Do Better Wages Reduce Crime? A Research Note

A bstract . Recent research has called into question theoretical and empirical findings demonstrating a deterrent effect of punishment. Also challenged has been the view that improved employment opportunities help to reduce participation in illegitimate activities. This research note summarizes newly published econometric findings revealing that better wages and employment indeed do appear to reduce individual recidivism rates, at least in the major data set studied. The data are drawn from the Baltimore LIFE experiment. Maximum likelihood methods are used to estimate the probability of recidivism one year after release from prison and the probability of avoiding rearrest or "survival" each month after release from prison. It is found that higher average weekly wages are associated with lower recidivism and higher survival rates. In contrast, no evidence is found to confirm a deterrent effect of punishment. [Complete documentation is published in S. L. Myers, Jr "Estimating the Economic Model of Crime: Employment vs. Punishment Effects,".     

Decision-making in the two-act antitrust decision problem

This paper focuses on the antitrust decision-making process as it pertains to anti-merger policy as a special case of the more general two-act decision problem. We employ the Analytic Hierarchy Process to analyze some prominent antitrust merger decision. The analysis suggests that the courts have failed to give potential competition its due when it acts to dampen any alleged market power accruing to the market leader, which in turn suggests that the defendants would be well advised to reorient the weight that they give to potential competition in designing their defense.     

Earning per share and takeovers

Eps (earning per share) is widely used as a financial measure of performance, but it can be misleading in takeovers and mergers. Conditions are examined under which the eps of a combined enterprise is greater than that of each of the constituent companies prior to the bid, and the relative gains to the bidder (in terms of earning) are stated.     

THREE HYPOTHESES ON THE BRAZILIAN SERVICE SECTOR

Three hypotheses on services, the Gershuny effect, the externalisation of producers services and the macroeconomic equation for the services share in employment, are tested with Brazilian data. The first two show trends similar to those in the developed economies, but, in the last one, findings are affected by consideration of the underground economy. The results suggest a dual character for Brazilian services: an informal, labour intensive group of sectors, present in the large metropolitan areas, coexists with a formal, less labour intensive one, where producers' services are probably predominant. These groups will respond differently to a greater trade liberalisation.     

Number,Age Composition and School Achievements of Siblings in Two African Capital Cities

This paper uses biographical data from Dakar and Yaoundé, two large African cities, to study the link between number of siblings and school attainment. The data describe all fertility events experienced by parents and the number of siblings of each child over time. The average family size effect is estimated first. The family size effect at different ages is then estimated. The results show that, in Dakar, both the overall and age-specific effect of family size on education are negative and statistically significant. In Yaoundé, the overall effect is not significant, but negative effects at some schooling ages (between 14 and 17) are observed in this study. Finally, the negative impact of family size on school achievement seems to be driven more by elder siblings than by younger ones.     

Influence Strategies and Channel Member Satisfaction in Cameroon

Researchers have called for increased understanding of channel member satisfaction as a bidimensional construct comprising economic and social elements. In addition to responding to this call, the view that threats and punishments are natural necessities in the African context by reason of cultural preponderances is examined. The study was conducted among brewers and their retailers. The authors found that the brewers' use of threats and indirect influence strategies respectively decreases and increases both economic and social satisfaction of their less powerful retailers, whereas the use of promises contributes to retailers' economic satisfaction. Contrary to theory, however, the use of promises does not undermine channel members' autonomy and intrinsic motivation as will be expected in some Western countries.     

Limiting Corporate Power

In this article, the authors examine the recent evolution of Fannie Mae and Freddie Mac in light of the ongoing and massive public sector bailout of "too big to fail" private banks. The authors propose that instead of using these semi public banks as vehicles for a backdoor bailout of their private peers, they could easily be employed as a centerpiece for a people's bailout.