Knowledge that Transforms

By estimating the parameters of a production function whose inputs consist of family time and market goods, the authors offer some new microeconomic estimates of the value of production that takes place in the home and also examine the concept of joint production-that is, the degree to which time devoted to home production simultaneously serves as leisure. They find evidence of substantial jointness between home production time and leisure, the degree of which is greater for wives than for husbands; and that both husband and wife possess human capital skills more productive in market work than in home work.

This paper examines nine models of aggregate import demand for each of five countries (Canada, Germany, Japan, United Kingdom, and United States) in an attempt to determine which of the frequently used single equation models of import demand are appropriate. An appropriate model is defined as one which generates unbiased (or at least consistent) and efficient elasticity estimates. While models without lagged adjustments and Almon lag models perform rather poorly according to these criteria, models including dynamic behavior through lagged values of the dependent variable are frequently accepted. Results are reported regarding functional form, measures of variables, and structural shift. ECONOMISTS have devoted considerable attention to the estimation of aggregate import demand elasticities because of their importance in trade theory. The simplest procedure for estimating these elasticities which is consistent with economic theory is to assume that the elasticity of supply of imports is infinitely elastic and to estimate'

This paper considers a complex relation among R & D, market structure and a market value-based measure of profits. Perhaps of greatest interest, a positive effect of R & D on profits emerges, as does a negative R & D-concentration interaction effect. Both appear robust, and support an and rivalrous view of R & D. Despite substantial interest in the question little direct evidence on research and development (R&D), market structure and profits relations has appeared in the literature. An important exception to this rule is Grabowski and Mueller (hereafter G-M) (1978) who reported a strong effect of R & D on adjusted profit rate data, in addition to an equally strong negative R & Dmarket concentration interaction effect. G-M interpret their findings as support for an intangible capital and rivalrous view of R & D. Alternatively, they are also consistent with the hypothesis that firms in highly concentrated markets pursue R & D less efficiently, or take on riskier projects. In any event, G-M's findings seem inconsistent with a view of R & D as a barrier to entry (see Kamien and Schwartz, 1975). This study extends previous research in at least four respects. First, we adopt a market valued-based measure of profits in order to avoid any bias inherent in accounting profit data due to an expense-as-incurred rather than capitalization and amortization treatment of R & D, advertising and similar expenditures. Second, we evaluate simultaneous influences among profits, R & D, advertising and concentration suggested, but not tested, previously. Third, estimation results are derived using Leamer's SEARCH technique which illustrates the sensitivity of estimates to alternate model specifications. And fourth, we consider an n = 390-firm Fortune 500 sample, which is substantially larger than in previous studies, including firms responsible for nearly 90% of private sector R & D during 1977. Estimation results should therefore be broadly indicative of the economic consequences of R & D.

While recent studies have shown that up to 35% of the total urban population of the Third World live in squatter settlements, there is a dearth of economic analysis on the phenomenon of squatting. This paper attempts to fill this gap. The equilibrium model argues that the difference in unit housing prices between the non-squatting (formal) sector of a city and its squatting (informal) sector reflects the premium associated with a secure tenure status. The empirical portion of this paper uses hedonic price techniques to derive the average premium on tenure security in a medium-sized Philippine city, Davao. Results show that formal-sector unit dwelling prices are about 18% (renters) to 58% (owners) more than in the informal sector. These equilibrium price differentials were found to be greater for lower income groups, larger household sizes, and households with older heads for renters and younger heads for

A hstract-This paper develops a model of the decision to adopt interrelated innovations emphasizing the role of innovative ability and a measure of the economic incentive to be informed about innovations. Education, experience, and the availability of information are hypothesized to be measurable dimensions of innovative ability. The results from fitting univariate, conditional, and joint logistic models suggest that innovative ability contributes significantly to explaining the adoption of new technology but does not explain its diffusion. The results also indicate that the diffusion of previously available innovations depends on the introduction and adoption of interrelated current innovations.

tional attainments suggests the usefulness of special training programs for unskilled immigrants. Further, the persistence of racial differentials underscores the importance of the enforcement of anti-bias employment regulations to protect non-white immigrants. Recent changes in immigration law under the Refugee Act of 1980 will increase uncertainty regarding the composition of future immigration waves. It is likely, however, that the proportion of immigrants for whom specialized training and anti-bias regulation enforcement can hasten the traditional catch-up process which has historically characterized the immigrant economic experience will continually increase. Additional research using more recent data will allow both the efficacy of the recommendations advanced and the persistence of the observed patterns to be tested.

Ahstract-The usual treatment of consumer demand theory assumes a solution to the demand equations with positive quantities of all commodities. This paper characterises a class called hierarchic demand systems for which only a subset of commodities are in the purchased set. The hierarchic linear expenditure svstem is used to illustrate interesting properties of such systems. The empirical section shows how the number of commodities purchased expands with total expenditure both in aggregate and for commodity groups. The data clearly establish the empirical importance of corner solutions and of the purchase decision in demand studies.

The hedonic travel cost method is a technique which reveals how much users are willing to pay for the individual characteristics of outdoor recreation sites. The prices of recreation attributes are estimated by regressing travel costs on the bundles of characteristics associated with each of several potential destination sites. The demand for site characteristics on site quality is then revealed by comparing the site selection of users facing different attribute prices. The technique is applied to value steelhead fish density in Washington State streams.

Regressions containing dummy variables are easily estimated by the familiar expedient of dropping out one of the categories but the result is often awkward to interpret. Since coefficients of dummy variables are determined only up to an additive constant, however, the equation can be transformed into a more easily interpretable form by adding on an appropriately chosen constant to each coefficient. For most regressions the constants should be chosen to force the mean of the transformed coefficients to equal 0. For logarithmic regressions the constants should be chosen to force the sum of the antilogs of the coefficients to equal 1. With logarithmic demand curves fitted to monthly data the resulting antilogs become monthly seasonal indexes. The technical procedure by which dummy variables are used to capture the influence of categorical variables in regression equations is generally familiar (see Goldberger (1964), Kmenta (1971), Johnston (1960), or, to go back near the beginning of things, Suits (1957)). In many cases, particularly where only two classes of observation are involved, results presented in the usual way involve no special problems of interpretation. For example, use of a dummy variable to distinguish pre-war from post-war behavior, or to measure the shift in a relationship during the period of a strike is readily understood by any reader. But where a set of several dummy variables is employed to measure the variation in behavior among a number of classes-regions, education groups, age brackets, and the like-there is often an important difference between the purely mechanical problem of fitting the regression and the quite different problem of presenting the results in the most effective fashion. The purpose of this paper is to call attention to this distinction, and to illustrate by simple examples.