Testing Efficient Risk Sharing with Heterogeneous Risk Preferences

By Maurizio Mazzocco and Shiv Saini

American Economic Review, February 2012

We propose a method that enables one to test efficient risk sharing even when households have different risk preferences. The method is composed of three tests. The first one determines whether in the data households have homogeneous risk preferences. The...

A Structural Analysis of Disappointment Aversion in a Real Effort Competition

By David Gill and Victoria Prowse

American Economic Review, February 2012

We develop a novel computerized real effort task, based on moving sliders across a screen, to test experimentally whether agents are disappointment averse when they compete in a real effort sequential-move tournament. We predict that a disappointment aver...

Why Don't We See Poverty Convergence?

By Martin Ravallion

American Economic Review, February 2012

Average living standards are converging among developing countries and faster growing economies see more progress against poverty. Yet we do not find poverty convergence; countries starting with higher poverty rates do not see higher proportionate rates o...

Was the New Deal Contractionary?

By Gauti B. Eggertsson

American Economic Review, February 2012

Can government policies that increase the monopoly power of firms and the militancy of unions increase output? This paper shows that the answer is yes under certain "emergency" conditions. These emergency conditions—zero interest rates and deflation...

The Internet and Local Wages: A Puzzle

By Chris Forman, Avi Goldfarb, and Shane Greenstein

American Economic Review, February 2012

How did the diffusion of the internet affect regional wage inequality? We examine the relationship between business investment in advanced internet technology and local variation in US wage growth between 1995 and 2000. We identify a puzzle. The internet ...

The Impact of Shrouded Fees: Evidence from a Natural Experiment in the Indian Mutual Funds Market

By Santosh Anagol and Hugh Hoikwang Kim

American Economic Review, February 2012

We study a natural experiment in the Indian mutual funds sector that created a 22-month period in which closed-end funds were allowed to charge an arguably shrouded fee, whereas open-end funds were forced to charge entry loads. Forty-five new closed-end f...

Contracts versus Salaries in Matching

By Federico Echenique

American Economic Review, February 2012

Firms and workers may sign complex contracts that govern many aspects of their interactions. I show that when firms regard contracts as substitutes, bargaining over contracts can be understood as bargaining only over wages. Substitutes is the assumption c...

Efficient Pollution Regulation: Getting the Prices Right: Comment

By Art Fraas and Randall Lutter

American Economic Review, February 2012

The cost-effectiveness of cap-and-trade emissions regulations has become widely accepted. A 2009 proposal by Muller and Mendelsohn would replace conventional ton-for-ton trading with trading based on estimates of marginal damages by pollutant and by sour...

Efficient Pollution Regulation: Getting the Prices Right: Reply

By Nicholas Z. Muller and Robert Mendelsohn

American Economic Review, February 2012

Fraas and Lutter raise two important points in their comment on Muller and Mendelsohn (2009): How to design policies for sources that yield negative marginal damages? How does statistical uncertainty in the marginal damages affect the trading ratios acros...

Efficient Pollution Regulation: Getting the Prices Right: Corrigendum (Mortality Rate Update)

By Nicholas Z. Muller and Robert Mendelsohn

American Economic Review, February 2012

Front Matter

Journal of Economic Perspectives, Winter 2012

Is There an Energy Efficiency Gap?

[Symposium: Energy Challenges]

By Hunt Allcott and Michael Greenstone

Journal of Economic Perspectives, Winter 2012

Many analysts of the energy industry have long believed that energy efficiency offers an enormous "win-win" opportunity: through aggressive energy conservation policies, we can both save money and reduce negative externalities associated with energy use. ...

Creating a Smarter U.S. Electricity Grid

[Symposium: Energy Challenges]

By Paul L. Joskow

Journal of Economic Perspectives, Winter 2012

This paper focuses on efforts to build what policymakers call the "smart grid," involving 1) improved remote monitoring and automatic and remote control of facilities in high-voltage electricity transmission networks; 2) improved remote monitoring, two-wa...

Prospects for Nuclear Power

[Symposium: Energy Challenges]

By Lucas W. Davis

Journal of Economic Perspectives, Winter 2012

Nuclear power has long been controversial because of concerns about nuclear accidents, storage of spent fuel, and how the spread of nuclear power might raise risks of the proliferation of nuclear weapons. These concerns are real and important. However, em...

The Private and Public Economics of Renewable Electricity Generation

[Symposium: Energy Challenges]

By Severin Borenstein

Journal of Economic Perspectives, Winter 2012

Generating electricity from renewable sources is more expensive than conventional approaches but reduces pollution externalities. Analyzing the tradeoff is much more challenging than often presumed because the value of electricity is extremely dependent ...

Reducing Petroleum Consumption from Transportation

[Symposium: Energy Challenges]

By Christopher R. Knittel

Journal of Economic Perspectives, Winter 2012

The United States consumes more petroleum-based liquid fuel per capita than any other OECD high-income country—30 percent more than the second-highest country (Canada) and 40 percent more than the third-highest (Luxembourg). The transportation secto...

How Will Energy Demand Develop in the Developing World?

[Symposium: Energy Challenges]

By Catherine Wolfram, Orie Shelef, and Paul Gertler

Journal of Economic Perspectives, Winter 2012

Over the next 25 to 30 years, nearly all of the growth in energy demand, fossil fuel use, associated local pollution, and greenhouse gas emissions is forecast to come from the developing world. This paper argues that the world's poor and near-poor will pl...

The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?

[Symposium: Higher Education]

By David J. Deming, Claudia Goldin, and Lawrence F. Katz

Journal of Economic Perspectives, Winter 2012

Private for-profit institutions have been the fastest-growing part of the U.S. higher education sector. For-profit enrollment increased from 0.2 percent to 9.1 percent of total enrollment in degree-granting schools from 1970 to 2009, and for-profit insti...

Student Loans: Do College Students Borrow Too Much--Or Not Enough?

[Symposium: Higher Education]

By Christopher Avery and Sarah Turner

Journal of Economic Perspectives, Winter 2012

Total student loan debt rose to over $800 billion in June 2010, overtaking total credit card debt outstanding for the first time. By the time this article sees print, the continually updated Student Loan Debt Clock will show an accumulated total of roughl...

American Higher Education in Transition

[Symposium: Higher Education]

By Ronald G. Ehrenberg

Journal of Economic Perspectives, Winter 2012

American higher education is in transition along many dimensions: tuition levels, faculty composition, expenditure allocation, pedagogy, technology, and more. During the last three decades, at private four-year academic institutions, undergraduate tuition...