Knowledge that Transforms

Negative product-market shocks reduce wage growth and increase the probability of plant closing. There is a U-shaped relation between th is probability and job tenure that proxies the specific human capital that raises a firm's value. Estimates based on Panel Study of Income Dynamics data for 1977-81 generally support the model. They show that wages grow less rapidly among workers who will subsequently be displaced and imply that large wage concessions reduce the risk of pl ant closing only slightly.

Relatively unique data on the costs of public services for local governments in Victoria, Australia, are used to estimate a system of demand equations and to test alternative specifications of the underlying preferences using a translog model. Symmetry conditions are rejected so the data are not consistent with constrained utility maximization. A nonparametric test confirms that result. Conditional on symmetry, tests reject homogeneity and the additivity of preferences and also the separability of personal and property services.

Hideki Yamawaki, David A. Audretsch, Import Share under International Oligopoly with Differentiated Products: Japanese Imports in U.S. Manufacturing, The Review of Economics and Statistics, Vol. 70, No. 4 (Nov., 1988), pp. 569-579

This paper analyzes the joy of giving bequest motive in which the utility obtained from leaving a bequest depends only on the size of the bequest. It exploits the fact that this formulation can be interpreted as a reduced form of an altruistic bequest motive to derive a relation between the value of the altruism parameter and the value of the joy of giving parameter. Using previous discussions of an a priori range of plausible values for the altruism parameter we then derive plausible restrictions on the joy of giving parameter. We demonstrate that this parameter may well be orders of magnitude larger than assumed in the existing literature.

of Economics Departments, University of Westem Ontario Centre for Economic Analysis of Property Rights, Working Paper, 1986. Maddala, G. S., Limited-Dependent and Qualitative Variables in Economics (Cambridge: Cambridge University Press, 1983). McDowell, John M., and Michael Melvin, The Determinants of Co-Authorship: An Analysis of the Economics Literature, this REVIEW 65 (Feb. 1983), 155-160. McKelvey, R., and W. Zavoina, A Statistical Model for the Analysis of Ordinal Level Dependent Variables, Journal of Mathematical Sociology 4 (1975), 103-120. Schweser, Carl, The Economics of Academic Publishing, Journal of Economic Education 14 (1983), 60-64.

Lonnie Magee, The Behaviour of a Modified Box-Cox Regression Model when Some Values of the Dependent Variable are Close to Zero, The Review of Economics and Statistics, Vol. 70, No. 2 (May, 1988), pp. 362-366

The econometric method in the C. Flinn and J. Heckman (1982) study for estimating a Markovian model of search unem ployment and job tenure is further augmented by introducing a possibi lity that jobs may differ by separation rates or nonwage attributes. A set of reservation wages is obtained as a solution to the value fun ctions. Differences in reservation wages estimate the compensating no nwage utility differentials among jobs. The unemployment spell distri bution is characterized as one of competing risk based on which type of job is finally accepted. The model is implemented using data from the Employment Opportunities Pilot Project.