Misreporting trade: Tariff evasion,corruption, and auditing standards

Official international trade statistics report commerce between every pair of countries twice: once for the importing country and once for the exporter. In principle, the two values differ only by transport costs, but as has long been recognized, they also differ systematically with product‐level tariffs. We aggregate across products to construct a dataset of annual aggregate bilateral trade, separately for the importer and exporter reports. With these data, we show that the reporting differences also vary systematically with country characteristics aside from tariffs: incomes, auditing standards, corruption, and trade agreements.     

UNMASKING THE POLLUTION HAVEN EFFECT*

We use theory and empirics to examine the effect of environmental regulations on trade flows. A simple model demonstrates how unobserved heterogeneity, endogeneity, and aggregation issues bias standard measurements of this relationship. A reduced‐form estimate of the model, using data on U.S. regulations and trade with Canada and Mexico for 130 manufacturing industries from 1977 to 1986, indicates that industries whose abatement costs increased most experienced the largest increases in net imports. For the average industry, the change in net imports we ascribe to regulatory costs amounting to 10% of the total increase in trade volume over the period.     

The hierarchy of roads, the locality of traffic, and governance

This study investigates the use of road networks both within and outside of home jurisdictions (city (or town) and county of residence) by analyzing GPS data collected in the Minneapolis—Saint Paul metropolitan area. The study tracked volunteers' travel behavior to determine which roads (and thus which class of roads) users chose to accommodate their travel needs. More than half of the travel on county roads and city streets occur outside of one's home city, but most travel is within one's home county. The average share of travel distance in the home county is more than 70% for both county and city streets. The high share, which does not account for non-residents destined for the county to work or shop, e.g., implies that the free rider problem on city and county streets at the county level is minimal. Of particular concern is travel on city roads in cities other than one's own. To the extent that this is to go to a destination in that city, that travel is also local. However, because city and county roads are typically funded by those jurisdictions from land-based sources such as property taxes, through trips with neither end in the city through which they are traveling are in a very real sense “free riders”, and pose a problem. With growing trip lengths and emerging economies of scale in road management, it may be appropriate to consider moving more roads from township, town, or city level to the county level of government.     

Post-construction evaluation of traffic forecast accuracy

This research evaluates the accuracy of demand forecasts using a sample of recently-completed projects in Minnesota and identifies the factors influencing the inaccuracy in forecasts. Based on recent research on forecast accuracy, the inaccuracy of traffic forecasts is estimated as the difference between forecast traffic and actual traffic, standardized by the actual traffic. The analysis indicates a general trend of underestimation in roadway traffic forecasts with factors such as roadway type, functional classification and direction playing an influencing role. Roadways with higher volumes and higher functional classifications such as freeways are underestimated compared to lower volume roadways and lower functional classifications. The comparison of demographic forecasts shows a trend of overestimation while the comparison of travel behavior characteristics indicates a lack of incorporation of fundamental shifts and societal changes.     

The minimum circuity frontier and the journey to work

People travel between places of residence and work destinations via transportation networks. The relation between selection of home and work locations has been heavily debated in the transportation planning literature. In this paper we use circuity, the ratio of network to Euclidean distance, to better understand the choice of residential location relative to work. This is done using two methods of defining origins and destinations in twenty metropolitan regions in the United States, with more detailed analysis of Minneapolis–St. Paul, Minnesota and Portland, Oregon. The first method of selection is based on actual choice of residence and work locations. The second is based on a randomly selected dataset of origins and destinations in the same regions, followed by a comparison between the two methods for these regions. The study shows circuity measured through randomly selected origins and destinations differs from circuity measured from actual origins and destinations. Workers tend to reside in areas such that the journey to work circuity is lower than random, applying intelligence to their location decisions. Consistent with traditional urban economic theory, this suggests locators wish to locate on the frontier with the largest residential lot at the shortest commute time, but in contrast with the classic model which simplifies transportation networks to be uniform, we cannot assume that all possible home–work pairs are on the frontier. This finding, developed from microscopic data not previously used for this question, reveals an important issue related to residence choice and location theory and how resident workers tend to locate with respect to network configuration in an urban context.     

The Missing Pollution Haven Effect

This paper examines the effect of recent increases inhazardous waste disposal taxes on employment growth inindustries that generate hazardous waste. Mostexisting literature has found that interjurisdictionaldifferences in environmental stringency havenegligible measurable economic consequences. Commonexplanations for this lack of effect include claimsthat (1) measures of environmental stringency arepoorly quantified, (2) compliance costs are modest,(3) variation in compliance costs among jurisdictionsis small, and (4) cross-section data are insufficientto explore the consequences of increasingly stringentstandards. This paper addresses these four concernsby quantifying hazardous waste disposal taxes,demonstrating that they are large and varied acrossjurisdictions in the United States, and showing thatthey have had a significant effect on hazardous wasteshipping among states. The paper then uses a panel ofstate and county-level data to show that despite thesefindings, state hazardous waste disposal taxes do notimpose large employment losses on industries thatgenerate waste.