Competition, Comparative Performance, and Market Transparency

By Bruce I. Carlin, Shaun William Davies, and Andrew Iannaccone

American Economic Journal: Microeconomics, November 2012

We study how competition affects market transparency, taking into account that comparative performance is assessed via tournaments and contests. Extending Dye (1985) to a multi-firm setting in which top performers are rewarded, we show that increased com...

Front Matter

American Economic Journal: Economic Policy, November 2012

Late Budgets

By Asger Lau Andersen, David Dreyer Lassen, and Lasse Holbøll Westh Nielsen

American Economic Journal: Economic Policy, November 2012

The budget forms the legal basis for government spending, and timely budgets, enacted before the new fiscal year, are an integral part of good governance. This paper examines the causes of late budgets using a unique dataset of budget completion dates for...

Framing Social Security Reform: Behavioral Responses to Changes in the Full Retirement Age

By Luc Behaghel and David M. Blau

American Economic Journal: Economic Policy, November 2012

We use a US Social Security reform as a quasi-experiment to provide evidence on framing effects in retirement behavior. The reform increased the full retirement age (FRA) from 65 to 66 in two-month increments per year of birth. We find strong evidence tha...

Happiness on Tap: Piped Water Adoption in Urban Morocco

By Florencia Devoto, Esther Duflo, Pascaline Dupas, William Parienté, and Vincent Pons

American Economic Journal: Economic Policy, November 2012

Connecting private dwellings to the water main is expensive and typically cannot be publicly financed. We show that households' willingness to pay for a private connection is high when it can be purchased on credit, not because a connection improves healt...

Poverty Alleviation and Child Labor

By Eric V. Edmonds and Norbert Schady

American Economic Journal: Economic Policy, November 2012

Poor women with children in Ecuador were selected at random for a cash transfer that is less than 20 percent of median child labor earnings. Poor families with children in school at the time of the award use the transfer to postpone the child's entry into...

Innovation and Climate Change Policy

By Joshua S. Gans

American Economic Journal: Economic Policy, November 2012

This paper examines whether climate change policies will induce innovation in environmentally friendly technologies. The model demonstrates that a tighter emissions cap will reduce the scale of fossil fuel usage and that this will diminish incentives to ...

Discrimination in Grading

By Rema N. Hanna and Leigh L. Linden

American Economic Journal: Economic Policy, November 2012

We report the results of an experiment that was designed to test for discrimination in grading in India. We recruited teachers to grade exams. We randomly assigned child "characteristics" (age, gender, and caste) to the cover sheets of the exams to ensure...

The Heterogeneous Geographic and Socioeconomic Incidence of Cigarette Taxes: Evidence from Nielsen Homescan Data

By Matthew Harding, Ephraim Leibtag, and Michael F. Lovenheim

American Economic Journal: Economic Policy, November 2012

We use Nielsen Homescan data to examine who bears the economic burden of cigarette taxes. We find cigarette taxes are less than fully passed through to consumer prices, suggesting consumers and producers split the excess burden of these taxes. Using infor...

Spatial Competition and Cross-Border Shopping: Evidence from State Lotteries

By Brian Knight and Nathan Schiff

American Economic Journal: Economic Policy, November 2012

This paper investigates competition between jurisdictions in the context of cross-border shopping for state lottery tickets. Our theoretical model, in which consumers consider both travel costs and lottery payoffs, predicts that per-resident sales should ...

The Impact of Year-Round Schooling on Academic Achievement: Evidence from Mandatory School Calendar Conversions

By Steven C. McMullen and Kathryn E. Rouse

American Economic Journal: Economic Policy, November 2012

In 2007, 22 Wake County, North Carolina traditional calendar schools were switched to year-round calendars, spreading the 180 instructional days evenly across the year. This paper presents a human capital model to illustrate the conditions under which the...

Clunkers or Junkers? Adverse Selection in a Vehicle Retirement Program

By Ryan Sandler

American Economic Journal: Economic Policy, November 2012

Vehicle retirement programs have become popular tools of public policy for reducing pollution. The efficacy of these programs is difficult to measure, as it is difficult to tell how much a vehicle would have polluted otherwise. I estimate that counterfact...

From Exxon to BP: Has Some Number Become Better Than No Number?

[Symposium: Contingent Valuation]

By Catherine L. Kling, Daniel J. Phaneuf, and Jinhua Zhao

Journal of Economic Perspectives, Fall 2012

On March 23, 1989, the Exxon Valdez ran aground in Alaska's Prince William Sound and released over 250,000 barrels of crude oil, resulting in 1300 miles of oiled shoreline. The Exxon spill ignited a debate about the appropriate compensation for damages su...

Contingent Valuation: A Practical Alternative When Prices Aren't Available

[Symposium: Contingent Valuation]

By Richard T. Carson

Journal of Economic Perspectives, Fall 2012

A person may be willing to make an economic tradeoff to assure that a wilderness area or scenic resource is protected even if neither that person nor (perhaps) anyone else will actually visit this area. This tradeoff is commonly labeled "passive use valu...

Contingent Valuation: From Dubious to Hopeless

[Symposium: Contingent Valuation]

By Jerry Hausman

Journal of Economic Perspectives, Fall 2012

Approximately 20 years ago, Peter Diamond and I wrote an article for this journal analyzing contingent valuation methods. At that time Peter's view was that contingent valuation was hopeless, while I was dubious but somewhat more optimistic. But 20 years ...

The End of Cheap Chinese Labor

[Symposium: China's Economy]

By Hongbin Li, Lei Li, Binzhen Wu, and Yanyan Xiong

Journal of Economic Perspectives, Fall 2012

In recent decades, cheap labor has played a central role in the Chinese model, which has relied on expanded participation in world trade as a main driver of growth. At the beginning of China's economic reforms in 1978, the annual wage of a Chinese urban ...

Labor Market Outcomes and Reforms in China

[Symposium: China's Economy]

By Xin Meng

Journal of Economic Perspectives, Fall 2012

Over the past few decades of economic reform, China's labor markets have been transformed to an increasingly market-driven system. China has two segregated economies: the rural and urban. Understanding the shifting nature of this divide is probably the k...

Understanding China's Growth: Past, Present, and Future

[Symposium: China's Economy]

By Xiaodong Zhu

Journal of Economic Perspectives, Fall 2012

The pace and scale of China's economic transformation have no historical precedent. In 1978, China was one of the poorest countries in the world. The real per capita GDP in China was only one-fortieth of the U.S. level and one-tenth the Brazilian level. ...

Aggregate Savings and External Imbalances in China

[Symposium: China's Economy]

By Dennis Tao Yang

Journal of Economic Perspectives, Fall 2012

Over the last decade, the internal and external macroeconomic imbalances in China have risen to unprecedented levels. In 2008, China's national savings rate soared to over 53 percent of its GDP, whereas its current account surplus exceeded 9 percent of G...

How Did China Take Off?

[Symposium: China's Economy]

By Yasheng Huang

Journal of Economic Perspectives, Fall 2012

There are two prevailing perspectives on how China took off. One emphasizes the role of globalization—foreign trade and investments and special economic zones; the other emphasizes the role of internal reforms, especially rural reforms. Detailed docume...