bluuebunny/crossref_metadata_2025 huggingface dataset:
EFFECTS ON INTEREST RATES OF IMMEDIATELY RELEASING FOMC DIRECTIVES
Authors: BELONGIA MICHAEL T. , KLIESEN KEVIN L.
Published: January 2010

Prior to February 1994, the Federal Open Market Committee (FOMC) did not officially release its current Domestic Policy Directives to the public until after the next FOMC meeting, a lag of approximately 45 days. Thus, the public never knew the FOMC's latest decisions about short‐run monetary policy. On 11 occasions between early 1989 and May 1993, however, the essence of the directives was “leaked” to the Wall Street Journal within one week of an FOMC meeting. This study tests Federal Reserve officials' original assertion that early release of directives would increase volatility in financial markets by creating announcement effects. The study finds some evidence of announcement effects in certain instances, but the assertion that an immediate release would “roil the markets” appears unfounded.
CULTURAL ACCOUNTING: AN EXAMPLE FROM A SMALL CARIBBEAN ISLAND
Authors: COLE SAM
Published: January 2010

A cultural accounting matrix (CAM) is a means of describing and analyzing the cultural division of labor in socially and economically segmented societies. This paper explains the background to the CAM approach and applies it to a small Caribbean island. The analysis involves identifying the way in which the present‐day division of labor between the principal resident populations of the Island has arisen and calculating inter‐relational income distribution multipliers between the populations.
ECONOMIC INTERACTIONS: CHINA VIS‐A‐VIS HONG KONG
Authors: Cheung Steven N. S.
Published: January 2010

Hong Kong's role has been integral to China's unprecedented economic growth, but privatization ranks first in importance. Another key factor is Beijing's putting economic reform before political reform. Giving democracy to a society in chaos likely makes matters worse. Hong Kong and China both have profited from their partnership. As China has opened up to allow transformation into a market economy, Hong Kong has provided informational impetus for change, a capitalist model to copy, and middleman functions for China to participate in outside‐world goods and financial markets. The collapse of Communism in China and elsewhere has increased the supply of cheap labour perhaps by 2 billion. Manufacturing countries with expensive labour and high cost welfare programmes—such as those in the United States, Canada, and Europe—will have difficulty. Capitalists in these countries will do well by investing abroad but not in their own countries. Though wrong in detail, the factor price equalization theorem—that international movement of goods and international movement of factors of production are equivalent—basically is correct. If China continues moving toward privatisation and joining the international community, it will become fiercely competitive, and prospects will be bright for both China and Hong Kong. However, China's recent drift from capitalism clouds those prospects. Fundamentally, three kinds of rights systems exist: (i) a capitalist system, with well defined private property rights, protected by law, where control of resources is based on ownership; (ii) a hierarchical system, such as Communism, where control of resources is based on one's rank in the hierarchy; (iii) a system of corruption, where control of resources is based on bribes and patronage. China rapidly had been making a transition from the second system to the first but recently seems to have derailed into the third. In any case, Communism's collapse is one of the great events in human history. The hero of that event is Deng Xiaoping—not Gorbachev, nor Thatcher, nor Reagan. Hong Kong, by contributing significantly to China's capitalist movement, has led the Communist world to change.
STRATEGIES FOR RAPID ECONOMIC DEVELOPMENT: THE CASE OF HONG KONG
Authors: Cheng Leonard K.
Published: January 2010

This paper reviews factors that significantly affected Hong Kong's rapid economic development in three consecutive periods: (i) the period of industrialization from 1952 to 1974, (ii) the period of diversification from 1974 to 1980, and (iii) the period of economic integration with China since 1980. The paper discusses the role of Hong Kong's government in the territory's development process, examines the advantages and drawbacks of Hong Kong's development strategy, and analyzes the territory's economic future. The analysis relates Hong Kong's development experience to the “endogenous growth” theory.
IS THERE PROGRESS IN ENVIRONMENTAL POLICY?
Authors: Crandall Robert W.
Published: January 2010

Environmental reformers often seek to impose partial, market‐like mechanisms into costly, complex new environmental statutes. These mechanisms are likely to offset only a small fraction of the loss in economic welfare created by the rest of the legislation. A far better approach is to write cost‐benefit requirements directly into all new legislation. Such requirements, when enforced by the courts, are likely to yield far greater improvements in economic welfare than are the weak market mechanisms found in new statutes such as the 1990 Clean Air Act.
RISK OF ACCIDENTS AND THE POLICY OF FORCED RETIREMENT
Authors: Liner Gaines H.
Published: January 2010

In 1960, the Federal Aviation Administration put in place the Age 60 rule forcing airline pilots to retire upon reaching the age of 60 years. This paper uses data from the National Transportation Safety Board and the Federal Aviation Administration to determine if having pilots above 59 years of age carries a social cost. Statistical evidence indicates that the severity of aircraft accidents is related to pilot age for some classes of pilots but not for others. Findings are that small‐airplane accidents tend to be more severe for pilots over 59 with private and commercial licenses than for younger pilots with equal qualifications. Thus, some (though not convincing) evidence suggests that private and commercial pilots above 59 years of age impose a greater social cost on the flying public than do younger pilots. However, among ATP pilots—that is, those who are licensed to fly large airplanes—no evidence indicates that pilots over 59 have more severe accidents when flying small airplanes than do younger ATP pilots flying such airplanes. Moreover, no evidence indicates that age is a factor in serious and fatal accidents for ATP pilots flying large airplanes up to the mandatory retirement age of 60 years. The extra screening and training of ATP pilots may explain the differences in accident severity between these and other pilots.
DISCOUNT RATES AND ENERGY EFFICIENCY
Authors: Howarth Richard B. , Sanstad Alan H.
Published: January 2010

Empirical studies provide compelling evidence that economic agents do not adopt the complete range of energy‐efficient technologies that are cost‐effective under prevailing prices and market conditions. Analysts commonly attribute this anomaly to the use of high discount rates in energy‐related decisions‐an interpretation that is difficult to reconcile with standard models of rational choice. This paper recasts the controversy from the perspective of economic theory and finds that market failures related to asymmetric information, bounded rationality, and transaction costs are major contributors to the so‐called “efficiency gap.”
BANK ASSET RISK: EVIDENCE FROM EARLY‐WARNING MODELS
Authors: Hooks Linda M.
Published: January 2010

Using alternative measures of risk can increase the predictive accuracy of early‐warning models of U.S. bank failures. However, the coefficients and the predictive accuracy of these revised models are not stable over time. Exploring the possibilities for accurately measuring risk using available accounting data involves examining the performance of a number of risk measures in early‐warning models. An alternative measure improves model estimates for the United States in the mid‐1980s, but the improvement deteriorates during the later stages of banking difficulties. The time specificity of the early‐warning models affects their usefulness for bank policy and supervision.
COSTS AND BENEFITS OF AIR QUALITY IMPROVEMENT IN HONG KONG
Authors: Barron William F. , Liu Joseph , Lam T. H. , Wong C. M. , Peters Jean , Hedley Anthony
Published: January 2010

A respiratory health survey conducted in Hong Kong in 1989 identified significant health differences between school age children living in an industrial area with poor ambient air quality and those in a control group living in a relatively clean area. In 1990, the government banned the use of high sulphur fuel. As a result, ambient sulfur levels dropped sharply and particulate levels dropped moderately. The avoided costs of doctor consultations alone offset a moderate fraction of the costs of this air quality improvement. If even the lower end of estimates from elsewhere apply to Hong Kong's willingness to pay for symptom relief, such values offset a major share of the costs of the air quality improvement simply through near‐term improvements in health. Considering longer‐term health and other benefits leads one to conclude that the economic benefits likely far outweigh the costs.
A MACROECONOMIC PERSPECTIVE OF AFTA'S PROBLEMS AND PROSPECTS
Authors: SIMONE FRANCISCO D. A. NADAL DE
Published: January 2010

The Association of Southeast Asian Nations (ASEAN) and the impressive economic performance of most of its members have increased the weight of the region's views in world fora. However, ASEAN has been unsuccessful in fostering a regional integration arrangement (RIA) leading to an increase in intraregional trade and foreign direct investment. In January 1992, ASEAN launched the Asean Free Trade Area (AFTA) seeking to establish a free trade area (FTA) by 2008.

Market integration increases economic interdependence and thereby raises the need for policy integration and discipline. This paper argues that a number of difficulties that ASEAN faced in promoting intraregional trade are likely to continue to affect AFTA (e.g., low economic complementarity and macroeconomic imbalances requiring large changes in equilibrium real exchange rates). The experience of other RIAs suggests other potential problems.

AFTA's prospects of evolving into deeper forms of sustainable integration are remote. Some cooperation in areas of common interest seems likely.
RESIDENTIAL RURAL SOLAR ELECTRICITY IN DEVELOPING COUNTRIES
Authors: CHAPMAN DUANE , ERICKSON JON D.
Published: January 2010

Are photovoltaic (PV) systems appropriate for use in developing countries now? This paper presents an empirical review of the comparative costs of gasoline portable generators and PV systems and concludes that cost reduction is necessary before PV systems will be broadly competitive. Both private sector research and university research have important roles to play.
A CASE STUDY IN POLLUTION MARKETS: DISMAL SCIENCE VS. DISMAL REALITY
Authors: HALL JANE V. , WALTON AMY L.
Published: January 2010

Economists long have argued that economic incentives can reduce pollution more efficiently than do narrow regulatory prescriptions, but this theory has not enjoyed wide application. Southern California experiences the worst air pollution in the United States and has developed the most complex set of regulatory approaches in the world to address the problem. Rising costs and increasing resistance to further regulation led to the Regional Clean Air Incentives Market (RECLAIM) program, which is expected to reduce pollution control costs by about 50 percent over a decade (relative to direct regulation). This paper describes the theoretical advantages of pollution trading, clearly identifies three criteria that acceptable economic incentive‐based programs must meet, explains the structure of RECLAIM, and raises issues regarding firm behavior in response to a newly created asset with an initial price of zero.
THE SO2EMISSIONS TRADING PROGRAM: COST SAVINGS WITHOUT ALLOWANCE TRADES
Authors: BURTRAW DALLAS
Published: January 2010

Title IV of the 1990 amendments to the Clean Air Act initiated a historic experiment in incentive‐based environmental regulation by permitting electric generating facilities to trade allowances for emission of sulfur dioxide. To date, relatively little allowance trading has occurred. However, the costs of compliance have been much less than anticipated. The purpose of this paper is to address the apparent paradox—that the allowance trading program may not require (very much) trading in order to be successful. Title IV represented two great steps forward in environmental regulation: (i) a move toward performance standards and (ii) formal allowance trading. The first step has been sufficient to date for improving dynamic efficiency and achieving relative cost‐effectiveness.
COMMERCIAL BANKS AND LDC DEBT REDUCTION
Authors: WOLLER GARY M. , PHILLIPS KERK
Published: January 2010

This paper investigates the relationship between the probability of default of lesser developed country commercial bank debt and the level of debt reduction granted by commercial banks. The analysis tests this relationship by regressing debt reduction totals for 29 middle‐income debtors on 11 default probability indicators over the years 1985 through 1993 and finds a statistically significant relationship between the expected probability of default and the level of debt reduction. However, the findings fail to determine clearly the overall direction of this relationship. Thus, the evidence is insufficient to support the conclusion that the banks have behaved systematically as if they believed a debt‐relief Laffer curve existed.
CORRUPTION AND SCHUMPETERIAN GROWTH IN DIFFERENT ECONOMIC ENVIRONMENTS
Authors: BRAGUINSKY SERGUEY
Published: January 2010

This paper takes up the phenomenon of corruption and its relationship to growth explicitly in conjunction with overall institutional environment in which it occurs. The literature has pointed out that some forms of corruption are more detrimental to growth, while others can be considered even beneficial, given the underlying regulation. These notions are made more precise in a framework of Schumpeterian growth in “capitalist” and “totalitarian” environments. The analysis shows that corruption in an overall competitive capitalist environment ordinarily is of a transitive nature and is likely to be conducive to economic growth rather than otherwise. On the other hand, in totalitarian environment, corruption, though also possibly conducive to static welfare, becomes deeply entrenched in the socio‐economic system and inevitably leads to a breakdown of the system. That breakdown, in turn, greatly enhances the possibilities for corruption and makes it especially detrimental to the prospects for resumed economic growth.
HAS THE QUALITY OF IMMIGRANTS DECLINED? EVIDENCE FROM THE LABOR MARKET ATTACHMENT OF IMMIGRANTS AND NATIVES
Authors: FRY RICHARD
Published: January 2010

This is an investigation of the labor market activities of U.S. immigrants who arrived from the 1960s through the 1980s. Relative to natives, upon arrival male immigrants who arrived during the 1980s are more likely to be persistently jobless than are male immigrants who arrived during the 1960s. The increased disengagement of immigrant arrivals from the U.S. labor market appears solely in the form of labor market withdrawal and has not manifested itself in increased institutionalization. Though the “new immigration” apparently does not increase fiscal burdens on the penal system, it nonetheless is expanding the dependent population. The greater labor market idleness of today's immigrants relative to pre‐1970 arrivals is consistent with a growing body of economic evidence suggesting a deterioration of U.S. immigrants' labor market capital and success during the post war period.
COMPARING THE NEW ENGLAND AND SOUTHERN CALIFORNIA REGIONAL RECESSIONS
Authors: GROBAR LISA MORRIS
Published: January 2010

During the early 1990s, both New England and Southern California experienced regional recessions that were much more severe than the national recession of 1990–1991. At first glance, these regional recessions appear to be similar phenomena. However, shift‐share analysis conducted at the 3‐digit Standard Industry Classification (SIC) level indicates that the underlying causes of the recessions were different. During the late 1980s and early 1990s, New England's manufacturing industries did not perform nearly so well as their national counterparts in creating new jobs and preventing job losses. The loss of regional competitiveness was the main factor explaining that region's recession. On the other hand, most of Southern California's industries performed about as well as their national counterparts during the recession. For Southern California, the industry structure of the region—in particular, its heavy reliance on defense‐related production—contributed to the recession more than did a loss of regional competitiveness.
UNIFICATION OF CHINA'S FOREIGN EXCHANGE RATES
Authors: HUANG GUOBO , WONG CLEMENT YUK‐PANG
Published: January 2010

This paper studies China's foreign exchange market before and after the 1994 unification of the official and swap exchange rates. Examining segmentation as well as linkages among the foreign exchange adjustment centers (FEACs) reveals that the linkages were not strong enough to eliminate or narrow price differentials among FEACs. Hence, improving the foreign exchange market's efficiency requires a reform to unify the swap rates. This paper discusses the unification's implications for inflation, monetary policy, and current account convertibility.
BINGE DRINKING IN COLLEGE: THE IMPACT OF PRICE, AVAILABILITY, AND ALCOHOL CONTROL POLICIES
Authors: CHALOUPKA FRANK J. , WECHSLER HENRY
Published: January 2010

This paper estimates the effects of beer prices, alcohol availability, and policies related to driving under the influence of alcohol on drinking and binge drinking among youths and young adults. Data are from a nationally representative survey of students in U.S. colleges and universities. Separate estimates are obtained for underage male and female students, as well as for older male and female students. The estimates indicate that the drinking practices of male college students are generally insensitive to the price of beer. However, underage drinking and binge drinking by female students do respond significantly to price, although both are relatively inelastic. The results also show that strong drunk driving policies targeting youths and young adults significantly reduce drinking and binge drinking by male students. Similarly, these policies reduce drinking among female college students but appear to have little impact on their binge drinking. Instead, the results indicate that many elements of campus life (including participation in a fraternity or sorority, living on campus, and the ready availability of alcoholic beverages) are among the most important determinants of drinking and binge drinking among college students.
PHYSICIANS' COST SHIFTING BEHAVIOR: MEDICAID VERSUS OTHER PATIENTS
Authors: SHOWALTER MARK H.
Published: January 2010

Much of the debate about rising health care costs in the United States centers on the notion of “cost shifting.” Cost shifting is loosely defined as charging one set of patients a higher price to offset losses on another set of patients. One aspect of the cost shifting debate that the empirical work has ignored is whether or not doctors—as opposed to hospitals—practice cost shifting. The analysis here investigates this question using the Physicians' Practice Costs and Income Survey, 1983–1985 (PPCIS, expanded version)

Using variation across states in Medicaid reimbursements, the analysis finds that lower Medicaid reimbursements tend to lower the fees physicians charge, contradicting the standard cost shifting story. Evidence also suggests that lower Medicaid reimbursements tend to cause physicians to treat fewer Medicaid patients. These results are consistent with profit maximizing behavior for physicians and also with the hypothesis that physicians exert some monopoly power.
SENSITIVITY ANALYSIS IN BENEFIT COST ANALYSIS: A KEY TO INCREASED USE AND ACCEPTANCE
Authors: MERRIFIELD JOHN
Published: January 2010

“We must insist that all empirical studies offer convincing evidence of inferential sturdiness.”

Sensitivit
IS THE MARKET FAILING AGRICULTURAL PRODUCERS WHO WISH TO MANAGE RISKS?
Authors: BLANK STEVEN C. , CARTER COLIN A. , McDONALD JEFFREY
Published: January 2010

The variability of producers ‘net income levels is largely a function of variability in output price, yield, and input prices. Yet, the tools available to manage price risk and yield risk are not widely used by producers. Is the market failing to provide agricultural producers with effective risk management tools? To identify producers’ needs, the paper establishes the relative importance of price and yield risk by decomposing the variability of revenues from a sample of crops in California agriculture. The risk tools available to producers of those commodities are compared to producers needs for tools. Results indicate that “market failure” is readily apparent in markets for tools to manage risks. However, the nature of these missing or incomplete markets does not necessarily imply inefficiencies that would justify government intervention.
ECONOMIC MODELING AND THE FALSE TRADEOFF BETWEEN ENVIRONMENTAL PROTECTION AND ECONOMIC GROWTH
Authors: DeCANIO STEPHEN J.
Published: January 2010

One important element of the current policy debate on what measures should be taken to reduce greenhouse gas emissions is the controversy over the costs of reducing those emissions. “Top‐down” macroeconomic and general equilibrium models give much higher estimates of the costs than “bottom‐up” models based on microeconomic and engineering data. This paper investigates the causes of the divergence between the two modeling approaches. The conventional top‐down models incorporate strong implicit assumptions about maximization, technical progress, and organizational efficiency that predetermine their results. However, these assumptions are questionable on both theoretical and empirical grounds. Economic assessment of policy alternatives would benefit. from analyses that take account of the actual characteristics of business firms and other organizations that emit greenhouse gases in the course of their activities.
NONMARKET VALUATION AND THE COURTS: THE CASE OF THEEXXON VALDEZ
Authors: DUFFIELD JOHN
Published: January 2010

This paper examines a natural resource damages case, the Exxon Valdez,and contrasts the use and acceptance of market and nonmarket valuation methods in two related sectors: commercial fishing and Alaska native subsistence use of fish and wildlife. Much economic literature focuses on how, in principle, one should value environmental injury. These principles and methods have been codified in the Department of Interior and National Oceanic and Atmospheric and Administration natural resource damage regulations that implement the Comprehensive Environmental Response, Compensation, and Liability Act and the Oil Pollution Act of 1990. However, these liability rules are fairly new, and thus little evidence exists on the acceptance of valuation methods by the courts and juries. In this regard, theExxon Valdez case is of particular interest because substantial resources were at stake and much of the case went all the way through to a jury verdict. The two major plaintiff classes—commercial fishermen and Alaska natives—are market and nonmarket versions, respectively, of otherwise fairly similar economic sectors. However, the court's acceptance of the “correct in principle” valuation methods appropriate to each sector was asymmetric. The court accepted as admissible the market valuation procedures (primarily “diminution in market price”) used by the commercial fish experts but rejected the nonmarket valuation procedure applied to subsistence uses (a hedonic price model).
INFRASTRUCTURE INVESTMENT AND GROWTH: SOME EMPIRICAL EVIDENCE
Authors: SANCHEZ‐ROBLES BLANCA
Published: January 2010

This paper explores empirically the relationship between infrastructure and economic growth by including the data of expenditure in infrastructure as a share of GDP in traditional growth cross‐country regressions. Since results are inconclusive, the paper elaborates some new indicators of investment in infrastructure employing physical units of infrastructure. They are positively and significantly correlated with growth in two different samples of countries.
THAILAND'S EXCHANGE‐RATE CRISIS: RELATIONSHIPS TO EAST ASIA AND THE GLOBAL ECONOMY
Authors: SAVING THOMAS R. , CHEUNG STEVEN N.S. , HALL JANE V. , KAWAI MASAHIRO , NASUTION ANWAR , PANITCHPAKDI SUPACHAI , PUPPHAVESA WISARN , SIAMWALLA AMMAR , TATOM JOHN A.
Published: January 2010

Editor's Note: This is an edited transcription of the general session of the January 1998 Pacific Rim Allied Economic Organizations 3rd Biennial Conference, held in Bangkok, Thailand.
HAVE INSTITUTIONAL INVESTORS DESTABILIZED EMERGING MARKETS?
Authors: AITKEN BRIAN
Published: January 2010

In the past few years, there has been a large increase in portfolio capital flows into emerging markets, mostly fueled by mutual funds and other institutional investors. Based on a simple variance ratio test, this paper finds that emerging stock markets as a group experienced a sharp increase in autocorrelation in total returns at a time when institutional investors began to expand significantly their holdings in these markets. These results are consistent with the view that institutional investor sentiment toward emerging markets as an asset class can at times play a critical role in determining asset prices, with shifts in sentiment resulting in periods of bubble‐like booms and busts and asset price overshooting.
U.S. DIRECT INVESTMENT TO MEXICO: POLITICS, ECONOMICS, AND NAFTA
Authors: STEVENS GUY V.G.
Published: January 2010

The goal of this paper is to determine whether the recent opening of the Mexican economy caused a significant change in the investment behavior of U.S. multinational firms. The first finding is that a real investment function that explained the data well through 1989 shifted dramatically thereafter. Tests indicate that the probable causes of this shift were (i) the relaxation of Mexican restrictions on direct investment after 1989 and (ii) anticipatory investment behavior after the positive conclusion of the NAFTA negotiations.
THE CURSE OF DEMOCRACY AS AN INSTRUMENT OF REFORM IN COLLAPSED COMMUNIST ECONOMIES
Authors: CHEUNG STEVEN N.S.
Published: January 2010

I will begin with some general remarks on democracy. Then, I will discuss democracy as an instrument of reform in a collapsed communist economy.
STATE PATTERNS IN FAMILY INCOME INEQUALITY
Authors: PARTRIDGE JAMIE S. , PARTRIDGE MARK D. , RICKMAN DAN S.
Published: January 2010

It is well known that U.S. income inequality began to increase in the 1970s and increased sharply in the 1980s. Yet, what is less well known is that this upward trend was not uniform across states. Some states experienced almost no increase in family income inequality, while other states experienced dramatic increases. We use the variation in state trends to examine factors that may underlie shifts in U.S. income inequality. Among numerous factors, we include variables that allow us to examine the role that state and local economic development policy may play. Also, in examining state income inequality differences that could not be explained by economic factors, we explore the possibility that cultural and social norm factors affect state income inequality.
ILLICIT DRUG USE, ABSENTEEISM, AND EARNINGS AT SIX U.S. WORKSITES
Authors: FRENCH MICHAEL T. , ZARKIN GARY A. , DUNLAP LAURA J.
Published: January 2010

Considerable national attention has focused recently on the adverse consequences of illicit drug use. While several studies estimate the relationship between illicit drug use and wages, the findings are inconsistent. Surprisingly, some researchers identify a positive and statistically significant relationship between wages and drug use for young adults. Motivated by this counter‐intuitive finding, this paper compiles unique data on employees at six worksites in order to explore the relationships among drug use, wages, and absenteeism. Using various measures of current and lifetime drug use and accounting for alcohol‐use comorbidity, the authors find predominantly insignificant relationships (both direct and indirect) between drug use and both wages and absenteeism, regardless of gender.
HOW WELL DO WE MEASURE EMPLOYER‐PROVIDED HEALTH INSURANCE COVERAGE?
Authors: BERGER MARK C. , BLACK DAN A. , SCOTT FRANK A.
Published: January 2010

Using data from the Current Population Survey and a new matched survey of employers and employees, this paper investigates error in the measurement of employer‐provided health insurance. The often‐used March CPS gives lower coverage estimates than the April/May CPS, which focuses on employer‐provided coverage. In addition, individuals who are in both the March CPS and April/May CPS often give inconsistent responses on their health insurance status, perhaps due to differences in the wording of the health insurance questions. A new survey shows that workers tend to report higher rates of coverage than do firms and that many individuals also disagree with their employers about their coverage. The differences in the firm and worker reports of coverage are uncorrelated with standard worker and firm characteristics, suggesting classical measurement error that does not bias the parameters of models explaining health coverage. When health insurance is used as an explanatory variable, however, measurement error results in significant bias toward zero.
PRICE DISCRIMINATION AT THE LINKS
Authors: SHMANSKE STEPHEN
Published: January 2010

This paper reports on an econometric analysis of the pricing structures at 46 public access golf courses in the San Francisco area. Comparisons among several attempts to get a generic measure of price discrimination suggest that the standard deviation of the prices charged is the best measure. Using narrowly cast measures of price discrimination, the paper successfully distinguishes among several different types. Measures of price discrimination can be significant regressors, yet the overwhelming majority of existing work excludes such a variable, leading to biased estimates of the other parameters.
COSTS AND BENEFITS OF REDUCING AIR POLLUTANTS RELATED TO ACID RAIN
Authors: BURTRAW DALLAS , KRUPNICK ALAN , MANSUR ERIN , AUSTIN DAVID , FARRELL DEIRDRE
Published: January 2010

The 1990 Clean Air Act Amendments initiated a dramatic reduction in emissions of sulfur dioxide and nitrogen oxides by electric power plants. This paper presents the results of an integrated assessment of the benefits and costs of the program. Dramatic uncertainties characterize the estimates especially with respect to the benefits of the program, many of which were modeled explicitly. The lion's share of benefits results from reduced risk of premature mortality, especially through reduced exposure to sulfates, and these expected benefits measure several times the expected costs of the program. Significant benefits also are estimated for improvements in health morbidity, recreational visibility, and residential visibility, each of which measures approximately equal to costs. Areas that were the focus of attention in the 1980s—including effects to soils, forests, and aquatic systems—still have not been modeled comprehensively, but evidence suggests that benefits in these areas are relatively small, at least with respect to “use values” for the environmental assets that are affected.
CAN RECREATION VALUES FOR A LAKE CONSTITUTE A MARKET FOR BANKED AGRICULTURAL WATER?
Authors: FADALI ELIZABETH , SHAW W. DOUGLASS
Published: January 2010

This paper presents estimates of the recreational use value to prevent the loss of a western lake threatened by diversions of upstream waters that supply it. The recreation demand model used to estimate recreation‐related values is the popular repeated nested multinomial logit model. The model is specified to allow an individual to choose when to visit various sites during the season, because site choice is likely to be influenced by water levels that change over the course of the season. The values are compared to agricultural values in order to assess whether the potential recreation demand side of a market for a water bank exists.
SUPER‐SPECIALIZATION AND THE GAINS FROM TRADE
Authors: ARNDT SVEN W.
Published: January 2010

An important facet of “globalization” is the spread of cross‐border production, which is variously known as intro product specialization, super‐specialization, or production fragmentation. This advanced stage in the international division of labor works particularly well between high‐wage developed and low‐wage emerging economies. But it is precisely this context in which the practice has been criticized for destroying jobs and undermining wages.

This paper examines the welfare implications of this type of specialization on the part of labor‐intensive, import‐competing industries in advanced countries. The results will surprise the skeptics, for when import‐competing industries abandon production of labor‐intensive components, wages rise and industry employment and output expand. National welfare increases. For a large country, the terms of trade improve, raising national welfare still further.
ARE WAGE INCREASES IN CHINESE STATE INDUSTRY EFFICIENT? PRODUCTIVITY IN NANJING'S MACHINE‐BUILDING INDUSTRY
Authors: PARKER ELLIOTT
Published: January 2010

Since China's economic reform began, wages in state enterprises have increased at rates much faster than the rate of price inflation. This paper investigates the source of this rapid wage increase for a sample of Chinese state‐owned machine‐building enterprises to determine whether increased wages can be best explained by changes in productivity, changes in the output market, or changes in input markets. CES production function estimates find the marginal product of labor was stagnant between 1980 and 1992 but initially higher than wages. Rising wages were therefore consistent with other evidence that the reform process cost the state sector its labor monopsony.(JELP31)
ROLE OF MARKET INSTITUTIONS IN PACIFIC RIM DEVELOPMENT AND TRANSITION
Authors: INTRILIGATOR MICHAEL D. , BRAGUINSKY SERGUEY , BOWEN JEWELL RAY , TULLOCK GORDON , ROOT HILTON L.
Published: January 2010

Editor's Note: This is a collection of papers and edited transcription from a general session of the January 1998 Pacific Rim Allied Economic Organizations 3rd Biennial Conference, held in Bangkok, Thailand.
WINDOW GUIDANCE BY THE BANK OF JAPAN: WAS LENDING CONTROLLED?
Authors: RHODES JAMES R. , YOSHINO NAOYUKI
Published: January 2010

Over the period 1961–1991, the Bank of Japan (BOJ) attempted to directly control the volume of commercial bank credit by providing lending targets for selected banks. This policy of “window guidance” (WG) applied to only a subset of lending institutions. The guided banks involved were under no legal obligation to heed the BOJ's requests. Using actual WG data to city banks, two questions are addressed. First, did city banks comply with WG (the “compliance hypothesis”)? Second, was WG successful in controlling economywide lending or did lending adjustments by other financial institutions simply displace the lending of guided banks (the “displacement hypothesis”)? The empirical results show a high degree of compliance in the first two decades of the program and evidence of weakening in the final years. The displacement hypothesis is rejected, particularly in the early period of highly regulated financial markets. (JEL E58, E51, E52)
A TEST OF EMPLOYER DISCRIMINATION IN THE NBA
Authors: BODVARSSON ÖRN B. , BRASTOW RAYMOND T.
Published: January 2010

This paper presents a test of an important implication of Becker's theory of employer discrimination: when institutional change enhances labor mobility, employer discrimination falls because it becomes more costly for employers to indulge tastes for discrimination. The test case is the National Basketball Association (NBA). This paper specifically addresses the following question about the NBA: why did black/white player salary differentials vanish by the early 1990s? Previous studies claim that NBA wage gaps in the 1980s are attributable to customer discrimination and monopsonistic wage discrimination. This study argues that employer discrimination was an important source of those gaps and that one reason they vanished was because reduced monopsony power eradicated employer discrimination. Monopsony power fell because the 1988 NBA Collective Bargaining Agreement and the entry of four new teams in the league enhanced player mobility and increased the amount of labor market competition. Using data for the 1985‐86 and 1990‐91 seasons, employer discrimination was proxied by the race of the team's general manager. Empirical results strongly suggest that a major reason the NBA wage gap vanished in the later period was because of a reduction in employers' ability to discriminate. This is in contrast to earlier literature on the NBA, which has tended to emphasize the role of customer discrimination. (JEL J71)
LETTING THE MARKET PRESERVE LAND: THE CASE FOR A MARKET‐DRIVEN TRANSFER OF DEVELOPMENT RIGHTS PROGRAM
Authors: THORSNES PAUL , SIMONS GERALD P. W.
Published: January 2010

The inequities inherent in conventional zoning‐based policies leave urban‐fringe jurisdictions unable to meet the growing demand for permanently preserved open space. Allocating marketable development rights (MDR) among all landowners treats this problem directly. It also leaves open the option of allowing the market to allocate land to undeveloped uses. This paper uses a simple market model to develop a framework that describes the mechanics of such a program and allows comparison with other commonly considered policies. The paper then addresses several concerns policy makers have raised about a market in development rights. Finally, the paper looks at alternative regulatory responses to perceived market failures. The analysis suggests that an MDR program offers significant advantages over existing preservation efforts. (JEL Q2, Rl, R5)
INFLATION TARGETING IN PRACTICE: FURTHER EVIDENCE
Authors: LEE JIM
Published: January 2010

This paper empirically investigates the plausibility, which has been argued but not fully established, that the efficacy of the inflation‐targeting strategy recently implemented by New Zealand, Canada, and the U.K. has been an artifact of a global disinflationary environment. A data decomposition procedure, which involves cointegration and canonical correlation analysis, is used to remove common trend and cyclical components from historical data that these three countries share with their nontargeting neighboring countries, namely, Australia, the U.S., and Germany, respectively. Simulations based on resulting country‐specific data for inflation and other economic aggregates reveal scant evidence of regime‐shift effects as exhibited in observed data. This contrast in findings highlights the extent to which cross‐country synchronization in economic activity has on the performance of small open economies. (JEL C32, E52, E58)
INFRASTRUCTURE AND PRODUCTION EFFICIENCY: AN ANALYSIS ON THE KOREAN MANUFACTURING INDUSTRY
Authors: KIM SANGHO , KOO JAEWOON , LEE YOUNG HOON
Published: January 2010

This study estimates an aggregate production function of manufacturing industry using panel data of 11 Korean regions covering 1977–1992. While the previous studies regard infrastructure as a direct input for production, the present study proposes that infrastructure has an effect on actual output by enhancing technical efficiency thereby, reducing the gap between maximum potential output and actual output. To investigate the relationship between infrastructure and technical efficiency, a stochastic frontier approach is applied to Korean manufacturing industry. Confirming the presence of substantial technical inefficiency in production, this study shows that an increase in infrastructure reduces the technical inefficiency level. The study also finds that, contrary to expectation, the industrialized regions are less efficient than the less industrialized ones. (JEL O20, H54, C23)
FACTOR ENDOWMENTS, TRADE LIBERALIZATION, AND THE FUTURE OF APEC TRADE PATTERNS
Authors: CHAN KITTY K. , NUGENT JEFFREY B.
Published: January 2010

The heads of state of Asia‐Pacific Economic Cooperation (APEC) nations have committed member nations to remove all barriers to trade both among themselves and with respect to the rest of the world by 2020. The present paper uses a simple econometric model of bilateral trade flows based on country size, relative factor endowments, and trade barriers of importing as well as exporting countries to estimate the shares by country of origin in imports of each of the 16 major APEC countries and the rest of the world for each of 45 commodity groups comprising world trade in commodities. The estimates reveal that APEC trade would be expanded by 13% with complete liberalization of tariff barriers, by an additional 5% if nontariff barriers are also removed, and by another 4% if the rest of the world would also remove all barriers to trade. Variants on this base scenario show that such trade expansion could be substantially reduced were trade liberalization, capital growth, or both to be reduced in the countries affected by the Asian financial crisis. (JEL Fl, F17)
CONSUMER BANKRUPTCY AND CHAPTER CHOICE: STATE PANEL EVIDENCE
Authors: NELSON JON P.
Published: January 2010

Between 1985 and 1996, the number of personal bankruptcy cases filed annually in the United States rose from 341,000 to 1.1 million, and the rate of bankruptcies per 100,000 adults increased from 203 to 596. By state, bankruptcy rates vary from a low of 147 in Hawaii to a high of 956 in Tennessee. A controversial aspect of bankruptcy policy is the discharge of debts permitted under Chapter 7, in contrast to Chapter 13, where the debtor agrees to repay all or a portion of unsecured debt over a 3‐5‐year period. This paper examines empirically the determinants of the frequency with which individuals choose Chapter 13 relative to Chapter 7 (chapter choice). The panel data set is a cross section of states and the District of Columbia for the 8‐year period from fiscal year 1989 to 1996. The empirical model and policy application focus on the importance of several laws for bankruptcy decisions, and legal variables are included for each state's Chapter 7 homestead exemption, personal property exemptions, and garnishment laws. This study shows that both homestead exemption laws and garnishment laws are statistically significant for bankruptcy choices. Although the marginal effect of the homestead exemption is small, there is a large range under current laws, suggesting that changes in this exemption are important for bankruptcy policy. (JEL K1, K4, D2, D9)
African elephants: the effect of property rights and political stability
Authors: McPherson MA. , Nieswiadomy ML.
Published: January 2010

African elephant populations have declined by more than 50% over the past 20 years. International outrage over the slaughter led to a worldwide ban on ivory sales beginning in 1989, despite the objections of many economists and scientists, and of several southern African countries that have established systems of property rights over elephants. Far from declining, elephant populations in many of these countries have increased to levels at or above the carrying capacity of the ecosystem. This article estimates the determinants of changes in elephant populations in 35 African countries over several time periods. The authors find that, controlling for other factors, countries with property rights systems of community wildlife programs have more rapid elephant population growth rates than do those countries that do not. Political instability and the absence of representative governments significantly lower elephant growth rates.
What do schools produce? Implications of multiple outputs in education
Authors: Wenger JW.
Published: January 2010

This article introduces the hypothesis that secondary schools create at least two competing ‘outputs’ standardized test scores and high school completion ‐ which may be seen as substitutes. This hypothesis provides an explanation for the decrease in standardized test scores that occurred over the last 40 years along with an often overlooked increase in high school graduation rates. The article presents evidence supporting this hypothesis as well as evidence that different schools face different tradeoffs and discusses the policy implications of such trade‐offs.
Do German, Japanese, and U.S. export prices asymmetrically respond to exchange rate changes? Evidence from aggregate data
Authors: Mahdavi S.
Published: January 2010

This article estimates the responses (elasticity coefficients) of the export price index to appreciation and depreciation of the nominal effective exchange rate using quarterly data (1973:1–1997:2) for Japan, Germany, and the United States. Cross‐country comparisons of the elasticity magnitudes based on the statistically superior of the estimated models indicate that Japanese exporters, in the aggregate, have the highest tendency to dampen the effects of exchange rate fluctuations on the foreign currency export prices in both directions by adjusting their home currency prices. Intracountry comparisons provide some evidence of an asymmetric adjustment in export prices in the cases of Japan and Germany.
Public capital formation and labor productivity growth in Chile
Authors: Ramirez MD.
Published: January 2010

Following the lead of the endogenous growth literature, this article analyzes the impact on labor productivity growth of public and private investment spending in Chile. Using cointegration analysis, the results of the dynamic labor productivity function for the 1960–95 period show that (lagged) public and private investment spending, as well as the rate of growth in exports, has a positive and highly significant effect on the rate of labor productivity growth. The estimates also indicate that increases in government consumption spending have a negative effect on the rate of labor productivity growth, thus suggesting that the composition of government spending may also play an important role in determining the rate of labor productivity growth. The findings call into question the politically expedient policy in many Latin American countries of disproportionately reducing public capital expenditures to meet targeted reductions in the fiscal deficit as a proportion of GDP.
Inflation, inflation uncertainty, and monetary policy in Turkey: 1960–1998
Authors: Nas TF. , Perry MJ.
Published: January 2010

The authors constructed a time series of monthly inflation uncertainty in Turkey from 1960 to 1998 using GARCH models and investigated the link between inflation and inflation uncertainty using Granger tests. The authors found strong statistical support that inflation significantly raised inflation uncertainty in Turkey over the full sample period and three subsamples. The evidence on the effect of inflation uncertainty on average inflation is mixed and depends on the time period examined. An analysis of the political conditions and the record of macroeconomic policy making in Turkey between 1960 and 1998 reveal institutional and political factors that can help explain the empirical results.
Economic efficiency and social insurance reforms in China
Authors: Li H.
Published: January 2010

This study discusses efficiency issues related to social insurance provisions and their implications for the newly established three‐pillar pension system and three‐tier health insurance system in China. It shows that these new systems can be improved substantially through some restructuring to reduce efficiency losses. The discussion of efficiency consequences focuses on correction for market failure and alternative mechanisms for financing and providing social insurance benefits. Alternative methods for financing the transition are also discussed.