Knowledge that Transforms

A bstract-The standard disequilibrium model is supplemented with outside information on the extent of market excess demand. Estimation of this supplemented model is considerably less involved than that of the standard model, and certain desirable structural features, such as improved dynamics, are obtained. In addition, a simple nested test of the hypothesis of market equilibrium is available. The model is estimated with aggregate U.S. post-war labor market data, and the econometric test rejects the hypothesis of labor market equilibrium.

Jouke van Dijk, Hendrik Folmer, The Consequences of Interregional Labor Migration for the Regional Labor Market: Theory, Methodology and Dutch Experience, The Review of Economics and Statistics, Vol. 68, No. 1 (Feb., 1986), pp. 74-83

Alan L. Gustman, Thomas L. Steinmeier, A Disaggregated, Structural Analysis of Retirement by Race, Difficulty of Work and Health, The Review of Economics and Statistics, Vol. 68, No. 3 (Aug., 1986), pp. 509-513

Dennis M. Bushe, Irving B. Kravis, Robert E. Lipsey, Prices, Activity, and Machinery Exports: An Analysis Based on New Price Data, The Review of Economics and Statistics, Vol. 68, No. 2 (May, 1986), pp. 248-255

A hstract-This research investigates innovative behavior in the U.S. steel industry under the assumption that basic oxygen and large electric furnaces are competing technologies. The empirical model of innovation is based on recent theoretical research. The coefficients are estimated by a seemingly unrelated Tobit approach. The research finds innovation is strongly influenced by a demonstration effect. Adoption is also influenced by potential cost savings and technical progress. There is no evidence that large U.S. steel producers modernized more slowly than their smaller rivals. The large electric furnace becomes sufficiently attractive by 1980 that firms choose not to adopt basic oxygen.

The jointness of labor and housing decisions is explicitly modelled in a consumer demand framework. Behavior of seven demographic groups differentiated by marital status, employment status and the presence of children is estimated from a micro data set. Results indicate that (1) decisions regarding work hours and housing consumption are interdependent choices and (2) responses to market signals differ significantly by demographic group. Results are likely to be superior to single equation studies or studies based on aggregate data.

This paper develops an empirical strategy for testing competing hypotheses of expectation regimes when direct measures of expectations are unavailable. The procedure takes as given an assumed structural relationship between expected values of exogenous variables and a given decision variable. By imposing different expectation regimes on this model, we obtain an artificial nesting of the hypothesized regimes which allows us to test whether any specification dominates. This methodology is extended to multiple equation applications with any number of hypothesized expectation regimes. The tests are illustrated using a model of the response of county-level farm acreage allocation to expected commodity prices.