Knowledge that Transforms

American Economic Association Universal Academic Questionnaire Summary Statistics by Charles E. Scott and John J. Siegfried. Published in volume 96, issue 2, pages 527-530 of American Economic Review, May 2006

Following the 1999 Israeli elections, the winning candidate's (Ehud Barak's) party was fined 3.2 million dollars for violating Israel's campaign financing laws by exceeding the spending cap imposed and raising 1.2 million dollars illegally (see Time Europe, 2000).While adhering to the strict NCAA recruiting regulations, the University of Oregon spent 3 million dollars to make their football locker room the "best anywhere, including the NFL" (Lexington Herald Leader, 2003).When asked about the previous salary cap in the UK Football league, players said that "it [the cap] was so artificial that clubs paid money in brown paper envelopes."(BBC2, Newsnight 2002).In all these cases, there officially existed a rigid spending cap.However, they show that even though a cap exists: The cap might not be easily enforced.When enforced, the penalty may just be financial rather than a change in outcome.The cap may be enforced and adhered to, but there may also be alternate perhaps less effective (hence more costly) means of spending.We also see that the flexible nature of the cap is often built into the rules by examining the salary caps of the four major US sports leagues where the caps are routinely exceeded.In baseball and basketball, surpassing the cap invokes a pure financial penalty, called a luxury tax, which is proportional to the excess.In football, while the cap is stated in terms of salaries, many teams use signing bonuses as a way to circumvent it.In ice hockey, there is a dual cap system, where the luxury tax is invoked on salaries falling between the two caps and signing bonuses are an allowed method to exceed the

This paper analyses the compensatory behavior of smokers. Exploiting data on cotinine concentration - a metabolite of nicotine - measured in a large population of smokers over time, we show that smokers compensate tax hikes by extracting more nicotine per cigarette. Our study makes two important contributions. First, as smoking more intensively a given cigarette is detrimental to health, our results question the usefulness of tax increases. Second, we develop a model of rational addiction where agents can also adjust their intensity of smoking and we show that the previous empirical results suffer from severe estimation biases.

Measuring market discrimination is extremely difficult except in the increasingly rare case where physical output measures allow direct measurement of productivity.We illustrate this point with evidence on elections to offices of the American Economic Association.Using a new technique to infer the determinants of the chances of observing a particular outcome when there are K choices out of N possibilities, we find that female candidates have a much better than random chance of victory.This advantage can be interpreted either as reverse discrimination or as reflecting voters' beliefs that women are more productive than observationally identical men in this activity.If the former this finding could be explained by the behavior of an unchanging median voter whose gender preferences were not satisfied by the suppliers of candidates for office; but there was a clear structural change in voting behavior in the mid-1970s.The results suggest that it is not generally possible to claim that differences in rewards for different groups measure the extent of discrimination or even its direction.

We use a Bayesian Markov Chain Monte Carlo algorithm to estimate a model that allows temporary gaps between a true expectational Phillips curve and the monetary authority's approximating nonexpectational Phillips curve.A dynamic programming problem implies that the monetary authority's inflation target evolves as its estimated Phillips curve moves.Our estimates attribute the rise and fall of post WWII inflation in the US to an intricate interaction between the monetary authority's beliefs and economic shocks.Shocks in the 1970s altered the monetary authority's estimates and made it misperceive the tradeoff between inflation and unemployment.That caused a sharp rise in inflation in the 1970s.Our estimates say that policymakers updated their beliefs continuously.By the 1980s,