Bayesian estimation of manufacturing effects in a fuel economy model

The analysis of fuel economy data results in estimates of the technology utilization by manufacturer and vehicle line. The analysis employs a hierarchical Bayesian regression model with random components representing vehicle lines and manufacturers. The model includes predictor variables which describe vehicle features, such as type of transmission, and vehicle line specific measurements, such as compression ratio. Non-informative priors with novel modifications are used and the Bayes estimates are obtained by use of Gibbs sampling. The results show there is substantial variability among manufacturers in efficiently utilizing technology for fuel economy.     

Central-city income redistribution and the flight to the suburbs: A stylized model

This paper characterizes the optimal tax policy of a central-city government whose goal is to redistribute income from the rich to the poor to maximize the intertemporal utility of the latter group. Since redistribution erodes the tax base by stimulating suburban flight on the part of the rich, choosing the optimal path for the income tax rate is a problem in optimal control. The nature of the solution to the problem is shown to depend crucially on the level of the discount rate and the time path of exogenous income for the poor.     

Family income and children's education: Using the Norwegian oil boom as a natural experiment

Parental income is positively correlated with children's educational attainment. This paper addresses the causality of this observed link. We have a unique data set for Norwegians born in the period 1967–1969, with a measure of permanent family income in the children's adolescence. This enables us to examine the long-term effect of family income on children's educational attainment. The Norwegian oil shock in the 1970s is used as an instrument, because this – in some regions but not in others – implied a general increase in income unrelated to parents' abilities. This variation in income is used to estimate the causal effect of family income on children's educational attainment. We find no such causal relationship. This result is robust with respect to different specification tests.     

The American for-profit university: a model for the information economy

Within the context of 'the engine of globalisation,' Sperling explores the rigidities and inefficiencies in 'traditional' American higher education institutions. He points to the ways in which the for-profit university can overcome these problems, while at the same time being a net contributor to the tax system. In particular, he suggests that it is the profit motive that makes the University of Phoenix responsive to its its customers, and technologically innovative.     

A model of child support and the underground economy

We develop and estimate a model of the informal and formal employment decisions of American noncustodial fathers who have never married the mother of their child, as well as the paternity establishment decisions of the mothers. Fathers may evade child support payment through informal child support payments to induce the mother not to cooperate with the child support authorities or through underground work. To estimate the model, we use data drawn from the Fragile Families dataset and a discrete model of no work, part-time work and full-time work in both sectors, as well as paternal child support payment. Simulation results indicate that an increase in the order amount leads to small but statistically significant decreases in formal child support, as well as an increase in underground work.     

A political economy model of immigration quotas

The paper examines a model in which the number of immigrants allowed into a country is the outcome of a costly political lobbying contest between a firm and a union. The union and the firm bargain over the wage of natives after the number of immigrants that will be permitted is known. I assume that the lobbying contest is an all-pay auction (i.e., the lobbyist with the higher effort wins with certainty). Comparative statics results are derived to show how the reservation wage of immigrants, the price of the firms product, the size of the union and the cost of lobbying affect immigration quotas and the post-immigration wage of natives.Received: 4 June 2003, Accepted: 23 June 2004 JEL Classification: D72, D73, J5, J61I thank the editor, Amihai Glazer, Don Devoretz, Dan Usher, and three anonymous referees for helpful comments. My thanks are especially due to Doug Allen and Gordon Myers who supervised this work as part of my doctoral thesis at Simon Fraser University, Canada. An earlier version of this paper was circulated as RIIM working paper #00-01, Simon Fraser University, Canada and also presented at the 2001 meetings of the Canadian Public Economics Study Group in Montreal, Canada.     

A political economy model of road pricing

In this paper, we use a simple majority voting model to study the introduction of urban congestion tolls. The model allows for different types of uncertainty and considers different uses of the toll revenues. The following results are obtained. First, we show that individual uncertainty with respect to modal substitution costs may imply that a majority votes against road pricing ex ante, although a majority would have been in favor after its introduction ex post. Moreover, if a majority is against road pricing ex ante, there will also be no majority for organizing an experiment that would take away the individual uncertainty. Second, political uncertainty with respect to the use of the revenues corroborates the finding that ex ante more voters will be against the introduction of tolls. Third, both types of uncertainty suggest that fewer voters are against road pricing when toll revenues are used to subsidize public transport than when they are redistributed to all voters. Importantly, the results of this paper are consistent with a number of recent empirical observations on efforts to introduce road pricing, including the systematic rejection of road pricing in referenda, the more favorable attitudes towards road pricing after than before its introduction, and tying the toll revenues to support public transport.     

Agent based model of a simple economy

This article proposes a model of a simple economy based on a set of agent-based modeling principles. The model is based on the ??trust game?? formulated by Berg et?al. (Games Econ Behav 10:122?C142, 1995), and anticipates a random matching of partners taking in to account adaptive agent behavior. Simulation in the NetLogo programming environment, using profile distributions obtained from empirical studies, has shown the most successful agents to posses low parameters of trust in the role of Sender and high parameters of trustworthiness in the role of Receiver.     

Distribution of personal income: Development of a new model and its application to U.S. income data

This paper proposes a four-parameter statistical model of the personalized distribution of income using the ‘income share elasticity’ approach suggested by Esteban (1986). Our proposed model includes the Singh–Maddala (1976) and Dagum (1977) distributions as special cases. The generalized beta II distribution of McDonald (1984) is also a variant of this model. It appears to give an excellent fit to US income data and its empirical performance turns out to be superior to those of the Singh–Maddala (1976), Dagum (1977), the five-parameter Champernowne (1953) distributions and the generalized beta II distribution of McDonald (1984) on some data.     

On the distributional effects of trade policy: Dynamics of household saving and asset prices

This paper studies the effect of trade liberalization on inequality. We develop a theoretical framework that generates economy-wide distributions of wealth and income for different levels of trade protection. The model unambiguously determines the effect of liberalization on inequality; and rationalizes why larger inequality can be the outcome of a welfare enhancing policy, as households reduce their buffer savings when liberalization lowers the price of food. The framework reconciles the increase in inequality, the fall in the value of land, and farmers’ opposition to freer trade, that have featured in different liberalization episodes. We also present empirical support for the model’s predictions.     

循环经济：与自然和谐的经济发展模式

循环经济是通过将经济活动按照自然生态系统的模式,组成"资源-产品-再生资源"的物质反馈式循环过程,使经济活动对自然环境的影响降低到最小程度,在物质不断循环的基础上实现资源的最大化利用,促进社会经济的可持续发展.发展循环经济是人类社会发展的必然选择.在我国高速的经济增长中,资源短缺和环境污染的问题非常严重,因而发展循环经济具有重要意义.发展循环经济是一项涉及各行各业、千家万户的事业,需要政府、企业和社会各界的共同努力,增强全社会的资源忧患意识和节约资源、保护环境的责任意识,构建资源节约型、环境友好型社会.     

The transition from central planning to a market economy: A computable general equilibrium model

This paper develops a computable general equilibrium (CGE) model of the transition from a central planned economy to a market economy. The model is an extension of Wellisz and Findlay's (1986) model of the Soviet second economy. By distinguishing alternative assumptions about the disposition of the government budget, two model variants — the activist and non-activist — are analyzed. Equilibria of these model variants are computed for various parameter specifications of the Kantorovich ray, which represents the stringency of central planners' direction of the economy. The paper shows that increasing efficiency of the private sector, while it reduces the size of government subsidies to the state sector, does not necessarily increase the net government budget.     

Macroeconomy and the well-being of low income African American families

By employing unit root testing and cointegration procedures, this paper is the first study of its kind to present empirical evidence showing higher inflation rate, lower unemployment, and increased real per capita gross domestic product decreased the poverty rate among African American families during the 1966–99 period. The findings, estimated using the Phillips-Hansen fully modified OLS estimator, are also consistent with results obtained using Johansen’s maximum likelihood cointegration procedure. Long-run Granger causality, inferred by the estimated error-correction model, suggests that the African American poverty rate is not weakly exogenous and will respond to policy intervention.     

A closed-form solution for the continuous-time consumption model with endogenous labor income

In this paper, we study the consumption, labor supply, and portfolio decisions of an infinitely lived individual who receives a certain wage rate and income from investment into a risky asset and a risk-free bond. Uncertainty about labor income arises endogenously, because labor supply evolves randomly over time in response to changes in financial wealth. We derive closed-form solutions for optimal consumption, labor supply and investment strategy. We find that deferring the retirement age stimulates optimal consumption over time and discourages optimal labor supply during the working life. We also find explicitly that optimal portfolio allocation becomes more ‘conservative’ when the individual approaches his prescribed retirement age. The effects of risk-aversion coefficients on optimal decisions are examined.     

市场经济条件下增加旅客列车运营收益的研究

提高经济效益是当前经济建设中的突出问题,开展列车运营收益的策略研究是提高经济效益整体水平的关键,具有十分重要的意义。文章以增加旅客列车运营收益为目标进行分析,运用需求价格弹性理论建立定价模型和计算公式,为客票定价调价提供科学的理论依据,并从定价策略和营销策略角度提出了相应的对策和建议。     

Expansionary effects of the welfare state in a small open economy

We examine the relationship between welfare state policies and economic performance in a small open economy with (i) free trade in final goods and international capital mobility, and (ii) aggregate increasing returns to scale. Contrary to the conventional wisdom, we find that a retrenchment of welfare programmes is not an inevitable consequence of economic integration. Instead, by improving the exploitation of aggregate scale economies, social expenditure policies and international openness complement each other in facilitating an improvement in economic performance that can sustain a more generous welfare protection.     

A small linear model of wage- and price-inflation in the Norwegian economy

This paper presents a model of inflation in a small open economy which features both wage-wage linkages and a wage-price spiral. Hence we have a simultaneous structure which contains the conventional Scandinavian model of inflation as a special case. Full system estimation results are reported. Great emphasis is placed on data coherency and on parameter stability. One interesting finding is that both wage growth and the wage level in the exposed (E)-sector are strongly influenced by the outside wage. This contradicts the predictions of the Scandinavian model, which defines the wage-leading role of the E-sector by the absence of outside wage effects in E-sector wage formation. Another result is that the speed of adjustment to exogenous shocks is greater for prices than for wages. This finding may be important in explaining real wage flexibility, which is often seen as the hallmark of low unemployment economies such as the Norwegian.     

A flexible dynamic model of multiproduct technology for the West German economy

This paper tests symmetry and negativity of the Slutsky matrix for a system of demand functions derived from an aggregate model of multi product technology within a flexible dynamic framework. The model considers three inputs and three outputs, including imports and exports of intermediate goods. We derive a static demand model from a trans log cost function and specify the data generation process by a stationary ARX (1, 1) model. Results based on West German quarterly data indicate that the integrability conditions are not rejected when imposed on the ARX (1, 1) model, whereas they are rejected for all the less general dynamic models considered.