Knowledge that Transforms

The efficiency with which coefficients in probit mod- els are estimated is improved by exploiting data on continuous ancillary variates. In this paper the resulting gains in efficiency are examined and illustrative calculations are provided. Extra precision is achieved at the cost of making an extra assumption but this assumption can be tested. It is shown that fully efficient maximum likelihood estimation of the probit model with a continuous ancillary variate can be achieved by a simple two step procedure involving an ordinary least squares and a probit estimation.

Two models for competitive spatial pricing between retail outlets in a single urban area are presented. The models are distinguished in terms of first, their relationships to underlying supply and demand conditions in the market and second, the spatial forms of inter-site competition described. Properties of the models are identified. The statistical theory appropriate to these models is reviewed and the models then fitted to data for retail gasoline prices during periods of falling and then rising average price levels.

In this paper a general flow of funds model explaining aggregate RD (b) although some previous studies using U.S. data have concluded that RD (c) consistent with recent studies, no evidence of crowding out of private expenditures by government expenditures could be found.

Abstrac-t-A Generalized CES (GENCES) preference ordering is developed and estimated. It incorporates characteristics of both the individual and the activities. The GENCES is used to explain the share of ski time an individual allocates to each ski area as a function of site characteristics, skiing ability, and costs. The stochastic specification limited the shares to the 0-1 simplex. This specification was found to be more appropriate than the conventional normality assumption. The null hypothesis that preferences are homothetic and additive is rejected. Charactenrstics, ability, and costs are important determinants of demand. The estimated elasticities provide numerous insights into skier behavior.

Roberta Barnes, Robert Gillingham, Demographic Effects in Demand Analysis: Estimation of the Quadratic Expenditure System Using Microdata, The Review of Economics and Statistics, Vol. 66, No. 4 (Nov., 1984), pp. 591-601

This article examines the mobility of Utah households as measured by their wealth holdings reported in the census manuscripts of 1860 and 1870. Substantial mobility is observed though there is a tendency for the households to remain in the richest decile. Control for age, nativity, or dichotomies such as urban-rural or farm and nonfarm does not substantially reduce mobility. The lack of association of characteristics with the observed mobility, combined with high levels of cross-sectional inequality, highlights the importance of measuring mobility as well as wealth or income dispersion in order to make valid normative inferences. S UBSTANTIAL effort has been devoted to analyses of distributional inequality, whether measured by individual incomes, earnings, or wealth holdings. As a consequence, we know a good deal about dispersion at various points in time for measures of economic position and hence about the changes in dispersion across decades and even centuries: income, earnings and wealth distributions evidence considerable dispersion and the dispersion appears to have narrowed somewhat in the twentieth century after earlier increases in inequality. However, the small changes happen slowly so that the stability of measured dispersion over decade or longer intervals is remarkable (Williamson and Lindert, 1980). We know a good deal less about economic mobility-the movement of individual households through these disperse distributions (cf. McCall, 1973, or Schiller, 1976). This paper considers evidence of mobility for a panel of households with a relatively stable distribution through time sampled from an economy with increasing inequality in wealth holdings. We find substantial mobility over a two-decade interval. Mobility of the sort we observe poses some difficulties for normative judgments when distributional dispersion is an element in welfare evaluations of a society or of policies likely to have distributional impacts. We return to this issue briefly in a concluding section. I. The Distribution of Wealth in Utah,

Sebastian Edwards, The Demand for International Reserves and Monetary Equilibrium: Some Evidence From Developing Countries, The Review of Economics and Statistics, Vol. 66, No. 3 (Aug., 1984), pp. 495-500

This study presents the first evidence on the relation of consumption to lifetime wealth, based on data from the 1973 and 1975 Retirement History Survey that have been linked to Social Security earnings records.