Illicit drug use is prevalent around the world. While the nature of the market makes it difficult to determine the total sales worldwide with certainty, estimates suggest sales are around 150 billion dollar a year in the United States alone. Among illicit drugs marijuana is the most commonly used, where the US government spends upwards of $7.7 billion per year in enforcement of the laws for marijuana sales (Miron, 2005). For the past 30 years there has been a debate regarding whether marijuana should be legalized. There are two important avenues through which legalization could impact use: legalization would make marijuana easier to get, and it would remove the stigma (and cost) associated with illegal behavior. Studies to date have not disentangled the impact of limited accessibility from consumption decisions based solely on preferences. However, this distinction is particularly important in the market for cannabis as legalizing the drug would impact accessibility. Hence, if most individuals do not use because they don't know where to buy it, but would otherwise use, we would see a large increase in consumption ceteris paribus, which would be important to consider for policy. On the other hand, if accessibility plays little role in consumption decisions, then making drugs more readily available would impact the supply more. In order to access the impact of legalization on use, it is necessary to explicitly consider the role played by accessibility in use, the impact of illegal actions in utility, as well as the impact on the supply side. In this paper, we develop and estimate a model of buyer behavior that explicitly considers the impact of illegal behavior on utility as well as the impact of limited accessibility (either knowing where to buy or being offered) an illicit drug on using the drug. We use the demand side estimates to conduct counterfactuals on how use would change under a policy of legalization. We conduct counterfactuals under di¤erent assumptions regarding how legalization would impact the supply as well as various tax policies on the price of cannabis.
In this paper we explore a serious eating disorder, bulimia nervosa (BN), which afflicts a surprising number of girls in the US. We challenge the long-held belief that BN primarily affects high income White teenagers, using a unique data set on adolescent females evaluated regarding their tendencies towards bulimic behaviors independent of any diagnoses or treatment they have received. Our results reveal that African Americans are more likely to exhibit bulimic behavior than Whites; as are girls from low income families compared to middle and high income families. We use another data set to show that who is diagnosed with an eating disorder is in accord with popular beliefs, suggesting that African American and low-income girls are being under-diagnosed for BN. Our findings have important implications for public policy since they provide direction to policy makers regarding which adolescent females are most at risk for BN. Our results are robust to different model specifications and identifying assumptions.
The purpose of this paper is to analyze the optimal scale of local jurisdictions (cantons) in Switzerland applying Data Envelopment Analysis (DEA) to the years 2000 to 2004. Aggregate output performance indicators for four local government activities (administration, education, health, and transportation) are used to measure technical and scale efficiency and to derive DEA scores. Results show that these public services fail to exhibit economies of scale, undermining quests for centralization of public good provision while suggesting the possibility of Tiebout competition.
This paper describes individuals' inequality perceptions, distributional norms, and redistributive preferences in a panel of OECD countries, primarily focusing on the association between these subjective measures and the effective level of inequality and redistribution. Not surprisingly, the effective level of redistribution (after tax-and-transfer inequality) is positively (negatively) correlated with redistributive preferences. There is also evidence showing that the subjective and objective dimension of inequality and redistribution are, at least partially, linked with individuals' political preferences and their voting behavior. The association between objective and subjective measures of inequality and redistribution vanishes, however, once more fundamental country characteristics are taken into account. This suggests that these characteristics explain both redistributive preferences as well as the effective level of redistribution and after tax-and-transfer inequality.
Being good-looking seems to generate substantial benefits in many social interactions, making the "beauty premium" a not to be underrated economic factor. This paper investigates how physical attractiveness enables people to generate these benefits in the case of cooperation, using field data from a modified one-shot prisoner's dilemma played in a high-stakes television game show. While attractive contestants are not more or less cooperative than less attractive ones, facial attractiveness produces more cooperative behavior by counterparts, but only in mixed-gender interactions. Effects of attractiveness are therefore not exclusively due to "beauty-is-good" stereotyping, but rather operate through a preference-based mechanism.
This paper studies the patterns of trade and the incentives to innovate in an unequal global economy. We introduce non-homothetic preferences in a general-equilibrium model of endogenous growth and international trade between two countries, and argue that the effects of market integration on the consequent trade patterns and the incentives to innovate depend on the degree of income inequality across countries. We find that if inequality across countries is low, the extensive margin of trade between countries is high whereas the world growth rate is low. The introduction of non-homothetic preferences rises a number of interesting questions that are not an issue in the standard model. For example, we discuss the design of intellectual property rights, in particular national vs. international exhaustion of patents, and argue that households in poor and rich countries might not see eye to eye depending on how poor households weigh future losses in consumption against present gains. Furthermore, we address the welfare consequences of a trade liberalization, and show that households in the poor country might loose relative to households in the rich country if trade costs fall from a high to a sufficiently low level.
In this paper, we test how reporting behaviors (response time, cognitive effort, questionnaire order) affect reported happiness in a large Dutch internet panel survey. We find that slower responses and higher cognitive effort reduce reported happiness. Moreover, in multivariate happiness equations, these factors moderate the estimated effect of income on happiness, while no interaction effects are found for other determinants of happiness. As a consequence, relative marginal effects may not be invariant to reporting circumstances.
This chapter is about experiments that study aspects of organizational structure and economic performance. Relative to field studies using empirical data, experiments often have obvious advantages, especially that of control and randomized assignment to implement theoretical assumptions that can only be imperfectlymeasured or controlled econometricallywhenusing field data. Despite these advantages, the range of organizational hypotheses studied in experiments is small, although it is growing rapidly.
: Physica-Verlag, 2002
Umfang 205 S. : Ill.
Reihe (Contributions to economics)
Bibliogr. Includes bibliographical references and index
ISBN Link(softcover : alk. paper)
