STABILIZATION POLICY, LEARNING-BY-DOING, AND ECONOMIC GROWTH

This paper shows that fiscal policy, when used for stabilizationpurposes, can have a positive effect on the economy's growth,on human capital accumulation, and on welfare. We introducestochastic productivity shocks into a model in which productivityis augmented through learning-by-doing If future benefits oflearning-by-doing are not fully internalized by workers, thenrecessions are periods in which opportunities for acquiringexperience are foregone. We identify configurations of disturbancesand other parameters for which a countercyclical policy maximizesgrowth and welfare.     

Home Warranties: An Analysis of an Emerging Development in Consumer Protection

Although warranty coverage on consumer products is a universally accepted form of protection, the extension of similar coverage to buyers of new and used homes is a developing practice. Home warranties serve a dual purpose: they reduce a homebuyer's risk of substantial financial loss, and protect the builder, seller or real estate vendor from legal liability should undisclosed material defects occur after a sale. In an effort to examine consumer reactions to home warranties, a mail survey was conducted of recent purchasers residing in four central counties of New York State. It was found that two-thirds of the 571 single-family homeowners who responded were aware of warranties on new housing and 97 percent were in favor of such coverage. Only 22 percent were aware of warranties for resale homes and 56 percent favored such coverage. Unexpected defects costing more than $100 were experienced by 55 percent of the sample. However, only 27 percent of the sample had defects which were warrantable under most current warranty programs.     

Climbing the Job Ladder: New Evidence of Gender Inequity

An explanation for the gender wage gap is that women are less able or less willing to “climb the job ladder.” However, the empirical evidence on gender differences in job mobility has been mixed. Focusing on a subsample of younger, university‐educated workers from an Australian longitudinal survey, we find strong evidence that the dynamics of promotions and employer changes worsen women’s labor market position.     

The Relationship between Multiple Choice and Essay Response Questions in Assessing Economics Understanding

Efficiency considerations have led to increased use of multiple-choice questions to assess economics understanding at the secondary and tertiary levels throughout Australia. A multiple-choice test would suffice if multiple-choice and essay questions measure the same dimensions of knowledge, as suggested by least squares estimation of the relationship between these two forms of testing. We show a simultaneous equation bias inherent in least squares estimation of the relationship between these two forms. A two-stage least squares estimation reveals no relationship, implying that these testing forms measure different dimensions of knowledge. Thus, a single form of testing economics knowledge must be avoided.     

ADVERTISING RESTRICTIONS AND CIGARETTE SMOKING: EVIDENCE FROM MYOPIC AND RATIONAL ADDICTION MODELS

Because of the high social cost of cigarette smoking, many countries impose advertising restrictions to reduce cigarette consumption. Yet previous studies conclude that advertising constraints have been ineffective at reducing cigarette smoking. This conclusion is incorrect because it ignores the fact that advertising restrictions have supply as well as demand effects. The authors extend existing research by showing that advertising regulations, especially those found in the recent National Tobacco Settlement, have decreased the equilibrium level of cigarette consumption in the United States, a result that holds for both myopic and rational addiction models. (JEL L50, L66, M37 )     

DWELLING LAYOUT AND COMMUNICATION BETWEEN ROOMS: TOPOLOGICAL REPRESENTATION AND A CLASSIFICATION SYSTEM

This paper presents a method for the topological representation of dwelling floor plans and a system for the classification of a floor plan according to the amount of communication possible between the rooms.     

ONE HAT TOO MANY: KEY EXECUTIVE PLURALITY AND SHAREHOLDER WEALTH

Tracing backward the career paths of the key executives of Business Week’s 1990 listing of the 1000 most valuable publicly held companies, we empirically examined the impact of announced changes in key executive plurality on stockholder returns. We found the more complete the position consolidation, the more negative were the shareholder responses. To attempt to gain further understanding, the additional variables of executive’s origin, the size of the board of directors of the firm, the proportion of outsiders on the board, and prior firm performance were examined. © 1997 by John Wiley & Sons, Ltd.     

Secondary household production of food: the influence of home meal preparation on food expenditures and reported adequacy

A path model was tested to ascertain the relationships between certain socio-economic and demographic variables, the percentage of household meals prepared and eaten at home (secondary household production), food expenditures, and the household's reported adequacy of food consumed. Significant positive predictors of secondary household production of food were the age of the head and household size. Negative predictors were education of the head, income of the head(s) and number of hours worked by the household head(s). By far the most important predictor was the number of hours worked. The strongest predictor of food expenditures was household size. Other positive predictors were income of the head(s), number of household heads and the degree of urbanization. Negatively affecting food expenditures was secondary household production of food, indicating the ‘saving’ effect of preparing meals at home. The household's reported adequacy of their food was predicted by the positive effect of education of the head, age of the head, tenure, hours worked by the head(s) and number of household heads. Although the number of hours the heads are employed decreased the percentage of meals prepared at home, and the percentage of meals at home negatively affected expenditures, the number of employment hours had no effect on food expenditures.