Economics - Research Publications
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ItemWater rights for variable supplies(BLACKWELL PUBLISHING, 2006-09)The relative merits of different systems of property rights to allocate water among different extractive uses are evaluated for the case where variability of supply is important. Three systems of property rights are considered. In the first, variable supply is dealt with through the use of water entitlements defined as shares of the total quantity available. In the second, there are two types of water entitlements, one for water with a high security of supply and the other a lower security right for the residual supply. The third is a system of entitlements specified as state‐contingent claims. With zero transaction costs, all systems are efficient. In the realistic situation where transaction costs matter, the system based on state‐contingent claims is globally optimal, and the system with high‐security and lower security entitlements is preferable to the system with share entitlements.
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ItemCan the large swings in russian life satisfaction be explained by ups and downs in real incomes?(WILEY, 2006)Abstract Russians reported large changes in their life satisfaction over the post‐transition years. In this paper, we explore the factors that drove these changes, focusing on exogenous income changes, using panel data from the Russian Longitudinal Monitoring Survey over the period 1995 to 2001 and implementing a recently developed ordinal fixed‐effects estimator. We apply a causal decomposition technique that allows for bias arising from panel attrition when establishing aggregate trends in life satisfaction. Changes in real household incomes explained 10% of the total change in reported life satisfaction between 1996 and 2000, but up to 30% of some year‐on‐year changes.
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ItemTrade frictions and welfare in the gravity model: how much of the iceberg melts?(UNIV TORONTO PRESS INC, 2006-02)Abstract. A key element missing from the structural gravity literature is an examination of the implied general equilibrium. By design the gravity equation is adept at predicting bilateral trade flows. To make inferences beyond trade flows, however, the theoretic models should be consistent with other observables. Structural econometric estimates from Anderson and van Wincoop (2003) allow us to evaluate their proposed general equilibrium along several dimensions. We find that their gravity model predicts too large a difference between consumer and producer prices; excessive variation in the geographic distribution of consumer price indices; and an exceptionally large portion of output devoted to overcoming trade frictions. Under plausible parameterizations of the model at least 50% of output ‘melts’ in transit. JEL classification: F10
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ItemEstimating state-contingent production frontiers(WILEY, 2006-02)Chambers and Quiggin (2000) use state‐contingent representations of risky production technologies to establish important theoretical results concerning producer behavior under uncertainty. Unfortunately, perceived problems in the estimation of state‐contingent models have limited the usefulness of the approach in policy formulation. We show that fixed and random effects state‐contingent production frontiers can be conveniently estimated in a finite mixtures framework. An empirical example is provided. Compared to conventional estimation approaches, we find that estimating production frontiers in a state‐contingent framework produces significantly different estimates of elasticities, firm technical efficiencies, and other quantities of economic interest.
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ItemAn empirical model of the multi-unit, sequential, clock auction(WILEY, 2006-12)