The Economics Of Partner Out Trading in Sexual Markets

This paper derives a model of participation in what is commonly known as ‘adultery’. Arguably the best sex survey in the world is used to produce estimates of participation functions. The results show a great deal of support for bioeconomic models and reveal some interesting similarities and differences between the male and female equations. This revised version was published online in July 2006 with corrections to the Cover Date.     

Strategic candidacy for multivalued voting procedures

Dutta et al. (Econometrica 69 (2001) 1013) (Dutta, Jackson, and Le Breton—DJLeB) initiate the study of manipulation of voting procedures by a candidate who withdraws from the election. A voting procedure is candidate stable if this is never possible. We extend the DJLeB framework by allowing: (a) the outcome of the procedure to be a set of candidates; (b) some or all of the voters to have weak preference orderings of the candidates. When there are at least three candidates, any strongly candidate stable voting selection satisfying a weak unanimity condition is characterized by a serial dictatorship. This result generalizes Theorem 4 of DJLeB.     

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.     

Institutions,quality competition and public service provision: The case of public education

This paper contributes to the literature on integovernmental competition in two ways. First, the institutional setting within which public services are delivered is analyzed with respect to the impact on the quality of services provided. Previous studies have measured competition only in terms of governmental structure, ignoring the issue of service quality and the potential for differentiating local governmental jurisdictions along quality dimensions. Second, the outcome of competition is defined in terms of service quality. Previous studies generally have measured the outcome of competition by examining the fiscal effects of fragmentation and accountability through service costs or tax revenue impacts. School districts were used to empirically test quality competition. Student academic performance was modeled as a function of control variables and the degree of competition from neighboring school districts. Academic performance in public schools was positively associated with the performance of neighboring districts, although the effect was small. These findings, however, suggest that strategies to strengthen interjurisdictional competition may be useful in enhancing public service quality.     

BANK INTEREST MARGINS AND BUSINESS START-UP COLLATERAL: TESTING FOR CONVEXITY

The paper investigates the relationship between bank interest rate margins and collateral for loans issued to new ventures. The analysis finds a convex U‐shaped relationship. The results indicate that while provision of collateral initially reduces bank exposure to risk (through security, more optimal levels of capital and lower moral hazard among entrepreneurs) that beyond a point, the positive risk‐wealth association gives rise to greater risk taking propensity among entrepreneurs and ultimately higher interest rates. This indicates that a lender's pricing policy may even somewhat help to level the competitive playing field between ventures launched by higher and moderately wealthy entrepreneurs.     

The Impact of Organizational Culture and Reshaping Capabilities on Change Implementation Success: The Mediating Role of Readiness for Change

abstract    It was hypothesized that employees' perceptions of an organizational culture strong in human relations values and open systems values would be associated with heightened levels of readiness for change which, in turn, would be predictive of change implementation success. Similarly, it was predicted that reshaping capabilities would lead to change implementation success, via its effects on employees' perceptions of readiness for change. Using a temporal research design, these propositions were tested for 67 employees working in a state government department who were about to undergo the implementation of a new end-user computing system in their workplace. Change implementation success was operationalized as user satisfaction and system usage. There was evidence to suggest that employees who perceived strong human relations values in their division at Time 1 reported higher levels of readiness for change at pre-implementation which, in turn, predicted system usage at Time 2. In addition, readiness for change mediated the relationship between reshaping capabilities and system usage. Analyses also revealed that pre-implementation levels of readiness for change exerted a positive main effect on employees' satisfaction with the system's accuracy, user friendliness, and formatting functions at post-implementation. These findings are discussed in terms of their theoretical contribution to the readiness for change literature, and in relation to the practical importance of developing positive change attitudes among employees if change initiatives are to be successful.     

Who Gains from the Demographic Dividend? Forecasting Income by Age

Changes in the population age structure are known to influence the total income per person, but little is known about whether the changes are equally shared across the population or are concentrated on particular age groups and/or birth cohorts. The answer to this question has potentially important implications for income inequality, human capital investment, and fertility decision-making. We propose a new model of intergenerational transfers which distinguishes between the effects of changes in population structure and the effects of changes in family age structure. Using age-specific data from annual income and expenditure surveys of Taiwan between 1978 and 1998, we show that changes in age structure have had a very favorable effect on Taiwan's income growth. The gains are not equally shared by all age groups, however. Children and young adults have benefited the most, while the elderly have benefited the least. The population and family age structures have independent effects on per capita income; the effect of the population age structure is most important. Generational differences in per capita income are closely related to intergenerational differences in earnings, suggesting only a weak form of altruism. Finally, we predict that, on average, population aging will adversely influence the per capita income growth in Taiwan in the coming decades.     

The effect of annual changes in automobile fuel economy standards

Since 1978 the Federal government has regulated the fuel economy of new cars sold in the United States. The purpose of Corporate Average Fuel Economy (CAFE) standards is to lessen the national dependence on foreign oil. Through the use of theoretical and empirical models this paper examines the impact of CAFE standards on the automobile industry and on energy consumption. It is shown that CAFE standards may or may not save energy. If CAFE does save energy, it does so at a prohibitive cost to the economy. CAFE standards are also shown to have a number of perverse impacts on the automobile industry as well as consumers.