Distributional assumptions and a test of the dual labor market hypothesis

Recent application of the switching regression model to allocate workers into the primary and secondary labor markets is considered to be the best solution to the classification problem of the empirical testing of the dual labor market theory. In such models, normality of the error terms is assumed. This paper adopts the switching regression model to test the dual labor market theory by assuming different distributions of the error terms. The test results strongly support the dual labor market theory regardless of the assumption one makes about the error terms. However, the results indicate that different distribution can lead to different percentage distributions of workers in the two segments. In particular, the normal distribution generates more workers in the primary segment than the non-normal distributions. Therefore, care must be taken not to generalize the type of industries or occupations that fall under the primary and secondary segments. First version received: October 2000/Final version received: March 2002 RID="*" ID="*"  I would like to thank Kevin Lang, Robert Marshall, and two anonymous referees for their helpful comments. I am grateful for comments received from the session participants of the Western Economic Association International Conference, San Francisco, CA, June 28–July 2, 1996, and the Midwest Economic Association Conference, Kansas City, 1997. I thank George Bonney, the Chief Statistician of Fox Chase Cancer Center, Philadelphia for his comments. Any remaining errors are my responsibility. I gratefully acknowledge financial support from Penn State Research and Development Grant, 1995.     

Winner-take-all price competition

Summary. We analyze an oligopoly model of homogeneous product price competition that allows for discontinuities in demand and/or costs. Conditions under which only zero profit equilibrium outcomes obtain in such settings are provided. We then illustrate through a series of examples that the conditions provided are “tight” in the sense that their relaxation leads to positive profit outcomes. Received: April 7, 2000; revised version: September 14, 2000     

Economic Valuation of Health for Environmental Policy: Comparing Alternative Approaches. Introduction and Overview

Protecting human health is a primary goal of environmental policy and economic evaluation of health can help policy-makers judge the relative worth of alternative actions. Economists use two distinct approaches in normatively evaluating health. Whereas environmental economists use benefit-cost analysis supported by monetary valuation in terms of willingness-to-pay, health economists evaluate interventions based on cost-effectiveness or cost-utility analysis (CEA), using quality-adjusted life-years (QALY) or similar indexes. This paper provides background on the controversy about the relative merits of these approaches and introduces the remaining papers in the special issue. These papers (with one exception) were presented at a conference sponsored by the Department of Economics at the University of Central Florida with support from the US Environmental Protection Agency. Although CEA might not lead to substantially different implications for environmental policy than benefit-cost analysis, and QALY may provide a benefit transfer tool to fill gaps in the morbidity valuation literature, the papers in this issue raise serious concerns about the suitability of QALY-based CEA for environmental regulatory analysis. QALY does not in general appropriately represent individual preferences for health and CEA is neither independent of income distribution nor adequate to assess efficiency.     

Enforcing Emissions Trading when Emissions Permits are Bankable

We propose enforcement strategies for emissions trading programs with bankable emissions permits that guarantee complete compliance with minimal enforcement costs. Our strategies emphasize imperfect monitoring supported by a high unit penalty for reporting violations, and tying this penalty directly to equilibrium permit prices. This approach is quite different from several existing enforcement strategies that emphasize high unit penalties for emissions in excess of permit holdings. Our analysis suggests that a high penalty for excess emissions cannot be used to conserve monitoring effort, and that it may actually increase the amount of monitoring necessary to maintain compliance.The authors are grateful to Anthony Heyes and three anonymous referees for their valuable comments. Partial support for this research was provided by the Cooperative State Research Extension, Education Service, U. S. Department of Agriculture, Massachusetts Agricultural Experiment Station under Project No. MAS00871.     

进言中国企业:如何攻略美国市场

我们正看到一种趋势初露端倪.这种趋势将很快成为下个10年里中国商业战略的"主流".更多的有战略头脑的中国公司开始在全世界展开直接的兼并业务,尤其是在美国.     

Trends and cycles in Colombia's real GDP and fiscal deficit

The purpose of this paper is twofold. The first is methodological. We review the Beveridge-Nelson technique for decomposing economic time series, and illustrate its usefulness for examining the cyclical and secular movements in real GDP in Colombia. Second, we examine government expenditures and revenues in order to assess the extent to which the sharp increase in the fiscal deficit in the early 1980s should be viewed as a cyclical rather than a secular phenomenon.     

A COMPARISON OF PERFORMANCE INDICATORS FOR TRAINING AND ENTERPRISE COUNCILS IN THE UK

ABSTRACT ** : The use of performance indicators for the evaluation and comparison of efficiency in service provision in the public and related sectors of the economy is continuously developing. While they often represent a step forward, to the extent that they focus attention on the objectives of the organization in question, it is frequently suspected that they fail to take into account non-controllable environmental factors. To do so requires multivariate techniques of analysis. This paper compares the results of three such methods with the raw performance indicators. It confirms the importance of non-controllable factors but also shows that different multivariate methods give results which do not always agree. Understanding the properties of different approaches is essential in drawing conclusions about performance.     

Individual bidder behavior in first-price private value auctions

Individual bid functions display sensitivity to the strategic considerations inherent in first-price auctions. However, several formal models, including heterogeneous Nash equilibrium bidding models with constant relative risk aversion, perform quite poorly.     

A Contingent Valuation Estimate of the Benefits of Wolves in Minnesota

In this paper we estimate the willingness topay for a wolf management plan and a wolfdamage plan in Minnesota using the contingentvaluation method. The theoretical definition ofwillingness to pay for wolf protection iscomposed of use and non-use values. Weincorporate a don't know response option in thedichotomous choice valuation questions. A largenumber of respondents answered don't know. Themultinomial logit model is used todifferentiate between don't know and noresponses. Non-use motives are importantfactors that explain willingness to pay. We usethese benefit estimates in combination with twoalternative cost estimates to consider theefficiency of the wolf management and damageplans. Both plans have estimated benefitsgreater than costs.     

How Big Was the Effect of Budget Consolidation on the Australian Economy in the 1990s?

This article evaluates the effects of budget consolidation on the Australian economy in the 1990s. As the economy recovered from the 1991–92 recession, the need to improve the fiscal balance to lift national saving became the dominant influence on fiscal policy. The article argues that spending cuts by the Australian federal government announced in 1996 had immediate effects on financial markets, with reduced long‐term interest rates of about 50 basis points in 1996–97. Using a modified version of the Treasury macroeconometric model of the Australian economy (TRYM), the article simulates the net macroeconomic effects of the expenditure cuts, fiscal consolidation and lower long‐term interest rates. The article finds that the program of budget consolidation had a sizeable short‐ and medium‐term impact on the economy, raising Gross Domestic Product by up to three‐quarters of a percentage point and reducing unemployment by 0.3 percentage points over the next two to three years.