ON INTERNATIONAL MIGRATION AND THE SOCIAL WELFARE FUNCTION

In defining optimum population, economists have used two distinct concepts of the social welfare function: the Millian and the Benthamite. Although analytically the issue of the welfare impact of international migration is closely related to the concept of optimum population, the migration analysis has been based almost exclusively on the Benthamite welfare function. As its point of departure, the present note explores the implications of the alternative Millian welfare function for migration analysis.
An interesting aspect of the results derived from the present exercise is that they are in sharp contradiction with the results based on the Benthamite social welfare function. This highlights the sensitivity of the results to the welfare criteria used and the need for greater caution in policy formulation.     

THE IMPACT OF PRICES AND CONTROL POLICIES ON CIGARETTE SMOKING AMONG COLLEGE STUDENTS

Smoking among youths and young adults rose throughout the 1990s. Numerous policies were enacted to try to reverse this trend. However, little is known about the impact these policies have on the smoking behavior of young adults. This article uses a dichotomous indicator of daily smoking participation in the past 30 days, an ordered measure representing the frequency of cigarette consumption, and a quasi-continuous measure of the number of cigarettes smoked per day on average to examine the impact of cigarette prices, clean indoor air laws, and campus-level smoking policies on the smoking behaviors of a 1997 cross section of college students. The results of the analysis indicate that higher cigarette prices are associated with lower smoking participation and lower levels of use among college student smokers. Local- and state-level clean indoor air restrictions have a cumulative impact on the level of smoking by current smokers. Complete smoking bans on college campuses are associated with lower levels of smoking among current smokers but have no significant impact on smoking participation. Bans on cigarette advertising on campus as well as bans on the sale of cigarettes on campus have no significant effect on the smoking behavior of college students.     

THE EFFECT OF GATE REVENUE SHARING ON SOCIAL WELFARE

This paper provides a theoretical model of a team sports league based on contest theory and studies the welfare effect of gate revenue sharing. It derives two counterintuitive results. First, it challenges the "invariance proposition" by showing that revenue sharing reduces competitive balance and thus produces a more unbalanced league. Second, the paper concludes that a lower degree of competitive balance compared with the noncooperative league equilibrium yields a higher level of social welfare and club profits. Combining both results, it concludes that gate revenue sharing increases social welfare and club profits in our model. ( JEL L83)     

THE IMPACT OF ANTI‐TERRORISM EXPENDITURE ON ECONOMIC GROWTH AND WELFARE

This paper examines the effects of increasing anti‐terrorism expenditure on economic growth rate and social welfare. It is shown that: (i) spending the least amount possible on anti‐terrorism expenditure will lead to a maximum economic growth rate; and (ii) to achieve maximum social welfare, the government should allocate its budget to anti‐terrorism expenditure. The results shed light on why the US government has chosen to uphold and pursue its anti‐terrorism policies in recent years to present day.     

MEDIA ADVERTISING AND BALLOT INITIATIVES: THE CASE OF ANIMAL WELFARE REGULATION

Spending on political advertising increases with every election cycle, not only for congressional or presidential candidates, but also for state‐level ballot initiatives. There is little research in marketing, however, on the effectiveness of political advertising at this level. In this study, we conduct an experimental analysis of advertisements used during the 2008 campaign to mandate new animal welfare standards in California (Proposition 2). Using subjects' willingness‐to‐pay for cage‐free eggs as a proxy for their likely voting behavior, we investigate whether advertising provides real information to likely voters, and thus sharpens their existing attitudes toward the issue, or whether advertising can indeed change preferences. We find that advertising in support of Proposition 2 was more effective in raising subjects' willingness‐to‐pay for cage‐free eggs than ads in opposition were in reducing it, but we also find that ads in support of the measure reduce the dispersion of preferences and thus polarize attitudes toward the initiative. More generally, political ads are found to contain considerably more “hype” than “real information” in the sense of Johnson and Myatt [Johnson, J. P., and D. P. Myatt. “On the Simple Economics of Advertising, Marketing and Product Design.” American Economic Review, 96, 2006, 756–84]. (JEL D12, D72, K32, L66, M37)     

IDIOSYNCRATIC RISK,AGGREGATE RISK,AND THE WELFARE EFFECTS OF SOCIAL SECURITY

We ask whether a pay‐as‐you‐go financed social security system is welfare improving in an economy with idiosyncratic and aggregate risk. We show that the whole welfare benefit from insurance against both risks is greater than the sum of benefits from insurance against the isolated risks. One reason is the convexity of the welfare gain. The other reason is a direct risk interaction amplifying the utility losses from risk. Our quantitative evaluation shows that introducing a minimum pension leads to sizeable welfare gains, despite substantial crowding out. About 60% of these gains would be missing from summing up the isolated benefits.     

SOCIAL INFLUENCE AND THE CONSUMER BANKRUPTCY DECISION

I examine the influence of neighbors on the consumer bankruptcy decision using administrative bankruptcy records linked to the 2000 Decennial Census. Two empirical strategies remove unobserved common factors that affect identification. The first strategy uses small geographical areas to isolate neighborhood effects, and the second strategy identifies the effect using past bankruptcy filers who moved states. The findings from both strategies reinforce each other and confirm the role of social influence on the bankruptcy decision. Having a past bankruptcy filer move into the block from a different state increases the likelihood of filing by 10%. (JEL D12, K35)     

WHY SOCIAL PREFERENCES MATTER – THE IMPACT OF NON-SELFISH MOTIVES ON COMPETITION, COOPERATION AND INCENTIVES

A substantial number of people exhibit social preferences, which means they are not solely motivated by material self-interest but also care positively or negatively for the material payoffs of relevant reference agents. We show empirically that economists fail to understand fundamental economic questions when they disregard social preferences, in particular, that without taking social preferences into account, it is not possible to understand adequately (i) effects of competition on market outcomes, (ii) laws governing cooperation and collective action, (iii) effects and the determinants of material incentives, (iv) which contracts and property rights arrangements are optimal, and (v) important forces shaping social norms and market failures.     

CORPORATE SOCIAL RESPONSIBILITY INVESTMENT AND SOCIAL OBJECTIVES: AN EXAMINATION ON SOCIAL WELFARE INVESTMENT OF CHINESE STATE OWNED ENTERPRISES

We apply the theory of corporate social responsibility to analyse social welfare investment undertaken by Chinese State Owned Enterprises (SOEs). We present a simple theoretical model to illustrate how the presence of social objectives in the firm's objective function changes its investment behaviour. Our theoretical model accommodates special features of Chinese SOEs, whose social welfare investment is driven by both social objectives and profit concerns. The model is then tested using a panel of Chinese enterprises during the period 1995–1999. The empirical analysis indicates that despite of the corporatization reform social welfare investment undertaken by Chinese SOEs is still inefficient due to the lack of profit concerns, suggesting that social objectives still dominate profit concerns in motivating the SOEs' social welfare investment. However, we do obtain clear-cut evidence showing that social objectives become less important as time progresses.     

A SOCIAL WELFARE VIEW OF THE MEASUREMENT OF INCOME EQUALITY

Economists' use of the term "equality" in reference to a distribution of incomes has historically been in the sense of a consensus for some statistical characteristic(s) of the distribution rather than a firm concept of equality. Of course such a concept rests on appropriate welfare assumptions about income and its distribution, assumptions which, for the most part, have been left implicit (and unknown) in discussions of income equality in the literature.
Our purpose in this paper is dual: first, we wish to discover an unambiguous, welfare-related equality measure. This we accomplish through suitable assumptions on a social welfare function. What is produced is an "index" of equality which describes the performance of a given distribution relative to the maximum welfare derivable from the total income it represents. The measure thus depends functionally on the welfare attributes of income, something which in reality we know little about.
This impasse leads us to inquire into the sensitivity of the index over specifications of the welfare function, which is done by comparing equality ranks for the states of the United States for 1960 under various functional forms and among curves within a given form. As an interesting secondary issue, the performance of traditional equality measures is tested relative to the welfare-oriented index to discover implications about their welfare content.
It is found that the equality index is, in certain ranges for the welfare function, insensitive to its specification. The findings lead directly to conclusions concerning traditional equality measures, their usefulness in correctly accounting for equality differences among alternative income distributions and, concomitantly, their implicit welfare inputs.     

THE DEMAND FOR CIGARETTES IN JAPAN: IMPACT OF INFORMATION DISSEMINATION ON CIGARETTE CONSUMPTION

The authors present a theoretical derivation of cigarette demand and estimate the demand in Japan with prefecturE-level data. By examining the impact of information dissemination regarding the health hazards of smoking, the authors argue that information dissemination is an effective instrument of public health policy, supplementary to cigarette taxation and antismoking ordinances.     

THE EFFICIENCY OF THE STATE‐OWNED FIRM AND SOCIAL WELFARE: A NOTE

We consider a mixed market where a state‐owned firm competes with private firms. If the number of firms is exogenous, then a deterioration of the efficiency of the state‐owned firm might improve social welfare. This situation occurs when the state‐owned firm is inefficient and private firms are efficient. However, if the number of firms is endogenous, then a deterioration of the efficiency of the state‐owned firm must reduce social welfare.