Unions and Gender Pay Equity in Academe: A Study of U.S. Institutions

This paper uses 1994-95 faculty salary data from over 1,100 four-year U.S. academic institutions, about one-fourth of them with collective bargaining agreements, to ask if faculty unions make a difference to gender pay equity. Average gender salary differences are negative at every rank and at every category of U.S. institution with or without collective bargaining agreement. Unions may improve gender salary differentials somewhat, particularly at the assistant professor level. There is no evidence that this gain will be lost at higher levels, and mixed evidence that further gains occur for women at the full professor level. The most pervasive and robust consequence of unions is to increase the positive impact that higher proportions of women at senior faculty ranks make on relative salaries at the assistant professor level. However, the influence of these higher-ranked women on gender salary inequalities at the associate and full levels is lower in union schools than nonunion schools. By reducing the flexibility of existing salary structures, collective bargaining apparently reduces the influence of senior women faculty on the salaries of current women faculty members while increasing their attention and influence at entry levels.     

Strategic Reaction of Vertically Integrated Firms to Downstream Entry: Deterrence or Accommodation

The purpose of this paper is to analyze strategic behavior of vertically integrated firms when there is downstream entry, taking into account the balance between competition in the market and competition for the market. This analysis can serve to explain diverse distributional structures, including the coexistence of vertically integrated firms and independent retailers. And it shows that the relative efficiency of downstream entrants and the level of competition among incumbents are two major factors in determining equilibrium configuration.     

Liquidity, Quality, Production Cost, and Welfare in a Search Model of Money

This paper examines a search model of money with divisible commodities of high and low quality, while keeping the assumptions of indivisible money and unit-inventory constraint. With no direct barter and a higher fixed cost of producing high relative to low quality, an increase in the money stock encourages the production of high-quality output by trading off the larger trading opportunities against the significance of higher fixed cost. As long as the fixed-cost differential between high and low quality is sufficiently small relative to the utility gain from high-quality consumption, the quality improvement outweighs the negative effect of higher money stocks on aggregate production, and hence implies higher welfare.     

Money and inflation in Germany: A cointegration analysis

This paper analyses the relation between money and inflation in Germany in a cost-push/demand-pull model of an open small economy by means of cointegration methods. The full-information-maximum-likelihood method of Johansen as well as structural methods are applied to datasubsets and the full data set. The focus of the paper is on tests for overidentifying restrictions and for weak and strong exogeneity within these data sets. The result of the paper is that the money stock, the price level and gross national product are endogenous whereas the interest rate and the real import price are both weakly and strongly exogenous. By means of the price cointegration relation we illustrate how monetary targeting should react to imported inflation.     

Market Instability and Revision Error in Risk Premium

This paper provides a theory and evidence that the risk premium puzzle is viewed as a phenomenon pertaining to the unstable foreign exchange market. In an unstable market, revision error uncompensated by an initial risk premium accrues due to consumer expectation revision about the ex ante uncertainty of the exchange rate. The risk premium widely deviates from its initial level, depending on the frequency of the consumer expectation revision and the degree of risk aversion. Subsequent evidence shows the existence of the revision errors for the risk premium during the Asian currency crisis and the recent financial crisis periods.     

Compensating for unforeseeable damages in torts

The doctrine regarding unforeseeable damages in a contract was established in the well known case of Hadley vs. Baxendale. According to the judgement, a plaintiff cannot be compensated for unforeseeable damages in an incomplete contract unless he informs the defendant of the possible unforeseen contingency beforehand. In this paper, I extend the argument to the tort case in which it is hardly possible to communicate between a plaintiff and a defendant before an accident occurs. In the case of the sequential bilateral accident in which the victim’s care level is observable to the injurer, the victim’s care level can be a signal of the unforeseen contingency. I mainly discuss the implementability of the social optimum by the contributory negligence with dual standard of care enabling the communication between the parties.     

Negative externalities on property values resulting from water impairment: The case of the Pigeon River Watershed

The objective of this research was to determine whether willingness to bear the negative externality from water quality impairment differs between those who do and those who do not receive economic benefit from the impairment source. Differences were tested using a hedonic analysis of ambient water quality in two discrete housing markets in the Pigeon River Watershed, which have been polluted by the operation of a paper mill. The results suggest that North Carolina residents residing in subwatersheds with impaired portions of the Pigeon River, who experience economic benefit from the paper mill in addition to its harmful effects on water quality, do perceive the pollution as a negative externality. In contrast, the effects of both the degraded river and its contributing streams on property values are perceived as negative externalities by watershed residents in Tennessee who experience only harmful effects from the pollution. Differences in willingness to bear the water-impairment externality were not indicated by variables representing view of and proximity to impaired water bodies. The results suggest that the perception of water quality to which property owners implicitly apply value should be considered when establishing water-quality regulations.     

Stochastic convergence of the catch-up rate and multiple structural breaks in Asian countries

Allowing for multiple structural breaks and cross-section dependence, we re-investigate the hypothesis that the catch-up rates stochastically converge for 13 Asian countries from 1960 to 2007. Non-rejection of stationarity provides evidence for stochastic convergence, implying that following shocks to the catch-up rate, it will eventually revert to its long-run level.