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Template-Type: ReDIF-Paper 1.0
Title: Interequation Constraint and the Specification of Dynamic Structure
Author-Name: Kent D. Wall
Number: 0119
Creation-Date: 1976-01
Order-URL: http://www.nber.org/papers/w0119
File-URL: http://www.nber.org/papers/w0119.pdf
File-Format: application/pdf
Abstract: This note considers the effect of a class of linear inter-equation constraints in the specification of the lag structure in econometric models. In particular, attention is focused on the linear summing, or "adding up�, constraints which arise between equations in factor shares analysis. The consequences of such constraints on the specification of lag structures for models with dynamic adjustments and autoregressive or moving-average disturbances are presented in the form of linear restrictions which result in singular coefficient matrices . Thus, the structural (lag) specification of one equation depends on the structure of all other equations in the model.
Handle: RePEc:nbr:nberwo:0119
Template-Type: ReDIF-Paper 1.0
Title: From Bismark to Woodcock: The "Irrational" Pursuit of National Health Insurance
Author-Name: Victor R. Fuchs
Author-Person: pfu157
Number: 0120
Creation-Date: 1976-01
Order-URL: http://www.nber.org/papers/w0120
File-URL: http://www.nber.org/papers/w0120.pdf
File-Format: application/pdf
Publication-Status: published as Fuchs, Victor R. "From Bismark to Woodcock: The "Irrational" Pursuit of Natnal Health Insurance." Journal of Law and Economics, Vol. XIX, No. 2, (August 1976), pp. 347-359.
Abstract: This paper contains an exploration of some of the special or general benefits that might explain the widespread pursuit of national health insurance follows. The primary purpose of this inquiry has been to attempt to explain the popularity of national health insurance around the world.
Handle: RePEc:nbr:nberwo:0120
Template-Type: ReDIF-Paper 1.0
Title: Analysis of Longitudinal Earnings Data: American Scientists 1960-70
Author-Name: Lee A. Lillard
Author-Name: Yoram Weiss
Number: 0121
Creation-Date: 1976-01
Order-URL: http://www.nber.org/papers/w0121
File-URL: http://www.nber.org/papers/w0121.pdf
File-Format: application/pdf
Publication-Status: published as (Published as "Components of Variation in Panel Earnings Data: American Scientists 1960-70") Econometrica, Vol. 47, no. 2 (1979): 437-454.
Abstract: The major findings of this study are as follows: (1) Simple cross section estimates grossly underestimate cohort profiles during the period 1960-70. Furthermore the growth in earnings is not uniform across experience groups and more recent vintages tend to have steeper profiles in most fields. Consequently the rate of return or present value comparisons based on cross sections are likely to be misleading even if the standard adjustment for growth is made. (2) For purposes of estimating mean profiles and mean effects of variables estimates based on pooled independent cross sections are quite close to those based on the more expensive longitudinal data. (3) There are important persistent unmeasured individual effects on both the level and growth of earnings. Consequently, individuals with the same observed characteristics will still have a wide variance in their permanent income.
Handle: RePEc:nbr:nberwo:0121
Template-Type: ReDIF-Paper 1.0
Title: The Market for Optometric Services in the United States
Author-Name: Douglas Coate
Number: 0122
Creation-Date: 1976-02
Order-URL: http://www.nber.org/papers/w0122
File-URL: http://www.nber.org/papers/w0122.pdf
File-Format: application/pdf
Publication-Status: published as Explorations in Economic Research, Volume 4, number 2. National Bureau of Economic Research, Inc., 1977.
Abstract: The purpose of this paper is to analyze the market for optometric services in the United States. This paper is divided into seven sections. In the first section an overview of the practice of optometry is presented. This is succeeded by an examination of the distribution of eye health professionals in the United States. In sections 3-5 a market model for optometric services is specified and discussed. Next, estimates of the model are presented. Finally, the implications of this research are considered.
Handle: RePEc:nbr:nberwo:0122
Template-Type: ReDIF-Paper 1.0
Title: Child Endowments, and the Quantity and Quality of Children
Author-Name: Gary S. Becker
Author-Name: Nigel Tomes
Number: 0123
Creation-Date: 1976-02
Order-URL: http://www.nber.org/papers/w0123
File-URL: http://www.nber.org/papers/w0123.pdf
File-Format: application/pdf
Publication-Status: published as Becker, Gary S. and Nigel Tomes. "Child Endowments, and the Quantity of Children." Journal of Political Economy, Vol. 84, No. 4, part 2, (August 1976) , pp. S143-S162.
Abstract: This paper brings together and integrates social interactions and the special relation between quantity and quality. We are able to show that the observed quality income elasticity would be relatively high and the quantity elasticity relatively low and sometimes negative, even if the true "unobserved� income elasticities for quantity and quality were equal and of average value. Moreover, the observed quality elasticity would fall, and the observed quantity elasticity would rise, as parental income rose.
Handle: RePEc:nbr:nberwo:0123
Template-Type: ReDIF-Paper 1.0
Title: Representing Symmetric Rank Two Updates
Author-Name: David M. Gay
Number: 0124
Creation-Date: 1976-02
Order-URL: http://www.nber.org/papers/w0124
File-URL: http://www.nber.org/papers/w0124.pdf
File-Format: application/pdf
Abstract: Various quasi-Newton methods periodically add a symmetric "correction" matrix of rank at most 2 to a matrix approximating some quantity A of interest (such as the Hessian of an objective function). In this paper we examine several ways to express a symmetric rank 2 matrix [delta] as the sum of rank 1 matrices. We show that it is easy to compute rank 1 matrices [delta1] and [delta2] such that [delta] = [delta1] + [delta2] and [the norm of delta1]+ [the norm of delta2] is minimized, where ||.|| is any inner product norm. Such a representation recommends itself for use in those computer programs that maintain A explicitly, since it should reduce cancellation errors and/or improve efficiency over other representations. In the common case where [delta] is indefinite, a choice of the form [delta1] = [delta2 to the power of T] = [xy to the power of T] appears best. This case occurs for rank 2 quasi- Newton updates [delta] exactly when [delta] may be obtained by symmetrizing some rank 1 update; such popular updates as the DFP, BFGS, PSB, and Davidon's new optimally conditioned update fall into this category.
Handle: RePEc:nbr:nberwo:0124
Template-Type: ReDIF-Paper 1.0
Title: On Modifying Singular Values to Solve Possible Singular Systems of Non-Linear Equations
Author-Name: David M. Gay
Number: 0125
Creation-Date: 1976-03
Order-URL: http://www.nber.org/papers/w0125
File-URL: http://www.nber.org/papers/w0125.pdf
File-Format: application/pdf
Abstract: We show that if a certain nondegeneracy assumption holds, it is possible to guarantee the existence of a solution to a system of nonlinear equations f(x) = 0 whose Jacobian matrix J(x) exists but maybe singular. The main idea is to modify small singular values of J(x) in such away that the modified Jacobian matrix J^(x) has a continuous pseudoinverse J^+(x)and that a solution x* of f(x) = 0 may be found by determining an asymptote of the solution to the initial value problem x(0) = x[sub0}, x’(t) = -J^+(x)f(x). We briefly discuss practical (algorithmic) implications of this result. Although the nondegeneracy assumption may fail for many systems of interest (indeed, if the assumption holds and J(x*) is non-singular, then x is unique), algorithms using(x) may enjoy a larger region of convergence than those that require(an approximation to) J[to the -1 power[(x).
Handle: RePEc:nbr:nberwo:0125
Template-Type: ReDIF-Paper 1.0
Title: Transnational Activity and Market Entry in the Semiconductor Industry
Author-Name: Arthur W. Lake
Number: 0126
Creation-Date: 1976-03
Order-URL: http://www.nber.org/papers/w0126
File-URL: http://www.nber.org/papers/w0126.pdf
File-Format: application/pdf
Abstract: This paper has examined the factors that affect the pattern of introduction of semiconductor innovations into the United Kingdom, studying both differences among products and differences among firms. The pattern of product innovations is based on the concept of a lifecycle process. A model is developed for estimating product life cycles in a way that gives information suitable for assessing induced changes in the host country industry. The analysis that follows is broken into two parts. Firstly, factors determining the rate of diffusion of the innovations in the host country are examined; secondly, factors determining the positions of individual firms within the life cycle are considered.
Handle: RePEc:nbr:nberwo:0126
Template-Type: ReDIF-Paper 1.0
Title: Identification Theory for Time Varying Models
Author-Name: Thomas F. Cooley
Author-Person: pco35
Author-Name: Kent D. Wall
Number: 0127
Creation-Date: 1976-03
Order-URL: http://www.nber.org/papers/w0127
File-URL: http://www.nber.org/papers/w0127.pdf
File-Format: application/pdf
Abstract: The identification of time-varying coefficient regression models is investigated using an analysis of the classical information matrix. The variable coefficients are characterized by autoregressive stochastic processes, allowing the entire model to be case in state space form. Thus the unknown stochastic specification parameters and priors can be interpreted in terms of the coefficient matrices and initial state vector. Concentration of the likelihood function on these quantities allows the identification of each to be considered separately. Suitable restriction of the form of the state space model, coupled with the concept of controllability, lead to sufficient conditions for the identification of the coefficient transition parameters. Partial identification of the variance-covariance matrix for the random disturbances on the coefficients is established in a like manner. Introducing the additional concept of observability then provides for necessary and sufficient conditions for identification of the unknown priors. The results so obtained are completely analogous to those already established in the econometric literature, namely, that the coefficients of the reduced form are always identified subject to the absence of multicollinearity. Some consistency results are also presented which derive from the above approach.
Handle: RePEc:nbr:nberwo:0127
Template-Type: ReDIF-Paper 1.0
Title: A Note on Optimal Smoothing for Time Varying Coefficient Problems
Author-Name: Thomas F. Cooley
Author-Person: pco35
Author-Name: Kent D. Wall
Number: 0128
Creation-Date: 1976-03
Order-URL: http://www.nber.org/papers/w0128
File-URL: http://www.nber.org/papers/w0128.pdf
File-Format: application/pdf
Publication-Status: published as Cooley, Thomas F. and Wall, Kenneth D. "A Note on Optimal Smoothing for Time Varying Coefficient Problems." Annals of Economic and Social Measurement, Vol. 6, No. 4, pp. 453-456, 1977.
Publication-Status: published as Cooley, Thomas F. and Wall Kenneth D. "A Note on Optimal Smoothing for Time Varying Coefficient Problems," Annals of Economic and Social Measurement, Vol. 5, No. 4, (1977), pp. 453-456.
Publication-Status: published as A Note on Optimal Smoothing for Time Varying Coefficient Problems, Thomas F. Cooley, Barr Rosenberg, Kent D. Wall. in Annals of Economic and Social Measurement, Volume 6, number 4, Berg. 1977
Abstract: An algorithm is presented which provides a complete solution to the optimal estimation problem for time-varying parameters when no proper prior distribution is specified. The key ideas involve a combination of the information-form Kalman filter with the two-filter interpretation of the optimal smoother. The algorithm produces efficient estimates of the parameter trajectories over the entire sample, arid is equally applicable when a proper prior distribution has been specified.
Handle: RePEc:nbr:nberwo:0128
Template-Type: ReDIF-Paper 1.0
Title: A Survey of Recent Research in Health Economics
Author-Name: Michael Grossman
Author-Person: pgr107
Note: EH
Number: 0129
Creation-Date: 1976-03
Order-URL: http://www.nber.org/papers/w0129
File-URL: http://www.nber.org/papers/w0129.pdf
File-Format: application/pdf
Publication-Status: published as Grossman, Michael. "A Survey of Recent Research in Health Economics." The American Economist, Vol. 21, No. 1, (Spring 1977), pp. 14-20.
Abstract: In this survey of recent research in health economics, I concentrate on studies that have appeared since 1971 or are in progress. The survey reflects in part my own research interests and biases and is not meant to be comprehensive. Four topics are covered: (1) demand for adults' health and medical care; (2) effects of health on labor supply and wage rates; (3) demand for children's health and medical care and (4) selected topics pertaining to the supply side of the medical care market.
Handle: RePEc:nbr:nberwo:0129
Template-Type: ReDIF-Paper 1.0
Title: Rosepack Document 3: Guidelines for Writing Semi-Portable Fortran
Author-Name: Neil Kaden
Author-Name: Virginia Klema
Number: 0130
Creation-Date: 1976-03
Order-URL: http://www.nber.org/papers/w0130
File-URL: http://www.nber.org/papers/w0130.pdf
File-Format: application/pdf
Abstract: Transferring Fortran subroutines from one manufacturer' s machine to another, or from one operating system to another, puts certain constraints on the construction of the Fortran statements that are used in the subroutines. The reliable performance of mathematical software should be unaffected by the host environment in which the software is used or by the compiler from which the cod eis generated. In short, the reliable performance of the algorithm is to be independent of the computing environment in which it is run. The subroutines of ROSEPACK (Robust Statistics Estimation Package) are Fortran IV source code designed to be semi-portable where semi-portable is defined to mean transportable with minimum change. *This paper described the guidelines by which ROSEPACK subroutines were written.
Handle: RePEc:nbr:nberwo:0130
Template-Type: ReDIF-Paper 1.0
Title: Exports and Foreign Investment in Manufacturing Industries
Author-Name: Robert E. Lipsey
Author-Person: pli259
Author-Name: Merle Yahr Weiss
Note: ITI IFM
Number: 0131
Creation-Date: 1976-03
Order-URL: http://www.nber.org/papers/w0131
File-URL: http://www.nber.org/papers/w0131.pdf
File-Format: application/pdf
Publication-Status: published as Lipsey, Robert E. and Weiss, Merle Yahr. "Foreign Production and Exports in Manufacturing Industries." The Review of Economics and Statistics, Vol. LXIII, No. 4, pp. 488-494, (November 1981). (NOTE: Reprint 240 isbased on this Working Paper- W0131- as well as on W0087.)
Abstract: One of the main purposes of our studies of U.S.-based multinational firms has been to examine the relationship between direct investment by U.S. firms and the export trade of the United States, a subject of bitter controversy for at least the last fifteen years. Changes over time in trade flows and trade balances are influenced by trends in productivity in the United States and elsewhere and by shifts in monetary and fiscal policy, all of which ate reflected in price and income changes, the effects of which on trade probably swamp any that might stem from changes in the level of direct investment, One way to disentangle some of these influences might be to disaggregate by country, industry, and even better, by firm. However, we have not yet developed enough disaggregated time series data for this purpose and have therefore chosen to work with cross-sections by country and industry and, in some eases, by firm.
Handle: RePEc:nbr:nberwo:0131
Template-Type: ReDIF-Paper 1.0
Title: Health, Family Structure, and Labor Supply
Author-Name: Donald O. Parsons
Author-Person: ppa291
Number: 0132
Creation-Date: 1976-04
Order-URL: http://www.nber.org/papers/w0132
File-URL: http://www.nber.org/papers/w0132.pdf
File-Format: application/pdf
Publication-Status: published as American Economic Review, Vol. 67, no. 4 (1977): 703-712.
Abstract: I consider the health, family structure, and labor supply inter-relationships at both a theoretical and empirical level. The paper is organized in the following way. SectionI introduces the material. In Section II, a theoretical model of family time allocation among market, home, and health activities is developed. The concept of a family health maintenance function is formalized to generate qualitative predictions of the effect of wages, health status, health care efficiency, and property income on the labor supply of husband and wife. In Section III, data from the older male portion of the National Longitudinal Surveys are used to estimate labor supply functions for married and single men with special attention to differences in poor health responses. A simultaneous model of male labor supply and other family income (chiefly transfer income and the earnings of the wife) is then estimated to determine whether variations in the work hours of males, largely due to health differences, induce any substantial changes in income producing activities by other family members. Finally, in Section IV the detailed time budget data on both males and females from the Productive Americans Survey are used to estimate more precisely the effect of health on total family time allocations. These data provide estimates of the impact of poor health on home production time as well as market time for both husband and wife.
Handle: RePEc:nbr:nberwo:0132
Template-Type: ReDIF-Paper 1.0
Title: Toward a More General Theory of Regulation
Author-Name: Sam Peltzman
Number: 0133
Creation-Date: 1976-04
Order-URL: http://www.nber.org/papers/w0133
File-URL: http://www.nber.org/papers/w0133.pdf
File-Format: application/pdf
Publication-Status: published as Journal of Law and Economics, Vol. 19, no. 2 (1976): 211-240.
Abstract: In previous literature, George Stigler asserts a law of diminishing returns to group size in politics: Beyond some point it becomes counterproductive to dilute the per capita transfer. Since the total transfer is endogenous, there is a corollary that dirninishing returns apply to the transfer as well, due both to the opposition provoked by the transfer and to the demand this opposition exerts on resources to quiet it. Stigler does not himself formalize this model, and my first task will be to do just this. My simplified formal version of his model produces a result to which Stigler gave only passing recognition, namely that the costs of using the political process limit not only the size of the dominant group but also their gains. This is at one level, a detail, which is the way Stigler treated it, but a detail with some important implications -- for entry into regulation, and for the price-output structure that emerges from regulation. The main task of the paper is to derive these implications from a generalization of Stigler's model.
Handle: RePEc:nbr:nberwo:0133
Template-Type: ReDIF-Paper 1.0
Title: Taxation, Saving and the Rate of Interest
Author-Name: Michael J. Boskin
Note: PE
Number: 0135
Creation-Date: 1976-04
Order-URL: http://www.nber.org/papers/w0135
File-URL: http://www.nber.org/papers/w0135.pdf
File-Format: application/pdf
Publication-Status: published as Journal of Political Economy (April 1978).
Abstract: After exploring both the crucial role of the interest elasticity of the saving rate in the analysis of a wide variety of issues in economic - particularly tax - policy and reasons why previous studies of the effect of interest rates on consumption and saving have biased the estimated elasticity toward zero, this study presents new estimates of consumption functions based on aggregate U.S. time series data. The results are striking: a variety of functional forms, estimation methods and definitions of the real after-tax rate of return invariably lead to the conclusion of a substantial interest elasticity of saving.
Handle: RePEc:nbr:nberwo:0135
Template-Type: ReDIF-Paper 1.0
Title: Price Behavior in Primary Manufacturing Industries, 1958-1973
Author-Name: Joel Popkin
Number: 0136
Creation-Date: 1976-06
Order-URL: http://www.nber.org/papers/w0136
File-URL: http://www.nber.org/papers/w0136.pdf
File-Format: application/pdf
Abstract: It is the price behavior in primary manufacturing industries and its implication for general inflation that is the subject of this paper. The industries comprising primary manufacturing are quite diverse. They differ with respect to labor and capital intensity, domestic and international market structure and the markets that they supply -- consumer goods manufacturing, producer goods manufacturing and construction. To shed light on the price behavior of the group as a whole it is necessary to disaggregate the total somewhat. In this study they are broken down into eight separate industries. The exact definition of each, both in terms of 4-digit SIC industry and I-0 cell is available on request. In general, the eight separate industries consist of the primary manufacturers producing (1) textiles, (2) wood, (3) paper,(4) chemicals, (5) fertilizers,(6) stone, clay and glass, (7) iron and steel, and (8) nonferrous metals.
Handle: RePEc:nbr:nberwo:0136
Template-Type: ReDIF-Paper 1.0
Title: Leisure, Home Production and Work--The Theory of The Allocation of Time Revisited
Author-Name: Reuben Gronau
Author-Person: pgr333
Number: 0137
Creation-Date: 1976-05
Order-URL: http://www.nber.org/papers/w0137
File-URL: http://www.nber.org/papers/w0137.pdf
File-Format: application/pdf
Publication-Status: published as Gronau, Reuben. "Leisure, Home Production and Work - The Theory of the Allocation of Time Revisited," Journal of Political Economy, Vol. 85, No. 6, pp. 1099-1124, (Dec. 1977).
Abstract: From the theoretical point of view, the justification for aggregating leisure and work at home into one entity, "non-market time" (or "home time") can rest on two assumptions: (a.) the two elements react similarly to changes in the socio-economic environment and, hence, nothing is gained by studying them separately, and (b.) the two elements satisfy the conditions of a composite input, i.e., their relative price is constant, and there is no interest in investigating the composition of this aggregate since it has no bearing on production and the price of the output. This study sets out to show that none of these assumptions holds. Recent time budget findings have established that work at home is affected differently by changes in socioeconomic variables than is leisure, and this paper shows that the aggregation is also suspect from the analytical point of view.
Handle: RePEc:nbr:nberwo:0137
Template-Type: ReDIF-Paper 1.0
Title: Experience, Vintage and Time Effects in the Growth of Earnings: AmericanScientists, 1960-1970
Author-Name: Yoram Weiss
Author-Name: Lee A. Lillard
Number: 0138
Creation-Date: 1976-05
Order-URL: http://www.nber.org/papers/w0138
File-URL: http://www.nber.org/papers/w0138.pdf
File-Format: application/pdf
Publication-Status: published as Weiss, Yoram and Lee A. Lillard. "Experience, Vintage, And Time Effects In The Growth Of Earnings: American Scientists 1960-1970," Journal of Political Economy, 1978, v86(3), 427-448.
Abstract: This paper is concerned with the growth of individual earnings over time. Four aspects of time are distinguished: experience, age, vintage and calendar year. The first section of the paper provides a brief outline of a theory of planned growth in earnings. The second and main section of the paper is devoted to an empirical attempt to estimate the role of experience, vintage and age on the growth in earnings and to separate these effects from exogenous changes in market conditions. We present a detailed specification of the earnings function which accounts for the inherent multi-collinearity between variables such as time, vintage and experience. One of our main objectives is to point out the implications of this identification problem for the analysis of earnings data. Though we cannot completely eliminate this difficulty, longitudinal data, which follows the same individuals over a period of time, allows us to identify more aspects of time than one could obtain from a single cross section. We provide a descriptive analysis of the exogenous changes in market conditions occurring during the period. No attempt is made to relate them to causal changes, such as past and expected future enrollment and government research grants. We find two basic tendencies: (1) Over the decade as a whole, scientists in academic institutions enjoyed better market conditions and thus a higher growth rate than those employed in private industry. (2) Toward the end of the decade, there is a marked reduction in the market's contribution to the growth rate. In some fields, such as physics, we note an actual reduction in the real earnings of new entrants. We conclude with a brief discussion of the changes in relative earnings over the decade by field and type of employer.
Handle: RePEc:nbr:nberwo:0138
Template-Type: ReDIF-Paper 1.0
Title: Treatment Decision-Making in Catastrophic Illness
Author-Name: Kenneth E. Warner
Number: 0139
Creation-Date: 1976-05
Order-URL: http://www.nber.org/papers/w0139
File-URL: http://www.nber.org/papers/w0139.pdf
File-Format: application/pdf
Publication-Status: published as Warner, Kenneth E. "Treatment Decision-Making in Catastrophic Illness." Medical Care 15, 1 (Jan 1977): 19-33.
Abstract: It is well established that the social and economic environment of medical care distinguishes its provision from that of other goods and services. While scholars have studied the influences of this idiosyncratic environment, there is relatively little empirical knowledge about how it affects decision-making in specific medical contexts. Through general conceptual discussion and consideration of a case study of leukemia chemo-therapy, this paper examines the medical decision-making process in one specific context: the response of physicians to the availability of an innovative treatment for a catastrophic illness. The manner in which the medical profession deals with serious illness is relevant to concerns as diverse as the promotion of economic efficiency and the preservation of human dignity.
Handle: RePEc:nbr:nberwo:0139
Template-Type: ReDIF-Paper 1.0
Title: A Multiplicative Model of Investment in Human Capital
Author-Name: Yoram Weiss
Number: 0140
Creation-Date: 1976-06
Order-URL: http://www.nber.org/papers/w0140
File-URL: http://www.nber.org/papers/w0140.pdf
File-Format: application/pdf
Publication-Status: published as (Published as "The Effect of Risk on the Investment in Human Capital") American Economic Review, Vol. 64, no. 5 (1974): 950-963.
Abstract: The purpose of this paper is to analyze the effects of changes in exogenous parameters such as the interest rate, the length of the working period and initial endowments on the shape of the observed earnings profile. Though this problem can be treated in general, we shall restrict ourselves to the following "inverse optimal" problem: find a form of the trade-off function between current and future earnings which leads to a logarithmic earnings function. In the paper we demonstrate that logarithmic earning functions can be derived from optimal behavior. Specifically, the simple case which we analyze leads to piece wise linear log earnings functions. Such a derivation has the advantage that the effects on earnings of exogenous factors can be consistently analyzed. The model is sufficiently simple to allow a clear exposition of the basic elements which govern earnings in a static world. The same elements appear in the more complicated derivations currently available in the literature but it is more difficult to trace their impact. The multiplicative model provides additional information on the robustness of the results previously derived from the Ben-Porath specification. This is particularly important since the "production function" for human capital is not directly observable and alternative specification can only be compared in terms of their implications with respect to observed earnings.
Handle: RePEc:nbr:nberwo:0140
Template-Type: ReDIF-Paper 1.0
Title: Estimation of Econometric Model Using Nonlinear Full Information Maximum Likelihood: Preliminary Computer Results
Author-Name: David A. Belsley
Author-Name: Kent D. Wall
Number: 0142
Creation-Date: 1976-07
Order-URL: http://www.nber.org/papers/w0142
File-URL: http://www.nber.org/papers/w0142.pdf
File-Format: application/pdf
Abstract: This working paper provides some preliminary results on the computational feasibility of nonlinear full information maximum likelihood (NECML) estimation. Severa1 of the test cases presented were also subjected to nonlinear three stage least square (NLBSLS) estimation in order to illustrate the relative performance of the two estimation techniques. In addition, certain other aspects central to practical implementation are highlighted. These include the effect of various computers on the efficiency of the code, as well as the relative merits of numerical and analytical generation of gradient information. Broadly speaking, NLFIML appears competitive in cost and superior in statistical properties to NL3SLS.
Handle: RePEc:nbr:nberwo:0142
Template-Type: ReDIF-Paper 1.0
Title: The Distribution of Earnings Profiles in Longitudinal Data
Author-Name: George J. Borjas
Author-Person: pbo44
Author-Name: Jacob Mincer
Number: 0143
Creation-Date: 1976-08
Order-URL: http://www.nber.org/papers/w0143
File-URL: http://www.nber.org/papers/w0143.pdf
File-Format: application/pdf
Publication-Status: published as Borjas, George J. and Mincer, Jacob. "The Distribution of Earnings Profilesin Longitudinal Data." Income Distribution and Economic Inequality, editedby Zvi Griliches. New York: Halsted Press, 1978.
Abstract: We take advantage of our longitudinal data to explore individual variation in the parameters of individual earnings functions. (1) For this purpose we fit an earnings function to each of the individual histories in the sample.(2) We then try to ascertain the extent to which the estimated variation in individual parameters helps in explaining the cross-sectional variation in earnings.(3) we further inquire into the relation between the individual parameters and a vector of personal characteristics, as well as(4) into indirect (via variables and parameters) and direct effects of these characteristics on earnings.
Handle: RePEc:nbr:nberwo:0143
Template-Type: ReDIF-Paper 1.0
Title: Optimal Income Redistribution When Individual Welfare Depends Upon Relative Income
Author-Name: Michael J. Boskin
Author-Name: Eytan Sheshinski
Author-Person: psh109
Number: 0144
Creation-Date: 1976-08
Order-URL: http://www.nber.org/papers/w0144
File-URL: http://www.nber.org/papers/w0144.pdf
File-Format: application/pdf
Publication-Status: published as Quarterly Journal of Economics (November 1978).
Abstract: The purpose of the present note is to explore the structure of optimal income taxation/redistribution in an economy where the welfare of individuals depends in part on relative after-tax consumption, i.e., we specify individual welfare as a function of absolute and relative after-tax consumption, with diminishing marginal utility to each. With such a specification, of course, an additional incentive for income redistribution from wealthy to poor citizens is created and the logical impossibility of increasing tax rates to the point where disincentive effects actually reduce tax revenues is potentially removed. The analysis highlights the importance of the marginal valuation placed on upward social mobility in various ranges of the income distribution and its interaction with the elasticity of the marginal utility of consumption; of course, "labor supply" elasticities, the form of the social welfare function, and the skill distribution continue to play an important role.
Handle: RePEc:nbr:nberwo:0144
Template-Type: ReDIF-Paper 1.0
Title: Intergenerational Externalities
Author-Name: Edward P. Lazear
Author-Person: pla64
Note: LS
Number: 0145
Creation-Date: 1976-08
Order-URL: http://www.nber.org/papers/w0145
File-URL: http://www.nber.org/papers/w0145.pdf
File-Format: application/pdf
Publication-Status: published as Lazear, Edward. "Intergenerational Externalities." Center for Mathematical Studies in Business and Economics, Report No. 7811. (Feb 1978)
Publication-Status: published as Lazear, Edward. "Intergenerational Externalities." Canadian Journal of Economics, Vol. 16, No. 2, (May 1983), pp. 212-228.
Abstract: A common theme which runs through much of the investment literature is that private incentives may lead to sub-optimal levels of investment activity. The idea has been extended casually to consideration of human capital investment as well. It is sometimes contended that decisions, made by parents, have adverse effects on their offspring, which could be prevented if inter-generational contracts could be struck. If so, a case can be made for government intervention or subsidization programs to alleviate these intergenerational externalities. Specifically, the sub-optimal investment in offspring human capital may take such obvious forms as poor clothing, too little health care, or too few resources devoted to the child's education. Less obvious externalities may result when parents underinvest in themselves because they fail to consider spillover benefits to their children. Parental schooling, for example, may affect the child's ability (or desire) to learn. Dietary patterns established by parents for themselves may influence the child's eating habits and affect his health. More directly, healthy parents are less likely to transmit diseases to their offspring. This paper will examine the effects of these intergenerational externalities in greater detail.
Handle: RePEc:nbr:nberwo:0145
Template-Type: ReDIF-Paper 1.0
Title: Legal Precedent: A Theoretical and Empirical Analysis
Author-Name: William M. Landes
Author-Person: pla327
Author-Name: Richard A. Posner
Author-Person: ppo25
Number: 0146
Creation-Date: 1976-08
Order-URL: http://www.nber.org/papers/w0146
File-URL: http://www.nber.org/papers/w0146.pdf
File-Format: application/pdf
Publication-Status: published as Landes, William M. and Posner, Richard. "Legal Precedent: A Theoretical and Empirical Analysis." Journal of Law and Economics, (September 1976).
Abstract: The use of precedents to create rules of legal obligation has, to our knowledge, received little theoretical or empirical analysis. This paper presents and tests empirically an economic approach to legal precedent that is derived mainly from the analysis of capital formation and investment. We treat the body of legal precedents created by judicial decisions in prior periods as a capital stock that yields a flow of information services which depreciates over time as new conditions arise that were not foreseen by the framers of the existing precedents. New (and replacement) capital is created by investment in the production of precedents.
Handle: RePEc:nbr:nberwo:0146
Template-Type: ReDIF-Paper 1.0
Title: Factors Affecting Divorce: A Study of the Terman Sample
Author-Name: Robert T. Michael
Number: 0147
Creation-Date: 1976-08
Order-URL: http://www.nber.org/papers/w0147
File-URL: http://www.nber.org/papers/w0147.pdf
File-Format: application/pdf
Publication-Status: published as Michael, Robert T. "Determinants of Divorce." Sociological Economics, edited by L. Levy-Garboua. Sage Publications, (1979), pp. 223-245.
Abstract: Within the past few years, renewed interest in understanding marital behavior has resulted in a number of studies which focus on an equation estimating the probability of divorce or remarriage. This paper reports on one such effort. It offers a brief rationale for and an estimation of probability functions for divorce rates at specific lengths of marriage duration for a very unrepresentative sample of American women -- a group of geniuses. The data are from the "Terman sample" of some 671 women selected in 1921 (together with a comparable group of men) by psychologist Lewis N. Terman. The sample was chosen from children enrolled in California schools in urban areas. It included children, preselected by their teachers, whose measured IQ was 135 or above. The sample thus represented students in the highest one percent of the school population in general intelligence. In another report I have compared the marital behavior of these Terman subjects to the relevant California population, controlling for the very high level of schooling and the somewhat constricted distribution of age at first marriage among the Terman subjects (Michael 1976). The Terman subjects generally exhibited the same qualitative relationships between marital patterns and such variables as age at marriage and schooling as the California population. However, one should keep in mind the very special nature of this sample when comparing results with other studies.
Handle: RePEc:nbr:nberwo:0147
Template-Type: ReDIF-Paper 1.0
Title: Who is the Family's Main Breadwinner? The Wife's Contribution to Full Income
Author-Name: Reuben Gronau
Author-Person: pgr333
Number: 0148
Creation-Date: 1976-08
Order-URL: http://www.nber.org/papers/w0148
File-URL: http://www.nber.org/papers/w0148.pdf
File-Format: application/pdf
Publication-Status: published as Gronau Reuben. "Home Production -A Forgotten Industry." The Review of Economics and Statistics, Vol. LXII, No. 3, (August 1980), pp. 408-416.
Abstract: In contrast to past studies which have focused on the labor inputs going into home production (Sirageldin, 1969; Walker and Gauger, 1973), the emphasis in this paper is on the measurement of productivity and total home output. The questions I try to answer are: What are the factors determining the wife's productivity at home? What is the value of home production and how does it compare with the family's money in-come? How does the value of home production differ among families with different socioeconomic backgrounds? How is it affected by the wife's labor force participation and by the existence of young children? How does it changeover the family's life cycle?
Handle: RePEc:nbr:nberwo:0148
Template-Type: ReDIF-Paper 1.0
Title: Age, Education and Occupational Earnings Inequality
Author-Name: Edward N. Wolff
Author-Name: Dennis M. Bushe
Number: 0149
Creation-Date: 1976-09
Order-URL: http://www.nber.org/papers/w0149
File-URL: http://www.nber.org/papers/w0149.pdf
File-Format: application/pdf
Publication-Status: published as "Schooling & Occupational Earnings." Review of Income and Wealth, Vol. 23, No. 3, (September 1977), pp. 259-278.
Abstract: In this paper, we will investigate the effect of six factors on occupational earnings inequality across all occupations in our sample and across occupations in five major Census subgroups. Those six factors are: differences in tasks, different levels of efficiency, institutional factors, time worked, the demand for labor and discrimination. Age and schooling will receive primary attention in our work and it will be shown that they are important determinants of earnings inequality among professional and clerical occupations but not among skilled, semi-skilled or unskilled occupations. Ability is also hypothesized as an important factor, but no measure of ability is provided in our sample. Differences in time worked and labor demand conditions, as measured by industrial and urban-rural mix, will also be analyzed, and their effect on earnings inequality is strong in most of the occupational subsamples. Differences in the race and sex composition of occupations do not appear to be significant factors in occupational earnings inequality, and the explanation offered is that discrimination takes the form of occupational segregation rather than differences in pay for similar work. In the conclusion a sketch of a "structural" theory of income distribution is proposed to account for our results.
Handle: RePEc:nbr:nberwo:0149
Template-Type: ReDIF-Paper 1.0
Title: Dynamic Aspects of Earnings Mobility
Author-Name: Lee A. Lillard
Author-Name: Robert J. Willis
Author-Person: pwi192
Number: 0150
Creation-Date: 1976-09
Order-URL: http://www.nber.org/papers/w0150
File-URL: http://www.nber.org/papers/w0150.pdf
File-Format: application/pdf
Publication-Status: published as Econometrica, Vol. 46, no. 5 (1978): 985-1012.
Abstract: This paper proposes an econometric methodology to deal with life cycle earnings and mobility among discrete earnings classes. First, we use panel data on male log earnings to estimate an earnings function with permanent and serially correlated transitory components due to both measured and unmeasured variables. Assuming that the error components are normally distributed, we develop statements for the probability that an individual's earnings will fall into a particular but arbitrary time sequence of poverty states. Using these statements, we illustrate the implications of our earnings model for poverty dynamics and compare our approach to Markov chain models of income mobility.
Handle: RePEc:nbr:nberwo:0150
Template-Type: ReDIF-Paper 1.0
Title: Some Lessons from the New Public Finance
Author-Name: Joseph E. Stiglitz
Author-Name: Michael J. Boskin
Number: 0151
Creation-Date: 1976-10
Order-URL: http://www.nber.org/papers/w0151
File-URL: http://www.nber.org/papers/w0151.pdf
File-Format: application/pdf
Publication-Status: published as Boskin, Michael J. and Joseph E. Stiglitz. "Some Lessons from the New Public Finance," The American Economic Review, Papers and Proceedings, Vol. 67, No. 1, February 1977, pp. 295-301.
Abstract: In the last few years, there has developed a large literature, sometimes referred to as the new "public finance," providing a quantitative analysis of a number of traditional problems within the field. This paper is concerned with surveying, or interpreting, what can be learned from this literature; and our belief is that it has taught us a great deal. We concern ourselves here not so much with the derivation of precise formulae, e.g. for optimal tax rates, but with the more general lessons which have emerged.
Handle: RePEc:nbr:nberwo:0151
Template-Type: ReDIF-Paper 1.0
Title: Optimal Tax Theory: Econometric Evidence and Tax Policy
Author-Name: Michael J. Boskin
Number: 0152
Creation-Date: 1976-10
Order-URL: http://www.nber.org/papers/w0152
File-URL: http://www.nber.org/papers/w0152.pdf
File-Format: application/pdf
Publication-Status: published as Econometric Contributions to Public Policy, Stone, R., ed.: MacMillan forthe International Economic Associations, 1978.
Abstract: The purpose of this paper is to provide a progress report on the issue of the implications of optimal tax theory and recent econometric evidence for tax policy. Toward this end, Section 2 provides a brief and often heuristic summary of the major results of optimal tax theory. Section 3 reports the results of some recent econometric studies of saving and labor supply. Finally, Section 4 outlines the implications of the combined theory and econometric evidence for tax policy.
Handle: RePEc:nbr:nberwo:0152
Template-Type: ReDIF-Paper 1.0
Title: Economics of Marital Instability
Author-Name: Gary S. Becker
Author-Name: Elisabeth M. Landes
Author-Name: Robert T. Michael
Number: 0153
Creation-Date: 1976-10
Order-URL: http://www.nber.org/papers/w0153
File-URL: http://www.nber.org/papers/w0153.pdf
File-Format: application/pdf
Publication-Status: published as Becker, Gary S., Elisabeth M. Landes, and Robert T. Michael. " An Economic Analysis of Marital Instability." Journal of Political Economy, Vol. 85, No . 6, (December 1977), pp. 1141-1187.
Abstract: This paper focuses on the causes of divorce. Section I developsa theoretical analysis of marital dissolution incorporating uncertaintyabout the outcomes of marital decisions into a framework of utilitymaximization and the marriage market. Section II explores the implica-tions of the theoretical analysis with cross-sectional data,primarilythe 1967 Survey of Economic Opportunity and the Terman sample. Therelevance of both the theoretical and empirical analyses in explainingthe recent acceleration in the U.S. divorce rate is discussed.
Handle: RePEc:nbr:nberwo:0153
Template-Type: ReDIF-Paper 1.0
Title: Multicollinearity: Diagnosing its Presence and Assessing the Potential Damage It Causes Least Squares Estimation
Author-Name: David A. Belsley
Number: 0154
Creation-Date: 1976-10
Order-URL: http://www.nber.org/papers/w0154
File-URL: http://www.nber.org/papers/w0154.pdf
File-Format: application/pdf
Abstract: This paper suggests and examines a straightforward diagnostic test procedure that 1) provides numerical indexes whose magnitudes signify the presence of one or more near dependencies among columns of a data matrix X, and 2) provides a means for determining, within the linear regression model, the extent to which each such near dependency is degrading the least- squares estimation of each regression coefficient. In most instances this latter information also enables the investigator to determine specifically which columns of the data matrix are involved in each near dependency. The diagnostic test is based on an interrelation between two analytic devices, the singular-value decomposition (closely related to eigensystems) and a matching regression-variance decomposition. Both these devices are developed in full. The test is successfully given empirical content through a set of experiments that examine its behavior when applied to several different series of data matrices having one or more known near dependencies that are weak to begin with and are made to became systematically more nearly perfectly collinear. The general diagnostic properties of the test that result from these experiments and the steps required to carry out the test are summarized, and then exemplified by application to real economic data.
Handle: RePEc:nbr:nberwo:0154
Template-Type: ReDIF-Paper 1.0
Title: Foreign Competition and the UK
Author-Name: Arthur W. Lake
Number: 0155
Creation-Date: 1976-11
Order-URL: http://www.nber.org/papers/w0155
File-URL: http://www.nber.org/papers/w0155.pdf
File-Format: application/pdf
Abstract: This paper, which seeks to identify factors contributing to the rate and character of technical transfer and to assess host-country research and development effort in response to foreign competition, is one of three examining the impact of technically-advanced companies, particularly American, on British industries. Beginning first with an analysis of imitation cycles in pharmaceuticals and making use of a model of these, the study proceeds to examine the transnational operations of American and other foreign companies, showing the connection between company size, sales and new product introductions.
Handle: RePEc:nbr:nberwo:0155
Template-Type: ReDIF-Paper 1.0
Title: None
Author-Name:
Number: 0156
Creation-Date: 1976-11
Order-URL: http://www.nber.org/papers/w0156
Abstract: This paper number accidentally skipped in the early days of working paper publishing. No paper ever existed for this number.
Handle: RePEc:nbr:nberwo:0156
Template-Type: ReDIF-Paper 1.0
Title: Efficient Estimation of a Dynamic Error-Shock Model
Author-Name: Cheng Hsiao
Author-Person: phs10
Author-Name: P. M. Robinson
Number: 0157
Creation-Date: 1976-11
Order-URL: http://www.nber.org/papers/w0157
File-URL: http://www.nber.org/papers/w0157.pdf
File-Format: application/pdf
Publication-Status: published as Hsiao, C. and P. M. Robinson. "Efficient Estimation Of A Dynamic Error-Shock Model," International Economic Review, 1978, v19(2), 467-480.
Abstract: This paper is concerned with the estimation of the parameters in a dynamic simultaneous equation model with stationary disturbances under the assumption that the variables are subject to random measurement errors. The conditions under which the parameters are identified are stated. An asymptotically efficient frequency-domain class of instrumental variables estimators is suggested. The procedure consists of two basic steps. The first step transforms the model in such a way that the observed exogenous variables are asymptotically orthogonal to the residual terms. The second step involves an iterative procedure like that of Robinson [13].
Handle: RePEc:nbr:nberwo:0157
Template-Type: ReDIF-Paper 1.0
Title: The Market for Lawyers: The Determinants of the Demand for and Supply ofLawyers
Author-Name: B. Peter Pashigian
Number: 0158
Creation-Date: 1976-12
Order-URL: http://www.nber.org/papers/w0158
File-URL: http://www.nber.org/papers/w0158.pdf
File-Format: application/pdf
Publication-Status: published as Pashigian, B. Peter. "The Market for Lawyers: The Determinants of the Demand for and Supply of Lawyers." Journal of Law and Economics, Vol. 20, No. 1,(April 1977), pp. 53-86.
Abstract: Some additional evidence on the comparative effect of income, regulation, and other variables on the demand for lawyers is called for. One objective of this paper is to investigate the speed of adjustment of law schools to shifts in the demand for lawyers. Section I presents a theoretical model of the demand for and supply of lawyers. The empirical counterparts of the variables are introduced in Section II. Section III presents the results of the estimation and Section IV compares the actual number of lawyers with the number that would have existed if lawyers earned a normal return on their investment in legal education. Section V presents other evidence of an excess demand for lawyers and offers several explanations for the speed of adjustment of enrollments in law schools to shifts in the demand for lawyers. The paper ends with a summary of the major findings of the paper.
Handle: RePEc:nbr:nberwo:0158
Template-Type: ReDIF-Paper 1.0
Title: A Conic Algorithm for the Group Minimization Problem
Author-Name: Bruno Simeone
Number: 0159
Creation-Date: 1976-12
Order-URL: http://www.nber.org/papers/w0159
File-URL: http://www.nber.org/papers/w0159.pdf
File-Format: application/pdf
Abstract: A new algorithm for the group minimization problem (GP) is proposed. The algorithm can be broadly described as follows. A suitable relaxation of(GP) is defined, in which any feasible point satisfies the group equation but may have negative components. The feasible points of the relaxation are then generated in order of ascending costs by a variant of a well-known algorithm of Glover, and checked for non-negativity. The first non-negative point is an optimal solution of (GP). Advantages and disadvantages of the algorithm are discussed; in particular, the implementation of the algorithm (which can be easily extended so as to solve integer linear programming problems) does not require group arithmetics.
Handle: RePEc:nbr:nberwo:0159