The impact of vocational education on productivity

This study looks at the impact that vocational education has had on output via the production function in the United States over the period 1947–1970. The results suggest that each one percent increase in the number of students enrolled in vocational education programs eventually leads to a 0.31% increase in output.     

Optimal growth and distribution policies

The paper studies the impact of various policy instruments in a two-class Ramsey style model of optimal growth. It examines how conventional results must be modified when one considers the effect of policy instruments (taxes, government borrowing, and public investment) on the distribution of income and on factor supplies. The main conckusion is that without the availability of the ideal lump-sum tax, the (modified) golden rule is unlikely to be the optimal policy.     

The impact of vocational education on productivity in the United States

This paper examines the impact of vocational education on productivity in the United States. By using a cross-correlation test for directional causality, it is shown that vocational education has led to improvements in human capital that in turn increase productivity as measured by real private domestic product per worker hour in nonfarm business. The reverse is not true: that is, changes in productivity do not have a statistically identifiable impact on vocational education. Moreover, the time it takes for significant cross-correlations to appear suggests that the total effect of any vocational educational change takes at least 10 to 20 years to exhaust itself.When the manufacturing sector is studied separately, such positive results are not obtained. Only two out of seven vocational education measures appear to have a significant effect on productivity. For these two measures, the time for an identifiable impact to occur is also fairly long.     

The effectiveness of regulation in the electrical energy industry

There is a gap between what federal and state regulatory commissions are authorized to do and what they are doing to regulate the electrical energy industry. It has been argued that a pricing scheme in the industry has evolved akin to the pricing scheme a discriminating monopolist might employ for different classes of consumers that are spatially diffuse. The attention of the paper is focused on the effectiveness of regulation in the industry, given the characteristics of it. The method of analysis chosen is to construct two models which are polar opposites and compare the results with what was actually the situation in 1973. The conclusion indicates that it is justifiable to argue that the electrical energy industry on the whole is not allowed to behave as a spatial monopolist. It is not correct to conclude that monopolistic tendencies are absent. Specifically, the pricing structure does depart from the competitive criterion which requires price to equal marginal cost for each consumer sector and all regions. Further, little electrical energy is transmitted interregionally.     

Estimation of demand elasticities: A reflection on the issues

The general nature of demand and the notion of the elasticity of demand are the issues of concern. Whether the requisite conditions from demand theory are closely enough satisfied when estimating the demand for energy is problematical. Consequently, the meaning of such estimates is subject to debate.     

RELIABILITY AND REGULATION IN PRICING PUBLIC UTILITY SERVICE

The principal question addressed in this paper concerns the optimal price profile for a regulated public utility where demand is stochastic. Through the introduction of rationing costs and a rate-of-return constraint, marginal revenue will be approximately equated to the cost associated with satisfying the last unit of consumers’demand. This has significant implications for capacity expansion. Namely, capacity is added to keep the risk of failure minimal. As a result, to the extent that the associated costs are higher for the last unit of capacity, a higher marginal revenue and hence price will result. That is, if the marginal unit of capacity has a high operating and delivery cost and low capital cost with high reliability and consequent high total cost (e.g., an internal combustion peaking unit), the indicated result follows. Consequently, there is a direct trade off between the level of risk of failure and marginal revenue. This provides a rationalization for the existence of the price differential between firm and interruptible customers. Finally, if the firm is contrained to earn a fair return on its capital investment, it will set prices to favor the consumers generating the expansion in capacity.