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Working papers, 1997

9701
Jeffrey K. Sarbaum, Solomon W. Polachek and Norman E. Spear
The Effects of Price Changes on Alcohol Consumption in Alcohol-experienced Rats

9702
Edward C. Kokkelenberg and Julien van den Broeck
Stochastic Production Frontiers: A Bayesian Analysis of Nuclear Power Plant Efficiencies

9703
Charles W. Bischoff and Steven C. Hine
A Comparison of New Keynesian and Real Business Cycle Theories of Macroeconomic Behavior

9704
Solomon W. Polachek and John Robst
Employee Labor Market Information: Comparing Direct World of Work Measures of Workers' Knowledge to Stochastic Frontier Estimates

9705
Chulhee Lee
The Expected Length of Retirement and Life-Cycle Savings, 1850-1990

9707
Sudip Chattopadhyay
A Study on the Effectiveness of McFaddens's Nested Legit Model in Valuing Amenity Improvement

9708
Charles W. Bischoff and Halefom Belay
The Problem of Identification and the Money Demand Function (Revised)

9709
Edward C. Kokkelenberg and John A. Keil
The Shopping Mall as an Amenity: An Empirical Analysis

9710
Chulhee Lee
Long-Term Unemployment and Retirement in Early-Twentieth-Century America

9711
Kenneth V. Greene and Byung-Goo Kang
Public and Private Competition and the Search for their Effects on School Outputs in New York State

9712
Charles W, Bischoff, Oliver W. Rajakaruna, In-Bong Kang, and Hyo-Yong Sung
A Direct Test of the Theory of Rational Stock Market Bubbles

9713
Solomon W. Polachek and John Robst
Trade, Conflict, and Cooperation Among Nations

9714
Sudip Chattopadhyay
Estimating the Demand for Air Quality: New Evidence Based on the Chicago Housing Market

9716
Robert L. Basmann and Bong Joon Yoon
The Minimum Spread Rule to Identify Outlying Values

9717
John Robst and Kathleen Cuson-Graham
Human Capital, Atrophy Rates, and Occupational Sex Segregation

9718
Chulhee Lee
Selective Assignment of Military Positions in the Union Army: Implications for the Impact of the Civil War

9719
Kenneth V. Greene and Erol M. Balkan
Military Conscription, Efficient Policies, and Transfers from the Politically Weak

9721
John Robst and KimMarie McGoldrick
Frontier Estimation of Changes in Workers' Labor Market Information

9722
Chulhee Lee
Farm Ownership, Land Valve, and Retirement in Early-Twentieth-Century America


Number: 9701

Authors: Jeffrey K. Sarbaum, Solomon W. Polachek and Norman E. Spear

Title: The Effects of Price Changes on Alcohol Consumption in Alcohol-experienced Rats

Abstract:

This paper reports the results of two experiments designed to investigate responses to changes in the price of ethanol in laboratory rats with previous ethanol exposure via a variant of the Samson ethanol fading technique. Rats facing a budget constraint chose between two alternative non-ethanol commodities in a morning control session and between an ethanol and a non-ethanol commodity in an afternoon session. The non-ethanol session results were consistent with previous animal models of consumer choice, indicating that the history of ethanol exposure did not interfere with rats' ability to behave according to economic theory. The first experiment studied responses to a 100% increase and a 400% increase in the price of ethanol. In general, rats responded only moderately to a 100% price increase -- especially when compared to the response for the non-ethanol commodity during the control session. The response was more dramatic for a 400% ethanol price increase. The second experiment entailed an alternative approach to measure the effect of a price change on ethanol consumption as well as an attempt to determine whether ethanol consumption is affected by a cue signaling an increase in the future price of ethanol. In this experiment rats responded to increased ethanol prices but not to the cue reflecting future price increases. In general, the results from the two experiments showed that economic models of consumer choice are a useful tool to study ethanol and non-ethanol consumption in rats. In addition, the experiments provide some evidence supporting habit formation but not rational addiction as an explanation of ethanol consumption in rats.

File: Not available online.


Number: 9702

Authors: Edward C. Kokkelenberg and Julien van den Broeck

Title: Stochastic Production Frontiers: A Bayesian Analysis of Nuclear Power Plant Efficiencies

Abstract:

This paper reports on the development and use of a Stochastic Frontier Production Function technique to measure the efficiency of Nuclear Power Plants. We use a Bayesian approach and apply it to panel data. The method allows us to estimate individual efficiencies. We then investigate possible causes for their estimated efficiencies. We conclude that reactor type, operator experience, scale, and cumulative plant output are important explanatory variables.

File: Not available online.


Number: 9703

Authors: Charles W. Bischoff and Steven C. Hine

Title: A Comparison of New Keynesian and Real Business Cycle Theories of Macroeconomic Behavior

Abstract:

No abstract.

File: Not available online


Number: 9704

Authors: Solomon W. Polachek and John Robst

Title: Employee Labor Market Information: Comparing Direct World of Work Measures of Workers' Knowledge to Stochastic Frontier Estimates

Abstract:

A number of papers use stochastic frontier estimation to measure a worker's incomplete information about available wages. These papers define incomplete information as the difference between a worker's wage and his or her maximum potential wage. Many question this approach since it essentially measures incomplete information as a residual, without independent evidence relating this residual to incomplete information. This paper introduces independent direct measures of workers' knowledge of the world of work obtained from the National Longitudinal Survey of Young Men. Frontier estimates of incomplete information are compared to the direct measures of workers' knowledge. The results verify that stochastic frontier estimates provide a reasonable measure of a worker's incomplete wage information.

File: Not available online.


Number: 9705

Authors: Chulhee Lee

Title: The Expected Length of Retirement and Life-Cycle Savings, 1850-1990

Abstract:

This paper explains the time trend and the level of private savings in the United States over the last century by estimating the proportion of savings that represents accumulation for retirement. I develop a method of computing the expected length of retirement for each ten year labor market cohort between 1850 and 1990, based on its mortality and retirement experiences. I also estimate age consumption profiles and income and population shares for each cohort from 1900 to 1990. Using these estimates, I calculate a counterfactual life cycle savings-income ratio for 1900-1990 that would have resulted if the savings for retirement were the only motive for wealth accumulation. If contributions to the social security and government employee retirement funds are added to savings, then the counterfactual savings-income ratio is fairly consistent with the actual private savings rate in terms of the time trend. The proportion of private savings that represents life-cycle wealth accumulation increased over time, particularly after 1940. I argue that about half of the wealth stock resulted from life cycle savings.

File: Not available online.


Number: 9707

Authors: Sudip Chattopadhyay

Title: A Study on the Effectiveness of McFaddens's Nested Legit Model in Valuing Amenity Improvement

Abstract:

The paper presents an application of the nested legit model to a large, Chicago housing data set, with the goal of valuing environmental amenities. Four alternative hierarchical nestings based on dwelling, neighborhood, and city attributes are considered, and a sampling rule satisfying McFadden's uniform conditioning property is adopted. The benefit estimates of dwelling and city attributes are found to be less sensitive, while those of neighborhood attributes are found to be more sensitive to alternative nesting strategies. The effects of household demographics on parameter estimates generally conform to standard notions. A comparison of the model with the standard two-step hedonic model reveals that the benefit estimates are consistently lower in the case of the former.

File: Not available online.


Number: 9708

Authors: Charles W. Bischoff and Halefom Belay

Title: The Problem of Identification and the Money Demand Function (Revised)

Abstract:

This paper responds to an assertion by Thomas F. Cooley and Stephen F. LeRoy (American Economic Review, 1981) that "there is no obvious way to formulate models of equilibrium in financial markets in which the demand for money is identified." We show that the identification of standard demand for money functions is straightforward, regardless of whether or not the monetary authority sets money supply via a feedback rule, as long as the money supply mechanism depends on at least one variable not in the money demand function. We show that Cooley and LeRoy reached their erroneous conclusion because they applied an incorrect requirement for identification. We also discuss arguments by Hatanaka (1975) and Sims (1980), which might pose additional difficulties for identification of money demand.

File: Not available online.


Number: 9709

Authors: Edward C. Kokkelenberg and John A. Keil

Title: The Shopping Mall as an Amenity: An Empirical Analysis

Abstract:

Local housing prices may be affected during commercial facility construction due to uncertainty and land use change. Studies of the siting of noxious facilities show negative impacts on housing values, but there are no studies of the price impact during the construction of a shopping mall and subsequently. Further, few, if any, studies of land use change have tested a one equation specification that includes a dynamic metric, engages weighted least squares (to accommodate heteroskedasticity) and searches over a range of Box-Cox transformations. This is such a study. Using survey data garnered from the area around the Town Square Mall in Vestal, New York, we find that the effect of the announcement of the mall lowered housing prices ceteris paribus. The completion, however, raised housing prices; the ultimate premium being four to five percent. We characterize the mall as ultimately an amenity for the neighborhood. Our results are consistent with the view of the mall as a tax generator for the local community which in turn results in lower housing prices as either taxes on homes are relatively reduced, or tax supported amenities are increased. The period of depressed prices immediately after the mall announcement may result from uncertainty, erroneous expectations of community resources required or revenues received, or misperceptions regarding the ultimate nature of the mall.

File: Not available online


Number: 9710

Authors: Chulhee Lee

Title: Long-Term Unemployment and Retirement in Early-Twentieth-Century America

Abstract:

This paper explores the nature and effect on labor force participation of long-term unemployment by looking at the pattern of transitions in the labor force status of older males between 1900 and 1910. Long-term unemployment greatly increased the chances of retirement in the near future. The long-term unemployed were much more responsive to changes in income or health in retirement decisions than those who were unemployed for shorter periods. Long-term unemployment appears to be a clearly distinct state ~from non-participation, Some implications of the result are discussed for the trend in the labor force participation rate of older males before 1940.

File: Not available online.


Number: 9711

Authors: Kenneth V. Greene and Byung-Goo Kang

Title: Public and Private Competition and the Search for their Effects on School Outputs in New York State

Abstract:

No abstract.

File: Not available online.


Number: 9712

Authors: Charles W, Bischoff, Oliver W. Rajakaruna, In-Bong Kang, and Hyo-Yong Sung

Title: A Direct Test of the Theory of Rational Stock Market Bubbles

Abstract:

No abstract.

File: Not available online.


Number: 9713

Authors: Solomon W. Polachek and John Robst

Title: Trade, Conflict, and Cooperation Among Nations

Abstract:

Trade is hypothesized to reduce conflict and increase cooperation between countries. This article discusses the various approaches used to test these hypotheses and their results including the relationship between trade levels, trade gains and conflict/ cooperation, methods for addressing causation issues, and the role of trade in determining whether democracies fight each other.

File: Not available online/


Number: 9714

Authors: Sudip Chattopadhyay

Title: Estimating the Demand for Air Quality: New Evidence Based on the Chicago Housing Market

Abstract:

The paper combines a new, large household-level data set with the two-stage hedonic estimation technique to derive new estimates of willingness-to-pay for reduced air pollution. The estimates are found robust against functional-form specification. Marginal WTP estimates for a reduction in PM-10 are found to be quite comparable with some previous estimates. Benefits of non-marginal changes exhibit consistently higher monetary returns in the case of PM-10 than in the case of SO2, signifying that households dislike particulate pollution more than they do sulfur. However, the rate of return to reduced air pollution is diminishing faster in the case of the former than in the case of the latter.

File: Not available online.


Number: 9716

Authors: Robert L. Basmann and Bong Joon Yoon

Title: The Minimum Spread Rule to Identify Outlying Values

Abstract:

No abstract.

File: Not available online.


Number: 9717

Authors: John Robst and Kathleen Cuson-Graham

Title: Human Capital, Atrophy Rates, and Occupational Sex Segregation

Abstract:

This paper reexamines differences in atrophy rates for female occupations versus male occupations. The difference between this study and previous studies is that we emphasize hometime in the recent past, as opposed to hometime over the career. This allows us to avoid problems caused by examining workers after wages rebound upon reentering the labor force. We find married women in female occupations suffer lower penalties for recent hometime than married women in male dominated occupations. Previous studies may be incorrect in concluding that human capital theory does not play a role in occupational choice.

File: Not available online.


Number: 9718

Authors: Chulhee Lee

Title: Selective Assignment of Military Positions in the Union Army: Implications for the Impact of the Civil War

Abstract:

No abstract.

File: Not available online.


Number: 9719

Authors: Kenneth V. Greene and Erol M. Balkan

Title: Military Conscription, Efficient Policies, and Transfers from the Politically Weak

Abstract:

No abstract.

File: Not available online.


Number: 9721

Authors: John Robst and KimMarie McGoldrick

Title: Frontier Estimation of Changes in Workers' Labor Market Information

Abstract:

This paper uses search theory to analyze the association between worker characteristics and changes in workers' labor market information across time. A number of hypotheses concerning who will invest in more information over time are derived from search theory and tested. Stochastic frontier estimation techniques are used to estimate the workers' information at different points in time. Workers who are searching for a new job, currently have less information, experience, and tenure, more education, or live in counties with low levels of unemployment have a greater increase in information across time.

File: Not available online.


Number: 9722

Authors: Chulhee Lee

Title: Farm Ownership, Land Valve, and Retirement in Early-Twentieth-Century America

Abstract:

This study explores the effect of farmland value on retirement decisions of farm owners in the early twentieth century. The average farmland value per acre of county, as of either 1900 or 1910, had a strong positive effect on the probability of retirement of farm owners in 1910. Farm owners were much more responsive to a change in farmland value when it was not produced by a shift in the farmland productivity than when it was. I argue that the rapid growth in farmland value between 1900 and 1910 accounted for 40% to 50% of the decline in the labor force participation rate of males aged 15 and over during the same period.

File: Not available online.


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Last Updated: 6/16/09