The Effect of Incentive Regulation in Telecommunications in the United States

Incentive regulation is now an important regulatory tool in the telecommunications industry in the United States. The issue explored here is whether incentive regulation has resulted in an increase in productive efficiency. After providing an overview of the nature of incentive regulation, one methodology for measuring the effects of incentive regulation on productive efficiency is reviewed. This methodology is data envelopment analysis (DEA) and allows for the measurement of both scale efficiency and technical efficiency of individual local exchange carriers. The results indicate that most local exchange carriers were technically efficient over the 1988–1998 period. Four LECs, however, consistently demonstrate scale inefficiency. In the aggregate, however, based on the DEA results there was no identifiable improvement in aggregate LECs' technical efficiency between 1988 and 1998. Subsequently, an alternative methodology, a stochastic frontier production function approach, is considered. The results from this methodology confirm that there was no change in technical efficiency over the period of study, something that incentive regulation was specifically designed to enhance.     

Agricultural Chemical Residues as a Source of Risk

Exposures to individual agricultural chemical residues are a relatively small source of risk across selected environmental and human health end points; nutrients in water, of which agricultural uses are only one source, may be an exception. This may explain recent policy decisions to tighten regulation of nutrients in water resources. However, uncertainty about nutrient damages hinders design of an efficient policy to deal with nutrients.     

Effects of U.S. equal employment opportunity and affirmative action programs on women's employment stability

An important labor market issue in the United States is the effect that the Equal Employment Opportunity and affirmative action programs that were implemented in 1965 have had on the employment of women relative to that of men. Using time series data covering the period 1947–1988, an analysis of this issue is undertaken. The results indicate that women in the 20–54 age group benefitted in terms of greater stability of employment (i.e., less sensitivity to short run variations in employment) over the period 1965–1980 while they lost some of these gains over the period 1981–1988 (corresponding to the tenure of the Reagan Administration). Men in the same age group, on the other hand, experienced the opposite effect. That is, men in the 20–54 age group became more sensitive to short run variations in employment over the period 1965–1980 and less sensitive over the period 1981–1988. The evidence also indicates that the EEO and affirmative action programs had the effect of increasing the share of projected employment of women in the 20–54 age group and in the 55–64 age group while decreasing the share of projected employment of men in the comparable age groups.     

A note on defining geographic markets

This paper offers an approach to delineating geographic markets and/or product markets based on the notion of instantaneous causality. After providing a brief review of the issue of concern and a discussion of the relevant statistical methodology the flour market in the United States is examined. It is concluded that the flour market in fact is national in scope.     

Cable Service and Its Implicit Marginal Valuation

The objective is to estimate the implicit marginal value of channel offerings by cable systems in the USA. Hedonic analysis is a convenient framework in which to explore the relationship between the price of cable service and the channels offered by a cable system. Two separate hedonic equations are estimated-- one for the price of analog cable service and one for the price of digital cable service. With regard to the price of analog cable service, the implicit marginal valuation is statistically significant and positive for just 15 of 106 channel offerings and negative for seven channels. For the price of digital cable service, the implicit marginal valuation is statistically significant and positive for just eleven of 105 channel offerings and negative for five channels. The results suggest that a subscriber's utility would be enhanced by a pricing structure different from the typical approach used by cable systems today of offering a bundled package consisting of several channels. One alternative is to allow consumers to subscribe to just those programming services for which they have a positive implicit marginal value (i.e. an a la carte pricing structure).     

Psychology, Behavioral Economics, and Public Policy

Economics has typically been the social science of choice to inform public policy and policymakers. In the current paper we contemplate the role behavioral science can play in enlightening policymakers. In particular, we provide some examples of research that has and can be used to inform policy, reflect on the kind of behavioral science that is important for policy, and approaches for convincing policy-makers to listen to behavioral scientists. We suggest that policymakers are unlikely to invest the time translating behavioral research into its policy implications, and researchers interested in influencing public policy must therefore invest substantial effort, and direct that effort differently than in standard research practices.     

The Change in Productive Efficiency in Telecommunications in the United States

The question addressed here is whether the adoption of incentive regulation, which has become an important regulatory tool in the telecommunications industry in the USA, has resulted in a change in the technical efficiency of local exchange carriers in the USA. After providing an overview of the nature of incentive regulation, a methodology for measuring technical efficiency and its change is introduced. This is a multiple-output/multiple-input distance function approach to measuring technical efficiency. The results of implementing this approach for 19 local exchange carriers for the 1988-2001 period indicate that in the production of local service, intrastate toll/access service, and interstate access to local loops, there was no change in technical efficiency between the 1988-1990 period and the 1991- 2001 period, something that incentive regulation was specifically designed to promote.