offered increased knowledge about the temporal effects of different types of financial aid will help policy makers make more informed choices about the structure of financial aid packages

measuring racial discrimination with fair housing audits caught in the act a survey technique called a fair housing audit provides a direct measure of racial discrimination in housing this paper examines the econometric issues raised by audit data measures the discrimination uncovered by a 1981 boston study and tests hypotheses about the causes of discrimination the estimated level of discrimination is high black housing seekers are told about 30 percent fewer available housing units than are whites the hypothesis tests indicate that the primary cause of this discrimination is that housing agents illegally promote their economic interests by catering to the racial prejudice of their current or potential white customers

endogeneity in the concentration price relationship causes consequences and curses the ordinary least squares estimator of the effect of concentration on price is biased for two reasons first performance feeds back into structure causing a simultaneous equations bias second as a function of outputs or revenues measured concentration is correlated with determinants of price that are at best measured with error so measured concentration is correlated with the error term with panel data fixed effects procedures can be combined with instrumental variables to eliminate bias from both sources in concentration price regressions for the airline industry the bias can be substantial and negative copyright 1993 by blackwell publishing ltd