Towards an efficiency interpretation of regulatory implementation lags

Regulatory agencies are often legally obliged to use a cost-benefit rule in revising environmental standards to reflect improvements in pollution-control techniques, but have considerable discretion over the timing of such revision. How should the agency use this discretion? Longer lags tend to encourage more intense R&;D effort by the regulated industry itself whilst discouraging parallel effort by external developers. Optimal implementation lags are characterized. The analysis calls into question the conventional view that “footdragging” by agencies is necessarily evidence of incompetence or regulatory capture. More generally, whether or not subject to conscious manipulation by regulatory agencies, the delays routinely observed in implementation may enhance welfare.     

The measurement and decomposition of nonuse values: A critical review

We critically review the literature that claims that existence values, or nonuse values in general, are a large and measurable component of total value for certain environmental resources. Our concern is not with the question “do nonuse values exist?” For some individuals they surely do. Rather, our concern is with two interrelated questions: are there operationally meaningful theorems which might lead to the specific measurement of nonuse values, and do we in fact have a body of credible evidence which shows that nonuse values, particularly components of any nonuse value, are “large”? We find nothing in the way of operationally meaningful hypotheses which would permit the estimation of values attributable to specific motives of individuals. We find no credible basis for claims related to either the measurement of existence and other motive-related values or claims for the “large” relative size of such values. In short, we question the conventional wisdom that such values are measurable and that they are significant as a component of total value.     

Optimal Welfare-to-Work Programs

A Welfare-to-Work (WTW) program is a mix of government expenditures on various labour market policies targeted to the unemployed ( e.g. unemployment insurance (UI), job search monitoring (JM), social assistance (SA), wage subsidies). This paper provides a dynamic principal–agent framework suitable for analysing chief features of an optimal WTW program, such as the sequence and duration of the different policies, the dynamic pattern of payments along the unemployment spell, and the emergence of taxes/subsidies upon re-employment. The optimal program endogenously generates an absorbing policy of last resort ("social assistance") characterized by a constant lifetime payment and no active participation by the agent. Human capital depreciation is a necessary condition for policy transitions to be part of an optimal WTW program. The typical sequence of policies is quite simple: the program starts with standard UI, then switches into monitored search and, finally, into SA. The optimal benefits are decreasing during unemployment insurance and constant during both JM and SA. Whereas taxes (subsidies) can be either increasing or decreasing with duration during UI, they must decrease (increase) during a phase of JM. In a calibration exercise, we use our model to analyse quantitatively the features of the optimal program for the U.S. economy. With respect to the existing U.S. system, the optimal WTW scheme delivers sizeable welfare gains to unskilled workers because the incentives to search for a job can be retained even while delivering more insurance and using costly monitoring less intensively.     

Behavior in one-shot traveler’s dilemma games: model and experiments with advice

We report results of one-shot traveler’s dilemma game experiments to test the predictions of a model of introspection. The model describes a noisy out-of-equilibrium process by which players reach a decision of what to do in one-shot games. To test the robustness of the model and to compare it to other models of introspection without noise, we introduce non-binding advice. Advice has the effect of coordinating all players’ beliefs onto a common strategy. Experimentally, advice is implemented by asking subjects who participated in a repeated traveler’s dilemma game to recommend an action to subjects playing one-shot games with identical parameters. In contrast to observations, models based on best-response dynamics would predict lower claims than the advised. We show that our model’s predictions with and without advice are consistent with the data.      

Parallel Neutrality

This paper develops the notion of parallel-neutral technical change for inputs and outputs. It is shown that parallel-neutral technical change generalizes existing radial notions of neutral technical change. A taxonomy of the structural consequences of parallel-neutral technical change is developed.     

Bioenergy Crop Production in the United States: Potential Quantities, Land Use Changes, and Economic Impacts on the Agricultural Sector

The U.S. Departments of Agriculture and Energyjointly analyzed the economic potential for,and impacts of, large-scale bioenergy cropproduction in the United States. Anagricultural sector model (POLYSYS) wasmodified to include three potential bioenergycrops (switchgrass, hybrid poplar, and willow). At farmgate prices of US $2.44/GJ, anestimated 17 million hectares of bioenergycrops, annually yielding 171 million dry Mg ofbiomass, could potentially be produced at aprofit greater than existing agricultural usesfor the land. The estimate assumes highproductivity management practices are permittedon Conservation Reserve Program lands. Traditional crops prices are estimated toincrease 9 to 14 percent above baseline pricesand farm income increases annually by US $6.0billion above baseline.At farmgate prices of US $1.83/GJ, anestimated 7.9 million hectares of bioenergycrops, annually yielding 55 million dry Mg ofbiomass, could potentially be produced at aprofit greater than existing agricultural usesfor the land. The estimate assumes managementpractices intended to achieve highenvironmental benefits on Conservation ReserveProgram lands. Traditional crops prices areestimated to increase 4 to 9 percent abovebaseline prices and farm income increasesannually by US $2.8 billion above baseline.     

Joseph A. Schumpeter’s contributions in the area of fiscal sociology: a first approximation

Fiscal sociology deals with the ramifications of the fiscal activities of the state into areas which are not their primary target. These effects may occur in sectors not directly affected such as related markets, but they may also occur outside the economic sphere proper, such as in politics, culture, religion, or society at large. Schumpeter contributed to the research project of fiscal sociology throughout his life. In this first approximation, his contribution is discussed in terms of his appreciation of three important scholars who all made landmark contributions to fiscal sociology: Franz Oppenheimer, Werner Sombart, and Gustav (von) Schmoller.JEL Classification: B15, H39     

A brief study of age specific birth proportions,Japan and Singapore

The suitability of age-specific birth proportions (ASBP), or percentage distribution of births, as a rough and ready index of fertility change was analyzed by establishing a theoretical framework for its limitations and uses. The discussion suggested that the utility of ASBP as an indicator of fertility change depends on the characteristics and behavior of the population being considered. The concept was then empirically applied to birth trends in Japan and Singapore for 2 different time periods. Analysis suggested that ASBP trends in Japan reflected changes in age-specific fertility rates relative to general fertility rate as well as trends in parity distribution. The Singapore analysis was more complicated, raising different issues. As very limited empirical work has been done on ASBPs, the utility of ASBPs as an indicator of fertility change cannot be definitely ascertained. It was suggested however that ASBP trends may be applicable in countries where the age distribution of fertile-aged women is fairly stable. More empirical research should be done on ASBP trends in other countries, the behavior of A matrix as discussed in this paper, and useful empirical relationship of ASBP with other fertility measures.