Knowledge that Transforms

This paper presents a detailed examination of the effect of piece rates and other forms of incentive compensation on individual employee earnings. The study examines the impact of incentives on the earnings of over 100,000 employees in 500 firms within the footwear and men's and boys' clothing industries. Two distinct incentive effects are observed. First, incentive workers' earnings are more disperse than identical time workers' earnings within both firms and occupations. This greater variance is maintained with the addition of controls for heterogeneity of individual characteristics between the two sectors. Second, incentive workers receive an earnings premium, in part to compensate for the greater variation in their income, and partially as a result of an incentive- effort effect. The incentive earnings premium averages 14%, controlling for individual characteristics, occupational classification, and individual firms. Subsequent decomposition of the incentive-earnings premium reveals that the compensating differential for variation in earnings accounts for a minority of the incentive earnings premium. This supports the view that increased effort by incentive employees leads to relatively greater earnings.

This paper deploys the Granger method to determine the directions and patterns of causality between national income and total as well as various components of public expenditure. Empirical results based on the data for India (1950-81) suggest that while at the disaggregate level the causal process is rather diverse, it is essentially feed back-type at the aggregate level. It neither confirms the Wagnerian (Income Public Expenditure) nor the Keynesian (Public Expenditure National Income) view. The paper recommends that two variables be treated as jointly-dependent in both the public finance and macroeconometric studies.

In this paper we present a specification test for the Tobit model. Specifically, we test the Tobit model against the alternative of a two-part model in which one set of parameters determines the probability of a limit observation while a second set of parameters determines the distribution of the non-limit observations. An advantage of our test is that it is easily calculated from the Tobit residuals.

5. This finding may reflect both the fact that, relatively speaking, manufacturing industries do not "import" much R&D (though they "export" a lot to non-manufacturing industries) and that at the more disaggregated levels used by us Scherer's estimates are based on smaller samples and may be subject to more significant errors in variables problems.On the first point, see Scherer (1982b, p. 233).

A hstract-Estimates of the demand for the characteristics contained in a differentiated product such as housing can be based on hedonic regressions. However, previous studies have not dealt with several potential problems in such estimation. A more appropriate framework for the estimation is provided in this paper. Also data from a number of cities are used to eliminate the identification problem, and the endogeneity of the marginal prices derived from non-linear hedonic equations is considered in the estimation. The results on own and cross price elasticities, expenditure elasticities, and the effects of socio-economic vafiables accord well with expectations.

Journal Article A Note on “The Optimal Depletion of Exhaustible Resources” Get access Farhed A. Shah Farhed A. Shah University of Alberta Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 51, Issue 2, April 1984, Page 351, https://doi.org/10.2307/2297698 Published: 01 April 1984 Article history Received: 01 August 1983 Accepted: 01 October 1983 Published: 01 April 1984

This paper analyses a class of iterative planning procedures that can be applied in environments describable by the Leontief-Samuelson technology. Members of the class are distinguished by the extent of the communication of technical information from firms to the Centre. All members of the class are monotonic and convergent, but the speed and finiteness of convergence is shown to depend critically on the extent of the transfer of technical information throughout each procedure. The paper thus establishes a trade-off between the informational and performance properties of a class of resource allocation mechanisms, taking environmental coverage as given.

This paper provides a complete characterization of the welfare economics of employment contracts when workers are immobile in the ex post period. Necessary and sufficient conditions for constrained Pareto optimality are derived for economies with incomplete risk markets, two consumption goods and random production technologies in which: (a) workers can/cannot observe realizations of their employers ' revenue function (symmetric vs. asymmetric information), and in which; (b) employment contracts allow/preclude contingent wages and/or employment levels (flexible vs. rigid contracts). This taxonomic approach serves to identify the welfare implications of exogenous and endogenous contractual rigidities, and to isolate a class of externalities that is unique to economies with asymmetric information. The latter market failure is also present with "indexed " contracts when workers alone can observe realizations of their consumption goods prices (another form of asymmetric information). 1.

In this note we discuss necessary and sufficient conditions for dynamic path controllability, and show that the rank condition in Aoki (1975) is necessary but not sufficient unless impulse controls are admissible. It is demonstrated that in the special case of state space targets Tinbergen's concept of static controllability is equivalent to the dynamic concept of path controllability. For general linear systems conditions for path controllability depend on the choice of the admissible target and instrument space. In contrast to discrete-time models Tinbergen's original counting rule is necessary for path controllability for any target and instrument space in the continuous-time framework.