Economies of scale for a state system of public school districts

A review of the different variables, school district samples, regression techniques and a priori assumptions utilized in recent studies clearly indicates that no standard model or set of procedures have been developed for the problems of economies of scale within the educational sector. Based on these studies and a brief discussion of the limitations of economies of scale models as a tool in policy planning, we present a generalizable model that can easily be applied to statistics now available in state departments of education to derive valuable new information about the existing cost-size relationships and opportunity costs that exist in a state system of public school districts. A recent application of the model in Oregon that illustrates its generalizability is described. An example of how economies of scale information might be used in policy planning and proposed district consolidations is also outlined.     

Improving food retailing in developing Asian countries

The adoption of horizontal and vertical integration in retail systems in the marketing of food in developing countries has long been the recommendation of researchers in this field. The author suggests that such proposals may not achieve the desired results for the poorer consumers in low-income Asian countries. An alternative approach, based upon the strengthening and improvement of traditional methods, is suggested as a more appropriate course of action in those countries.     

Factors of Immobility: Why the Unemployment Rate is Slow to Adjust

During the recent recession and the continuing recovery, the national unemployment rate has maintained a level that has only been observed one other time since the Great Depression. While the initial causes of the increased unemployment rate are documented, the adjustment process and reduction of unemployment rates back toward some natural rate has not been addressed empirically. In this paper, the authors analyze labor supply side factors that may cause unemployment rates to remain high for a longer period than the typical recession. The authors focus on the impact of unemployment insurance extensions, housing market contractions and the general breadth of the economic downturn as factors that slow the labor supply adjustment process and lead to prolonged high rates of unemployment.     

Standard Oil and Predatory Pricing: Myth Paralleling Fact

The Supreme Court in 1911, on the occasion of the first major test of the Sherman Act, ordered the dissolution of the Standard Oil Trust. In his 1958 paper John McGee argued that predatory pricing is, in general, irrational and, relying solely on the information in the Trial Record related to that decision, concluded that Standard Oil did not engage in predatory pricing. His paper has had an extraordinary influence on both antitrust policy in the United States and economic lore. This paper documents the breadth and scope of the influence of McGee’s paper and offers several possible explanations for it. We suggest four reasons: (1) the lack of a theoretical challenge for 25 years, (2) the failure of scholars to replicate McGee’s empirical findings, (3) the unique status of the Standard Oil case in the history of American antitrust and (4) the influence of the Chicago School on economic and legal thinking.     

Internet Technology and the Extensive Margin of Trade: Evidence from eBay in Emerging Economies

Online platforms such as eBay offer technologies that make it easier for firms to export. This paper dissects a new firm‐level dataset that covers sales made through eBay by sellers based in 21 emerging economies to provide a new lens through which to look at the effect of trade costs on the extensive margin of trade. Comparing eBay sellers with “offline” firm‐level data from the World Bank's Exporter Dynamics Database allows us to test whether the observed trade patterns on eBay fit with the trade‐liberalization predictions of heterogeneous‐firm models. We find that eBay firms export to more destinations, suggesting low destination‐specific fixed costs on eBay. We then show that the distribution of export destinations across eBay sellers is well approximated by a balls‐and‐bins model of frictionless trade, suggesting eBay indeed lowers fixed export costs. Finally, we compare the gravity of eBay with that of offline trade and find geographic distance, languages, and trade agreements to matter less for online trade.