Knowledge that Transforms

Over the period 1979-85, the petroleum industry offers a unique test of the agency theory of corporat e restructuring. A panel data set for twenty-five firms indicates con siderable support for a hybrid free cash flow model in which explorat ion expenditures appear guided by neoclassical profitability measures , but at the margin, cash flow also exerts an independent influence. The magnitude of the parameter estimates suggests that the free cash flow hypothesis does not fully explain the gains from restructuring.

Evidence on cost savings from reorganizing township low-volume, rural-road systems into larger units is presented in the study of technical efficiencies in producing local government services. Data are from a sample of midwestern townships. Heterogeneity of surface types is accounted for by specifying a multiple output translog cost function. Examination of economies of size suggest that cost savings could be realized by reorganizing townships into larger units. The presence of economies of scope suggest that jurisdictions should not specialize in maintenance responsibilities due to the joint use of inputs.

Workers choose a job and receive in return a bundle consisting of income and a probability of job injury. The authors view this income- job-risk bundle chosen by the worker as being exchanged in an implici t market. By jointly estimating the market income-job-risk locus and the optimum conditions for utility maximization, they are able to identif y the market locus and parameters of the workers' utility function. In contrast to previous work, the authors are able to derive valuations of discrete changes in job risk for each individual in the sample. They present evidence that an increase in nonlabor income leads workers to select safer jobs.

Income and price elasticities for non-oil exports of non-OPEC developing countries play an imp ortant role in the development of policy responses to the debt crisis. These elasticities are estimated for the major Standard Internation al Trade Classification commodity groups. Based on two-stage least sq uares and quarterly data for 1973 to 1984, the income elasticity for non-oil exports ranges between 1.4 and 1.9. The analysis also tests t he properties of the error term, the dynamic specification, and para- metric stability. The sensitivity of the results is assessed using Sh iller's lags and band spectrum estimation.

In order to determine the importance of parental time inputs in the intergenerational transmission of socioeconomic status, previous work relies on proxies such as family size, birth order, maternal employment, and retrospective reports of child care time. This paper is unique in finding a connection between more direct measures of mother's child-care time and children's outcomes as adults. It shows that (1) higher home productivity increases, but higher opportunity costs reduce, maternal child-care time and (2) greater child-care time of highly-educated, but not of less well-educated, mothers significantly raises children's years of schooling.