One Semester Or Two

The problem of optimum instruction in economics includes all kinds of technological constraints created by choices among different media of instruction. It also includes the problem of how long a course is required for adequate instruction. Traditionally, principles of economics has been taught as a two-semester, three-hour credit course. This article investigates the extent to which the results achieved by students after one semester's study are equivalent to those achieved after two semesters, and finds the differences less than might be supposed.     

The Welfare and Resouce Allocation Implications of the U.S.Dairy Quotas

This paper examine the welfare and resource allocation implications of the U.S. dairy quotas. A computable general equilibrium model detailing five dairy sectors and nine aggregate sectors is calibrated to a 1989 benchmark of the U.S economy. The model is used to simulate the removal of the U.S.dairy quotas both the with and without a first-best subsidy to maintain a dairy farm output objective. Welfare, production, trade, and employment results are provided. The welfare cost of the U.S dairy quotas ranges from $0.7 to $1.0 billion. The first-best subsidy ranges from $2.0 to $2.3 billion or approximately $1.4 million per full-time equivalent job maintained in the dairy farm sector [F13, Q17]     

Rent sharing to control noncartel supply in the German cement market

A challenge for many cartels is avoiding a destabilizing increase in noncartel supply in response to having raised price. In the case of the German cement cartel that operated over 1991–2002, the primary source of noncartel supply was imports from Eastern European cement manufacturers. Testimonies in a private enforcement case have claimed that the cartel sought to control imports by sharing rents with intermediaries in order to discourage them from sourcing foreign supply. Specifically, cartel members would allow an intermediary to issue the invoice for a transaction and charge a fee even though the output went directly from the cartel member's plant to the customer. We investigate this claim by first developing a theory of collusive pricing that takes account of the option of bribing intermediaries. The theory predicts that the cement cartel members are more likely to share rents with an intermediary when the nearest Eastern European plant is closer and there is more Eastern European capacity outside of the control of the cartel. Estimating a logit model that predicts when a cartel member sells through an intermediary, the empirical analysis supports both predictions.     

Convergent Validity of Contingent Behavior Responses in Models of Recreation Demand

Recreation demand modeling efforts are often limited by the range of variation in observed environmental quality. To address this limitation, the practitioners increasingly make use of contingent behavior (CB) data; i.e., asking survey respondents to forecast their trip patterns under hypothetical quality conditions. However, relatively little is known as to whether these stated responses are consistent with how households response to actual quality variation. The purpose of this paper is to investigate the convergent validity of CB data with observed trip patterns. Toward this end, we jointly model recreational lake usage in Iowa using observed and CB trip data collected from the 2004 Iowa Lake Survey. The Iowa lakes Survey collected three sets of trip data for 131 lakes in the state: (a) actual trips in 2004, (b) anticipated trips in 2005 to the same lakes given current lake conditions and (c) anticipated trips in 2005 given hypothetical improvements to a subset of the lakes. The three types of recreation demand data provide a unique opportunity to investigate the convergent validity of individual responses to actual versus hypothetical environmental conditions.     

Prospects of basket production in promoting sustainable rural livelihoods in the Okavango Delta,Botswana

This paper uses the concept of sustainable rural livelihoods and income diversification to assess the role that basket making as a cultural tourism activity can play in improving rural livelihoods in the Okavango Delta, Botswana. Using both primary and secondary data sources, this paper points out that shocks and natural causes such as drought, disease and changing flood levels in the Okavango River, particularly the drying of the Thaoge (one of the distributaries of the Okavango), have contributed to a decline in livestock and crop yields and increased poverty levels in the region. Therefore, alternative livelihood options that can diversify rural incomes from agricultural production need to be identified. This paper argues that basket making has the potential to diversify rural incomes and improve livelihoods in the Okavango. Baskets are a cultural tourism product that can raise income earning and employment opportunities for rural residents in the Okavango. For this to be successful, basket making will need to be developed as part of cultural tourism. A sustainable cultural tourism sector where baskets are key products requires the sustainable use of natural resources used for basket making. These resources are at present overharvested and are threatened with depletion. There is also a need to promote the empowerment of basket weavers particularly in entrepreneurship and managerial skills in the tourism business, attract young and educated people and promote the preservation of traditional basket making skills, which are important in the development of cultural tourism. Copyright © 2004 John Wiley & Sons, Ltd.     

Bayesian Estimation of Prediction Error and Variable Selection in Linear Regression

An important statistical application is the problem of determining an appropriate set of input variables for modelling a response variable. In such an application, candidate models are characterized by which input variables are included in the mean structure. A reasonable approach to gauging the propriety of a candidate model is to define a discrepancy function through the prediction error associated with this model. An optimal set of input variables is then determined by searching for the candidate model that minimizes the prediction error. In this paper, we focus on a Bayesian approach to estimating a discrepancy function based on prediction error in linear regression. It is shown how this approach provides an informative method for quantifying model selection uncertainty.     

INFORMATION AND THE BEAUTY PREMIUM IN POLITICAL ELECTIONS

We use data on 800 candidates from the 2012 U.S. election cycle in U.S. and state congressional races to examine the degree to which beauty affects electoral outcomes. We find that a candidate that is one standard deviation more beautiful receives a 1.1 percentage point higher vote share and is 6.0 percentage points more likely to win the election. This beauty premium is larger in situations where voters are less likely to have more information about the candidate. The beauty premium is much smaller for U.S. congressional races than for state congressional races, and is also much smaller for incumbent candidates. In addition, we find a correlation that the beauty premium is lower when a candidate spends more money on the election. (JEL D72, J70)     

Say’s Law,Marxian Crisis Theory and the Interconnectedness of the Capitalist Economy

ABSTRACT

Scholars have long debated exactly why Marx felt that general gluts were not just possible, but inevitable. This article argues that Theories of Surplus Value anchored that necessity in the complex interconnectedness that characterizes capitalist production. There, Marx’s criticism of Say’s Law builds on a version of crisis theory that begins with raw material shortages in a leading sector. The disturbance is then transmitted through the many inter-industry linkages in the capitalist economy. What starts as a supply-side shock in a leading sector is transformed into a broad crisis of aggregate demand as workers are laid off and businesses fall into insolvency. This article argues that Marx’s later discussion of other types of crises in Capital can be read as consistent with this approach. A severe profit squeeze in a leading sector (whether originating in intermediate good prices, market demand, rising wages or rising use of fixed capital) necessarily turns into a general glut. In this context, Say’s Law becomes an irrelevant theorem concerning an imaginary economy. What Marx sees as fundamentally new under capitalism is not the use of money and the separation of sale and purchase, but massive interconnectedness.     

A Historian’s Perspective on the PATCO Strike, Its Legacy, and Lessons

This article argues that the unsuccessful 1981 strike of federal air traffic controllers was the most significant single event in accelerating the decline of organized labor in the United States in the late 20th century. Like the failed Homestead steel strike of 1892, the PATCO strike cast a long shadow over US labor relations for many years after the event itself. Among the effects of the strike was the role it played in legitimizing the use of permanent replacement workers during strikes. This article draws lessons from the PATCO debacle that are worth considering 25 years later.