Precautionary Demand for Education, Inequality, and Technological Progress

This paper offers an explanation for the evolution of wage inequality within and between industries and education groups over the past several decades. The model is based on the disproportionate depreciation of technology-specific skills versus general skills due to technological progress, which occurs randomly across sectors. Consistent with empirical evidence, the model predicts that increasing randomness is the primary source of inequality growth within uneducated workers, whereas inequality growth within educated workers is determined more by changes in the composition and return to ability. Increasing randomness generates a precautionary demand for education, which we show empirically to be significant.     

Clustering at the Movies

Weekly box office revenues for approximately 100 successful motion pictures are analyzed by use of a finite mixture regression technique to determine if regular sales patterns emerge. Based on an exponential decay model applied to market share data, four clusters of movies, varying in opening strength and decay rate, are found. Characteristics of the clusters and implications for future research are discussed.     

A Quantitative Assessment of the Effect of First Contract Arbitration on Bargaining Relationships

This article investigates first contract arbitration's (FCA) capacity to foster bargaining relationships and deter misconduct by analyzing its effect on decertifications. Using time‐series cross‐sectional (TSCS) analysis with data from nine Canadian provinces over a four‐decade period, it shows: (1) FCA correlates with 20 to 37 percent fewer decertifications in provinces that have an FCA provision relative to those that do not; (2) of the various types of FCA, the automatic and fault forms have the most robust effect on decertifications while the mediation‐arbitration form may have the largest effect on decertifications; and (3) the effect of FCA is heightened in the presence of card‐check certification such that the best results for fostering bargaining relationships may be found in the presence of both policies.     

The impact of free and exaggerated prices on perceived quality of services

Previous research in the price-quality area has largely limited its focus to the normal price range and has concentrated on physical goods almost entirely. This study examines the effect of offering a service for free and at an exaggerated price on the perception of its quality. Consistent with the theory developed in this paper, the experimental results suggest that when the tested services are offered for free and for exaggerated prices, they are perceived as lower in quality than when they are offered in a normal price range.     

Intraurban residential mobility: The role of transactions costs, market imperfections, and household disequilibrium

This paper presents a model of household residential search and mobility that focuses on microeconomic elements of household behavior and incorporates housing market features. The model is cast explicitly in terms of a rigorous model of housing demand, allowing the benefits from moving to be measured as the compensating income variation of the potential change in consumption. The empirical results indicate that large changes in economic variables, such as income and prices produce only small potential gains from moving and that a major factor in the moving decision is the magnitude of search and moving costs.     

The demand for rental housing: Evidence from the Housing Allowance Demand Experiment

This paper provides new evidence on the price and income elasticities of demand for rental housing by low income households. Housing expenditures of households participating in the Housing Allowance Demand Experiment and receiving housing allowances in the form of a proportional rent rebate are analyzed. These rent rebates experimentally vary the effective relative price of housing and thus enable estimation of the price elasticities. Natural income variation enables estimation of income elasticities. Analysis is carried out using two functional forms and a variety of models of housing dynamics. The estimated income and price elasticities of demand are 0.36 and −0.22, respectively. When the sample is restricted to include only households headed by couples, the elasticity estimates are 0.47 for income and −0.36 for price. These estimates are lower (in absolute value) than have been previously estimated and it is suggested that this may be due to the low-income nature of the sample.     

Review of the fed and Lehman brothers: setting the record straight on a financial disaster,by Laurence Ball

Business Economics -     

‘til Dissolution Do Us Part: (Re)Assessing the First Contract and Trial Marriage Goals of First Contract Arbitration in Ontario

Using a series of labor law reforms in the Canadian province of Ontario between 1991 and1998, this article seeks to (re)assess and compare the effectiveness of two forms of first contract arbitration (FCA) in satisfying the primary policy goals of aiding in the achievement of a first contract and in establishing lasting bargaining relationships. In contrast to previous research findings using this setting, the analysis fails to identify any statistically significant difference in the achievement of first contracts across the automatic and no‐fault forms of FCA. Further, estimates do not appear to identify a statistically significant difference in the establishment of lasting bargaining relationships, defined as the settlement of three of more collective agreements, across the two forms of FCA. These findings indicate that differences observed during this period in the first contract success rate and the establishment of bargaining relationships may be confounded with other factors than the changes to first contract arbitration.