Pigou, Tiebout, property taxation, and the underprovision of local public goods

Pigou's proposition that the use of distorting taxes rather than neutral head taxes reduces public service levels is examined in this paper. A simple model with a national system of competing local governments is utilized to demonstrate that the use of a distorting property tax on mobile capital decreases the level of residential public services. The case where public services are an intermediate producer good is also considered.     

A quantitative approach to stakeholder interests

In an age when the role, behaviour and performance of the firm are under greater scrutiny than ever before, it is important to pursue quantitative empirical research in the area of social auditing. Using data relating to one particular company, the various inputs and outputs attributable to the firm's different stakeholders, (shareholders, employees, consumers and the community) are examined and corresponding rates of return calculated. Considerable methodological and data problems arise and consequently the results need careful interpretation.     

Recovering Hicksian Consumer Surplus within a Collective Model: Hausman's Method for the Household

The purpose of this paper is to describe the implications of the collective model of household behavior for the methods used to estimate the economic value of non-marketed environmental resources. After demonstrating how the separability restrictions inherent in the collective model allow individual preference and household income allocation choices to be distinguished, the paper demonstrates how the framework can be used to recover Hicksian consumer surplus. An algebraic example is used to illustrate how the framework can be used in valuing environmental resources.     

Are hyperinflation paths learnable?

Earlier studies of the seigniorage inflation model have found that the high-inflation steady state is not stable under learning. We reconsider this issue and analyze the full set of solutions for the linearized model. Our main focus is on stationary hyperinflationary paths near the high-inflation steady state. These paths are shown to be stable under least-squares learning if agents can utilize contemporaneous data. In an economy with a mixture of agents, some of whom only have access to lagged data, stable hyperinflationary paths emerge only if the proportion of agents with access to contemporaneous data is sufficiently high.     

Do realized betas exhibit up/down market tendencies?

In this paper we employ the STAR (smooth transition autoregressive) model to investigate potential nonlinearities, cyclical behaviour and duration dependence in the realized monthly betas of 39 US industry portfolios. Tests reject linearity for all but eight industries. The estimated nonlinear models suggest that industry betas are characterised by asymmetric cycles, with the speed of transition between the bull and bear market regimes being relatively slow for seven industries. We find duration dependence in industry betas since the probability of transition between regimes does depend on how long the market has been in an up or a down state.     

The Effect of Protest Votes on the Estimates of WTP for Use Values of Recreational Sites

Contingent valuation studies are often characterized by a considerable number of protest responses, which may cause selectivity bias on the final estimates for WTP. Sample selection models can detect and – if necessary – correct selectivity bias. In economic applications where the relevant dependent variable is continuous, sample selection models are generally estimated using Heckman's 2-step method rather than the FIML estimator. Either method has its own drawback: computational complexity for the FIML method, susceptibility to collinearity problems for the 2-step method. Using data on valuation of forest resources for recreational use, we analyse the performance of the two estimators. In this application, given the presence of some collinearity, the FIML is preferred to the 2-step method. A procedure is outlined to deal with selectivity problems in similar settings.     

A Vector Error Correction Model for Japanese Real Exports

Atlantic Economic Journal - Japanese exports did not immediately react to the depreciations of the yen after a change in the economic policy framework in 2012, with the launching of Abenomics. This...     

Does china income FSDs follow Benford? A comparison between Chinese income first significant digit distribution with Benford distribution

Since Benford’s law is an empirical phenomenon that occurs in a range of data sets, this raises the question as to whether or not the same thing might be true in terms of the Chinese income distribution data. We focus on the first significant digit (FSD) distribution of Chinese micro income data from the 2005 Inter-Census sample, which corresponds to 1% of Chinese population and other micro income data from the China family panel studies (CFPS) and Chinese General Social Survey (CGSS). We use information theoretic-entropy based methods to investigate the degree to which Benford’s FSD law is consistent with the FSD of Chinese income data and our findings suggest consistency between the Chinese FSD income distribution and Benford’s distribution. The close connection between the two distributions has implications for the quality of the sample of Chinese micro data.     

The role of experience in six sigma project success: An empirical analysis of improvement projects

Recent learning-by-doing research highlights the importance of examining multiple measures of experience and their relationship to the performance of work teams. Our paper studies the role of individual experience, organizational experience, team leader experience, and experience working together on a team (team familiarity) in the context of improvement teams. To do so, we analyze successful and failed six sigma improvement team projects at a Fortune 500 consumer products manufacturer with multiple business groups. Such improvement project teams focus on deliberate learning, which differs from the primary focus of work teams.Our analysis uses archival data generated by these improvement project teams over a six year time span. Of the four experience variables we study, we find that team leader experience exhibits the strongest relationship with project success, followed by organizational experience. Further, in contrast to prior-related research on work teams, we find no relationship between individual experience or team familiarity and project success beyond that explained by team leader and organizational experience. These results suggest that a well-developed and deployed structured problem-solving process—characteristic of effective six sigma deployments—may reduce the importance of team familiarity in the context of improvement teams.