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Supply Constraints and Housing Prices
(Department of Economics, 2006)
This paper analyzes the effects of land use constraints on housing prices. We provide a new framework for evaluating policy when mobility across regions is allowed but limited. A key result is that loosening regulatory constraints within individual...
Customization: Ideal Varieties, Product Uniqueness and Price Competition
(Department of Economics, 2009)
We study customization in the Hotelling model with two firms. In addition to providing ideal varieties, the perceived uniqueness of a customized product contributes independently to consumer utility. We show that only when ...
Testing the Bounds: Empirical Behavior of Target Zone Fundamentals
(Department of Economics, 2009)
Standard target zone exchange rate models are based on nonlinear functions of an unobserved economic fundamental, which is assumed to be bounded, similarly to the target zone exchange rates themselves. A violation of this key assumption is a basic...
Income and Substitution Effects of Increases in Risk when Payoffs are Linear in the Random Variable
(Department of Economics, 2000)
attention in the literature. This paper provides a Hicks-Slutsky decomposition of the effect of Rothschild-Stiglitz increases in risk on the optimal decision. Two measures of aversion to additional risk are introduced. Their behavior is shown to control...
Optimality of the Friedman rule in overlapping generations model with spatial separation
(Department of Economics, 2003)
Recent papers suggest that when intermediation is analyzed seriously, the Friedman rule does not maximize social welfare in overlapping generations model in which money is valued because of spatial separation and limited communication. These papers...
Estimating the Impact of State Policies and Institutions with Mixed-Level Data
(Department of Economics, 2006)
clustered standard errors as a more straightforward, feasible approach, especially when working with large datasets or many cross-level interactions, our purpose in this Practical Researcher piece is to draw attention to the issue of clustering in state...
Exact FGLS Asymptotics for MA Errors
(Department of Economics, 2004)
We show under very parsimonious assumptions that FGLS and GLS are asymptotically equivalent when errors follow an invertible MA(1) process. Although the linear regression model with MA errors has been studied for many ...
Does a Seller Really Want Another Bidder?
(Department of Economics, 2007)
Jeremy I. Bulow and Paul D. Klemperer (AER, 1996) argue that the usual concerns of auction design miss the big picture, and show that a simple English auction without a reserve price and N + 1 bidders attains expected ...
When Do Input Prices Matter For Make-Or-Buy Decisions?
(Department of Economics, 2007)
informationally-demanding way to ensure efficient make-or-buy decisions is to price inputs at marginal cost. The extent to which input prices can depart from marginal cost while still inducing efficient make-or-buy decisions depends on the relative efficiency...
An Information Theoretic Approach to Flexible Stochastic Frontier Models
(Department of Economics, 2007)
Parametric stochastic frontier models have a long history in applied production economics, but the class of tractible parametric models is relatively small. Consequently, researchers have recently considered non-parametric alternatives...
The Effect of Monetary Policy on Economic Output
(Department of Economics, 2003)
There is substantial research effort devoted to identifying a sufficient statistic for monetary policy. The purpose of this paper is to broaden the scope of the on-going investigation along three dimensions. First, we follow up the Rudebusch...
Incentive Schemes in Peer-to-Peer Networks
(Department of Economics, 2008)
In this paper we use mechanism design approach to find the optimal file-sharing mechanism in a peer-to-peer network. This mechanism improves upon existing incentive schemes. In particular, we show that peer-approved scheme is never optimal...
How Do States Formulate Medicaid and SCHIP Policy? Economic and Political Determinants of State Eligibility Levels
(Department of Economics, 2009)
We exploit the existence of substantial variation in state policies toward public health insurance for children between 1990 and 2002 to estimate the economic and political determinants of state eligibility levels. Controlling for state and year...
Do Liberals Play Nice? The Effects of Party and Political Ideology in Public Goods and Trust Games
(Department of Economics, 2004)
We test the conventional wisdom that political ideology is associated with generosity or compassion by comparing the behavior of experimental subjects in public goods or trust games. We find that self-described liberals ...
Exposure Order Effects and Advertising Competition
(Department of Economics, 2008)
This paper applies the theories of exposure order effects, developed in the psychology literature, to an industrial organization model to explore their role in advertising competition. There are two firms and infinitely many identical consumers...
Did the Devil Make Them Do It? The Effects of Religion in Public Goods and Trust Games*
(Department of Economics, 2008)
We test whether religious affiliation and participation in religious services are associated with behavior in public goods and trust games. Overall, religious affiliation is unrelated to individual behavior. However, we ...
Environmental Policy Attitudes: Issues, Geographical Scale, and Political Trust
(Department of Economics, 2008)
Objectives. This article examines environmental policy attitudes, focusing on the differences in preferences across issue type (i.e., pollution, resource preservation) and geographical scale (i.e., local, national, global). ...
An Experimental Study of the Effects of Inequality and Relative Deprivation on Trusting Behavior
(Department of Economics, 2005)
Several non-experimental studies report that income inequality and other forms of population-based heterogeneity reduce levels of trust in society. However, recent work by Glaeser et al. (2000) calls into question the reliability of widely used...
The Welfare Caseload, Economics Growth and Welfare-to-Work Policies: An Analysis of Five Urban Areas
(Department of Economics, 2000)
This paper uses quarterly data on AFDC (later TANF) recipients in five major urban areas to examine the relative importance of policy reform and economic conditions in explaining the dynamics of the welfare caseload and the employment experiences...
The Impact of Welfare Reform on Leaver Characteristics, Employment and Recidivism
(Department of Economics, 2002)
recidivism comparing cohorts of leavers prior to and after welfare reform. We find that after welfare reform leavers are much more likely to be working, have higher total earnings, work for employers with similar characteristics, and are less likely to return...