Revealed Preference Analysis of Characteristics Models

Characteristics models have been found to be useful in many areas of economics. However, their empirical implementation tends to rely heavily on functional form assumptions. In this paper we develop a revealed preference approach to characteristics models. We derive the necessary and sufficient empirical conditions under which data on the market behaviour of heterogeneous, price-taking consumers are non-parametrically consistent with the consumer characteristics model. Where these conditions hold, we show how information may be recovered on individual consumers' marginal valuations of product attributes. In some cases, marginal valuations are point identified, and in other cases, we can only recover bounds. Where the conditions fail, we highlight the role which the introduction of unobserved product attributes can play in rationalizing the data. We implement these ideas using consumer panel data on the Danish milk market.     

国际贸易和自然资源"诅咒":中国的增长威胁到东南亚地区的发展了吗?

随着中国经济的迅猛发展和快速融入全球市场,东南亚资源丰裕国家正在不断丧失其在劳动密集型制造业上的比较优势,同时其资源开发变得更为有利可图。对这些东南亚国家,尤其是一些最为贫穷同时却又正处于减少中央对资源控制管理的分权过程中的国家而言,这一趋势如何影响长期增长和福利?正如“自然资源诅咒”所预言一样,快速的资源采伐和减速的工业发展可能会使这些国家进入慢速经济增长时期。     

SYSTEMATIC INFLUENCES ON TEACHING EVALUATIONS: THE CASE FOR CAUTION*

In this paper, we examine eight years of Quality of Teaching (QOT) responses from an Economics Department in an Australian University. This is done to determine what factors, besides the instructor, have an impact on the raw average student evaluation scores. Most of the previous research on student ratings has been conducted in the US. One significant difference between US and Australian tertiary education is that, on average, the number of foreign undergraduate students in Australia is ten times the number in US institutions. We find that cultural background significantly affects student evaluations. Other factors that have an influence on the average QOT score include: year level; enrolment size; the quantitative nature of the subject; the gender of the student; fee‐paying status by gender; course of study; the differences between the course mark and previous marks; the quality of workbooks; the quality of textbooks; and the QOT score relative to those in other subjects taught at the same time. In addition, average QOT scores for instructors who have taught in a mix of subjects are similar to those based on scores adjusted to account for subject and student characteristics.     

The Impact of Inflation and Taxation on Tenure Choice and the Redistributive Effects of Home-Mortgage Interest Rate ReguIation*

Judy Yates (1981) notes the regressive redistributive impact of home-mortgage interest rate regulation and offers some explanations. This paper provides an alternative explanation of Yates' observations in terms of the interaction of inflation with the current tax system in Australia. A model of tenure choice in the context of inflation and taxation is developed. In explaining this phenomenon, the model also establishes the regressive nature of the tax subsidy to owner-occupation. Home-mortgage interest rate regulation is then introduced. This reinforces the redistributive bias in the housing finance market. The model is used finally to predict the impact of deregulation. It is concluded that deregulation by itself can only remove redistributive bias resulting from regulated mortgage interest rates. Reform of the tax system is required to eliminate the regressive redistributive effects of the tax subsidy to owner-occupation .     

Effect of World Fertility Scenarios on International Living Standards

This paper applies a two good, multi-region Ramsey-Solow model of the world economy to determine the impact that alternative world fertility rates would have on international capital markets and living standards. Notable features of the model include: relative consumption demands and relative employment efficiencies that vary by age, traded and non-traded goods, vintage technology, outward-looking reference consumption, a proportion of non-optimising rule-of-thumb consumers and imperfect capital mobility due to asymmetric information. The model suggests that projected demographic change will imply a flow of international capital from the ageing regions to the younger regions; and that the world interest rate will fall. The lower world interest rate will cause a loss in living standards for ageing regions, the lenders, and a gain for the younger regions, who are borrowers.     

The Dynamic Interactions Between the Phillips Relation and the IS-LM Model*

In this paper the IS-LM model is extended dynamically by the addition of a price-adjustment relation (the Phillips relation) and a quantity-adjustment relation. Three specifications of the Phillips relation are considered. It is shown that the nature of the price-adjustment process has important implications for stability; in fact the price-adjustment processes which yield clockwise (counter-clockwise) Phillips loops may also be unstable (are not unstable). On the other hand, the speed of the price-adjustment process is not relevant for stability. The speed of quantity adjustment is only important in the expectations case and there the slower the speed of adjustment the more likely is instability. No clear conclusions emerge, in general, concerning the slopes of the IS-LM relations and stability. In conclusion the results are related to the debate on the micro-foundations of Keynesian economics.     

Trading Complex Assets

We perform an experimental study to assess the effect of complexity on asset trading. We find that higher complexity leads to increased price volatility, lower liquidity, and decreased trade efficiency especially when repeated bargaining takes place. However, the channel through which complexity acts is not simply due to the added noise induced by estimation error. Rather, complexity alters the bidding strategies used by traders, making them less inclined to trade, even when we control for estimation error across treatments. As such, it appears that adverse selection plays an important role in explaining the trading abnormalities caused by complexity.