Decomposing US regional income inequality from 1969 to 2009

This article analyses changes in levels and composition of income inequality among US counties from 1969 to 2009. It also decomposes inequality using the Theil coefficient into between-State and within-State inequality. The article finds that income inequality has increased in the period studied with between-State inequality decreasing and within-State inequality increasing. We subsequently decompose income inequality into the proportion arising from differences in productivity and employment–population ratios across counties. The results suggest that inequality arising from differentials in labour productivity has fallen over the period studied while those arising from employment–population ratio differences have increased.     

Discretion in bank loan loss allowance,risk taking and earnings management

We study whether banks use the allowance for loan losses (ALL) for efficiency or for opportunistic reasons. We find that banks that had higher abnormal ALL during the period prior to the 2007–2009 crisis engaged in less risk taking during the pre‐crisis period and had a lower probability of failure during the crisis period. In testing earnings management to meet or beat earnings benchmarks, we find that abnormal ALL is unrelated to next period's loss avoidance and just meeting or beating the prior year's earnings. Our results suggest that banks use ALL for efficiency and not for opportunistic purposes.     

Seventy Years of Economic Development: A Review from the Angle of New Structural Economics

This review paper provides a new narrative by combing through the experiences of structural transformation among developing countries and discussing the roles of government and market in different contexts. Country performance has been influenced by the prevailing development thinking: the structuralism in the 1950s–1970s, which stresses an active government's role to overcome market failures for industrialization, and the neoliberalism in the 1980s–present, which advocates for eliminating government failures to build up a well‐functioning market. We find that almost all countries failing by following structuralism in their industrialization and neoliberalism in their transition to a market economy, and the few countries successful in catching up have a few characteristics that go against the prevailing structuralism and neoliberalism. The new structural economics, generated from the experiences of successful East Asian economies and proposing active facilitating roles of government in a market economy to remove market failures, will gain traction and take root.     

Big Fish,Small Pond: The Effect of Rank at Entry on Postsecondary Outcomes

We study whether a student's rank in her program of study in university affects short- and longer-term educational outcomes. Using student-level administrative data from four universities across many cohorts, we show that ranking higher compared to students in the same program in the same year has a positive effect on grade point average and lowers the probability of switching programs at the end of the first year, but has small effects on credit completion, departures, and degree attainment. Our results suggest that being the big fish in the small pond produces moderate advantages in higher education.     

A multi-sector intertemporal optimization approach to assess the GHG implications of U.S. forest and agricultural biomass electricity expansion

This study applies an intertemporal partial equilibrium model of the U.S. Forest and Agricultural sectors to assess the market, land use, and greenhouse gas (GHG) implications of biomass electricity expansion. Results show how intertemporal optimization procedures can yield different biomass feedstock portfolios and GHG performance metrics at different points in time. We examine the implications of restricting feedstock eligibility, land use change, and commodity substitution to put our results in the context of previous forest-only modeling efforts. Our results highlight the importance of dynamic considerations and forest and agricultural sector interactions on projecting the GHG effects of biomass electricity expansion in the U.S.     

Returns to Schooling and Bayesian Model Averaging: A Union of Two Literatures

Abstract.  In this paper, we review and unite the literatures on returns to schooling and Bayesian model averaging. We observe that most studies seeking to estimate the returns to education have done so using particular (and often different across researchers) model specifications. Given this, we review Bayesian methods which formally account for uncertainty in the specification of the model itself, and apply these techniques to estimate the economic return to a college education. The approach described in this paper enables us to determine those model specifications which are most favored by the given data, and also enables us to use the predictions obtained from all of the competing regression models to estimate the returns to schooling. The reported precision of such estimates also account for the uncertainty inherent in the model specification. Using U.S. data from the National Longitudinal Survey of Youth (NLSY), we also revisit several 'stylized facts' in the returns to education literature and examine if they continue to hold after formally accounting for model uncertainty.     

Housing Costs and the Elderly

Estimates are made of changes in average housing costs and average family incomes for non-moving elderly homeowners and renters over the period 1972–80. Findings suggest that: rental costs are higher in each time period than are homeownership costs; evidence of serious deterioration in affordability of housing is weak, when looking at aggregate price/income ratios; and it is clear that elderly renters are more seriously disadvantaged in housing affordability than are elderly homeowners at every time period.