Wine Retail Price Dispersion in the United States: Searching for Expensive Wines?

By David A. Jaeger and Karl Storchmann

American Economic Review, May 2011

Similar to other markets in which deviations from Jevons' "law of one price" is the norm rather than the exception, the retail wine market in the United States is characterized by large price dispersions. Drawing on a large sample of retail prices from wi...

Climate, Grapevine Phenology, Wine Production, and Prices: Pauillac (1800-2009)

By Jean-Michel Chevet, Sébastien Lecocq, and Michael Visser

American Economic Review, May 2011

This paper analyzes 19th and 20th century data from a well-known château in Bordeaux. The dataset includes information on weather conditions, starting dates of three phenological stages of grapevine, prices, and yields. We discuss how these variable...

Isolating the Symbolic Implications of Employee Mobility: Price Increases after Hiring Winemakers from Prominent Wineries

By Peter W. Roberts, Mukti Khaire, and Christopher I. Rider

American Economic Review, May 2011

Because wines are aged for several years before they are released, newly hired winemakers arrive as wines made by their predecessors enter the market. An analysis of winemaker hiring events reveals that wines released right after a new winemaker's arrival...

What Is the Value of Terroir?

By Robin Cross, Andrew J. Plantinga, and Robert N. Stavins

American Economic Review, May 2011

We examine the value of terroir—the set of special characteristics of a location that impart unique qualities to the wine produced. We conduct a hedonic analysis of vineyard sales in the Willamette Valley of Oregon to ascertain whether site attribut...

The Restoration of Welfare Economics

By Anthony B. Atkinson

American Economic Review, May 2011

This paper argues that welfare economics should be restored to a prominent place on the agenda of economists, and should occupy a central role in the teaching of economics. Economists should provide justification for the ethical criteria underlying welfar...

Markets and Morality

By Jagdish Bhagwati

American Economic Review, May 2011

The paper addresses two issues. First, economics has evolved both as a positive science and, from moral philosophy, also as a normative discipline. Advancing the public good requires that public policy walk on both these legs. Second, the criticism has be...

Economics: A Moral Inquiry with Religious Origins

By Benjamin M. Friedman

American Economic Review, May 2011

In contrast to the standard interpretation of the origins of economics out of the secular European Enlightenment of the 18th century, the transition in thinking that we rightly identify with Adam Smith and his contemporaries and followers, which gave us e...

Economists as Worldly Philosophers

By Robert J. Shiller and Virginia M. Shiller

American Economic Review, May 2011

While leading figures in the early history of economics conceived of it as inseparable from philosophy and other humanities, there has been movement, especially in recent decades, towards its becoming an essentially technical field with narrowly specializ...

Completion Rates and Time-to-Degree in Economics PhD Programs (with comments by David Colander, N. Gregory Mankiw, Melissa P. McInerney, James M. Poterba)

By Wendy A. Stock, John J. Siegfried, and T. Aldrich Finegan

American Economic Review, May 2011

This paper describes the progress, eight years after matriculating, of 586 individuals who entered one of 27 economics Ph.D. programs in fall 2002. By October 2010, 59 percent of the fall 2002 entering cohort had earned a Ph.D. in economics at the univers...

A Bright Idea for Measuring Economic Growth

By Vernon Henderson, Adam Storeygard, and David N. Weil

American Economic Review, May 2011

The quantity of human-generated light visible from outer space reflects variation in both population density and income per capita. In this paper we explore the usefulness of the change in visible light as a measure of GDP growth. We discuss the data, and...

Does Quality Adjustment Matter for Technologically Stable Products? An Application to the CPI for Food

By John S. Greenlees and Robert McClelland

American Economic Review, May 2011

Most indexes in the Consumer Price Index (CPI) use a form of the "matched-model" approach. It is frequently assumed that this approach accurately reflects inflation for items that have no major trend in quality. In this paper we investigate that hypothesi...

Quality Adjustment for Health Care Spending on Chronic Disease: Evidence from Diabetes Treatment, 1999-2009

By Karen N. Eggleston, Nilay D. Shah, Steven A. Smith, Ernst R. Berndt, and Joseph P. Newhouse

American Economic Review, May 2011

Although US health care expenditures reached 17.6 percent of GDP in 2009, quality measurement in this important service sector remains limited. Studying quality changes associated with 11 years of health care for patients with diabetes, we find that the v...

Sale Rates and Price Movements in Art Auctions

By Orley Ashenfelter and Kathryn Graddy

American Economic Review, May 2011

This paper examines the relationship between sale rates and price shocks in art auctions. Using data on contemporary and impressionist art, we show that while sale rates appear to have little relationship to current prices, there exists a strong negative ...

Rock and Roll Bands, (In)complete Contracts, and Creativity

By Cédric Ceulemans, Victor Ginsburgh, and Patrick Legros

American Economic Review, May 2011

Members of a rock and roll band are endowed with different amounts of creativity. They match, compose songs, and share credit. The presence of more creative members increases the probability of success, but those more creative members may also claim a lar...

Art and Money

By William N. Goetzmann, Luc Renneboog, and Christophe Spaenjers

American Economic Review, May 2011

This paper investigates the impact of equity markets and top incomes on art prices. Using a newly constructed art market index, we demonstrate that equity market returns have had a significant impact on the price level in the art market over the last two ...

Optimal Learning Patterns for Creativity Generation in a Field

By Jonathan S. Feinstein

American Economic Review, May 2011

I present a model of optimal learning for creativity generation in a field. The field is defined as a knowledge structure. A creative contribution is based on combining two previously unconnected elements, generating a new element. Individuals may possess...

Why Can't US Airlines Make Money?

By Severin Borenstein

American Economic Review, May 2011

US airlines have lost nearly $60 billion ($2009) in domestic markets since the 1978 deregulation, most of it in the last decade. The dismal financial record challenges the economics of deregulation. I examine some of the common explanations among industry...

Comparing the Costs of Intermittent and Dispatchable Electricity Generating Technologies

By Paul L. Joskow

American Economic Review, May 2011

Economic evaluations of alternative electric generating technologies typically rely on comparisons between their expected "levelized cost" per MWh supplied. I demonstrate that this metric is inappropriate for comparing intermittent generating technologies...

Financial Regulatory Reform: Challenges Ahead

By Randall S. Kroszner and Philip E. Strahan

American Economic Review, May 2011

Today's financial system is dominated by markets with institutions connected by short-term financing, securitization, derivatives, and other means. Yet regulations have focused on depositories, leaving regulators unprepared for the 2008 crisis. We suggest...

Measuring the Benefits of Greater Spatial Granularity in Short-Term Pricing in Wholesale Electricity Markets

By Frank A. Wolak

American Economic Review, May 2011

Hourly generation unit-level output levels, detailed information on the technological characteristics of generation units, and daily delivered natural gas prices to all generation units for the California wholesale electricity market before and after the ...