Showing papers in "American Economic Journal: Economic Policy in 2009"
TL;DR: The paradox of women's declining relative wellbeing is found across various datasets, measures of subjective well-being, and is pervasive across demographic groups and industrialized countries as mentioned in this paper, showing that women's happiness has declined both absolutely and relative to men.
Abstract: By many objective measures the lives of women in the United States have improved over the past 35 years, yet we show that measures of subjective well-being indicate that women’s happiness has declined both absolutely and relative to men. The paradox of women’s declining relative wellbeing is found across various datasets, measures of subjective well-being, and is pervasive across demographic groups and industrialized countries. Relative declines in female happiness have eroded a gender gap in happiness in which women in the 1970s typically reported higher subjective well-being than did men. These declines have continued and a new gender gap is emerging—one with higher subjective well-being for men.
363 citations
TL;DR: In this paper, the authors show that some of the costs of evasion and avoidance are transfers to other agents in the economy rather than real resource costs, and that the excess burden depends on a weighted average of the taxable income and total earned income elasticities, with the weight determined by the resource cost of sheltering income from taxation.
Abstract: Since Feldstein (1999), the most widely used method of calculating the excess burden of income taxation is to estimate the eect of tax rates on reported taxable income. Feld- stein's taxable income formula for deadweight loss implicitly assumes that the marginal social cost of evasion and avoidance equals the tax rate. This paper argues that this condition is likely to be violated in practice for two reasons. First, some of the costs of evasion and avoidance are transfers to other agents in the economy rather than real resource costs. Second, some individuals overestimate the costs of evasion and avoid- ance. I show that, in such situations, excess burden depends on a weighted average of the taxable income and total earned income elasticities, with the weight determined by the resource cost of sheltering income from taxation. This generalized formula implies that the e¢ ciency cost of taxing high income individuals is not necessarily large despite evidence that their reported incomes are highly sensitive to marginal tax rates.
292 citations
TL;DR: In this article, the authors simulate the outcomes of a national LCFS, focusing on gasoline and ethanol as the high- and low-carbon fuels, and find that the LCFS is unlikely to increase CO2 emissions.
Abstract: A low carbon fuel standard (LCFS) seeks to reduce greenhouse gas emissions by capping an industry’s carbon emissions per unit of output. California has launched an LCFS for automotive fuels; others have called for a national LCFS. We show that this policy causes production of high-carbon fuels to decrease but production of low-carbon fuels to increase. The net effect of this may be an increase in carbon emissions. The LCFS may also reduce welfare, and the best LCFS may be no LCFS. We simulate the outcomes of a national LCFS, focusing on gasoline and ethanol as the high- and low-carbon fuels. For a broad range of parameters, we find that the LCFS is unlikely to increase CO2 emissions. However, the surplus losses from the LCFS are quite large ($80 to $760 billion annually for a national LCFS reducing carbon intensities by 10 percent), and the average carbon cost ($307 to $2,272 per ton of CO2 for the same LCFS) can be much larger than damage estimates. We propose an efficient policy that achieves the same emissions reduction at a much lower surplus cost ($16 to $290 billion) and much lower average carbon cost ($60 to $868 per ton of CO2).
217 citations
TL;DR: In this paper, the shape of consumption profiles over the month for Social Security benefit recipients that have saved different amounts for retirement was described using data from the Continuing Survey of Food Intake by Individuals.
Abstract: Using data from the Continuing Survey of Food Intake by Individuals, this paper describes the shape of consumption profiles over the month for Social Security benefit recipients that have saved different amounts for retirement. Individuals with income mostly made up of Social Security and savings smooth consumption over the pay period, while individuals without savings consume 25 percent fewer calories the week before they receive checks relative to the week afterwards. The findings for individuals without savings, who comprise about a fourth of our sample, are inconsistent with the standard Life Cycle Permanent Income Hypothesis but are consistent with hyperbolic discounting. (JEL D14, E21, J26)
179 citations
TL;DR: This article analyzed the relationship between domestic and foreign operations of US manufacturing firms between 1982 and 2004 by instrumenting for changes in foreign operations with GDP growth rates of the foreign countries in which they invest.
Abstract: Do firms investing abroad simultaneously reduce their domestic activity? This paper analyzes the relationship between the domestic and foreign operations of US manufacturing firms between 1982 and 2004 by instrumenting for changes in foreign operations with GDP growth rates of the foreign countries in which they invest. Estimates produced using this instrument indicate that 10 percent greater foreign investment is associated with 2.6 percent greater domestic investment, and 10 percent greater foreign employee compensation is associated with 3.7 percent greater domestic employee compensation. These results do not support the popular notion that expansions abroad reduce a firm's domestic activity, instead suggesting the opposite. (JEL F23, H25, L25)
157 citations
TL;DR: In this article, the authors present results from a randomized study of a well-defined use of computers in schools, a popular instructional computer program for pre-algebra and algebra.
Abstract: We present results from a randomized study of a well-defined use of computers in schools, a popular instructional computer program for pre-algebra and algebra. We primarily assess the program using a test designed to target pre-algebra and algebra skills. Students ran domly assigned to computer-aided instruction score significantly higher on a pre-algebra and algebra test than students randomly assigned to traditional instruction. We hypothesize that this effective ness arises from increased individualized instruction as the effects appear larger for students in larger classes and in classes with high student absentee rates. (JEL H75,121)
142 citations
TL;DR: In this paper, the authors analyzed emissions leakage in an incompletely regulated and imperfectly competitive industry and showed that incomplete regulation can welfare dominate complete regulation of emissions from an asymmetric oligopoly.
Abstract: For political, jurisdictional and technical reasons, environmental regulation of industrial pollution is often incomplete: regulations apply to only a subset of facilities contributing to a pollution problem. Policymakers are increasingly concerned about the emissions leakage that may occur if unregulated production can be easily substituted for production at regulated firms. This paper analyzes emissions leakage in an incompletely regulated and imperfectly competitive industry. When regulated producers are less polluting than their unregulated counterparts, emissions under incomplete regulation exceed the level of emissions that would have occurred under complete regulation. The reverse can be true when regulated firms are relatively dirty. In a straightforward application of the theory of the second best, I show that incomplete regulation can welfare dominate complete regulation of emissions from an asymmetric oligopoly. The model is used to simulate greenhouse gas emissions from California’s electricity sector under a source-based cap-and-trade program. Incomplete regulation that exempts out-of-state producers achieves approximately a third of the emissions reductions achieved under complete regulation at almost three times the cost per ton of emissions abated.
130 citations
TL;DR: In this paper, the authors propose a new theoretical approach to urban squatting, reflecting the view that squatters and formal residents compete for land within a city, where squatters "squeeze" the formal market, raising the price paid by formal residents.
Abstract: This paper offers a new theoretical approach to urban squatting, reflecting the view that squatters and formal residents compete for land within a city. The key implication is that squatters “squeeze” the formal market, raising the price paid by formal residents. The squatter organizer ensures that squeezing is not too severe, since otherwise, the formal price will rise to a level that invites eviction by landowners. Because eviction is absent in equilibrium, the model differs from previous analytical frameworks, where eviction occurs with some probability. It also facilitates a general equilibrium anal ysis of squatter formalization policies. (
118 citations
TL;DR: In this paper, the authors examined the effects of gasoline prices on the automotive fleet's composition and found that high gasoline prices affect fleet fuel economy through shifting new auto purchases towards more fuel-efficient vehicles, and speeding the scrappage of older, less fuelefficient used vehicles.
Abstract: Exploiting a rich dataset of passenger vehicle registrations in 20 US MSAs from 1997 to 2005, we examine the effects of gasoline prices on the automotive fleet's composition. We find that high gasoline prices affect fleet fuel economy through two channels: shifting new auto purchases towards more fuel-efficient vehicles, and speeding the scrappage of older, less fuel-efficient used vehicles. Policy simulations suggest that a 10 percent increase in gasoline prices from 2005 levels will generate a 0.22 percent increase in fleet fuel economy in the short run and a 2.04 percent increase in the long run. (JEL H25, L11, L69, L71)
117 citations
TL;DR: This article examined the effects of presentation and information on the take-up of financial subsidies for retirement saving in a large randomized experiment carried out with H&R Block and found that both pure incentives and the presentation of those incentives affect consumer choices.
Abstract: We examine the effects of presentation and information on the take- up of financial subsidies for retirement saving in a large randomized experiment carried out with H&R Block. The subsidies raise take-up and contributions with larger effects when the subsidy is character - ized as a matching contribution rather than an equivalent-value tax credit (or cash back), and when filers are informed before the tax season about the subsidy. The results imply that both pure incentives and the presentation of those incentives affect consumer choices. (JEL D14, H24, H31, J26)
106 citations
TL;DR: The authors assesses the impact of an increase in funding for public community colleges on the market for two-year college education, considering both the effect on community college enrollments and on the number of proprietary schools in a market.
Abstract: This study assesses the impact of an increase in funding for public community colleges on the market for two-year college education, considering both the effect on community college enrollments and on the number of proprietary schools in a market. I draw on a new administrative dataset of for-profit colleges in California and votes on local community college bond referenda to implement a unique regression discontinuity design. The results suggest that bond pas - sage diverts students from the private to the public sector and causes a corresponding decline in the number of proprietary schools in the market. (JEL H75, I22, I23)
TL;DR: In this article, data on memory modules sales are used to explore aspects of e-retail demand and show that consumers prefer purchasing from firms in nearby states and appear to have a separate preference for buying from in-state firms.
Abstract: Data on memory modules sales are used to explore aspects of e-retail demand. Aggregate sales are examined in state-level regressions. Discrete choice techniques are used to examine (incomplete ) hourly sales data from a price comparison site. We find a strong relationship between e-retail sales to a given state and sales tax rates that apply to purchases from offline retailers, suggesting substantial online- offline substitution and the importance of tax avoidance motives. Geography matters in two ways: consumers prefer purchasing from firms in nearby states and appear to have a separate preference for buying from in-state firms. ( JEL D12, H25, H71, L81)
TL;DR: In this paper, an optimal commodity tax approach is taken to compare trade taxes and VATs when some commodities are produced informally, and it is shown that making the size of the informal sector endogenous in each regime is potentially decisive.
Abstract: An optimal commodity tax approach is taken to compare trade taxes and VATs when some commodities are produced informally. Trade taxes apply to all imports and exports, including intermediate goods, while the VAT applies only to sales by the formal sector and imports. The VAT achieves production efficiency within the formal sector, but, unlike trade taxes, cannot indirectly tax profits. Making the size of the informal sector endogenous in each regime is potentially decisive. The ability of the government to change the size of the informal sector through costly enforcement may also tip the balance in favor of the VAT. (JEL E26, H21, H25)
TL;DR: This article studied the child cycle of giving in an anonymous research university and found that if alumni believe donations will increase the likelihood of their child's admission and if this belief helps motivate their giving, then the pattern of giving should vary systematically with the ages of their children, whether the children ultimately apply to the university, and the admissions outcome.
Abstract: We study alumni contributions to an anonymous research university. If alumni believe donations will increase the likelihood of their child's admission, and if this belief helps motivate their giving, then the pattern of giving should vary systematically with the ages of their children, whether the children ultimately apply to the university, and the admissions outcome. We call this pattern the child cycle of alumni giving. The evidence is consistent with the child-cycle pattern. Thus, while altruism drives some giving, the hope for a reciprocal benefit also plays a role. We compute rough estimates of the proportion of giving due to selfish motives. (JEL D91, D64, I21)
TL;DR: This paper examined the design of the legal process for civil litigation in 40 countries between 1950 and 2000 and found that large differences in procedural formalism between common and civil law countries existed in 1950 and widened by 2000.
Abstract: dural formalism every year since 1950 We find that large differences in procedural formalism between common and civil law countries existed in 1950 and widened by 2000 For this area of law, the find ings are inconsistent with the hypothesis that national legal systems are converging, and support the view that legal origins exert long lasting influence on legal rules (JEL K41, 017) oth the standard historical narrative and recent empirical research show that national legal systems vary systematically according to the legal traditions or origins that countries belong to In particular, both substantive and procedural legal rules and regulations of civil (or Roman) law countries differ systematically from those of common (or English) law countries (Konrad Zweigert and Hein Kotz 1998; La Porta, Lopez-de-Silanes, and Shleifer 2008) The observed variation raises a number of questions Are these observed differences in laws and regulations merely a figment of recent data, or have they been present historically as well? Are legal rules coming from different legal traditions converging? Answers to these questions are central to the interpretation of legal origins, since some degree of permanence of their influence is central to the accounts of why they matter today In addition, we wish to know which factors economic, political, or even internal to the legal system itself determine the nature and the pace of legal change In this paper, we examine the design of the legal process for civil litigation in 40 countries between 1950 and 2000 We focus on civil procedure, defined as the "body of law concerned with methods, procedures and practices used in civil liti
TL;DR: The authors used quasi-random variation in candidate name placement on ballots from the 2003 California recall election to find that minor candidates' vote shares almost double when their names are adjacent to the names of major candidates.
Abstract: ing using quasi-random variation in candidate name placement on ballots from the 2003 California recall election. We find that minor candidates' vote shares almost double when their names are adjacent to the names of major candidates. All else equal, vote share gains are larger in precincts with higher percentages of poorly educated, poor, or third-party voters. A major candidate that disproportionally attracts voters from such precincts faces an electoral disadvantage. We also explore which voting technology platforms and brands miti gate misvoting. (
Abstract: lthough typically aiming at specific effects, large-scale policies can trigger other, general equilibrium effects. Thus, a comprehensive evaluation of these policies requires a general equilibrium framework. Furthermore, it is desirable that the framework serve not only for the analysis of actual policies but also for coun In this paper, I develop an empirical framework for the analysis of large-scale policies, and apply it to study the effects of school finance reform on the Detroit metropolitan area. Exploiting school finance reform in Michigan in 1994, I estimate a general equilibrium model of multiple jurisdictions with 1990 data from Detroit, predict the 2000 equilibrium, and compare this prediction with 2000 data to validate the model. I conduct counterfactual simulations using the estimates. According to my analysis, feasible revenue-based reforms that ensure spending equity or adequacy have little impact on school quality or household demographics in Detroit. (JEL H75, I22)