A Permanent Change in the Route to Owner Occupation?

This paper attempts to explain why home ownership rates among young adults fell in the early 1990s when various indicators suggested it had become more affordable. As a potential explanation, we focus on the relatively slower growth in their incomes and argue that this could signal a fundamental change in behaviour, a change in route adopted into owner occupation, induced by structural economic change. In examining the implications for housing tenure, we use a conditional fixed effects multinomial logit model to exploit the information on the tenure choice and the timing of transitions in the British Household Panel Survey. Our results reveal that relatively slower income growth contributed significantly to this decline and that ignoring the intertemporal correlation in micro‐panels generates inconsistent results.     

Courts of Law and Unforeseen Contingencies

We study a contracting model with unforeseen contingencies inwhich the court is an active player. Ex ante, the contractingparties cannot include the risky unforeseen contingencies inthe contract they draw up. Ex post, the court observes whetheran unforeseen contingency occurred and decides whether to voidor uphold the contract. If the contract is voided by the court,the parties can renegotiate a new agreement ex post. There aretwo effects of a court that voids contracts. The parties' incentivesto undertake relationship-specific investment are reduced, andthe parties enjoy greater insurance against the unforeseen contingenciesthat the ex ante contract cannot account for. In this context,we fully characterize the optimal decision rule for the court.The behavior of the optimal court is determined by the trade-offbetween the need for incentives and the gains from insurancethat voiding in some circumstances offers to the agents.     

Using Micro Data to Test the Divergence between Prices and Labour Values

An extremely robust finding in Marxian empirical economics is the 'Shaikh result' that estimates of labour values are closely correlated with prices. This result is established using input-output data together with a standard procedure in which variations in money wages are assumed to reflect labour quality. Two problems with this standard procedure can be identified. First, there is no translation between money units of wages and labour value units of output produced by different types of heterogeneous labour. Second, the standard procedure assumes perfectly competitive labour markets. In this paper, a new micro procedure for estimating labour values is developed in which both of these problems are addressed. To translate between money wage rates and the labour value of outputs a practical starting point for empirical analysis is suggested using some of the readily available tools of neoclassical economics. The assumption of perfect competition is accordingly relaxed by estimating a microeconometric wage equation using data from the UK Family Expenditure Survey. Conjoining this micro data with input-output data, estimates of labour values are used to test the Shaikh result, which is found not to hold in this particular exercise; with labour values diverging substantially from money prices.     

Exchange Rate Regimes and Foreign Direct Investment Flows to Developing Countries

Drawing on recent advances in exchange rate regime classifications, the paper examines empirically the effect of exchange rate regimes on foreign direct investment (FDI) flows to developing countries. Using system generalized methods of moments estimation on a panel of 70 developing countries for the period 1985–2004, we find that developing countries adopting de facto fixed or intermediate regimes significantly outperform those opting for a flexible exchange rate system in attracting FDI flows. No statistically significant differences in the FDI‐inducing properties of fixes, intermediates and floats are found using the International Monetary Fund official classification.     

Observation assistants: sitter effectiveness and industry measures

Patient safety remains a strategic goal and of societal importance for better health care. Direct observation remains an ineffective and expensive means of providing for patient safety. The nursing quality team found that using assessment tools helped to objectively categorize which patients are at risk. Defining patient volume, actual productive sitter usage, and assessing demand for patients in psychiatric crisis and patients at high risk to fall in the form of average daily census provided an easy-to-translate, familiar unit of measure to compare patient volume to demand and utilization. The sitter utilization case was unable to provide correlation of sitter use to decreased fall rates, elopement, or assault behaviors. Currently, there is no research to suggest the use of constant observation reduces the risk of patient harm related to their risk for falling or harming themselves.     

The geographic distribution of environmental inspections

Models of the enforcement of environmental regulations regarding point source pollution suppose that the probability of inspection or audit is independent across facilities. However, there are a number of reasons why regulators may choose to inspect many sites in a particular geographic area at one time. If the probability a site is inspected also depends on its compliance behavior, the expected payoff from choosing to violate will depend upon the compliance decisions of neighboring sites, creating a game of strategic interdependence between firms. In this paper, we use a dataset of inspections at petroleum storage sites in Manitoba between 1981 and 1998 to consider to what extent inspections are spatially correlated and whether inspection probabilities are a function of the inspection and violation history of the site and its neighbors. Further, we examine to what extent firms take into account whether their neighbors have been previously found in violation in determining compliance.     

Illustrating the importance of Austrian business cycle theory: A reply to Murphy,Barnett, and Block; A call for quantitative study

Murphy et al. (2009) criticize Young’s (2005) test of Austrian business cycle theory (ABCT) using US industry-level quarterly job reallocation data and the federal funds rate as a monetary policy indicator. I argue that not only are Murphy et al.’s specific criticisms misguided; more importantly, they all but completely rule out the type of empirical study that Young (2005) advocates: specifically, one that (1) is quantitative and distinguishes between statistical and economic significance and (2) attempts to exploit a hypothesis that is both a prediction of ABCT and not a prediction of competing monetary theories of the cycle. I argue that empirical studies embodying (1) and (2) are critical to ABCT as a research program. Furthermore, I review the existing econometric studies of ABCT from the last 10 years and conclude that there is much room for improvement along these lines.     

CUTTING CARBON EMISSIONS AT A PROFIT (PART II): IMPACTS ON U.S. COMPETITIVENESS AND JOBS

This article examines how an integrated least-cost implementation of the Kyoto Protocol in the United States would affect U.S. competitiveness and jobs. Drawing on previous work, the authors analyze integrated emission reduction strategies based on a $50/ton carbon tax (including border tax adjustments), a payroll tax cut, energy-productivity–oriented market reforms, and international flexibility mechanisms. This policy portfolios is compared to conventional approaches that omit market and fiscal reforms.
Input-output data are used to estimate the impact on export prices of goods and services produced in the United States. Similar data are used to translate changes in GDP and energy production into employment impacts in energy and nonenergy sectors. The costs of providing transitional assistance for workers in the coal industry are compared to the GDP benefits of a profitable Kyoto strategy.
The analysis shows that relative to purchasing international emission rights, productivity-raising domestic market, institutional, and fiscal reforms offer much broader advantages for tradE-exposed U.S. industries. Though allowance purchases alone increase export prices of U.S. manufactured goods and services, an integrated no-regrets strategy reduces export prices for the large majority of U.S. industries and limits the impact of climate protection policies on the few most energy-intensive basic materials industries to very small levels. Relative to the baseline, an integrated least-cost implementation of the Kyoto target increases economy-wide employment levels by several hundred thousand jobs in 2010.     

Taxation and household portfolio composition: US evidence from the 1980s and 1990s

This paper explores the relationship between household marginal income tax rates, the set of financial assets that households own, and the portfolio shares accounted for by each of these assets. It analyzes data from the 1983, 1989, 1992, 1995, and 1998 Surveys of Consumer Finances and develops a new algorithm for imputing federal marginal tax rates to households in these surveys. The empirical findings suggest that marginal tax rates have important effects on asset allocation decisions. The probability that a household owns tax-advantaged assets, such as tax-exempt bonds or assets held in tax-deferred accounts, is positively related to its tax rate on ordinary income. In addition, the portfolio share invested in corporate stock, which is taxed less heavily than interest bearing assets, is increasing in the household’s ordinary income tax rate. Holdings of heavily taxed assets, such as interest-bearing accounts, decline as a share of wealth as a household’s marginal tax rate increases.     

‘Nothing gets done and no one knows why’: PCS and workplace control of Lean in HM Revenue and Customs

This article examines the willingness and capacity of public sector unions to mobilise action against changes in the labour process in order to maintain some measure of control at the point of production. Taking as an instance an extended dispute in Her Majesty's Revenue and Customs over the introduction and impact of Lean processes, it marshals evidence gathered from documentary sources, branch representatives and national lay full‐time officers to engage with the notion of a trade union bureaucracy. In taking a union with a left‐wing leadership and a section with 80 per cent membership with an expressed willingness to escalate industrial action, the article tests Hyman's 1979 contention that, rather than a concentration on a bureaucratic caste, a much better explanation for conservatism centres on the nature of social relations within the union that encompass a wider layer of representatives.