Tax expenditures are a major source of support for energy related to activities in the federal budget exceeding direct budget support for energy by a factor of nearly six. Focusing on the policy goals of reducing greenhouse gas emissions and petroleum consumption, I find these tax expenditures highly cost ineffective at best and counterproductive at worse. The tax credit for ethanol is an example of a cost ineffective subsidy. The cost of reducing CO2 emissions through this subsidy exceeded $1,700 per ton of CO2 avoided in 2006 and the cost of reducing oil consumption over $85 per barrel.

We investigate the sources of the important shifts in the volatility of US macroeconomic variables in the postwar period. To this end, we propose the estimation of DSGE models allowing for time variation in the volatility of the structural innovations. We apply our estimation strategy to a large-scale model of the business cycle and find that shocks specific to the equilibrium condition of investment account for most of the sharp decline in volatility of the last two decades.

American Economic Association Universal Academic Questionnaire Summary Statistics by Charles E. Scott and John J. Siegfried. Published in volume 98, issue 2, pages 630-33 of American Economic Review, May 2008

We find that prior to World Trade Organization membership, countries set import tariffs 9 percentage points higher on inelastically supplied imports relative to those supplied elastically. The magnitude of this effect is similar to the size of average tariffs in these countries, and market power explains more of the tariff variation than a commonly used political economy variable. Moreover, US trade restrictions not covered by the WTO are significantly higher on goods where the United States has more market power. We find strong evidence that these importers have market power and use it in setting noncooperative trade policy.

We estimate the willingness to pay for reductions in crime risk using the location and move-in dates of sex offenders. We find significant effects of sex offenders' locations that are geographically localized. House prices within 0.1 miles of a sex offender fall by 4 percent on average. We then use this finding to estimate the costs to victims of sexual offenses, and find costs of over $1 million per victim—far greater than previous estimates. However, we cannot reject the alternative hypotheses that individuals overestimate risks posed by offenders or that living near an offender poses significant costs exclusive of crime risk.

We use data from the Current Population Survey collected both before and after Hurricane Katrina to estimate the impact of Katrina on the labor market outcomes of evacuees. Our estimates are based on a difference-in-differences strategy that compares evacuees to all residents of Katrina-affected areas prior to Katrina, with a control group consisting of individuals who originally resided outside the areas affected by the storm. We estimate that Katrina had substantial effects on the labor market outcomes of evacuees over the 13-month period immediately following Katrina. However, our estimates suggest that the effects of Katrina diminished substantially over time as evacuees recovered from the hurricane and adjusted to new economic and social conditions. Evacuees who did not return to their pre-Katrina areas have fared much worse in the labor market than have those who returned. Differences in individual and family characteristics account for some of the differences in outcomes between returnees and non-returnees. We present evidence that non-returnees have fared much worse in the labor market primarily because they came from areas that experienced greater housing damage due to the storm and thus were more likely to have had their lives severely disrupted.

“I want to tell my foreman to f*** off, but I can’t.” So says “Mike,” a steel handler we meet in Stud Terkel’s book Working (1974, xxxv). Many workers’ stories we read in Working and in ethnographies suggest workers greatly resent supervision. As a result, they exert lower effort and may sabotage production. Mike puts dents in the steel. Ethnographies also reveal workers who are not strictly monitored develop work group output norms. This paper uses the con cept of identity to study trade-offs in supervi sory policy. 1 We follow the social psychology literature and examine intrinsic incentives that depend on how workers see themselves in rela tion to the firm. When a supervisor monitors workers, workers adopt an identity in opposition to the firm. The firm gains information and can fine-tune its incentive pay. But resentful workers require high compensation to work in the firm’s interest. With no monitoring, workers are less hostile to the firm. But they may forge a work group identity, with norms that restrict output. We show that a firm may find it profitable to have lax supervision. When workers take on a work group identity, the cost per unit of effort can be lower than when workers view them selves in opposition to the firm. We shall present the model, and then discuss some classic studies of workplaces that portray these trade-offs. Our identity framework synthesizes an emerg ing body of economic theory and empirics on incentives and monitoring (e.g., Bruno Frey 1993; Gary Charness 2000; Daniel S. Nagin et al. 2002; Michael T. Rauh and Giulio Seccia 1 This paper provides a simple formal model of tradeoffs described loosely in Akerlof and Kranton (2005). We also discuss further implications of supervision versus work group cohesion.

How Big Are Total Individual Income Tax Expenditures, and Who Benefits from Them? by Leonard E. Burman, Christopher Geissler and Eric J. Toder. Published in volume 98, issue 2, pages 79-83 of American Economic Review, May 2008

Using Selection on Observed Variables to Assess Bias from Unobservables When Evaluating Swan-Ganz Catheterization by Joseph G. Altonji, Todd E. Elder and Christopher R. Taber. Published in volume 98, issue 2, pages 345-50 of American Economic Review, May 2008