The extension of economic analysis to problems beyond the domain of formal markets and explicit prices represents a major recent intellectual development. But "economic imperialism" is not new and was not invented in Chicago. Adam Smith, in his Wealth of Nations, extended economic reasoning to a variety of nonmarket exchange problems. One example is his analysis of religious behavior. Smith viewed participation in religion as a rational device by which individual enhanced the value of their human capital. He also explained the behavior of the clergy and other suppliers of religious services from an economic perspective.

The extension of economic analysis to problems beyond the domain of formal markets and explicit prices represents a major recent intellectual development. But "economic imperialism" is not new and was not invented in Chicago. Adam Smith, in his Wealth of Nations, extended economic reasoning to a variety of nonmarket exchange problems. One example is his analysis of religious behavior. Smith viewed participation in religion as a rational device by which individual enhanced the value of their human capital. He also explained the behavior of the clergy and other suppliers of religious services from an economic perspective.

We develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time. Strong addiction to a good requires a big effect of past consumption of the good on current consumption. Such powerful complementarities cause some steady states to be unstable. They are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention. Our theory also implies that "cold turkey" is used to end strong addictions, that addicts often go on binges, that addicts respond more to permanent than to temporary changes in prices of addictive goods, and that anxiety and tensions can precipitate an addiction.

The employment relationship with employees' ability and their actions both private information (thus combining adverse selection with moral hazard) is modeled as a repeated game with self-enforcing contracts being perfect Bayesian Nash equilibria. Under termination contracts, the equilibrium contract structure consists of a hierarchy of ranks, finite in number even though ability is continuous. Reputation acts as an effective device for worker discipline without the need for involuntary unemployment. Selection by bonding is not, in general, incentive compatible, but selection by promotion of employees through the ranks is. Many other features correspond to observed employment structures.

Health concerns are thought by many to have shifted consumption away from red meats, though econometric evidence is mixed. Testing for structural change is difficult, especially when one time series is used for both estimating demand equations and testing their stability. Specification errors may suggest a shift where none has occurred. Using nonparametric demand analysis, we find that meat consumption patterns in the United States and Australia can be explained using only relative prices and expenditures. Only imposing particular functional forms can reverse the conclusion, suggesting that specification errors in econometric demand studies can account for findings of taste changes.

[This paper outlines a procedure for estimating a general index of technical change within the context of a quite general production technology. Specifically, when panel data are available for firms in an industry, time-specific dummies can be combined in a nonlinear estimation procedure to yield a general index of technical change that may be both nonneutral and scale augmenting. This approach offers numerous advantages over the traditional time trend representation of technical change. For example, the general index can serve as the basis for analysis of the determinants of technical change. Results for a sample of 30 electric utilities over the period 1951-78 show that the productivity decline of the 1970s can be attributed primarily to sulphur oxide restrictions and secularly declining capacity utilization due to rapidly increasing peak-load demands.]

[The capital asset pricing model provides a theoretical structure for the pricing of assets with uncertain returns. The premium to induce risk-averse investors to bear risk is proportional to the nondiversifiable risk, which is measured by the covariance of the asset return with the market portfolio return. In this paper a multivariate generalized autoregressive conditional heteroscedastic process is estimated for returns to bills, bonds, and stock where the expected return is proportional to the conditional convariance of each return with that of a fully diversified or market portfolio. It is found that the conditional covariances are quite variable over time and are a significant determinant of time-varying risk premia. The implied betas are also time-varying and forecastable. However, there is evidence that other variables including innovations in consumption should also be considered in the investor's information set when estimating the conditional distribution of returns.]

Health concerns are thought by many to have shifted consumption away from red meats, though econometric evidence is mixed. Testing for structural change is difficult, especially when one time series is used for both estimating demand equations and testing their stability. Specification errors may suggest a shift where none has occurred. Using nonparametric demand analysis, we find that meat consumption patterns in the United States and Australia can be explained using only relative prices and expenditures. Only imposing particular functional forms can reverse the conclusion, suggesting that specification errors in econometric demand studies can account for findings of taste changes.