Microeconomics After Keynes: Post Keynesian Economics and Public Policy

Post Keynesian economics has mainly focused on macroeconomic issues and ignored microeconomic policy issues. This paper begins to remedy this gap. It outlines the main principles of the Post Keynesian approach, distinguishes them from neoclassical economics, explains how these principles can be applied to microeconomic issues, and then draws out some policy implications that differ markedly from neoclassical theory on the issues of health care and productivity growth.     

IS THE MARKET FAILING AGRICULTURAL PRODUCERS WHO WISH TO MANAGE RISKS?

The variability of producers ‘net income levels is largely a function of variability in output price, yield, and input prices. Yet, the tools available to manage price risk and yield risk are not widely used by producers. Is the market failing to provide agricultural producers with effective risk management tools? To identify producers’ needs, the paper establishes the relative importance of price and yield risk by decomposing the variability of revenues from a sample of crops in California agriculture. The risk tools available to producers of those commodities are compared to producers needs for tools. Results indicate that “market failure” is readily apparent in markets for tools to manage risks. However, the nature of these missing or incomplete markets does not necessarily imply inefficiencies that would justify government intervention.     

POWER SUPPLY EXPANSION AND THE NUCLEAR OPTION IN POLAND

This paper describes the construction of a data set of the Polish power sector for use with the Elfin capacity expansion planning model. Using Elfin, the paper derives four scenarios and some sensitivities for new generating capacity construction plans. These scenarios simulate choices among several generic generating technologies made to achieve the lowest overall net present cost of operating the power system through 2015. Key results include: (i) single-cycle natural gas-fired combustion turbines prove highly attractive for Poland because of its urgent need for peaking capacity, (ii) nuclear power cannot be excluded from consideration for Poland on economic grounds alone, (iii) the effectiveness of conservation to reduce airborne emissions is limited under scenarios in which nuclear generation is adopted, and (iv) the attractiveness of nuclear is shown to be highly sensitive to assumptions on some uncertain inputs, suggesting the need for a more detailed analysis before policy implications can be drawn.     

Determinants of Household Expenditures on Alcohol

This paper examines the determinants of household alcohol expenditures by using a nonnormal and heteroscedastic double-hurdle model to accommodate zero observations in the sample. The model is a generalization of the double-hurdle model estimated in previous studies of alcohol consumption. We also examine the effects of explanatory variables by calculating and decomposing the elasticities. Findings support the use of a more generalized error distribution. Income, region, education, and household demographics are among the significant determinants of alcohol expenditures.     

Does Vanity Describe Other Cultures? A Cross‐Cultural Examination of the Vanity Scale

Vanity is a psychological construct that describes a person's excessive concern with physical appearance or achievement. A scale, recently developed to measure this construct, has been psychometrically validated using data from U.S. respondents. The goal of this paper is to determine if this scale can be used cross‐culturally. If the scale has cross‐cultural applicability, it can be used as a counseling device to guide and alert individuals to certain tendencies. The scale also can be used to track foreign cultures as they adopt a consumerism ethos more aligned to Western consumer culture. Based on data from 475 young adults in China, India, New Zealand, and the U.S., the scale was found to have similar dimensionality and factor structure, internal consistency, discriminant validity, and metric invariance. Implications and future directions for research are discussed.