bluuebunny/crossref_metadata_2025 huggingface dataset:
IMPACTS OF VIOLENT CRIME ON BLACK FAMILY STRUCTURE
Authors: DARITY WILLIAM A. , MYERS SAMUEL L.
Published: January 2010

Violent crime contributes to depleting the supply of marriageable males in minority communities. Young black males die disproportionately due to homicides. Also, a disproportionate number of young black males are in prisons and jails. Consequently, they are withdrawn from the productive labor force and become less desirable mates and fathers. They become “marginalized.” Black families, in turn, are deprived of productive male heads. This paper, using Current Population Survey data for 1985, demonstrates that a direct effect of reducing the supply of marriageable mates is to increase the proportion of black families headed by females. The impacts of homicide and incarceration far exceed those of public welfare in influencing changing black family structures.
DETERMINANTS OF CHILD SUPPORT: A PILOT SURVEY OF ABSENT PARENTS
Authors: SONENSTEIN FREYA L. , CALHOUN CHARLES A.
Published: January 2010

The proportion of children living in single‐parent households has risen dramatically during the past two decades. Approximately half of these children live in poverty. A major factor in this impoverishment is non‐custodial parents'failure to provide child support. Much is known about child support behavior from the custodial parent's perspective, but little research has focused on the noncustodial parent's perspective. The Survey of Absent Parents (SOAP) was initiated to remedy this gap. This paper describes the results of the SOAP pilot survey of linked custodial and non‐custodial parents in three counties in Florida and three counties in Ohio. It reports the results of multivariate analyses of the predictors of (i) child support award levels, (ii) child support payments as reported by custodial and non‐custodial parents, and (Hi) compliance with child support awards as reported by custodial and non‐custodial parents. The results indicate that custodial and non‐custodial parents have very different perspectives on how much child support is paid. The main factors predicting payments across these two populations are (i) the non‐custodial parent's situation measured by his current income and marital status, (ii) the custodial parent's situation measured by her current income–excluding child support payments–and marital status, (Hi) program interventions such as formulas used to set award levels, payment through the court, and wage withholding, and (iv) the warmth of the relationships between the former partners and between the father and the child.
DISTRIBUTIVE CONFLICT AND MONETARY POLICY
Authors: HAVRILESKY THOMAS
Published: January 2010

This paper develops a public choice theory of monetary policy and compares it with political‐macroeconomic outcomes theory. The paper develops support for the public choice theory from recent historical evidence. It then employs this theory to explain the difficulty of effecting monetary reform and, in the absence of reform, the difficulty of implementing sustained periods of monetary restraint.
AFTERMATH OF THE THRIFT CRISIS: BALANCING THE ECONOMY'S BOOKS
Authors: MASCARO ANGELO R.
Published: January 2010

The thrift crisis has presented the federal government with a cleanup bill of unparalleled magnitude. Estimates of the present‐value cost range from $90 billion to $140 billion. Most observers acknowledge that the economic cost of the crisis already has occurred in the form of lost investment opportunities and a lower capital stock. Fewer acknowledge, however, that full payment of the cost can be made only through a reduction in private sector claims to wealth so as to match the misuse of deposits and soured loans made by thrifts. Some of that reduction has occurred through equity write‐downs in businesses and thrifts, but much of the necessary reduction has yet to occur. The necessary reduction constitutes an increased tax burden.

The thrift insolvencies, coupled with deposit insurance and bankruptcy of the Federal Savings and Loan Insurance Corporation (FSLIC), threw the economy's books out of balance: Claims on real assets in the form of insured deposits exceeded the value of assets owned by thrifts and insurance reserves of the FSUC. In the absence of deposit insurance, a write‐down of claims would have occurred through the market mechanism and the bankruptcy courts. In the presence of deposit insurance, the write‐down must be through taxation and the political mechanism. Recently enacted legislation will effect the writedown by spreading the taxation over time through debt finance, relying primarily on future taxes to service the debt. The desirability of debt finance hinges on whether the legislation also will prevent a recurrence of future crises. Critics maintain that prevention must entail reform of deposit insurance.
UNCERTAINTY AND THE COST OF ACID RAIN CONTROL
Authors: DOWLATABADI HADI , HARRINGTON WINSTON
Published: January 2010

This paper uses a utility capacity planning and dispatch model to examine the robustness of acid rain mitigation policies. The model meets electricity demand at the lowest economic cost while it responds to price or quantity signals for controlling emissions. The model is unique since it is couched in a risk analysis framework that captures the uncertainty in other economic parameters determining the utility's strategic choices–e.g., demand level and fuel prices. This permits one to compare various institutional settings for pollution control for both a world with perfect foresight and one with imperfect foresight. This exercise provides quantitative results on the cost of pollution control with price and quantity controls. It also provides a measure of the response of these cost functions to the uncertainty in other key parameters.

Exploring the performance of various pollution control mechanisms has led to three findings: (i) that the performance of a price control mechanism is dependent on the level of emission reductions that one seeks, (ii) that regionally traded emission permits and emission fees are equally efficient regardless of the level of foresight, and (Hi) that emission fees lead to more stable electricity generation prices. Finally, the sensitivity analysis of the results under imperfect foresight suggest that uncertainties in the level of demand and load management success play an important role in determining future pollution control costs.
THE ETERNITY PROBLEM: NUCLEAR POWER WASTE STORAGE
Authors: CHAPMAN DUANE
Published: January 2010

This paper treats an important problem that has not been treated elsewhere: the relationship between the evolution of the nuclear power industry and the costs of centralized and on‐site storage of spent fuel. The conclusion is that centralized storage, as current policy contemplates, would be cheaper given an expanding nuclear industry as projected during the 1970s. But given the current situation of no expansion–i.e., no new orders–the cost advantage of centralized storage disappears. Moreover, if the components of decommissioned reactors are to be stored on site–as seems likely–then perhaps spent fuel should be stored there also.
REACTOR SAFETY AND RISK ISSUES
Authors: HARDING JIM
Published: January 2010

This paper surveys trends and conclusions in federally sponsored studies of nuclear reactor safety and their implications for nuclear regulation. The paper finds that recent studies do not rule out the possibility of light water reactor accidents equal to or even larger in size than the 1986 Chernobyl accident. The probability of such an event–involving both core melt and prompt containment failure–is quite small, but the Nuclear Regulatory Commission's (NRC's) estimated probability of core melt is significantly higher. The paper reviews the NRC's use of these findings through a probabilistic cost‐benefit framework, and it concludes that a greater and focused NRC commitment to risk reduction is justified.
POTENTIALS FOR AND BARRIERS TO BUILDING ENERGY CONSERVATION IN CHINA
Authors: HUANG YU JOE
Published: January 2010

China is distinct among developing countries in that it has significant heating loads over much of the country. Because nearly half of the urban residential buildings are located in climates colder than that of Washington state, the already large demand for space heating will skyrocket if the current building boom continues. Space heating energy use, excluding that for hotels and offices catering to foreigners, is constrained by mandated coal allocations resulting in partially heated buildings with indoor temperatures significantly below design conditions.

This underheating, to a significant extent, masks the energy savings obtained from more energy‐efficient boilers and building designs. Even so, computer simulations show that such conservation strategies can reduce current energy use by 40 percent, while dramatically raising indoor temperatures. Economic calculations comparing energy savings with increased construction costs are skewed by the unmet heating loads as well as by government‐subsidized coal prices that are below actual costs. From the perspective of building owners and managers, building energy conservation still is economically attractive in the cold Northeast– where the cost of conserved coal is half that of the subsidized coal price–but is difficult to justify in terms of economic payback in Beijing or Shanghai.
COST‐EFFECTIVENESS OF CONSERVATION PROGRAMS: THE HOOD RIVER EXPERIMENT
Authors: KHAWAJA MUHANNAD , POTIOWSKY THOMAS R , PEACH H. GIL
Published: January 2010

Economic cost‐effectiveness analysis is a systematic approach to assessing benefits and costs associated with different actions. This analysis, as applied to energy conservation programs, is complicated greatly by the existence of intangible benefits and costs. A further complication occurs when the input values are uncertain. Such inputs include the useful lives of measures installed, the appropriate discount rate, and the expected levels of savings. This paper shows how one can incorporate input uncertainty and some intangibles into the cost‐effectiveness analysis calculations. The Hood River Conservation Experiment provides the framework for analyzing these issues and serves as a pilot program for future conservation implementation.
LEVELIZED COST OF ELECTRICITY GENERATION TECHNOLOGIES
Authors: BEMIS GERALD R. , DoANGELIS MICHAEL
Published: January 2010

The levelized cost of electricity is estimated for more than 70 electricity production technologies and for two facility ownership sectors. The analysis uses a Lotus 1–2‐3 spreadsheet for a consistent approach. The cost effectiveness of several alternative technologies is compared with that of conventional technologies. A variety of owners could build and operate facilities made from these conventional and alternative technologies.
SWEDEN AFTER NUCLEAR POWER
Authors: MILLS EVAN
Published: January 2010

The social costs of providing energy are varied and difficult to compare. Sweden's recent energy policy is notable for its broad‐based initiatives to internalize those social costs of energy that are difficult to measure in strictly monetary terms. This article focuses on one such initiative– the Swedish law to phase out nuclear power by the year 2010–and its relationship to other national goals: The hydroelectric system is not to expand, carbon dioxide emissions are to remain at current levels or decline, and oil‐import dependence is to be minimized. In addition to this challenge, between now and 2010 the Swedish economy is expected to maintain an average 1.9 percent real annual growth rate and to remain competitive industrially. Scenarios of future electricity demand and the accompanying supply mix illustrate the spectrum of costs–internal and external–from which Sweden can choose in implementing the phase‐out plan and in determining whether one can identify paths that simultaneously reconcile Sweden's potentially conflicting policy goals. The results show that the direct economic costs of high‐efficiency/low‐externality scenarios are less than those of low‐efficiency/high‐externality scenarios. Traditional societal economics does not stand as a barrier to energy futures that are consistent with Sweden's desire to further reduce the external societal costs of energy. The results are also significant since they demonstrate that strategies to reduce global climate change need not rely on nuclear power.
SOLAR POWER
Authors: WALTON A. L , HALL DARWIN C.
Published: January 2010

This paper describes categories of solar technologies and identijies those that are economic. It compares the private costs of power from solar, wind, nuclear, coal, oil, and gas generators. In the southern United States, the private costs of building and generating electricity from new solar and wind power plants are less than the private cost of electricity from a new nuclear power plant. Solar power is more valuable than nuclear power since all solar power is available during peak and mid‐peak periods. Half of the power from nuclear generators is off‐peak power and therefore is less valuable. Reliability is important in determining the value of wind and nuclear power. Damage from air pollution, when factored into the cost of power from fossil fuels, alters the cost comparison in favor of solar and wind power. Some policies are more effective at encouraging alternative energy technologies that pollute less and improve national security.
IGNORING ECONOMICS IN DEALING WITH THE SAVINGS AND LOAN AND COMMERCIAL BANKING CRISIS
Authors: BRUMBAUGH R. DAN , LITAN ROBERT E.
Published: January 2010

This paper describes how the government has largely ignored economics in its recent attempts to deal with the deterioration of federally insured depository institutions. The most recent example was the Financial Institutions Recovery, Reform, and Enforcement Act (FIRREA) of 1989. Well documented and widely distributed studies have pointed out the decline of commercial banks. However, the FIRREA completely ignored commercial banks. The paper discusses the pervasive regulatory laxity and forbearance that existed toward banks during the 1980s despite the consequences of similar regulatory behavior toward savings and loans. The paper also shows how the FIRREA's major provisions regarding savings and loans ignore economic analyses. The paper discusses the implications of economic analysis for more appropriate government responses to the continuing deterioration of depositories.
NUCLEAR POWER, SYSTEMATIC RISK, AND THE COST OF CAPITAL
Authors: FARBER STEPHEN
Published: January 2010

Previous studies of the effects of adoption of nuclear technologies by electric utilities have concentrated on the period following the catastrophe at Three Mile Island (TMI) in 1979. The purpose of this study is to test whether increased risk effects on equity costs of nuclear‐adopting utilities existed prior to that event. This study, using panel data and beta measures of systematic risk, concludes that a positive, significant, and persistent nuclear adoption effect existed even prior to TMI. Nuclear adoption increased equity costs, on average, 0.8 percent for periods following the adoption event. This is of the same order of magnitude as adoption effects estimated in other studies for the post‐TMI period.
ENVIRONMENTAL ECONOMICS AND THE SOCIAL COST OF SMOKING
Authors: LEE DWIGHT R.
Published: January 2010

A widely prevailing assumption is that taxing and regulating smoking are justified on efficiency grounds since smokers impose a significant cost on others. Supposedly, the same economic analysis that has been used to justify taxing and regulating environmental pollution also applies to smoking. But two serious problems undermine the efficiency argument for taxation and regulation to internalize the cost of smoking. First, the largest external cost that smoking supposedly generates does not exist. Second, even if smoking does generate an external cost in the form of environmental tobacco smoke, one cannot justify either taxing or regulating smoking when one properly applies the principles of environmental economics.
THE SWEDISH MARKET PRICE APPROACH TO MONETARY POLICY OF THE 1930s
Authors: KELEHER ROBERT E.
Published: January 2010

Recently, some analysts have prescribed the combined use of certain market prices as a useful strategy for monetary policy. In light of problems with conventional (time‐series) empirical tests of the approach, one may consider an alternative “test” of this strategy: examining historical episodes when the strategy was employed. The Swedish experience during the early 1930s provides one such example. This experience, fathered by Knut Wicksell, is an example of a fiat money‐flexible exchange rate regime in which (i) a short‐term interest rate was used as a policy instrument, (ii) market prices were used as policy guides or intermediate indicators, and (Hi) price stability was the explicitly voiced goal of monetary policy. Monetary or reserve aggregates were neither proposed nor employed as policy guides or targets in pursuing this price stabilization objective. This Swedish experience is important since it provides a rare example of a market price approach to monetary policy. This paper demonstrates that the approach worked remarkably well.
THE FED AND THE POLITICAL BUSINESS CYCLE
Authors: BECK NATHANIEL
Published: January 2010

This study asks whether the Federal Reserve has actively made monetary policy so as to aid the president's reelection. Using Shiller's smoothness “prior” to estimate the shape of cycles, the study finds a political business cycle in unemployment and a preelection increase in growth of the money supply. But the timing of these two cycles is inconsistent. Furthermore, little evidence exists of a cycle in the instruments of monetary policy. Thus, the Fed is not actively creating a political business cycle. Apparently, movements in real money that are not caused—but are not offset—by the Fed are an important cause of the political business cycle.

Elections influence Fed behavior. Monetary tightness occurs early in a presidential term, before reelection incentives become critical. This is due to the Fed's political weakness. Thus, the Fed's independence only partly insulates it from electoral pressures.
STRUCTURAL CHANGE AND PROSPECTS FOR SUSTAINED IMPROVEMENT IN U.S. EXTERNAL BALANCE
Authors: MANN CATHERINE L.
Published: January 2010

Projections from many macroeconometric models have suggested that the improving trend in U.S. external balance since 1987 would peter out by the end of 1990. Because the 1980s decade was a turbulent period in the international environment, one might question the reliability of these projections since the economic relationships underlying the models could have changed. This review finds insufficient evidence of structural change or of sufficiently important omitted variables to justify seriously questioning the projections. However, this study also considers model and parameter uncertainty and concludes that continued improvement in U.S. external balance is within the realm of statistical probability—but, then, so is substantial worsening.
FOREIGN TAKEOVERS AND NEW INVESTMENTS IN THE UNITED STATES
Authors: RAY EDWARD JOHN
Published: January 2010

This study is unique in several respects. First, it reviews the characteristics of the top 10 industries targeted for foreign direct investment (FDI) activity in the United States between 1979 and 1987. It analyzes both overall FDI activity and new plant and expansion FDI activity. The study summarizes and tests alternative hypotheses regarding the determinants of FDI in the United States by all countries, by the United Kingdom, by the European Community, by Japan, and by Canada.

Large and growing product markets in an expanding economy have attracted FDI in the United States. Exchange rate movements have prompted opportunistic decisions to invest in U.S. production facilities. Investors' superior management skills appear to have prompted takeovers, while efforts to realize technological advantages of new physical capital and of relatively large operating plants have fostered plant and expansion investments.

Evidence exists that a desire to circumvent current—but not potential—trade restrictions has motivated foreign direct investment. FDI activities are not associated with concentrated or heavily unionized industries. Highly protected industries have attracted heavier equity FDI by Japan and heavier new plant FDI by all sources and Canada. No evidence exists that FDI in the United States by Japan or anyone else is targeted to undercut union‐dominated firms or to arrest the spread of protectionist trade policies.
THE VALUE OF CLEANER AIR: AN INTEGRATED APPROACH
Authors: BRAJER VICTOR , HALL JANE V. , ROWE ROBERT
Published: January 2010

Policymakers in the legislative and regulatory arenas face increasing public expectations that authorities will both promulgate and implement strict environmental programs. At the same time, the aggregate cost of such programs is rising and is impacting economic sectors previously untouched. In this context, a major study used an integrated interdisciplinary perspective to determine what economic benefits would result from air pollution controls. Specifically, the study developed estimates for the health benefits of reducing ozone and fine particulate matter concentrations in the nation's most polluted region—the South Coast Air Basin centering on Los Angeles. This paper presents the economic methodologies and results of that study. It also discusses how health and atmospheric sciences informed the economic assessment.
CO‐DEVELOPMENT OF COASTAL RESOURCES: OIL vs. MARICULTURE
Authors: CASWELL MARGRIET F.
Published: January 2010

Leasing coastal areas so as to develop a single resource is wasteful and often leads to conflicts. Some uses impose negative externalities on other resource‐dependent uses, but such externalities should not preclude co‐development a priori. This paper describes a theoretical economic model of joint development for energy resources and mariculture showing the scientific data necessary so as to determine the optimal output for each activity in every location and to choose the optimal lease boundaries.
THE TEMPORAL CAUSALITY BETWEEN FISCAL DEFICITS AND INTEREST RATES
Authors: MILLER STEPHEN M. , RUSSEK FRANK S.
Published: January 2010

Conventional wisdom suggests that higher government fiscal deficits cause higher (long‐term) interest rates. Much empirical work—generally standard ordinary least squares (OLS) regression analysis—has examined this issue and has produced mixed findings. Even if these standard OLS studies conclude that deficits and interest rates are related, they do not answer the question of which came first—the higher deficit or the higher interest rate? A few studies have used Granger causality to consider the question of temporal causality, generally with short‐term interest rates. Tliis paper employs the relatively new cointegration and error‐correction methodology to reexamine the temporal causality between fiscal deficits and interest rates—both long term and short term. This study finds evidence that federal deficits cause the long‐term interest rate.
REGIONAL IMPACTS OF AIR QUALITY REGULATION: APPLYING AN ECONOMIC MODEL
Authors: LIEU SUE
Published: January 2010

The South Coast Air Quality Management District promulgated an Air Quality Management Plan (AQMP) in 1989 so as to attain federal air quality standards for the South Coast Air Basin by the year 2007. Because the AQMP affects all walks of life, its economic impact has become the focal point of debates. This paper examines not only the traditional approach to evaluating the direct cost of a public policy change on the regulated community, but also a systematic approach to assessing direct and indirect impacts of such policy change. This latter approach will enhance the decisionmaking process by allowing one to compare the impacts of various projects in the same context.
WATER CONSERVATION PROGRESS IN DENVER
Authors: MORRIS JOHN R.
Published: January 2010

Over the past 15 years, water conservation in Denver has progressed from a radical idea that was ignored and postponed—and even scorned—to an integral part of planning for future water service. This paper documents the progress through a variety of reports, proposals, and critiques. Policies already adopted have reduced projected demand for the year 2010 by 10–15 percent, and future policies could reduce demand by as much again by setting price equal to marginal cost of new water. Adopted policies include metering single‐family houses, ascending block rates, offering rebates on 1.6‐gallon toilets, improving irrigation in city parks, and reusing some water. Adopting such policies reflects the perseverance and alternative analysis that environmentalists opposed to constructing of the Two Forks Dam have offered over the course of 10 years. Water savings of 25 percent could postpone major new supply projects indefinitely.
CHINA'S RESISTANCE TO ECONOMIC REFORMS
Authors: TINARI FRANK D. , LAM DANNY KIN‐KONG
Published: January 2010

After 10 years of institutional and structural change, expanded economic activity, and subsequent economic difficulties, China adopted an austerity program in 1988. Underlying the ostensible economic reasons for the austerity program, however, was growing political resistance to economic reforms among Communist party members.

This paper puts forth two explanations. One is that the leadership misunderstands the market system, and this leads to errors in economic policy. The second explanation is that rent seeking by strategically situated groups is responsible for much of the resistance.

Because market‐oriented reform makes redundant both bureaucrats and job slots for apparatchik appointments, strong resistance to reform exists at the micro level.

Two scenarios could lead to real economic reform: (i) gradual self‐limitation by the Communist party as economic decline continues and as the costs of maintaining the existing system increase, or (ii) a breakdown of consensus within the ruling stratum. In this paper, the dual thesis for resistance to reform serves to reinforce the latter scenario.
MASSIVE DIVESTITURE AND PRIVATIZATION LESSONS FROM CHILE
Authors: J.LÜDERS ROLF
Published: January 2010

Between 1974 and 1989, the Chilean government privatized 550 state‐owned enterprises (SOEs). Before 1974, all but a handful of major corporations were SOEs. About 50 of the largest enterprises privatized during the 1970s fell into government hands again, only to be re‐privatized later. This was due partly to the economic and financial crisis affecting most Latin American countries during the early 1980s but also was a consequence of the privatization modes used. This paper analyzes that unique privatization experience so as to extract policy lessons. The analysis focuses on economic conditions, objectives of government policy, privatization modes, and the divestiture effects on employment, fiscal revenues, public sector wealth, spread of ownership, and capital market development.
LONG‐RUN IMPACTS OF AIDS
Authors: GOLDIN KEN
Published: January 2010

Over the next century, the impact of the AIDS epidemic on the supply of and returns to factors of production may be significant. Public policies might offset some of the long run impacts, especially if initiated early in the epidemic. History suggests the types of economic effects that can occur in the long run and the limits of public policies' effectiveness in controlling diseases of this type. The models developed here to show possible long run time paths for the epidemic also imply a long‐run equilibrium, a concept not appreciated in most disciplines. Because data defciencies make long run numerical forecasting highly controversial, this paper uses history and modeling to emphasize qualitative understanding of the epidemic.
CORPORATE LEVERAGE AND THE BUSINESS CYCLE
Authors: SETH RAMA
Published: January 2010

This paper examines the pattern of corporate leverage in the United States during the 1980s. Firms in other countries increased their debt during this period. However, the United States was the only major industrialized country in which firms experienced increases in both leverage and interest burden. Previous studies analyzing the distribution of corporate debt across sectors in the United States concluded that to the extent a pattern is discernible, highly indebted firms are concentrated in the stable sectors. This study confirms this earlier finding but shows that the U.S. firms that have been increasing their leverage most rapidly have been concentrated in cyclical sectors.
THE POLITICAL ECONOMY OF DRUG ENFORCEMENT IN CALIFORNIA
Authors: PHILLIPS LLAD
Published: January 2010

The war on drugs has placed new pressures on the criminal justice system. In recent years, arrests for drug violations have been growing more rapidly than arrests for the FBI index crimes in both the United States as a whole and California. By the year 1988, in California, the ratio of adult felony drug arrests to adult felony arrests for all seven major offenses in the FBI index had grown to 0.65.

The analysis in this article concerns the impact that the war on crime and the war on drugs has had on the corrections system in California. Part of this analysis is descriptive. It details the rising proportion of felons newly entering prison after drug law convictions. In addition to swelling the volume of prisoners and changing their composition by offense, the war on drugs has changed the nature of flows between felons on parole and felons in prison. By 1988, for the first time, the number of felons returned to prison for parole violation exceeded the number of felons newly entering prison after court convictions. The analysis develops how the behavior of parole officers and the special significance of drug offenders contribute to this phenomenon. The result has been to circulate more felons between parole and prison, thus reducing discharges as a proportion of total felons on parole and unnecessarily increasing the stock of prisoners.
ECONOMICS OF SPECIES PRESERVATION: THE SPOTTED OWL CASE
Authors: MONTGOMERY CLAIRE , BROWN GARDNER M.
Published: January 2010

This paper describes efforts to build a supply curve for survival of the northern spotted owl in the wild. A survey of experts and a population dynamics simulation model relate species survival to habitat capacity. Home range studies provide the basis for determining the owl's area requirements. Cataloging land in the range of the owl in terms of suitability for owl habitat and for timber production provides the link between timber harvest and the probability of owl survival. Finally, an econometric model of stumpage and wood products markets predicts welfare impacts of timber harvest reductions. The supply curve relates the probability of northern spotted owl survival to the present value to consumers and producers of foregone timber harvest over time.
TAX DISCOUNTING VS. CROWDING OUT
Authors: MATHIS STEPHEN , BASTIN HAMID
Published: January 2010

The “crowding out” effect of debt‐financed government spending on the private sector consumption‐saving decision and on private investment behavior has been a controversial subject for several years. Do increases in debt‐financed government spending stimulate private consumption and saving in the short run, as well as private consumption in subsequent periods? Or does the realization that future taxes must be raised to finance repayment of the debt result in a lack of stimulus for consumption as well as no detrimental impact on subsequent private saving? This article empirically tests for the presence and/or magnitude of tax discounting and crowding out, carefully distinguishing between the two, and decomposes government debt instruments according to their maturities in order to determine impact due to a reorientation of debt structure. The results do not support the existence of tax discounting, suggesting instead that government deficits do stimulate current consumption.
CRIME, ENTREPRENEURSHIP, AND LABOR FORCE WITHDRAWAL
Authors: MYERS SAMUEL L.
Published: January 2010

This article explores the links between self‐admitted drug dealing and labor force behavior to determine if and/or how returns to employment influence the decisions by both blacks and whites to enter drug dealing. Using data collected on inmates in prisons and jails in California, Michigan, and Texas, this analysis concludes that black and white offenders vastly differ in their perceptions of criminal opportunities. But the dominant factor contributing to entry into drug selling, especially among black males, is unattractive market opportunities. One cannot determine unambiguously whether this results from the lure of drug dealing for its entrepreneurial attractiveness or simply results from crime versus employment choices. In any case, evidence presented clearly shows that racial differences in returns to employment explain most of the gap between black and white drug dealing.
EFFECTS OF DRUG ABUSE TREATMENT ON LEGAL AND ILLEGAL EARNINGS
Authors: FRENCH MICHAEL T. , ZARKIN GARY A.
Published: January 2010

Although recent research has shown that drug abuse treatment reduces drug use and criminal activity in some clients, the impact of treatment on clients' post‐treatment labor market behavior is relatively unknown. This study uses data from a longitudinal survey to analyze annual legal and illegal earnings for 2,420 drug abusers. The analysis focuses on two different time intervals—one year before entering a drug abuse treatment program and one year after leaving the same program. It describes client characteristics, labor market variables, and treatment history, and estimates the effects of length of time in treatment on post‐treatment earnings. The regression analysis shows that length of time in treatment had a positive (negative) and statistically significant impact on real legal (illegal) earnings following treatment for methadone and residential clients, but the magnitude was small; accounting for possible selection bias had little effect on the results. Although residential clients experienced the largest relative changes in earnings outcomes, simply comparing the direct cost of residential treatment with the benefits from improved legal earnings and lower illegal earnings suggests that additional residential treatment is not cost‐beneficial.
A SOBER LOOK AT THE COSTS OF INTOXICATION
Authors: ANDERSON GARY M.
Published: January 2010

Advocates of increased government regulation of intoxicating substances often cite the “social cost” of such goods. A close examination of studies that calculate the social cost of intoxication reveals a variety of recurring methodological errors. These studies do not clearly distinguish external costs from private costs. They do not systematically compare the costs associated with the regulation of intoxicant use with the costs of intoxicant consumption, nor do they even estimate the social benefits associated with intoxication or compare them with the social costs. Unless these problems are addressed, social cost calculation will be dismissed as a tool for political lobbying.
CONSERVED ENERGY SUPPLY CURVES FOR U.S. BUILDINGS
Authors: Rosenfeld ARTHUR , Atkinson CELINA , Koomey JONATHAN , Meier ALAN , Mowris ROBERT J. , PRICE LYNN
Published: January 2010

Comparison of nine conservation supply curves for electricity shows that fully implementing a series of energy efficiency measures will result in annual saving of 734 billion kWh (BkWh). This is 45 percent of 1989 U.S. building sector electricity use of 1627 BkWh and represents a $29 billion saving. When translated to units of conserved carbon dioxide (CC CO2), this annual saving is 514 megatonnes, which is 10 percent of the total 1989 U.S. carbon dioxide (CO2) emissions from all sources. Implementing additional fuel efficiency measures would result in further potential saving of 5·2 quads of fuel (natural gas and oil) per year, or another 300 megatonnes of CO2, at a net savings of $20 billion. Fuel switching (replacing electric resistance heat with on‐site natural gas combustion) would produce annual saving of another 74 megatonnes of CO2 at a net saving of $6·8 billion. Thus, total CO2 saving from these combined efficiency measures are 890 megatonnes at a net saving of $56 billion per year.
ENERGY UTILITIES, CONSERVATION, AND ECONOMIC EFFICIENCY
Authors: Bhattacharjee VINAYAK , Cicchetti CHARLES J. , Rankin WILLIAM F.
Published: January 2010

Academic and policy debate has centered around an apparent “underinvestment in conservation.” This paper outlines traditional explanations for underinvestment and presents a prospect theory analysis of individual conservation behavior. On the basis of investment criteria, individuals seem to discriminate against conservation investments. While these decisions might appear rational as life style decisions, individual choice across different household appliances shows little consistency. For policymaking purposes, understanding and modeling actual behavior is crucial to maximizing social welfare. The insight of certain positive models of human behavior supports economic efficiency arguments for marketplace intervention. This paper argues that because individuals making conservation investment decisions apparently do not act according to the dictates of utilitarian economics, utility sponsored conservation programs are justified on economic efficiency grounds. Finally, in light of prospect theory considerations, the paper suggests marketing guidelines for conservation investments sponsored by electric utilities.
SEQUESTERING CARBON ON AGRICULTURAL LAND: SOCIAL COST AND IMPACTS ON TIMBER MARKETS
Authors: Adams RICHARD M. , Adams DARIUS M. , Callaway JOHN M. , Chang CHING‐CHENG , Mccarl BRUCE A.
Published: January 2010

Planting trees to sequester carbon has broad political appeal. However, effects of a major tree planting program on the agricultural sector and on timber markets are unclear. This paper examines social costs of sequestering carbon in tree plantations on U.S. agricultural land and investigates harvesting's effects on timber prices and on private timber producers' welfare. The analysis links a model of the U.S. agricultural sector that includes the land base in major production areas with a model of the U.S. softwood economy. Using current data on planting, maintenance, and harvesting costs for tree plantations and carbon sequestration rates, the models estimate the price and welfare effects of alternative carbon sequestration goals. Results indicate a range of outcomes. Consumers pay higher prices for food as farmers divert land from crops to trees. However, wood products consumers gain from falling timber prices if the trees enter commercial markets. Agricultural producers and landowners gain from higher commodity prices, but private forest owners lose. Large tree planting programs imply that policymakers must compensate private commercial tree planting to prevent farmers from displacing present tree plantations.
A CRITICAL ANALYSIS OF CLIMATE CHANGE POLICY RESEARCH
Authors: Rothman DALE S. , Chapman DUANE
Published: January 2010

After more than a decade of scientific warning, the policy community has begun to take up the challenge of global climate change. This paper considers recent efforts to analyze policymaking in this area. Shortcomings in present policy research include: (i) inconsistencies in data and methods, (ii) myopic vision of available options, (Hi) overly anthropocentric cost/benefit assessments, (iv) inadequate treatment of uncertainly and irreversibility, (v) lack of recognition of developing and developed countries' differential motives, (vi) unsatisfactory presentation and interpretation of results, and (vii) limited peer review.
EFFECTS OF PRICE AND AVAILABILITY ON ABORTION DEMAND
Authors: GOHMANN STEPHAN F. , OHSFELDT ROBERT L.
Published: January 2010

Over 1.5 million legal abortions were performed in the United States in 1988. State‐level regulation affecting the price or availability of abortion services may expand given recent Supreme Court decisions. This paper uses state‐level data pooled over time to estimate abortion demand. Using single cross‐sections of state data, past studies find abortion demand per 1,000 pregnancies to be price inelastic and find income elasticity to be positive and significant. The analysis here shows that price elasticity estimates in a single cross‐section are sensitive to the choice of state characteristics used to control for “abortion attitudes” within a state. Ajixed‐efects model design with pooled data gives more robust abortion demand price elasticity estimates. The results suggest that any new state regulations that increase the costs of obtaining abortions will reduce abortion use and increase unintended fertility.
COUNTERTRADE AS TRADE CREATION AND TRADE DIVERSION
Authors: ABDEL‐LATIF ABLA M. , NUGENT JEFFREY B.
Published: January 2010

This paper analyzes countertrade as a special case of a customs union in which the countertrade agreement gives rise (as in customs union theory) to both trade‐creating and trade‐diverting effects. The net effects on welfare are ambiguous. A detailed case study from Egypt and brief examples from other countries illustrate the relevance of this interpretation.
WHY THE COMPOSITE INDEX OF LEADING INDICATORS DOES NOT LEAD
Authors: KOENIG EVAN F. , EMERY KENNETH M.
Published: January 2010

This paper assesses the real‐time performance of the Commerce Department's composite index of leading indicators. The authors find that the composite leading index has failed to provide reliable advance warning of cyclical turning points. One reason for this failure is that the leading index's transition from expansion to contraction generally is not very sharp. Consequently, discerning real‐time cyclical peaks in the index is difficult. Transitions from contraction to expansion on average are sharp. However, cyclical troughs in the leading index often precede cyclical troughs in the economy by only a few months. Thus, even timely recognition of troughs in the leading index fails to provide advance warning of turnarounds in the general level of economic activity.
RECENT TRENDS IN JOB TRAINING
Authors: BOWERS NORMAN , SWAIM PAUL
Published: January 2010

This paper analyzes new data on job qualifications and training. Between 1983 and 1991, the share of workers reporting skill‐improvement training on their jobs increased as did the wage premium for this training. Even in 1991, however, 58 percent of all workers reported no training on their jobs, and 44 percent reported needing no special qualifications to obtain their jobs. Training rates are especially low for young and less‐educated workers. Skill demands appear to have shifted toward general and cognitive skills—best taught in formal training programs and schools—and away from specific and manual skills acquired through informal on‐the‐job training.
OPEN ACCESS AND THE EMERGENCE OF A COMPETITIVE NATURAL GAS MARKET
Authors: VANY ARTHUR DE , WALLS W. DAVID
Published: January 2010

Recent regulatory changes permitted natural gas pipelines to become “open access” transporters. This change in pipeline carrier status dissolved regulatory barriers to markets. This paper describes the institutions that were developed to support exchange in gas markets and observes and evaluates their emergence, evolution, and performance. The institutional and empirical evidence reveals that gas markets rapidly emerged with the dissolution of regulatory barriers. Spot gas prices converged and became highly correlated. A national market for natural gas developed within four years.
PHOTOVOLTAIC TECHNOLOGY AND MARKETS
Authors: CALDWELL JAMES H.
Published: January 2010

Photovoltaics—“solar power”—retains a strong fascination as a future sustainable energy source for the planet some 120 years after its discovery, 80 years after Einstein explained its physics, 30 years after the first laboratory device was produced, and 25 years after its first commercial application. This paper examines the market for photovoltaics at prices above those required for competitive bulk grid‐connected wholesale electricity, surveys current and possible future manufacturing technologies, describes the processes of technology introduction and manufacturing cost reduction, and discusses policy implications.
WHY DID ECONOMIC MODELS FALSELY PREDICT A BUSH LANDSLIDE IN 1992?
Authors: HAYNES STEPHEN E. , STONE JOE A.
Published: January 2010

Most economic models falsely predicted a landslide victory for former President Bush in 1992. Rather than winning by the predicted margin of eight to 12 percentage points, Bush lost by a margin of about four. Exit polls tend to eliminate the unique candidacy of Ross Perot as an explanation for the turnabout. This paper examines three factors: (i) changes in the proportion of the population in the military (a proxy for national security concerns), (ii) the number of consecutive terms of incumbency, and (iii) nonlinear interactions between the military variable and standard economic variables. Including these factors in an economic model of the 1992 presidential race avoids predictions of a landslide victory for Bush and also improves the model's overall power and stability.
THE CAPITAL INFLOWS PROBLEM: CONCEPTS AND ISSUES
Authors: CALVO GUILLERMO A. , LEIDERMAN LEONARDO , REINHART CARMEN M.
Published: January 2010

Since 1990, capital has flowed from industrial countries to developing regions like Latin America and parts of Asia. Most countries welcome reentry into international capital markets. However, capital inflows often are associated with inflationary pressures, a real exchange rate appreciation, a deterioration in the current account, and a boom in bank lending. This paper briefly examines how these inflows have altered the macroeconomic environment in a number of Asian and Latin American countries, and discusses the pros and cons of the policy options.
CIGARETTE TAXATION AND DEMAND: AN EMPIRICAL MODEL
Authors: SUNG HAI‐YEN , HU TEH‐WEI , KEELER THEODORE E.
Published: January 2010

This paper evaluates the impact of taxation on cigarette consumption, using a recursive model that includes a retail price equation and a dynamic demand equation. The analysis is based on panel data for 11 western states over the period 1967–1990. Results indicate that cigarette consumption is price‐sensitive, with a demand elasticity of –0.40 in the short run and –0.48 in the long run. A tax increase, such as that imposed in California in January 1989, can have a strong effect of reducing cigarette consumption by between 11.2 percent in the short run and 13.4 percent in the long run. These results support the theory of rational addiction and the hypothesis that, as a part of their oligopoly behavior, the tobacco companies often do raise end‐market prices by more than the amount of the increase in tax rates.
COMMERCIALIZATION OF INDIGENOUS GENETIC RESOURCES
Authors: SIMPSON R. DAVID , SEDJO ROGER A.
Published: January 2010

Living organisms produce chemicals for repelling pests and resisting infections. Some of these chemicals have considerable commercial value. The demonstration of commercial value might motivate increased conservation of tropical biodiversity. Successful commercialization requires countries with genetic resources either to transfer these resources to foreign research organizations that can develop them or to acquire the capacity to develop them commercially. This paper discusses factors in contracting for such transfers and investing in such capacity.
A MODEL FOR STANDARD SETTING: HIGH DEFINITION TELEVISION
Authors: MACINNES IAN
Published: January 2010

This paper presents a model for high definition television (HDTV) standard setting that can be applied to other technologies. The analysis examines conflict and coordination in the standardization process at three levels: international, domestic, and market. While national governments and firms share common priorities, firms are more likely to require standardization than are governments but are less likely to achieve it unless side payments are possible. Collaboration in standard setting benefits all parties and should be encouraged by the government.