ASSESSING THE IMPACTS OF LABOR MARKET AND DETERRENCE VARIABLES ON CRIME RATES IN MEXICO

Many studies examine the relationship between crime rates and various economic and/or sociodemographic variables in high income countries, but similar efforts for middle and low income countries are less common. Utilizing an 8‐year panel data sample for all 32 states in Mexico, this study assesses the impact of Mexican labor market and deterrence variables on various Mexican crime rates. The principal results indicate that: (1) State gross domestic product (GDP) per capita has ambiguous effect on crime rates under different conditions. Both wages and unemployment rates are negatively linked with crime rates. (2) Although the Mexican judicial and public security systems are widely believed to be ineffective, increased federal police forces and incarceration rates are associated with lower crime rates, but higher public security expenditure per capita is associated with higher crime rates. (3) The impacts from labor market and deterrence variables presented in (1) and (2) continue to hold under the Fox administration as well as for non‐border states. Their respective impacts diminish, however, under the Calderon administration as well as for border states because of the small number of observations. Overall, the results indicate that increasing average wages, federal police forces, and incarceration rates would have significant impacts on reducing crime rates in Mexican states. (JEL O54, K42)     

DEFINING A RIGHT OF ACCESS TO INTERSTATE NATURAL GAS PIPELINES

Decontrol of the wellhead price of natural gas under the Natural Gas Policy Act of 1978 ended the general shortage of natural gas, which had begun in the 1960s. It also led to dislocations in gas markets because of regulatory uncertainties that created difficulties in renegotiating contracts made during the shortage period. Together, the decontrol and dislocations led to a decline in the traditional role of interstate gas pipelines as full-requirements suppliers to local distributors, who now use pipelines primarily as transporters of gas purchased independently of the pipelines. The growth in transport transactions has increased greatly the potential scope of efficient exchanges in gas markets. Achieving efficiency gains, however, requires an underlying right of access to pipelines that is non-discriminatory, exchangeable, and consistent with both existing regulation and pre-existing contractual relationships. The authors define such a right, which they call exchangeable transport entitlement (ETE). They show that ETE satisfies the criteria for efficiency gains, and they examine the practical problems of the transition that a regulatory regime incorporating ETE faces. The analysis has important implications for other industries and for the economic theory of regulation. Specifically, the analysis shows that economists must realize the importance of diverse contractual relationships in both their theoretical literature and their proposals for regulatory reform.     

Some Results in the Theory of Arbitrage Pricing

This paper derives a stronger version of Huberman's recent “preference free” pricing theorem. This pricing result relates the expected return on an asset to its factor responses and the covariance structure of the residuals from a linear factor model. It must characterize any infinite asset economy in which no arbitrage opportunities are present whether or not the factor model has uncorrelated residuals. This result provides the intuition for the role of residual risk in the pricing model and eliminates some classes of arbitrage opportunities still present under Huberman's bound. Some applications to empirical tests and performance measurement are also discussed.     

Unconditional and conditional takeover offers: experimental evidence

This article compares the predictions of finite-shareholdermodels of conditional and unconditional takeover offers withthe outcomes of laboratory experiments. In addition to differentiatingbetween types of offers, the experimental designs span smalland large firms as well as different levels of offer premiums.It is found that in unconditional offers to large groups ofsubjects (28-40), the symmetric Nash equilibrium predicts observedtendering frequencies quite accurately. For other experimentaldesigns, the results are mixed. The analysis of shareholdertendering strategies from the experiment yields insights into(I) the effects of takeover offer designs, (ii) the appropriatenessof finite-shareholder models for research, and (iii) the costsof free riding when shareholders are nonatomistic.     

Wage Structures in the Private and Public Sectors in West Germany

In this paper, we investigate pay structures in the private and public sectors for West Germany. We commence by describing some basic features of the public sector. We use micro-data from the German Socio-Economic Panel for the years 1984–93 to analyse developments and differences in public and private sector wage distributions for both males and females. We break wages down into different education groups and age-groups, and use regressions to construct conditional wage differentials. Our results differ in many aspects from findings for the UK. For instance, we find that although mean wages are higher in the public sector for both males and females, conditional wages are higher in the private sector for all education groups for males, but higher in the public sector for females. JEL classification: J3.     

Downsizing Effects on Survivors: Layoffs,Offshoring, and Outsourcing

In a representative sample of 13,683 U.S. employees, we compared survivors of layoffs, offshoring, outsourcing, and their combinations to a group who experienced no downsizing. Survivors of layoffs perceived lower organizational performance, job security, affective attachment, calculative attachment, and had higher turnover intentions. Offshoring survivors perceived lower performance, fairness, and affective attachment, but outsourcing survivors generally did not have more negative outcomes than the no‐downsizing group. Layoffs generally had more negative outcomes than other downsizing forms.