Genetic Algorithms and Public Economics

To address common limitations of traditional economic models while maintaining a convenient mathematical framework, some economists have begun to employ genetic algorithms (GAs). GA optimization occurs in a way that may resemble the dynamics of actual decision making. It also alleviates any need for a closed form to the policy problem and can 'decide' between alternative optima. This paper provides a tutorial on the use of GAs in economics and constructs an example application in the area of tax policy formation. It also critically surveys the landscape of current uses, focusing on both the advantages and disadvantages of GAs in public economics contexts.     

How do trust and property security influence household contributions to public goods?: The case of the sloping land conversion program in China

Trust and property rights are generally considered to influence farmers' behavior regarding resource use and environmental management. Previous studies show that higher trust levels may enhance contributions to public goods. This paper investigates how trust and (land) property rights security influence the provision of one concrete public good: land protection through the Sloping Land Conservation Program in China. The analysis is based on household survey data from Ningxia Autonomous Region in China. From our questionnaire two trust factors are derived and distinguished, using factor analysis: general trust and kinship trust. Farm households are less likely to contribute to public goods when they perceive more secure land rights, but trust has mixed effects on public goods. The results show that general trust and kinship trust may rely on two opposite effects for influencing public goods provision. On the one hand, high levels of general trust may directly enhance people's willingness to provide contributions to public goods (by reduced likelihood to reconvert forest land) when farmers are aware of the positive environmental effects of the program, that's the public goods effect. On the other hand, general trust may also make it more likely that people invest more in their own private goods to pursue their own welfare (a more likely reconversion of forest land to arable land), that's the private goods effect. The final outcome depends on the size and direction of both effects. Compared to general trust, kinship trust is more inward-looking and self- or group-interested compared to more reciprocal general trust. Thus, unlike general trust, kinship trust may have no significant public goods effect on the provisioning of public goods.     

Internet odysseys: linking web roles to career and community investments

This paper examines a new kind of career odyssey, namely that into the relatively uncharted territory of the world wide web. It extends recent ideas about personal and communal career investments by exploring people's web-enabled career behaviour, based on Tapscott et al.'s (2000) typology of web roles. MBA students completed a preliminary career exploration instrument and then met in different focus groups according to the web role with which each student most identified. The reported career investments varied depending on the web role involved. An attempt was made to corroborate these findings through practitioner interviews, but there were problems in reconciling the two kinds of data. The implications of these findings are discussed, and a series of observations is offered concerning the further study of the increasingly virtual journeys anticipated for careers of the future.     

Strategic Goals and Practices of Innovative Family Businesses

A profile of 231 Washington state family businesses is presented. This article focuses on the business strategies of these firms, analyzing the relationship between strategy, performance, and business practices. Firms categorized as Prospector firms reported more gains in their current market position than all other strategic types. These firms were more likely to value an effective management and employee team and to develop new quality products and services and career development plans for non-family employees. Implications for family businesses are discussed.     

Amenities and Fringe Benefits: Omitted Variable Bias

ABSTRACT If labor is fairly mobile, as it is in the United States, one would expect that households would move from less desirable areas toward more desirable areas until all areas are equally desirable. The way that areas become equally desirable is through the impact of movers on wages and rents (and possibly "endogenous" disamenities, such as congestion or pollution). That is, as people move to desirable areas, they will increase the demand for land (raising rents) and increase the supply of labor (lowering wages); in equilibrium, the wage and rent "compensation" for the niceness of an area reveals, in dollar terms, just how nice the area is. Blomquist, Berger, and Hoehn 1988 demonstrated the empirical importance of such amenity compensation in estimates of the "quality-of-life" in urban areas. However, those authors were unable to include fringe benefits, which are about 40 percent of explicit wage payments, in their wage compensation. This matters greatly as amenities are seen here to be even more important than previously thought and the regional implications are pronounced, with the West and Southeast looking "better" when fringe benefits are included and the East North Central and Northeast looking substantially "worse."     

Part-time work, school success and school leaving

In this paper, we analyse part-time employment of teenagers still in full-time education, their academic performance, and their school leaving decisions. Our estimation strategy takes account of the possible interdependencies of these events and distinguishes between two alternative states to full time education: entering the labour force full time and going on to further training. We model this decision in a flexible way. Our analysis is based on data from the UK National Child Development Study, which has an unusually rich set of variables on school and parental characteristics. Our main finding is that working part time while in full-time education has only small adverse effects on exam performance for females, and no effects for males. The effect of part-time work on the decision to stay on at school is also negative, but small, and marginally significant for males, but not for females. Other important determinants of exam success as well as the continuation decision are parental ambitions about the child’s future academic career.     

Irving Fishers Theorie des Zinses

Ohne ZusammenfassungÜbersetzt von Erich Schiff, Wien     

The ethics of corporate governance

The failure of the critics of corporate governance to agree on what should be done to improve the governance process can, in most cases, be traced to a different understanding of the role of corporate directors in that process. This article analyzes and contrasts the obligations of directors under two legal theories, the fictional person theory and the organic theory, of the corporation. A comparison of the director's obligations under each theory indicates that the organic theory provides a better basis for assessing the performance of directors and initiating reform.Among the boards of directors of Fortune 500 companies, I estimate that 95% are not fully doing what they are legally, morally, and ethically supposed to do. And they couldn't, even if they wanted to.E. Eugene Arthur, S.J., is Associate Professor of Management and Economics at Rockhurst College. He is a Visiting Fellow at Trinity Center for Ethics and Corporate Policy.     

Bundling of substitutes or complements

The Adams-Yellen two good bundling framework is generalized to allow the goods to be substitutes or complements. General theorems on price change effects are given. A monopolist may find it most profitable to offer the goods only as a bundle, even if they are (imperfect) substitutes, or to not bundle the goods, even if they are complements. If one good is competitively sold, a monopoly producer of the other good can never increase profits by offering his good only as part of a bundle. However, such a monopolist might profitably offer his good in both bundled and unbundled form to price discriminate, even if the two goods are substitutes.