Showing papers by "Joshua C. Hall published in 2010"

Institutions, Capital, and Growth

Abstract: The international development community has encouraged investment in physical and human capital as a precursor to economic progress. Recent evidence shows, however, that increases in capital do not always lead to increases in output. We develop a growth model where the allocation and productivity of capital depends on a country's institutions. We find that increases in physical and human capital lead to output growth only in countries with good institutions. In countries with bad institutions, increases in capital lead to negative growth rates because additions to the capital stock tend to be employed in rent-seeking and other socially unproductive activities.

Tiebout Competition, Yardstick Competition, and Tax Instrument Choice: Evidence from Ohio School Districts

Abstract: Previous research has shown that Tiebout-style fiscal competition among local governments reduces the likelihood of adopting income taxes. This literature has not yet considered the impact of yardstick competition on tax instrument choice. This paper employs spatial econometrics to test for yardstick competition in the decision to adopt an income tax. The results, based on Ohio school district data, indicate that school districts are more likely to adopt an income tax if their neighbors have already done so. While a negative correlation of Tiebout competition on district income tax adoption persists, controlling for spatial dependence reduces the statistical significance of the effect.

Tiebout Competition, Yardstick Competition, and Tax Instrument Choice: Evidence from Ohio School Districts

Abstract: Previous research has shown that Tiebout-style fiscal competition among local governments reduces the likelihood of adopting income taxes. This literature has not yet considered the impact of yardstick competition on tax instrument choice. This article uses spatial econometrics to test for yardstick competition in the decision to adopt an income tax. The results, based on Ohio school district data, indicate that school districts are more likely to adopt an income tax if their neighbors have already done so. While a negative correlation of Tiebout competition on district income tax adoption persists, controlling for spatial dependence reduces the statistical significance of the effect.

Using the Simpsons to Improve Economic Instruction through Policy Analysis

Abstract: The analysis of public policy issues in the classroom can be a powerful tool to help students learn because it encourages students to actively apply classroom material. The television show The Simpsons provides several episodes that revolve around policy issues amenable to examination. Using The Simpsons to provide students with material for analysis has two advantages over traditional sources such as newspapers or magazines. First, a long-running and popular television show effectively engages students in a way traditional sources cannot. Second, the context of an animated television show can help students separate positive economic analysis from normative economic analysis.

Racial Fractionalization and School Performance

Abstract: I Introduction Parents and policymakers have long been concerned about racial diversity's affect on school performance. Racial diversity's impact on African-American students' academic achievement was at the heart of the 1954 U.S. Supreme Court decision in Brown v. Board of Education (Armor 1995). "White flight," where white families move to segregated communities or enroll their children in private schools, was another historical manifestation of this concern (Fairlie and Resch 2002). Most recently, public policy debates surrounding ability tracking, charter schooling, open enrollment, and school vouchers have also reflected concern about how these policies will affect school racial composition and academic outcomes (Greene 1999; Renzulli and Evans 2005). In light of this concern a body of research examines the impact of racial "peer effects" on school performance. Following the Brown v. Board of Education decision, early social science research focused on racial isolation's harmful effects on African-Americans' academic performance. Two influential reports were Coleman et al. (1966) and the U.S. Commission on Civil Rights (1967), which found that African-American students' racial isolation in segregated schools lowered their academic achievement. Jencks et al. (1972) found that desegregation improved black children's school performance by 2 to 3 percent; and Guryan (2004) estimates that half of the decline in black dropout rates during the 1970s occurred because of desegregation. In a related line of research Hoxby (2000) finds that black third graders perform substantially worse when surrounded by other black students than when they are in classes that are primarily white. Hanushek, Kain, and Rivkin (2009) isolate the peer composition of racial diversity and find similar results, namely, that having a higher percentage of black classmates lowers black academic achievement. Positive racial peer effects are the conventional channel through which racial diversity is thought to affect school performance. However, recent research in economic development suggests that diversity might negatively affect education and education-related outcomes. Several papers in this literature find that greater diversity is associated with worse political-economic outcomes (see, for instance, Easterly and Levine 1997; La Porta et al. 1999; Zak and Knack 2001). (1) This includes those related to schooling. For example, Easterly and Levine (1997) find a negative relationship between the degree of ethnolinguistic fractionalization and the number of years of schooling in a country. Similarly, Alesina, Baqir, and Easterly (1999) examine U.S. school districts and find that racial diversity lowers school spending. This literature points to policy choices--in particular public goods spending--as the channel through which diversity negatively affects education. According to this reasoning, diverse citizens have diverse and often inconsistent needs. They therefore find it more difficult to agree on the level and kinds of public goods that government should provide. This disagreement in turn leads important public goods, such as education, to be underprovided, if underprovided education means lower educational achievement, this work suggests a channel, which we call the "public goods channel," through which higher racial diversity could lead to lower school performance. This article empirically tests the public goods channel using data on Ohio school districts. We find that moving from a completely homogenous school district to one in which two racial groups have equal population shares is associated with a 7-17.5 percentage point decline in the passage rate on the state math exam. While our results suggest that racial diversity is negatively associated with school performance, we find that that the public goods channel is not the reason for this relationship. Compared to between countries, there is minimal institutional or policy variation between Ohio's school districts. …

Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist

Abstract: Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist Tyler Cowen Dutton, New York, 2007 Tyler Cowen's book Discover Your Inner Economist is a study of how individuals can make utility maximizing decisions, while taking into account the different social contexts they may find themselves in The book explores the concepts of incentives, signaling and scarcity in order to provide instruction on getting the most out of everyday life Cowen emphasizes that the main concept in economics is not money, but rather incentives Money can be a tool used to obtain things, but not everything can be bought with money Incentives are always at work as we go about obtaining things Money is one type of incentive, as is praise or approval or a smile He also points out that not every transaction is as simple and straightforward as buying a banana If a consumer wants a banana, he or she will go to the market and buy it There aren't such simple markets for everything As a result, we must often try to motivate others and ourselves to get what we want Discover Your Inner Economist provides the reader with insight on how to overcome the problem of motivation and as well as how to make more effective choices In this respect, Cowen has written what might be regarded as an economics self-help book To be able to understand the choices people make, and to make more effective decisions ourselves, we must understand how human beliefs and opinions change based on social context We must consider questions like: does dressing casually for a job interview signal a weak and careless candidate or does it signal strength? The second and third chapters of the book explore ways to "control the world" (by which Cowen means manipulate the circumstances around oneself), and they also instruct readers on knowing when to stop In trying to cure parents of lateness when picking up their children from daycare, for example, one option would be to charge them late fees Cowen points out, however, that in this context charging parents for being late will likely have unintended negative consequences Parents will begin to assume that it is fine to be late because they are paying This may cause them to be late more often, or to take advantage of extended and probably less expensive daycare services If the goal is to get parents to pick up their children on time, late fees are probably a bad incentive In attempting to motivate one's dentist, an option might be to give the dentist a bonus when you think he or she has done an exceptional job during your visit But Cowen asserts that this could yield a negative unintended consequence similar to the daycare scenario A bonus will probably give the dentist an incentive to put the patient through as little pain as possible, telling them to ignore something like a fragmented tooth, in order to give the patient short term, rather than long term, satisfaction Instead, Cowen's solution to motivating his dentist is to pretend he has no fear and tell his dentist he did a good job This, he says, contributes to his self image as a good dentist, causing him to perform better Chapter 4 is titled "Possess All the Great Art Ever Made," and it focuses on how to become a "cultural billionaire" (or, how to maximize your utility while exposing yourself to a maximum amount of culture) He instructs the reader on how to tour museums, choose and read books, watch movies, and eat out at restaurants An important thing to keep in mind is the scarcity of time and attention When touring a museum, we can become bored quickly An effective technique that Cowen provides is bringing the "me" factor into the experience by making it all about oneself In each room of the museum, he advises individuals to ask themselves which piece of art they would choose to take home This causes the individual to have a critical, interactive experience with the art, as well as to create a kind of personal attachment to specific pieces …

Why are some places rich while others are poor? the institutional necessity of economic freedom

Abstract: We survey perspectives on the economic differences between countries and argue that economic freedom is the key to prosperity. We close by outlining the policy implications. Specifically, removing obstacles to the exercise of economic freedom is an important step towards prosperity.

New Empirical Estimates of Rent Seeking: An Update of Sobel and Garrett (2002)

Abstract: The SIC sectors identified for direct, indirect, and in kind rent seeking activity have been identified and verified empirically in Sobel & Garrett (2002) by comparing capital counties to non-capital counties. We convert these industries from SIC to NAICS codes and provide measures of direct, indirect, and in-kind rent seeking for the year 2005. In addition, we extend their work by switching from counties to Metropolitan and Micropolitan Statistical Areas, which are defined as economically integrated counties. Our measures are consistent with theirs and provide a starting point for creating a time series of rent-seeking activity in the United States.

Doing more with less : making colleges work better

Abstract: Introduction: The American Higher Education Problem.- Introduction: The American Higher Education Problem.- Evaluating and Debating Causes.- Financial Aid in Theory and Practice.- Price Discrimination and Rising Costs: Is There Any Relationship?.- Cost Inflation in Intercollegiate Athletics: And Some Modest Proposals for Controlling It.- The Academics-Athletics Trade-Off: Universities and Intercollegiate Athletics.- Is For-Profit Education the Solution?.- For-Profit Education in the USA: A Primer.- A Market-Funded College's Approach to Student Learning and Job Placement: An Insider's View.- The Economics of For-Profit Education.- Opportunities for Reform.- Getting It Right: Where University Systems Lose Information in Designing Programs.- Managing the Internal Organization of Colleges and Universities.- Privatize It: Outsourcing and Privatization in Higher Education.- Improving Higher Education Using the Principles of Market-Based Management(R).- A Tale of Two Partners: How Specialization and Division of Labor Are Reshaping the Academy.

The Virtue of Business: How Markets Encourage Ethical Behavior

Abstract: Popular media is filled with claims about the immorality of the marketplace and businessmen. In this article, we question these claims. Because individuals as consumers want to support ethical behavior, if individuals are ethical, markets will tend to enhance, rather than retard, ethical behavior. The enhancement is carried out by ethical entrepreneurs who change and influence the way that business practices are carried out. We illustrate our argument with the examples of Barnum & Bailey Circus, Whole Foods Market, and BB&T Bank. Rachel Kotkin, "The Virtue of Business: How Markets Encourage Ethical Behavior," Journal of Markets & Morality 13, no. 1 (Spring 2010): 45-58

Electoral Pressures and the Legal System: Friends or Foes?

Abstract: Decisions made within the legal system are typically viewed as being impartial informed only by the testimony and evidence presented and legal precedent. For this reason, many scholars treat legal decisions as exogenous events, that is, that they are independent of preexisting conditions (see, for example, Baicker and Gordon 2006). However, political scientists and legal analysts have long understood that in many cases factors outside what is presented in the courtroom affect the outcomes of legal cases.1 The race, gender, and political affiliation of individuals involved in the legal process have all been found to play a role in determining legal outcomes.2

School Choice and Post-Katrina New Orleans: An Analysis

Abstract: In 2005 Hurricane Katrina posed an unprecedented set of challenges to formal and informal systems of disaster response and recovery. Informed by the Virginia School of Political Economy, the contributors to this study critically examine the public policy environment that led to both successes and failures in the post-Katrina disaster response and long-term recovery. Building from this perspective, this book lends critical insight into the nature of the social coordination problems disasters present, the potential for public policy to play a positive role, and the inherent limitations policymakers face in overcoming the myriad challenges that are a product of catastrophic disaster.

School Choice and Post-Katrina New Orleans: An Analysis

Abstract: In 2005 Hurricane Katrina posed an unprecedented set of challenges to formal and informal systems of disaster response and recovery. Informed by the Virginia School of Political Economy, the contributors to this study critically examine the public policy environment that led to both successes and failures in the post-Katrina disaster response and long-term recovery. Building from this perspective, this book lends critical insight into the nature of the social coordination problems disasters present, the potential for public policy to play a positive role, and the inherent limitations policymakers face in overcoming the myriad challenges that are a product of catastrophic disaster.

Objectivism versus subjectivism: A market test

Abstract: The terms objective and subjective are considered antonyms, and yet “objectivists”, associated with the ideas of Ayn Rand, and “subjectivists”, associated with the ideas of Ludwig von Mises, are both associated with the same political philosophy: classical liberalism. There are however important apparent differences between the “objectivist” approach of Rand and the “subjectivist” approach of Mises. Who is right? And which intellectual has the greater place in the classical liberal tradition? We propose to test these questions using data from a unique housing development in Charleston, South Carolina. We find objective evidence in favor of Mises's subjectivism.