A Theory of Broadcast Media Concentration and Commercial Advertising

We analyze a model in which the interaction of broadcasters, advertisers, and consumers determines the level of nonadvertising broadcasting produced and consumed. Our main finding is that an increase in concentration in broadcast media industries may lead to a decrease in the total amount of nonadvertising broadcasting. The strength of this inverse relationship depends, in part, on the behavioral response of the consumers to changes in advertising intensities. We also present a numerical general equilibrium solution to our model and demonstrate a positive relationship between consumer welfare and the number of firms in the broadcast industry.     

Sectoral Selection and Informality: a Nicaraguan Case Study

Using microdata from the 1998 and 1993 Nicaraguan Living Standards Measurement Survey, this paper analyzes the relative size and attractiveness of formal and informal sector employment. Switching regression models of the formal/informal sector employment choice indicate that education across years and gender are the primary determinants of formal sector participation. Furthermore, the formal sector is characterized by positive selection. The results for the informal sector are less definitive, but are also suggestive of positive selection. These findings imply that the informal and formal sectors in Nicaragua contribute positively to the overall economy by attracting those individuals best suited for (in)formal sector employment.     

Firm Size, Industry Mix and the Regional Transmission of Monetary Policy in Germany

Abstract. This paper estimates the impact of interest rate shocks on regional output in Germany over the period from 1970 to 2000. We use a vector autoregression (VAR) model to obtain impulse responses, which reveal differences in the output responses to monetary policy shocks across ten German provinces. Next, we investigate whether these differences can be related to structural features of the regional economies, such as industry mix, firm size, bank size and openness. An additional analysis of the volatility of real GDP growth for the period 1992–2000 includes the Eastern provinces. We also present evidence on the interrelationship between firm size and industry, and compare our measure of firm size with those used in previous studies. We conclude that the differential regional effects of monetary policy are related to industrial composition, but not to firm size or bank size.     

Future S&T management policy issues—2025 global scenarios

This article presents four scenarios depicting science and technology (S&T) management dilemmas of the next two decades. The scenarios concern the balance between risk and promise, between the need to steer the directions of S&T, to minimize risk, and the need to maintain a free and unconstrained S&T agenda. These scenarios were constructed in the third year of the Millennium Project's study of this topic. The scenarios were formed in an interactive process with the project's international participants. The key policies that were found to be useful in all of the scenarios include (1) when considering the possibility of the misuse of weapons of mass destruction by terrorists, include the possibility of misuse by a single individual, acting alone; (2) establish mechanisms and techniques for making possible the explicit unintended consequences of scientific research and technology, including malicious uses; (3) for desirable technologies, where it may not be possible to avoid significant risks, develop mitigation strategies in parallel; (4) teach science ethics.     

Burn or bury? A social cost comparison of final waste disposal methods

This paper evaluates the two well-known final waste disposal methods, incineration and landfilling. In particular we compare the social cost of two best-available technologies using a point estimate based on private and environmental cost data for the Netherlands. Not only does our comparison allow for Waste-to-Energy incineration plants but for landfills as well. The data provide support for the widespread policy preference for incineration over landfilling only if the analysis is restricted to environmental costs alone and includes savings of both energy and material recovery. Gross private costs, however, are so much higher for incineration, that landfilling is the social cost minimizing option at the margin even in a densely populated country such as the Netherlands. Furthermore, we show that our result generalizes to other European countries and probably to the USA. Implications for waste policy are discussed as well. Proper treatment of and energy recovery from landfills seem to be the most important targets for waste policy. Finally, WTE plants are a very expensive way to save on climate change emissions.     

Market Failures in Real-Time Metering

Policies to promote real-time metering (RTM) require more than showing benefits from more timely responses to variations in cost. They require positive externalities to imply that too few meters would be installed through private transactions. RTM presents no systematic externalities when utilities must serve peak period users, and may present negative externalities under some conditions. Positive externalities are likely when electricity is rationed through blackouts. RTM may or may not increase welfare when peak period wholesale markets are not competitive; a prohibition on RTM might be appropriate in such situations even if metering itself were costless.     

Sectoral and aggregate technology growth in Spain

In this paper we analyze technological change in the Spanish economy by constructing adjusted Solow residuals, where the adjustment attempts to correct for the bias associated with the potential presence of imperfect competition, increasing returns, variable input utilization and, especially, sectoral reallocation of inputs across sectors. We refer to this modified Solow residual as a technology index. Sectoral reallocations and variable input utilization are key determinants of the differences between the aggregate Solow residual and the technology index resulting from the aggregation of estimated sectoral technological growth. We show that starting in the mid nineties, there has been a deceleration in the aggregate growth rate of technology which is basically due to the behaviour of the manufacturing sectors. Finally, our results imply that aggregate technology growth is less volatile than aggregate productivity as measured by the Solow residual.     

Worker separations in a nonstationary corporate environment

Assessing ten years of unique personnel data from a large firm, this paper investigates how determinants of worker turnover differ between periods of corporate expansion and decline. Performance and career progress considerably reduce the hazard of job separation during downsizing for blue-collar workers, but are less important for white-collar workers. Effects of firm-tenure, occupation, education, training, part-time status, and gender are largely in accordance with the implications from existing models. But no model generates all patterns observed in the data. Age effects are sensitive to retirement options and discontinuous, dropping in response to the anticipation of becoming eligible for early retirement during downsizing and jumping at the actual retirement age.     

Competitive equilibria with limited enforcement

We show how to decentralize constrained efficient allocations that arise from enforcement constraints between sovereign nations. In a pure exchange economy these allocations can be decentralized with private agents acting competitively and taking as given government default decisions on foreign debt. In an economy with capital these allocations can be decentralized if the government can tax capital income as well as default on foreign debt. The tax on capital income is needed to make private agents internalize a subtle externality. The decisions of the government can arise as an equilibrium of a dynamic game between governments.