Economic Inquiry

Articles from Vol. 34, No. 2, April

A Model of "Family Fairness" and Its Implications for Debt Neutrality
A common finding in empirical analyses of bequests ... is that, in most cases, parents give equal amounts to each of their offspring ... this observation ... establishes that, for reasons not captured in our model, parents do not manipulate their children...
An Examination of the Market for Favors and Votes in Congress
I. INTRODUCTION At least since classic works such as Black [1958], Riker [1962], and Buchanan and Tullock [1962], social scientists have recognized the importance of side payments in legislatures.(1) Although actual money transfers between members of...
Discrimination, Bayesian Updating of Employer Beliefs, and Human Capital Accumulation
I. INTRODUCTION Can labor market discrimination persist over time? How do employer beliefs influence minority groups and their choices? Previous theoretical models of discrimination can be grouped into two distinct categories based upon the source of...
Economic Losses Due to Forecasting Error and the U.S. Populist Movement
I. INTRODUCTION Populism is perhaps the most significant third-party movement in American history. Although there was strong support for the movement in the South and West, the greatest shift to Populist candidates occurred in the Midwest. In the presidential...
Efficiency in Employment-Based Health Insurance: The Potential for Supra-Marginal Cost Pricing
I. INTRODUCTION This paper explores several theoretical models of employment-based health insurance which indicate that price may be set above marginal costs even when the market for insurance appears competitive by traditional measures (such as concentration...
New Estimates of the Optimal Tax on Alcohol
I. INTRODUCTION Over the past decade, federal taxes on alcoholic beverages have been increased twice, first in 1984 and again in 1990, to raise revenue and reduce the federal deficit. Many states also increased alcohol taxes, again usually prompted...
Teaching Tools: Why Workers Should Want Mandated Benefits to Lower Their Wages
I. INTRODUCTION I began this paper as Congress was debating whether health reform legislation should require employers to pay 80 percent of their employees' health insurance, or only 50 percent. While this debate no doubt had political relevance, economists...
Testing a Production-Based Asset-Pricing Model
I. INTRODUCTION In a decentralized economy, firms are the agents that make capital accumulation decisions. New structures are built, new equipment is installed, business inventories expand, and R&D activities intensify when the returns to such investments...
The Bias towards Zero in Aggregate Perceptions: An Explanation Based on Rationally Calculating Individuals
I. INTRODUCTION A central theme in the study of economic behavior is individual rationality, or utility maximizing behavior. Contrary to the accusations of many outside critics, the economics assumption of rationality neither denies that information...
The Dynamics of a Stable Cartel: The Railroad Express 1851-1913
I. INTRODUCTION The economic literature contains ample theoretical justification for the possibility of stable cartels - for example, Osborne [1976] and Porter [1983a] - but little in the way of empirical evidence about how stable cartels actually behave....
The Optimal Government Size: Further International Evidence on the Productivity of Government Services
I. INTRODUCTION In 1889, government purchases in the U.S. were slightly less than 5 percent of GNP. In 1989, a mere hundred years later, the fraction had jumped to 20 percent.(1) Which of the two years was closer to the "optimal" government size? The...
Trade Protection and the Role of Campaign Contributions in U.S. Food and Tobacco Industries
To exert political pressure, an organization must be capable of obtaining contributions from its members for lobbying activities. For this reason, past studies analyzing the determinants of political outcomes such as tariffs (such as Caves [1976]; Lavergne...
Trends in Rankings of Economics Departments in the U.S.: An Update
I. INTRODUCTION Some of the most frequently read articles in our profession are those that rank economics departments in the U.S. Faculty have an interest in the results because of a natural desire to see where one's department "stands," and because...