bluuebunny/crossref_metadata_2025 huggingface dataset:
STOCK RETURNS, ASYMMETRIC VOLATILITY, RISK AVERSION, AND BUSINESS CYCLE: SOME NEW EVIDENCE
Authors: KIM SEI‐WAN , LEE BONG‐SOO
Published: January 2010

We study how three interrelated phenomena—excess stock returns and risk relation, risk aversion, and asymmetric volatility movement—change over business cycles. Using an asymmetric generalized autoregressive conditional heteroskedasticity in mean model and a Markov switching model, we find that excess stock return increases and asymmetric volatility movement is weakened during boom periods. This suggests that investors become more risk‐averse during boom periods (i.e., procyclical risk aversion), which we confirm using a calibration of a simple equilibrium model. (JEL C32, E32, G12)
WHO IS AFRAID OF THE FRIEDMAN RULE?
Authors: BHATTACHARYA JOYDEEP , HASLAG JOSEPH , MARTIN ANTOINE , SINGH RAJESH
Published: January 2010

We explore the connection between optimal monetary policy and heterogeneity among agents in a standard monetary economy with two types of agents where the stationary distribution of money holdings is nondegenerate. Sans type‐specific fiscal policy, we show that the zero‐nominal‐interest rate policy (the Friedman rule) does not maximize type‐specific welfare; it may not maximize aggregate ex ante social welfare either. Indeed, one or, more surprisingly, both types may benefit if the central bank deviates from the Friedman rule. (JEL E31, E51, E58)
EFFICIENCY WAGES AND SUBJECTIVE PERFORMANCE PAY
Authors: YANG HUANXING
Published: January 2010

This paper studies optimal relational contracts in motivating workers in a market setting. We find that labor markets with higher turnover costs will use more subjective performance pay and less efficiency wages and that in those markets, the total wage payment is lower and the equilibrium employment level is higher. Surprisingly, under certain conditions, an increase in turnover costs leads to higher social welfare. Incorporating workers’ search costs, we show that wages are procyclical in booms and are either rigid or countercyclical during recessions. The predictions of the model are consistent with some empirical evidence. (JEL D82, J33, J41, J63)
THE ROLE OF NONCOGNITIVE SKILLS IN EXPLAINING COGNITIVE TEST SCORES
Authors: BORGHANS LEX , MEIJERS HUUB , TER WEEL BAS
Published: January 2010

This article examines whether noncognitive skills—measured both by personality traits and by economic preference parameters—influence cognitive tests’ performance. The basic idea is that noncognitive skills might affect the effort people put into a test to obtain good results. We experimentally varied the rewards for questions in a cognitive test to measure to what extent people are sensitive to financial incentives. To distinguish increased mental effort from extra time investments, we also varied the questions’ time constraints. Subjects with favorable personality traits such as high performance motivation and an internal locus of control perform relatively well in the absence of rewards, consistent with a model in which trying as hard as you can is the best strategy. In contrast, favorable economic preference parameters (low discount rate, low risk aversion) are associated with increases in time investments when incentives are introduced, consistent with a rational economic model in which people only invest when there are monetary returns. The main conclusion is that individual behavior at cognitive tests depends on noncognitive skills. (JEL J20, J24)
AFTER‐SCHOOL PROGRAM EFFECTS ON BEHAVIOR: RESULTS FROM THE 21ST CENTURY COMMUNITY LEARNING CENTERS PROGRAM NATIONAL EVALUATION
Authors: JAMES‐BURDUMY SUSANNE , DYNARSKI MARK , DEKE JOHN
Published: January 2010

This paper presents evidence on after‐school programs’ effects on behavior from the national evaluation of the U.S. Department of Education’s 21st Century Community Learning Centers after‐school program. Findings come from both of the study’s components: (1) an elementary school component based on random assignment of 2,308 students in 12 school districts and (2) a middle school component based on a matched comparison design including 4,264 students in 32 districts. Key findings include higher levels of negative behavior for elementary students and some evidence of higher levels of negative behaviors for middle school students. (JEL I21)
UNPACKING SOCIAL INTERACTIONS
Authors: COHEN‐COLE ETHAN , ZANELLA GIULIO
Published: January 2010

As empirical work in identifying social effects becomes more prevalent, researchers are beginning to struggle in identifying the composition of social interactions within any given reference group. In this article, we present a simple econometric methodology for the separate identification of multiple social interactions. The setting under which we achieve separation is special but is likely to be appropriate in many applications. (JEL Z13)
UNDERSTANDING REGRESSION VERSUS VARIANCE TESTS FOR SOCIAL INTERACTIONS
Authors: DURLAUF STEVEN N. , TANAKA HISATOSHI
Published: January 2010

This article considers the relationship between the use of regressions and the use of variance contrast methods to uncover social interactions. We illustrate how these methods employ different identifying assumptions and are therefore complementary approaches. We also provide formal identification results that extend existing ones for the two methods. (JEL C12, C21, C23, Z13)
BEHAVIORAL ECONOMICS AND DRINKING BEHAVIOR: PRELIMINARY RESULTS FROM AN IRISH COLLEGE STUDY
Authors: DELANEY LIAM , HARMON COLM , WALL PATRICK
Published: January 2010

This article examines the results of single‐equation regression models of the determinants of alcohol consumption patterns among college students modeling a rich variety of covariates including gender, family and peer drinking, tenure, personality, risk perception, time preferences, and age of drinking onset. The results demonstrate very weak income effects and very strong effects of personality, peer drinking (in particular closest friend), time preferences, and other substance use. The task of future research is to verify these results and assess causality using more detailed methods (JEL D12, I31).
RISK BELIEFS AND SMOKING BEHAVIOR
Authors: VISCUSI W. KIP , HAKES JAHN K
Published: January 2010

We analyze smoking risk beliefs and smoking behavior using individual data from 1997 for the United States and 1998 for Massachusetts. Smokers and adults more generally overestimate the lung cancer risks of smoking and the mortality risks and life expectancy loss. Higher risk beliefs decrease the probability of starting to smoke and increase the probability of quitting among those who begin. Better educated smokers have lower and more accurate risk beliefs, but education decreases the probability of smoking. Higher state cigarette taxes correlate with risk beliefs but not with smoking status. The uninsured are especially likely to remain current smokers. (JEL I12, I18, D80)
WHY UNDERSTANDING SMOKING BANS IS IMPORTANT FOR ESTIMATING THEIR EFFECTS: CALIFORNIA’S RESTAURANT SMOKING BANS AND RESTAURANT SALES
Authors: FLECK ROBERT K. , HANSSEN F. ANDREW
Published: January 2010

A large literature has sought to determine whether smoking bans help or hinder restaurants. Much of the literature improperly specifies its econometric equations and thus mistakenly infers causality. Examining the relationship between restaurant smoking bans and restaurant revenues in 267 California communities, we reach two main conclusions. First, California’s municipal restaurant smoking bans are endogenous in a critical way—restaurant sales growth (or something correlated with restaurant sales growth) appears to cause restaurant bans, not vice versa. Consequently, failure to control properly for trends can produce spurious “evidence” of causation. Second, ban heterogeneity (e.g., state versus local) can be exploited to sort out—or rule out—causal effects. In other words, pooling data and treating smoking bans implemented at different levels as homogenous (as many studies do) ignores an important source of information and is likely to lead to erroneous conclusions. Our analysis holds lessons for the many studies that have examined the arguably more important question of how smoking bans affect smoking rates.(JELL51)
REPRESENTATIVE TRUST AND RECIPROCITY: PREVALENCE AND DETERMINANTS
Authors: DOHMEN THOMAS , FALK ARMIN , HUFFMAN DAVID , SUNDE UWE
Published: January 2010

This paper provides evidence about the determinants of trust and reciprocal inclinations, that is, a tendency for people to respond in kind to hostile or kind actions, in a representative setting. We investigate the prevalence of reciprocity in the population, the correlation between trust and positive and negative reciprocal inclinations within person, the individual determinants of reciprocity, and the relationship with psychological measures of personality. We find that most people state reciprocal inclinations, in particular in terms of positive reciprocity, as well as substantial heterogeneity in the degree of trust and reciprocity. Trust and positive reciprocity are only weakly correlated, while trust and negative reciprocity exhibit a negative correlation. In terms of determinants, being female and increasing age are associated with stronger positive and weaker negative reciprocal tendencies. Taller people are more positively reciprocal, but height has no impact on negative reciprocity. Psychological traits also affect trust and reciprocity. (JEL D63, J3, J6)
STOCK OWNERSHIP AND CONGRESSIONAL ELECTIONS: THE POLITICAL ECONOMY OF THE MUTUAL FUND REVOLUTION
Authors: DUCA JOHN V. , SAVING JASON L.
Published: January 2010

We find that higher stock ownership rates are linked to an upward shift in the Republican share of the House popular vote since the late 1980s, consistent with theories that property interests affect voting. To proxy for discontinuous stock ownership rates, we use equity mutual fund costs, which have fallen, are negatively correlated with stock ownership rates and the Republican vote share in the long run, and help explain short‐run changes along with midterm elections, economic conditions, and presidential popularity. Findings suggest that the major parties’ shares of the House popular vote will fluctuate around 50% until other factors trigger a political realignment. (JEL D72, G11)
UNDERPRICING IN PUBLIC LOTTERIES: A CRITIQUE OF USER‐PAY AND ALL‐PAY TARIFFS
Authors: SCROGIN DAVID
Published: January 2010

A body of literature spanning from medical ethics to public economics has amassed regarding the rationing of underpriced public resources. This study investigates the effects of price on entry, individual and aggregate expected consumer surplus, and tax revenues in user‐pay and all‐pay (AP) lotteries. Comparative statics indicate that expected surplus may increase (decrease) as price increases (decreases) if entry is sufficiently responsive though entry in AP lotteries is inelastic at all prices. Further, the lotteries are shown to be outcome equivalent under revenue equivalency. Selected results are evaluated numerically with simulations performed across a broad class of distributions describing individual private values. (JEL D45, D61, H42)
THE ROLE OF THE BIDDING PROCESS IN PRICE DETERMINATION: JUMP BIDDING IN SEQUENTIAL ENGLISH AUCTIONS
Authors: RAVIV YARON
Published: January 2010

This paper uses data collected from a series of public auctions of used cars in New Jersey to examine how strategic bidding affects price determination in open‐outcry English auctions. “Jumps” in the bidding, which occur when a new offer exceeds the old offer by more than the minimum bid increment, are highly pervasive and consistently related to the item’s presale estimated price. The size of the jumps is not affected by the selling order, however. This jump bidding pattern suggests that open‐outcry auctions are more appropriately interpreted with models that assume common‐item valuations rather than models assuming private valuations. (JEL D44)
POLITICAL ECONOMY AND THE SOCIAL MARGINAL COST OF PUBLIC FUNDS: THE CASE OF THE MELTZER‐RICHARD ECONOMY
Authors: KEVIN HSU K. W , YANG C. C.
Published: January 2010

In previous studies on the social marginal cost of public funds (SMCF), the existing tax system has been assumed to be either arbitrary or optimal. This note explores another possibility: the existing tax system itself represents a political equilibrium. Our exploration proceeds in Meltzer and Richard’s (1981) political economy of redistributive taxation. An interesting feature of our finding is that the degree of income inequality as measured by the ratio of mean to median income can play an important role in estimating the SMCF and judging whether the level of redistribution is excessive or inadequate. (JEL D61, D72, H21)
THE CYCLICAL BEHAVIOR OF PRICES AND RELATIVE PRICES
Authors: DAVIS GEORGE K. , KANAGO BRYCE E.
Published: January 2010

Price and output shock correlations provide information concerning macroeconomic shocks. Previous research generally finds small or negative correlations between real gross domestic product (GDP) and GDP deflator shocks but positive correlations between industrial production (IP) and consumer price index (CPI) shocks at short forecast horizons. We show that mismatched price and output correlations may have different magnitudes or signs than matched pairs. Matched and mismatched correlations between disaggregated prices and output from the GDP accounts indicate the procyclical price of nondurables to durables makes correlations between mismatches misleading. Thus, there is reason to be skeptical of results based on IP and the CPI. (JEL E31, E32)
THE GRAVITY MODEL: AN ILLUSTRATION OF STRUCTURAL ESTIMATION AS CALIBRATION
Authors: BALISTRERI EDWARD J. , HILLBERRY RUSSELL H.
Published: January 2010

Dawkins, Srinivasan, and Whalley (“Calibration,”Handbook of Econometrics, 2001) propose that estimation is calibration. We illustrate their point by examining a leading econometric application in the study of international and interregional trade by Anderson and van Wincoop (“Gravity with Gravitas: A Solution to the Border Puzzle,”American Economic Review, 2003). We replicate the econometric process and show it to be a calibration of a general equilibrium model. Our approach offers unique insights into structural estimation, and we highlight the importance of traditional calibration considerations when one uses econometric techniques to calibrate a model for comparative policy analysis. (JEL F10, C13, C60)
SHOULD OIL PRICES RECEIVE SO MUCH ATTENTION? AN EVALUATION OF THE PREDICTIVE POWER OF OIL PRICES FOR THE U.S. ECONOMY
Authors: BACHMEIER LANCE , LI QI , LIU DANDAN
Published: January 2010

This paper evaluates the potential gains from using oil prices to forecast a variety of measures of inflation, economic activity, and monetary policy–related variables. With a few exceptions, oil prices do not have any predictive content for these variables. This finding is robust to the use of rolling forecast windows, the use of industry‐level data, changes in the forecast horizon, and allowing for nonlinearities. (JEL Q43, E37, C32)
OPTIMAL WAGE TAXATION WHEN HUMAN CAPITAL AND EMPLOYMENT ARE ENDOGENOUS
Authors: KREIDER BRENT
Published: January 2010

This paper studies how optimal wage tax conclusions from the classic two‐period life cycle model of human capital accumulation are affected by endogenizing the number of taxpaying workers. In the absence of a corrective policy, young individuals underinvest in human capital from a social perspective because tax premiums for transfers to nonworkers are not actuarially adjusted downward for human capital attainment. A combination of wage taxes and wage subsidies can restore proper price signals. Numerical simulations suggest that even modest employment elasticities can be sufficient to substantially impact the magnitudes and even the signs of optimal wage tax rates. (JEL H21, H3, J24)
SOME EVIDENCE ON LATE BIDDING IN EBAY AUCTIONS
Authors: WINTR LADISLAV
Published: January 2010

Bidding in the last seconds or minutes of an auction is a common strategy in Internet auctions with fixed end‐time. This paper examines the three explanations of late bidding in eBay auctions that survived the first scrutiny in Roth and Ockenfels (2002). There is no indication that late bidding could lead to collusive gains for bidders. Late bidding is a strategic response to the presence of bidders placing multiple bids. Experts protecting their private information are typically the last to bid, while collectors are often the first. As bidders gain familiarity with eBay rules, they tend to bid slightly earlier. (JEL D44)
WORK‐RELATED ACCIDENTS AND THE LEVEL OF MARKET COMPETITION: AN ANALYSIS OF WORKER INJURY RATES AT U.S. STEEL CORPORATION, 1907–1939
Authors: DECKER CHRISTOPHER S. , FLYNN DAVID T.
Published: January 2010

We investigate the relationship between accident rates and industry structure for the United States’ steel industry during the first four decades of the 20th century. We develop a dominant firm theoretical model linking accident rates to number of competitors, showing a positive correlation between accident avoidance and the number of fringe competitors. We then test this theory empirically and, when controlling for other influences, find that reductions in the dominant firm’s market share reduce worker injury rates substantially. (JEL L13, L61, N62, N82)
DEBT BAILOUTS AND CONSTITUTIONS
Authors: KOHLSCHEEN EMANUEL
Published: January 2010

A demand‐based theory of subnational debt bailouts is presented. It is shown that demand for bailouts among politicians with regional constituencies is affected by revenue sharing arrangements as a bailout implies a shift of taxation toward the federal tier. Automatic revenue sharing may lead to the formation of pro‐bailout coalitions formed by indebted states and states that are net recipients of the revenue sharing arrangement. The model shows that the state debt bailouts approved by the Brazilian Senate prior to the enactment of the Fiscal Responsibility Act were consistent with politicians who maximize the proceeds accruing to their constituencies. (JEL H70, D70)
WHAT DETERMINES CORRUPTION? INTERNATIONAL EVIDENCE FROM MICRODATA
Authors: MOCAN NACI
Published: January 2010

This paper uses a microlevel data set from 49 countries to create a direct measure of corruption, which portrays the extent of bribery as revealed by individuals who live in those countries. In addition, it investigates the determinants of being asked for a bribe at the individual level. The results show that both personal and country characteristics determine the risk of exposure to bribery. Examples are gender, income, education, marital status, the city size, the country’s unemployment rate, average education, and the strength of the institutions in the country.(JELK4, D73 P16)
POSTED OFFER MARKETS IN NEAR‐CONTINUOUS TIME: AN EXPERIMENTAL INVESTIGATION
Authors: DAVIS DOUGLAS D. , KORENOK OLEG
Published: January 2010

This paper reports an experiment conducted to evaluate a “near‐continuous” variant of the posted offer trading institution, where the number of periods in a market session is increased by reducing sharply each period’s maximum length. Experimental results suggest that although decisions in time‐truncated periods are not equivalent to periods of longer duration, extensive repetition improves considerably the drawing power of equilibrium predictions in some challenging environments. Nevertheless, significant deviations remain in the near‐continuous framework. We also observe that the extra data collected in the near‐continuous framework allow new insights into price convergence and signaling. (JEL C92, L12, L11)
THE INFLUENCE OF SOCIAL FORCES: EVIDENCE FROM THE BEHAVIOR OF FOOTBALL REFEREES
Authors: DOHMEN THOMAS J.
Published: January 2010

Analyzing the neutrality of referees during 12 German premier league (1. Bundesliga) soccer seasons, this paper documents evidence that social forces influence agents’ decisions. Referees, who are appointed to be impartial, tend to favor the home team by systematically awarding more stoppage time in close matches in which the home team is behind. They also favor the home team in decisions to award goals and penalty kicks. Crowd composition affects the size and the direction of the bias, and the crowd’s proximity to the field is related to the quality of refereeing. (JEL J00)
IS THE PRICE ELASTICITY OF MONEY DEMAND ALWAYS UNITY?
Authors: EVANS PAUL , WANG XIAOJUN
Published: January 2010

Including both monetary gold and nonmonetary gold in a standard money‐in‐utility model, we establish a presumption that the price elasticity of money demand should be less than 1 under commodity standards. Applying cointegration methods to data of the world, the United Kingdom, and the United States, we find support for the new theory. (JEL E41, E42)
EXPERIMENTAL ANALYSIS OF RISK AND UNCERTAINTY IN PROVISIONING PRIVATE AND PUBLIC GOODS
Authors: GANGADHARAN LATA , NEMES VERONIKA
Published: January 2010

This paper uses laboratory evidence from public goods games to examine how in payoff‐equivalent situations, decision makers contribute toward private or public goods when they are exposed to different kinds of risks and uncertainties in the provision of these goods. We find that location matters with subjects moving away from the environmental uncertainty in favor of strategic uncertainty when that uncertainty is located on the private good. When the uncertainty relates to the public good, subjects face both kinds of uncertainties on the same good, leading to a significant drop in contributions. An opportunity to reduce uncertainty increases cooperation.(JELC90, D81, H41)
WHITE‐KNUCKLE EXTERNALITIES
Authors: STEIMETZ SEIJI S. C.
Published: January 2010

Congestion generates travel delays and other unobservable but palpable costs, such as stress and frustration. This paper exploits a unique empirical setting to estimate these unobservable costs and the externalities that they imply. Results suggest that the size of these externalities is comparable to the size of travel delay externalities. This paper also demonstrates that common methods for estimating travel delay externalities can reasonably approximate the combined externalities of delayed travel and unobservable congestion costs. (JEL R41, R48, D62)
FRATERNITY MEMBERSHIP AND DRINKING BEHAVIOR
Authors: DeSIMONE JEFF
Published: January 2010

This paper estimates the impact of fraternity and sorority membership on a wide array of drinking outcomes among respondents to four Harvard College Alcohol Study surveys from 1993 to 2001. Identification is achieved by including proxies for specific types of unobserved heterogeneity expected to influence the relationship. These include high school and parental drinking behaviors to account for time‐invariant omitted factors and assessed importance of drinking‐related activities and reasons for drinking to control for changes in preferences since starting college. Because self‐selection is quantitatively important, I further hold constant variables plausibly affected by fraternity membership, such as current alcohol use categorization, ranging from abstainer to heavy drinker, and time spent socializing. Even in the fully saturated model, fraternity membership significantly increases drinking intensity, frequency, and recency, as well as the prevalence of many deleterious drinking consequences that potentially carry negative externalities. (JEL I12, I20)
INEQUALITY AND GROWTH IN THE UNITED STATES: EVIDENCE FROM A NEW STATE‐LEVEL PANEL OF INCOME INEQUALITY MEASURES
Authors: FRANK MARK W.
Published: January 2010

This paper introduces a new comprehensive panel of annual state‐level income inequality measures spanning the postwar period 1945–2004. For many states, the share of income held by the top decile experienced a prolonged period of stability after World War II, followed by a substantial increase in inequality during the 1980s and 1990s. This paper also presents an examination of the long‐run relationship between income inequality and economic growth. Our findings indicate that the long‐run relationship between inequality and growth is positive in nature and driven principally by the concentration of income in the upper end of the income distribution. (JEL D31, O40)
OUTSOURCING TYPES, RELATIVE WAGES, AND THE DEMAND FOR SKILLED WORKERS: NEW EVIDENCE FROM U.S. MANUFACTURING
Authors: CHONGVILAIVAN AEKAPOL , HUR JUNG , RIYANTO YOHANES E.
Published: January 2010

Existing studies on the impact of outsourcing on relative wages and the demand for skilled workers mainly focus on aggregate outsourcing, in which imported intermediate inputs are used as a proxy. We depart from the existing studies by focusing on various types of outsourcing based on the six‐digit NAICS U.S. manufacturing data. We show that downstream materials and service outsourcing are skill biased, whereas upstream materials outsourcing is not. We also produce other supplementary results pertaining to the impact of technology, different capital inputs on relative wages, and the demand for skilled workers. (JEL C33, F14, F15)
WAR AND PESTILENCE AS LABOR MARKET SHOCKS: U.S. MANUFACTURING WAGE GROWTH 1914–1919
Authors: GARRETT THOMAS A.
Published: January 2010

This paper explores the effect of mortalities from the 1918 influenza pandemic and World War I on wage growth in the manufacturing sector of U.S. states and cities from 1914–1919. The hypothesis is that both events decreased manufacturing labor supply, thereby initially increasing the marginal product of labor and wages. The results reveal that states and cities having had greater influenza mortalities experienced higher wage growth—roughly 2–3 percentage points for a 10% change in per capita mortalities. World War I combat mortalities also had a positive, but smaller, effect on wage growth. (JEL N62, N32, N92, I12)
FISCAL READJUSTMENTS IN THE UNITED STATES: A NONLINEAR TIME‐SERIES ANALYSIS
Authors: CIPOLLINI ANDREA , FATTOUH BASSAM , MOURATIDIS KOSTAS
Published: January 2010

We analyze the fiscal adjustment process in the United States using a multivariate threshold vector error regression model. The shift from single‐equation to multivariate setting adds value both in terms of our economic understanding of the fiscal adjustment process and the forecasting performance of nonlinear models. We find evidence that fiscal authorities intervene to reduce real per capita deficit only when it reaches a certain threshold and that fiscal adjustment takes place primarily by cutting government expenditure. The results of out‐of‐sample density forecast and probability forecasts suggest that a shift from a univariate autoregressive model to a multivariate model improves forecast performance. (JEL C32, C53, E62)
MOONLIGHTING OVER THE BUSINESS CYCLE
Authors: AMUEDO‐DORANTES CATALINA , KIMMEL JEAN
Published: January 2010

Using data from the 1979 National Longitudinal Survey of Youth, we examine the cyclicality of moonlighting by gender. We estimate a random‐effects Tobit model of moonlighting among working men and women and find that while male moonlighting behavior does not fluctuate significantly with the business cycle, female moonlighting does. The cyclicality of female moonlighting has, nonetheless, varied over the course of the past 35 yr. Female moonlighting seemed to behave countercyclically during much of the 1980s and early 1990s, confirming the popular media belief that moonlighting is more likely to occur during periods of economic distress. Yet, this countercyclical behavior disappears during the 1993–1999 period to become procyclical by the early twentieth century. The recent procyclicality of female moonlighting supports the idea that female workers respond to a need for “just‐in‐time” employment following the economic upturn of the mid‐ to late 1990s. (JEL J2, E32)
DECONSTRUCTING THE SUCCESS OF REAL BUSINESS CYCLES
Authors: NAKAMURA EMI
Published: January 2010

The empirical success of Real Business Cycle (RBC) models is often judged by their ability to explain the behavior of a multitude of real macroeconomic variables using a single exogenous shock process. This paper shows that in a model with the same basic structure as the bare bones RBC model, monetary, cost‐push or preference shocks are equally successful at explaining the behavior of macroeconomic variables. Thus, the empirical success of the RBC model with respect to standard RBC evaluation techniques arises from the basic form of the dynamic stochastic general equilibrium model, not from the specific role of the productivity shock. (JEL E32, E37)
PRESERVATION OF TRADE SECRETS AND MULTINATIONAL WAGE PREMIA
Authors: BERNHARDT DAN , DVORACEK VLADIMIR
Published: January 2010

This paper considers the strategic behavior of a multinational firm with superior technology operating in a developing country. Domestic firms do not have access to the superior technology other than by hiring away multinational corporation (MNC) workers. The MNC can retain its workers by paying a wage premia, and we determine how the industry structure and the nature of strategic competition between firms affects the MNC’s incentive to pay this premia and thus preserve its informational advantage. We characterize conditions under which MNCs inefficiently divide job tasks in order to raise the cost to domestic firms of acquiring the MNC’s trade secrets. (JEL F23, J31, O33)
SECRET SANTA REVEALS THE SECRET SIDE OF GIVING
Authors: DUNCAN BRIAN
Published: January 2010

This article shows how a secret Santa gift exchange offers unique insights into the nature of generosity and charitable giving. In a dictator experiment modified with features similar to a secret Santa gift exchange, I find that individuals contribute less when their gifts are allocated such that each person gives to fewer recipients. The results are inconsistent with both altruism and warm glow, suggesting that players are motivated by something in addition to these conventional models of generosity. Several alternative models of generosity are shown to be consistent with the experimental findings, all of which imply that, in addition to any positive externalities, giving can also carry a negative externality.(JELH41, C92, D62)
HAVE EFFORTS TO REDUCE SMOKING REALLY CONTRIBUTED TO THE OBESITY EPIDEMIC?
Authors: NONNEMAKER JAMES , FINKELSTEIN ERIC , ENGELEN MARK , HOERGER THOMAS , FARRELLY MATTHEW
Published: January 2010

Two of the most notable trends in public health over the past 30 yr are the reductions in smoking rates and the rapid rise in obesity rates. Several studies have investigated the relationship between these trends but have drawn different conclusions. In this article, we revisit this issue, attempting to clarify the prior discrepant results. Overall, we find no support for the claim that rising cigarette taxes have significantly contributed to rising obesity rates. Instead, we find only a moderately sized effect among former smokers. (JEL I12)
PRICE MATCHING AND THE DOMINO EFFECT IN A RETAIL GASOLINE MARKET
Authors: ATKINSON BENJAMIN , ECKERT ANDREW , WEST DOUGLAS S.
Published: January 2010

Using gasoline station price data collected eight times per day for 103 d for 27 stations in Guelph, Ontario, it is found that, consistent with an informal theory of competitive gasoline pricing, stations set prices to match a small number of other stations. However, these matched stations are not necessarily the closest. While retailers frequently respond to price changes within 2 h, many take considerably longer. Finally, while price decreases do ripple across the market like falling dominos, increases propagate across the city based more on geographic location and source of price control than on proximity to leaders of these increases. (JEL L13, L40, L81)
TACIT COLLUSION IN AUCTIONS AND CONDITIONS FOR ITS FACILITATION AND PREVENTION: EQUILIBRIUM SELECTION IN LABORATORY EXPERIMENTAL MARKETS
Authors: LI JIN , PLOTT CHARLES R.
Published: January 2010

The paper studies bidder behavior in simultaneous, continuous, ascending price auctions. We design and implement a “collusion incubator” environment based on a type of public, symmetrically “folded” and “item‐aligned” preferences. Tacit collusion develops quickly and reliably within the environment. Once tacit collusion developed, it proved remarkably robust to institutional changes that weakened it as an equilibrium of a game‐theoretic model. The only successful remedy was a non‐public change in the preference of participants that destroyed the symmetrically, “folded” and “item aligned” patterns of preferences, creating head‐to‐head competition between two agents reminiscent of the concept of a “maverick.”(JEL L50, L94, D43)
ASYMMETRIC SUBSTITUTABILITY: THEORY AND SOME APPLICATIONS
Authors: DE JAEGHER KRIS
Published: January 2010

Economists usually describe goods as being either (gross) complements or (gross) substitutes. Yet, what is less known is that one good may be a gross substitute for a second good, while the second good is a gross complement to the first good. This article develops a theory of asymmetric gross substitutability and suggests some potential examples and applications. (JEL D11)
UNCERTAINTY AND MONETARY POLICY RULES IN THE UNITED STATES
Authors: MARTIN CHRISTOPHER , MILAS COSTAS
Published: January 2010

This article analyzes the impact of uncertainty about the true state of the economy on monetary policy rules in the United States since the early 1980s. Extending the Taylor rule to allow for this type of uncertainty, we find evidence that the predictions of the theoretical literature on responses to uncertainty are reflected in the behavior of policymakers, suggesting that policymakers are adhering to prescriptions for optimal policy. Our estimates suggest that the effect of uncertainty on interest rates was most marked in 1983, when uncertainty increased interest rates by up to 140 basis points, in 1990–1991, when uncertainty reduced interest rates by up to 80 basis points, and in 1996–2001, when uncertainty reduced interest rates by up to 70 basis points over 5 yr. (JEL C51, C52, E52, E58)
TWIN SONS OF DIFFERENT MOTHERS: THE LONG AND THE SHORT OF THE TWIN DEFICITS DEBATE
Authors: GRIER KEVIN , YE HAICHUN
Published: January 2010

Interest in the twin deficits hypothesis fluctuates in tandem with the U.S. current account deficit. Surprisingly though, a statistically robust relationship between budget and trade deficits has been difficult to pin down. We argue that a big part of this difficulty is due to the failure to allow for structural breaks in the series when (either explicitly or implicitly) modeling their time series properties. We show that both series are break stationary (and conditionally heteroskedastic) and argue that while there is no common pattern in the long run, the short‐run dynamics reveal a sizeable and fairly persistent positive relationship between budget deficit shocks and current account deficit shocks. (JEL F41, E6, H6)
BLACK UNEMPLOYMENT AND INFOTAINMENT
Authors: ROBINSON BROOKS B.
Published: January 2010

Why has the black unemployment rate in the United States been more than twice that of whites over the past three decades? This article builds on earlier efforts to explain this conundrum using a discrimination framework, but it refocuses the explanation onto indirect cultural factors that motivate discriminatory behavior. Consistent with a call for using social phenomena to explain economic outcomes, the article reveals that “infotainment” (information and entertainment) contributes to increases in the black‐white unemployment rate gap and to higher black unemployment. (JEL J164, J71, Z10)
COSTLY EXTERNAL FINANCE AND INVESTMENT EFFICIENCY IN A MARKET EQUILIBRIUM MODEL
Authors: ZÁBOJNÍK JÁN
Published: January 2010

The corporate finance literature suggests that a financially constrained firm invests less than an identical unconstrained firm. This does not imply that financial frictions cause firms to invest less than in a frictionless economy. When firms compete for investment funds, an increase in financial frictions can lead individual firms to increase their investment levels. A greater than the frictionless level of investment is likely in low‐productivity firms, in cash‐rich firms, and in firms with cheap external capital. Government programs that make capital cheaper for small firms may lead to lower levels of investment for all firms and decrease efficiency (JEL O16, E22, E44, G20)
DATA REVISIONS AND OUT‐OF‐SAMPLE STOCK RETURN PREDICTABILITY
Authors: GUO HUI
Published: January 2010

It has been found that the consumption‐wealth ratio (cay) constructed from revised data is a strong predictor of stock market returns. This paper shows that its out‐of‐sample forecasting power becomes substantially weaker if cay is estimated using information available at the time of forecast. The difference, which mainly reflects periodic revisions in consumption and labor income data, is consistent with the conjecture that cay is a theoretically motivated variable. That is, revised data outperform real‐time data because the former have smaller measurement errors. Nevertheless, practitioners should be cautious when they need to use real‐time cay as a forecasting variable. (JEL G10, G14)
ESTIMATING A NEW KEYNESIAN PHILLIPS CURVE WITH A CORRECTED MEASURE OF REAL MARGINAL COST: EVIDENCE IN JAPAN
Authors: MUTO ICHIRO
Published: January 2010

We estimate a New Keynesian Phillips curve (NKPC) in Japan, focusing on the measurement of real marginal cost (RMC). Especially, we correct labor share by taking account of two kinds of labor market frictions: (1) labor adjustment costs and (2) real wage rigidity. Our results show that the consideration of these labor market frictions greatly improves the fit of Japan’s NKPC. Furthermore, if we additionally incorporate materials prices in the calculation of RMC then the fit of the NKPC is further improved. The conventional backward‐looking component is no more needed to explain Japan’s inflation dynamics if we use a corrected measure of RMC. (JEL E31)
The economic burden of obesity worldwide: a systematic review of the direct costs of obesity
Authors: Withrow D. , Alter D. A.
Published: January 2010

In the last decade, the prevalence of obesity has increased significantly in populations worldwide. A less dramatic, but equally important increase has been seen in our knowledge of its effects on health and the burden it places on healthcare systems. This systematic review aims to assess the current published literature on the direct costs associated with obesity. A computerized search of English language articles published between 1990 and June 2009 yielded 32 articles suitable for review. Based on these articles, obesity was estimated to account for between 0.7% and 2.8% of a country's total healthcare expenditures. Furthermore, obese individuals were found to have medical costs that were approximately 30% greater than their normal weight peers. Although variations in inclusion/exclusion criteria, reporting methods and included costs varied widely between the studies, a lack of examination of how and why the excess costs were being accrued appeared to be a commonality between most studies. Accordingly, future studies must better explore how costs accrue among obese populations, in order to best facilitate health and social policy interventions.
An empirical assessment of the value of irrigation water: the case study of Murrumbidgee catchment*
Authors: Qureshi Muhammad Ejaz , Ranjan Ram , Qureshi Sumaira Ejaz
Published: January 2010

Evaluation of value of irrigation water is essential for supporting policy decision making relating to investments in the irrigation sector, efficient allocation of irrigation water and water pricing and for crafting policies to compare the variable impacts of water reform within and across sectors of the economy. This paper asks the question of how much an established irrigator would pay for water and at what price farmers planning to expand the area they have under irrigation would consider paying for the right to access water. An analytical framework is developed to estimate the net present value of both annual and perennial agricultural activities in the Murrumbidgee catchment. Using these estimates the total value of water used in Murrumbidgee catchment is estimated. An aggregate water supply curve is derived for the catchment from where water may be acquired from irrigators for environmental flows.
Farm‐level impacts of prolonged drought: is a multiyear event more than the sum of its parts?
Authors: Peck Dannele E. , Adams Richard M.
Published: January 2010

A multiyear discrete stochastic programming model with uncertain water supplies and inter‐year crop dynamics is developed to determine: (i) whether a multiyear drought’s impact can be more than the sum of its parts, and (ii) whether optimal response to 1 year of drought can increase a producer’s vulnerability in subsequent years of drought. A farm system that has inter‐year crop dynamics, but lacks inter‐annual water storage capabilities, is used as a case study to demonstrate that dynamics unrelated to large reservoirs or groundwater can necessitate a multiyear model to estimate drought’s impact. Results demonstrate the importance of analysing individual years of drought in the context of previous and future years of drought.
Deregulation of wholesale petrol prices: what happened to capital city petrol prices?
Authors: Davey Alistair
Published: January 2010

Wholesale petrol prices were deregulated in August 1998. This paper will quantify the effect associated with the deregulation of wholesale petrol prices on relative retail prices for unleaded petrol in Adelaide, Melbourne and Sydney. This is done through Box–Jenkins autoregressive integrated moving average methodology coupled with Box and Tiao intervention analysis. Weekly price data will be used for Adelaide, Melbourne, and Sydney. It finds that from the beginning of 1999, deregulation coincided with relatively lower retail petrol prices for all three cities. In the absence of any other possible alternative explanation for the simultaneous fall in relative retail petrol prices across all three cities, it is concluded that this change was most likely associated with deregulation. These results suggest that regulation of wholesale petrol prices were ineffectual in terms of constraining capital city retail petrol prices at the very least and may have actually contributed towards relatively higher retail petrol prices. This also suggests that future policy interventions designed to constrain prices in the downstream petroleum industry should be very carefully considered.
Climate change and the Australian agricultural and resource industries
Authors: Garnaut Ross
Published: January 2010

There is a limited case for assisting trade‐exposed emissions‐intensive industries during a transitional period during which Australian resource industries but not all of their major competitors are subject to emissions constraints. There is no case for protecting Australian industry from all adjustment and loss of asset values during the transition. The valid case is analogous to anti‐dumping assistance, being confined to the case where weaker emissions constraints elsewhere would force adjustments that would be reversed later. The case for assistance is limited by the effect of others’ weaker emissions constraints on global resource prices.
Do family farms really converge to a uniform size? The role of unobserved farm efficiency*
Authors: Dolev Yuval , Kimhi Ayal
Published: January 2010

We analyse the growth of family farms in Israeli cooperative villages during a period of economic turmoil. We use instrumental variables to account for the endogeneity of initial farm size, and correct for selectivity as a result of farm survival. We also include a technical efficiency index, derived from the estimation of a stochastic frontier production model, as an explanatory variable. Our aim is to check whether ignoring efficiency could have been the reason for convergence results obtained elsewhere in the literature. We found that technical efficiency is an important determinant of farm growth, and that not controlling for technical efficiency could seriously bias the results. In particular, larger farms are found to grow faster over time, while without controlling for technical efficiency the farm growth process seemed to be independent of initial farm size. The increasing polarisation of farm sizes in Israel has ramifications for the inefficiencies induced by the historical quota system, for the political power of the farm sector and for the social stability of farm communities.
Anxiety disorders in 8–11‐year‐old children: Motor skill performance and self‐perception of competence
Authors: EKORNÅS BELINDA , LUNDERVOLD ASTRI J. , TJUS TOMAS , HEIMANN MIKAEL
Published: January 2010

Ekornås, B., Lundervold, A. J., Tjus, T. & Heimann, M. (2010). Anxiety disorders in 8–11‐year‐old children: Motor skill performance and self‐perception of competence. Scandinavian Journal of Psychology, 51, 271–277.

This study investigates motor skill performance and self‐perceived competence in children with anxiety disorders compared with children without psychiatric disorders. Motor skills and self‐perception were assessed in 329 children aged 8 to 11 years, from the Bergen Child Study. The Kiddie‐SADS PL diagnostic interview was employed to define a group of children with an anxiety disorder without comorbid diagnosis, and a control group (no diagnosis) matched according to gender, age, and full‐scale IQ. Children in the anxiety disorder group displayed impaired motor skills and poor self‐perceived peer acceptance and physical competence compared with the control group. Two‐thirds of the anxious boys scored on the Motor Assessment Battery for Children (MABC) as having motor problems. The present study demonstrated impaired motor skills in boys with “pure” anxiety disorders. Anxious children also perceived themselves as being less accepted by peers and less competent in physical activities compared with children in the control group.
Agreement in Ibibio: From Every Head to Every Head
Authors: Baker Mark , Willie Willie Udo
Published: January 2010

Abstract.  The Ibibio language has the special property that agreement with a single grammatical subject can appear multiple times in the same clause. After showing that this is a general phenomenon in the language, we argue that every verbal functional head in Ibibio—Aspect, Auxiliary, Mood, and Participle, as well as Tense—acts as a probe, capable of initiating an Agree relationship. Furthermore, a close comparison of agreement in indicative, subjunctive, negative, and infinitival clauses shows that these functional heads do not agree with the subject directly; rather each agrees with the next highest functional head within the extended projection. The facts of Ibibio thus point toward a version of Chomsky’s theory of Agree in which any functional head can be the probe in an agreement relation, and any functional head can be the goal in such a relation.
On the use of Non-Local Prior Densities in Bayesian Hypothesis Tests
Authors: Johnson Valen E. , Rossell David
Published: January 2010

We examine philosophical problems and sampling deficiencies that are associated with current Bayesian hypothesis testing methodology, paying particular attention to objective Bayes methodology. Because the prior densities that are used to define alternative hypotheses in many Bayesian tests assign non-negligible probability to regions of the parameter space that are consistent with null hypotheses, resulting tests provide exponential accumulation of evidence in favour of true alternative hypotheses, but only sublinear accumulation of evidence in favour of true null hypotheses. Thus, it is often impossible for such tests to provide strong evidence in favour of a true null hypothesis, even when moderately large sample sizes have been obtained. We review asymptotic convergence rates of Bayes factors in testing precise null hypotheses and propose two new classes of prior densities that ameliorate the imbalance in convergence rates that is inherited by most Bayesian tests. Using members of these classes, we obtain analytic expressions for Bayes factors in linear models and derive approximations to Bayes factors in large sample settings.