MacCoun and Reuter's primary goal is to understand how current U.S. drug policies can be improved. They carefully describe the facts and trends regarding drug usage, criminal justice enforcement, and the harms associated with drug use, then discuss the public debate surrounding drug prohibition and give an informal treatment of the theory underlying the competing positions. The authors study policies towards other vices like gambling, cigarettes, alcohol, and prostitution, as well as drug policies in other times and places. The broader implication that emerges is that there is a desperate need for better data and increased research if there is any hope for making truly informed policy on illicit drugs.

This study investigates whether compensating chief executive officers and business-unit managers using after-tax accounting-based performance measures leads to lower effective tax rates, the empirical surrogate used for tax-planning effectiveness. Utilizing proprietary compensation data obtained in a survey of corporate executives, the relation between effective tax rates and after-tax performance measures is modeled and estimated using a two-step approach that corrects for the endogeneity bias associated with firms' decisions to compensate managers on a pre- versus after-tax basis. The results are consistent with the hypothesis that compensating business-unit managers, but not chief executive officers, on an after-tax basis leads to lower effective tax rates.

We examine the impact of immigration on self‐employed natives. In a new general equilibrium model of self‐employment and wage/salary work, a range of plausible parameter values implies small negative effects of immigration on native self‐employment rates and earnings. Using 1980 and 1990 Census microdata, we then examine the relationship between changes in immigration and native self‐employment rates and earnings across 132 of the largest U.S. metropolitan areas. We find evidence suggesting that self‐employed immigrants displace self‐employed natives but do not have a negative effect on native self‐employment earnings. The effects are much larger than those predicted by the theoretical model.

Using a cash flow-based framework, we decompose exchange rate into short-term and long-term elements for 105 individual US banks over 1988–1998. We show that significant long-term exposure is more prevalent than significant short-term exposure, reflecting the difficulty in recognizing, modeling, and managing the longer-term effects of exchange rate risk. Our analyses reveal that 72% of internationally oriented and 88% of domestically oriented banks in the sample have significant exposure to at least one of five currency pairs. This result supports the theory that domestic banks are exposed and should be concerned about the indirect impact of exchange rate risk. Furthermore, we provide some evidence that economies of scale may exist for institutions with extensive international operations.

This study extends the work of Akella and Greenbaum [Journal of Banking & Finance 12 (1988) 419] through the use of a much larger, nationwide sample of US saving and loan associations and supports their original finding of significant expense-preference behavior in mutual savings and loans during their original study period (1979–80). This study also provides evidence that over the time period of substantial deregulation and changes in the competitive environment in the US financial services industry, expense-preference behavior for savings and loans decreased. The results are consistent with the idea that the removal of barriers that restrict competition should improve managerial efficiency in firms that survive.

This paper calculates elasticities of demand for race groups in South Africa, government-revenue-maximizing tax rates, and excess burdens associated with taxes. A change in tax policy can be the political engine of income redistribution with appropriate taxes and subsidies on different commodities. This paper compares both semiparametric and parametric estimators with the censored least absolute deviation and censored maximum likelihood in calculating demand equations and elasticities. It is found that cigarettes and milk are the two commodities that generate the most government revenues from whites per unit of government revenues from blacks.