Subsidizing charitable contributions: a natural field experiment comparing matching and rebate subsidies

We report the results of a field experiment conducted in conjunction with a mailed fundraising campaign of a nonprofit organization. The experiment is designed to compare the response of donors to subsidies in the form of matching amounts or rebated amounts. Matching subsidies are used by many corporations as an employee benefit; the US federal tax system encourages giving using a rebate subsidy by making donations tax deductible. The design includes a control group and two levels of subsidy of each type. Our main result is that matching subsidies result in larger total donations to charities than rebate subsidies, a result that is qualitatively similar to the lab findings. The estimated price elasticities for the matching subsidy are very similar to (and insignificantly different from) the lab experiments, while rebate subsidies lead to lower contributions in the field than in the lab. Since rebates in the field involve substantial lags and additional complications as compared with the “instant rebates” of the lab, this latter difference is not unexpected. The matching results are an important step in validating lab estimates of responsiveness to subsidies of charitable giving.

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Market structure and corporate charitable donations: some Canadian evidence for 1976 and 1981

The business of business, not charity.

Say eleemosynary its more confusing.

Whatever, as long as we don't given 'em any cash.

Harv Antione, ‘The Buzz Words of Entrepreneurship’

in Apocryphal Northern Tales

This paper investigates the general determinants of corporate charitable donations in Canada and, in particular, the impact of imperfectly-competitive market structure. We utilize a profit-maximizing model and assume that charitable donations occur only if, by performing an advertising/public relations function, they increase revenue; or if, by acting as a fringe benefit, they result in a reduction in wage costs. In this context, because only firms in imperfect markets generate the rents from which donations can be made, we anticipate a positive relationship between donations and a measure of imperfect competition (concentration). The data is a cross-section sample of 38, 3- and 4-digit SIC manufacturing industries pooled for 1976 and 1981. The major findings are that: the results are generally compatible with the predictions of the model; concentration is a significant determinant of donations although non-linear; the cost of giving (the tax rate) is appropriately positive; and there are significant negative relationships for measures of foreign ownership and wage rates.     

Price, unit value, and quality demanded

Given the paucity of quality price data, it is common to rely on “unit value” (average expenditure per unit) as a proxy for price, but this is an imperfect proxy if households respond to price increases by substituting to lower quality goods. This paper draws on survey data that contain both unit value and price to estimate the severity of quality substitution in Indonesia, finding that it is prevalent. The paper next calculates price elasticities that correct for quality substitution, evaluating and ultimately rejecting a commonly used method for calculating price elasticities using only unit value data. Finally, it demonstrates that quality substitution can result in biased price elasticities even when price is perfectly observed.     

On PPP,unit roots and panels

In this paper we use a combination of time series unit root and cointegration analysis and the Bai and Ng (Econometrica 72:1127–1187, 2004) factor model approach to assess the purchasing power parity hypothesis for four real exchange rate panels. Our main findings are twofold: First, we find robust evidence for nonstationary common components in the real exchange rate panels and hence no evidence for PPP. Second, the presence of nonstationary common components is consistent with rejections of the unit root null hypothesis when applying a battery of first and second generation panel unit root tests, which are known to be adversely affected in the presence of common nonstationary components.     

Ad valorem versus unit taxes: monopolistic competition, heterogeneous firms, and intra-industry reallocations

Real-world industries are composed from heterogeneous firms and substantial intra-industry reallocations take place, i.e. high productivity firms squeeze out low productivity firms. Previous tax-tool comparisons have not included these central forces of industry structure. This paper examines a general equilibrium monopolistic competition model with heterogeneous firms and intra-industry reallocations. We show that the welfare superiority of ad valorem over unit taxes under imperfect competition is not only preserved but amplified. The additional difference between the tools arises because unit taxes distort relative prices, which in turn reduces average industry productivity through reallocations (the survival and increased market share of lower productivity firms). Importantly, numerical solutions of the model reveal that the relative welfare loss from using the unit tax increases dramatically in the degree of firm heterogeneity.     

Country terms of trade: trends,unit roots,over-differencing,endogeneity, time dummies,and heterogeneity

The debate about the Prebisch-Singer thesis has focused on primary commodities with some extensions to manufactures. We analyse trends in country terms-of-trade for goods and services rather than those for commodities according to the World Bank income classification. We find that the natural logarithm of the terms of trade for all groups except for the poorest has common unit roots, but none has individual unit roots. As low-income countries have no unit roots over-differencing is inefficient and biases significance levels in first differences against the fall in the terms of trade. For the low-income countries the terms of trade of goods and services are falling at a rate that is significantly negative without and with endogeneity treatment by system GMM. A comprehensive analysis of the effects of time dummies supports the result of falling terms of trade for low-income countries. When all coefficients are country-specific 50% of all low-income countries have falling terms of trade in a simultaneous equation estimation using the SUR method. Food and financial crisis have no effect on the number of countries with falling terms of trade, but (dis-)improve the terms of trade or the significance of the results for a very small number of countries.     

Inpatient nursing unit volume, length of stay, cost, and mortality

Nursing unit volume-outcome relationships exist for patients assigned selected DRGs. This finding suggests that, in some cases, aggregating inpatients with similar clinical conditions may result in lower cost of care, shorter length of stay, and fewer hospital deaths.     

Weighted symmetric tests for a unit root: response functions,power, test dependence and test conflict

The most frequently applied test statistics for a unit root are the Dickey–Fuller tests, which are built into many econometric packages along with MacKinnon's empirical response functions. This article provides empirical response functions for some easy to compute alternative test statistics that are generally much more powerful than the Dickey–Fuller tests; specifically, these are the Dickey–Fuller tests and the weighted symmetric versions of the and tests. The empirical response functions presented here take into account adjustments for lag length in the maintained regression, and also extend the design of the simulation experiments compared to previous work. A second aspect of this study concerns the widespread practice in applied econometrics of using more than one test for the same feature without an assessment of the implications for the cumulative significance level and probability of test conflict. Tests for a unit root being are a leading example of this practice. Using the extended set of unit root tests considered here, the extent of test dependence is simulated and overall type one error calculated. Two empirical applications illustrate the key principles.     

Entrepreneurship,entry and performance of new business compared in two growth regimes: East and West Germany

The paper provides an outline of the concept of regional growth regimes and empirically illustrates the relevance of the concept. The empirical examples are entrepreneurship, entry and the performance of new businesses in East and West Germany. The differences of the factors determining the formation of new businesses as well as their development between these two growth regimes are immense and clearly demonstrate the relevance of region specific factors.JEL Classification: O11, O18, P25, R11Michael Fritsch: I amindebted to two anonymous referees for helpful comments on an earlier version and to Pamela Mueller and Antje Weyh for energetic support in preparing the data. Correspondence to Technical University of Freiberg, Faculty of Economics and Business Administration, Lessingstraße 45, 09596 Freiberg, Germany     

Stochastic unit root processes: Maximum likelihood estimation,and new Lagrange multiplier and likelihood ratio tests

We show in this study that the maximum likelihood estimators of stochastic unit root (STUR) processes are consistent and asymptotically normally distributed. We also present two new tests for STUR. We first propose a Lagrange multiplier test and show that it has a standard χ² distribution asymptotically. We also propose a likelihood ratio test and show that it has an asymptotic distribution of 50–50 mixture of χ² and a point mass at 0. As an empirical example, we test the existence of STUR in the Canadian real exchange rate and explore the implication of STUR on the validity of purchasing power parity.     

DRAMs, fiber and energy compared with three models of market penetration

When a new technology is introduced in the market, this technology generally follows an S-shaped curve, especially if measured on a relative (market share) basis. Marchetti and Nakicenovic and Norton and Bass have modeled the multivariant case of various technologies introduced at different times. A new, simple and flexible model has been proposed based on potential penetration. Potential penetration is penetration on the assumption that no other new technology will enter the market. In a stable competitive environment, potential penetration curves are typically positively sloped S-curves. The new model gives a good fit in markets with a limited number of competitors, which are capable of totally cannibalizing previous generations of technologies. It also fits well with markets with many competitors in a competitive equilibrium situation. Examples are the Dynamic Random Access Memory chips (DRAMs), fiber and energy market. The new model features fewer variables compared with existing models and can readily be adapted to technological processes with time varying parameters, which is particularly important in volatile competitive markets.     

Differences in the determinants and targeting of antidumping: China and India compared

Despite both being developing countries, China and India have markedly contrasting patterns in their use and targeting of antidumping (AD) measures. We explore the factors driving AD use by these two countries, considering in turn macroeconomic, strategic and other determinants. We find more regular or systematic features of AD use by China, while India displays a less systematic pattern of AD use. Economic growth, AD club effect and free trade agreement participation are shown to constrain AD use by China. Compared to India, AD use by China is also more sensitive across industries. Furthermore, China targets developed countries more than developing countries, while India is less discriminating with respect to the country type it targets.     

The scarring effects of unemployment,low pay and skills under-utilization in Australia compared

There is a substantial literature on the scarring effects of unemployment on future employment prospects and a smaller one on the scarring effects of low pay, but the possibility that skills mismatch, in the form of skills under-utilization, may have similar detrimental effects has not been considered before. We use the Household, Income and Labour Dynamics in Australia panel to investigate the dynamics of unemployment, low pay and skills under-utilization, including differences by gender and education. We show that, in addition to earlier evidence on wage penalties and reduced job satisfaction, skills under-utilization scars future employment prospects in a way similar to that of low pay.     

The unit root problem: Affinities between ergodicity and stationarity,its practical contradictions for central bank policy,and some consideration of alternatives

The initial focus in this article is the problem of mismatch between policy goals and statistical analysis, based on how data is transformed and processed. This intrinsically raises ontological issues regarding the nature of an economy within which policy is made and to which statistical analysis is applied. These are of general significance to post Keynesians irrespective of the position they take on the specifics of the ergodicity debate. However, they involve some issues that overlap with some aspects of that debate. The problem as posed in this article is specific and involves a practical contradiction regarding central bank policy and the problem of unit roots. The authors then consider some additional ways in which one can go beyond common practice based on the example of Forward Guidance in the United Kingdom and a more institutional approach to post Keynesian analysis.     

Nabumetone compared with Ibuprofen and a weighted NSAID combination: an economic evaluation

Summary

An economic evaluation has been performed to assess the cost effectiveness of using nabumetone to treat Osteoarthritis (OA) or Rheumatoid Arthritis (RA) compared to alternative NSAIDs (plain NSAIDs only, ie. excludes combinations). Clinical decision analysis has been used to model the costs and outcomes of treatment building on the results of a large, open label, randomised, controlled, multicentre US clinical study, from an NHS perspective. In the treatment of OA/RA, nabumetone carries a lower risk of major side effects and potential associated mortality, than either ibuprofen or a weighted NSAID comparator. The cost per life year gained, by prescribing nabumetone, in place of other NSAIDs, ranges from £1,656 to £3,087.

If reducing the risk of major side effects is a priority then the additional potential costs of prescribing Nabumetone to achieve this end compares favourably to many expenditures already made within the NHS. On this basis, prescribing nabumetone for OA/RA may be considered a cost effective use of resources from a health service perspective.