Copyright (c) 2009 Berkeley Electronic Press All rights reserved. http://www.bepress.com/bejeap Recent documents in The B.E. Journal of Economic Analysis & Policy en-us Fri, 06 Nov 2009 23:22:12 PST 3600 http://www.bepress.com/bejeap/vol9/iss1/art47 http://www.bepress.com/bejeap/vol9/iss1/art47 Thu, 05 Nov 2009 14:34:02 PST Emerging evidence from neuroscience and clinical research suggests a novel hypothesis about tobacco use: consumers may choose to smoke, in part, as a "self-medicating" response to the presence of economic insecurity. To test this hypothesis, we examine the effect of economic insecurity (roughly, the risk of catastrophic income loss) on the smoking behavior of a sample of male working-age smokers from the 1979 National Longitudinal Survey of Youth (NLSY79). Using instrumental variables to control for unobserved heterogeneity, we find that economic insecurity has a large and statistically significant positive effect on the decision to continue or resume smoking. Our results indicate, for example, that a 1 percent increase in the probability of becoming unemployed causes an individual to be 2.4 percent more likely to continue smoking. We find that the explanatory power of economic insecurity in predicting tobacco use is comparable to (but distinct from) household income, a more commonly used metric. Michael G. Barnes D12 D87 I12 I18 I38 http://www.bepress.com/bejeap/vol9/iss1/art46 http://www.bepress.com/bejeap/vol9/iss1/art46 Thu, 29 Oct 2009 13:26:41 PDT Olympic athlete selection procedures are different among countries and events, and famous athletes are often reported to have lost their selection races. This paper analyzes what kind of procedure is more likely to select high-ability athletes while preventing low-ability athletes from being selected by chance. Our game-theoretic model shows that the answer depends on how sharply high-ability athletes' race results fluctuate relative to those of low-ability athletes. Athletes' strategic choice of participation in races turns out to be crucial in addressing this question, and there are cases in which having only one race is desirable, even if the selection can involve multiple races. Yoichi Hizen D81 M51 http://www.bepress.com/bejeap/vol9/iss1/art45 http://www.bepress.com/bejeap/vol9/iss1/art45 Wed, 28 Oct 2009 07:45:24 PDT Consider a bottleneck monopoly whose access charge is regulated above marginal cost and produces an essential input used by an oligopoly of downstream firms. Should the monopolist be allowed to vertically integrate into the downstream market? Policy makers often argue that the vertically integrated subsidiary enjoys an undue advantage, because it receives access at marginal cost. We show that there is no undue advantage.With perfect competition downstream vertical integration is irrelevant because the subsidiary substitutes downstream output one-to-one and faces a per-unit opportunity cost equal to the access charge.With an oligopoly consumers and the bottleneck monopoly gain with vertical integration. By contrast, competitors lose oligopolistic rents. Social welfare increases, unless output is redistributed towards a very inefficient vertically integrated firm. Alexander Galetovic L12 L22 L51 http://www.bepress.com/bejeap/vol9/iss1/art44 http://www.bepress.com/bejeap/vol9/iss1/art44 Thu, 15 Oct 2009 18:21:19 PDT This paper documents how the structure of extended family networks in rural Mexico relates to the poverty and inequality of the village of residence. Using the Hispanic naming convention, we construct within-village extended family networks in 504 poor rural villages. Family networks are larger (both in the number of members and as a share of the village population) and out-migration is lower the poorer and the less unequal the village of residence. Our results are consistent with the extended family being a source of informal insurance to its members. Manuela Angelucci J12 O12 O17 http://www.bepress.com/bejeap/vol9/iss1/art43 http://www.bepress.com/bejeap/vol9/iss1/art43 Thu, 15 Oct 2009 18:21:16 PDT A rational, efficiency-based view of acquisitions implies that larger transactions generate greater gains for the acquirer and the seller. We test this prediction and find a positive relationship between acquirer abnormal returns and transaction size scaled by the acquirer size. This relationship holds for many classes of acquisitions, including asset purchases and mergers that target private firms. We find a similar relationship between total abnormal returns and relative transaction size. The results suggest that, in general, acquisitions help shift capital to more productive owners. Furthermore, we present evidence demonstrating that the average acquirer captures a significant portion of the total gains generated from an acquisition. Sugata Ray G34 E22 http://www.bepress.com/bejeap/vol9/iss2/art6 http://www.bepress.com/bejeap/vol9/iss2/art6 Fri, 25 Sep 2009 15:49:36 PDT Ecosystem services are public goods that frequently constitute the only source of capital for the poor, who lack political voice. As a result, provision of ecosystem services is sub-optimal and estimation of their values is complicated. We examine how econometric estimation can feed computable general equilibrium (CGE) modeling to estimate health-related ecosystem values. Against a back drop of climate change, we analyze the Brazilian policy to expand National Forests (FLONAS) by 50 million hectares. Because these major environmental changes can generate spillovers in other sectors, we develop and use a CGE model that focuses on land and labor markets. Compared to climate change and deforestation in the baseline, the FLONAS scenario suggests relatively small declines in GDP, output (including agriculture) and other macro indicators. Urban households will experience declines in their welfare because they own most of the capital and land, which allows them to capture most of the deforestation benefits. In contrast, even though rural households have fewer opportunities for subsistence agriculture and face additional competition with other rural agricultural workers for more limited employment, their welfare improves due to health benefits from conservation of nearby forests. The efficiency vs. equity tradeoffs implied by the FLONAS scenario suggests that health-related ecosystem services will be underprovided if the rural poor are politically weaker than the urban rich. In conclusion, we briefly discuss the pros and cons of the CGE strategy for valuing ecosystem-mediated health benefits and evaluating contemporary policies on climate change mitigation. Subhrendu K. Pattanayak Environmental Economics Computational General Equilibrium Modeling http://www.bepress.com/bejeap/vol9/iss1/art42 http://www.bepress.com/bejeap/vol9/iss1/art42 Wed, 23 Sep 2009 04:56:41 PDT A number of economic theories suggest that barriers to competition lead to higher levels of inefficiency among incumbents. In this paper, we use a detailed plant-level dataset to study the impact on productivity of two reforms (initiated in 1991) aimed at increasing product market competition in India -- liberalization of foreign direct investment (FDI) and reduction in tariff rates. First, we examine the effect of the liberalization policies on mean plant-level productivity in the targeted industries. We find significant increases in productivity in the FDI and tariff-liberalized industries, particularly in the longer term (1993-94). We check and find our results robust to a range of robustness tests. Next, we examine the role of intensive (within-plant productivity growth) and extensive (reallocation from less to more productive plants) margins in the post-reform productivity improvement, and find a predominant role for the former. Finally, we assess potential channels for within-firm productivity improvement. Consistent with a role for price competition, we find evidence of greater declines in output prices as well as concentration measures in the liberalized sectors. Jagadeesh Sivadasan D24 O47 F13 F14 http://www.bepress.com/bejeap/vol9/iss1/art41 http://www.bepress.com/bejeap/vol9/iss1/art41 Mon, 21 Sep 2009 09:43:50 PDT This paper presents simple measures of individual and family mental health indices based on axiomatic foundations and integrates mental health into a neoclassical model that allows for proper substitution possibilities in the family preferences and quantifies its significance in family utility. We find that mental health effects are far more important than the effect of consumption or children's schooling in determining family utility. We illustrate the usefulness of our approach by considering the case of HIV/AIDS experience in India. Using our approach, we find that while there are no significant differences in per capita consumption and schooling between HIV and NON HIV families, the welfare loss from HIV/AIDS are still considerably large due to the inclusion of mental health. Integrating mental health in a utility maximization framework helps us quantify this welfare loss. Sanghamitra Das http://www.bepress.com/bejeap/vol9/iss1/art40 http://www.bepress.com/bejeap/vol9/iss1/art40 Tue, 15 Sep 2009 19:21:04 PDT Mental health problems represent a potentially important but relatively unexplored factor in explaining human capital accumulation during college. We conduct the first study, to our knowledge, of how mental health predicts academic success during college in a random longitudinal sample of students. We find that depression is a significant predictor of lower GPA and higher probability of dropping out, particularly among students who also have a positive screen for an anxiety disorder. In within-person estimates using our longitudinal sample, we find again that co-occurring depression and anxiety are associated with lower GPA, and we find that symptoms of eating disorders are also associated with lower GPA. This descriptive study suggests potentially large economic returns from programs to prevent and treat mental health problems among college students, and highlights the policy relevance of evaluating the impact of such programs on academic outcomes using randomized trials. Daniel Eisenberg I10 - Health; I23 - Higher Education; J24 - Human Capital http://www.bepress.com/bejeap/vol9/iss1/art39 http://www.bepress.com/bejeap/vol9/iss1/art39 Thu, 10 Sep 2009 09:23:23 PDT In this paper, we analyze the problem faced by impatient researchers attempting to balance the considerations of journal quality, submission lags, and acceptance probabilities in choosing appropriate outlets for their work. We first study the case in which probabilities of submission outcomes are exogenous parameters and show that authors can find the optimal submission path through the use of journal 'scores' based only on the journals' characteristics and the author's degree of impatience. Then, we analyze a more realistic framework in which acceptance probability is determined by the quality of the manuscript, in which the reviewing process may be imperfect, and in which authors may not be certain of the manuscript's quality. Throughout, we illustrate our analysis with data on actual economics journals. We also consider the problem of journals facing a large number of submissions, limited space, and limited resources to review papers and, in particular, we examine the relative effectiveness of using submission fees and reviewing lags to ration article submissions. Martin Heintzelman A11 D8