Knowledge that Transforms

[The "new urban economics" is rather explicit with respect to demand for housing but the supply of housing is usually treated in a very cursory fashion. Housing is normally regarded as a one-dimensional good and equilibrium in a city is mostly concerned with the land market rather than the housing market. This paper introduces, on the supply side, the concept of design parameters of a building and, on the demand side, the concept of housing attributes, i.e. multi-dimensional housing. By means of structural analysis an engineering cost function is obtained in terms of design parameters. Due to housing attributes, the demand for housing and the supply of housing, the latter being based on the engineering cost function, should be derived simultaneously. Equilibrium is defined on the housing market rather than on the land market. It is shown how in equilibrium housing rent, land rent design parameters on buildings, and population density all depend on distance from the center of the city and on parameters of the problem: income, city population, diameter of the city, and technical coefficients.]

[This paper addresses the problem of estimating unknown regression coefficients when erroneous data and other violations of the standard assumptions are possible. An estimator which has a limited sensitivity to these departures from the assumptions is presented, and some of its properties are derived. This estimator is shown to have a certain efficiency property relative to other estimators with the same sensitivity to erroneous data.]

AbstractRecursive equilibrium theory is extended and generalized. Optimality of equilibria and supportability of optima are established in a direct way. Four economic applications are reformulated as recursive competitive equilibria and analyzed.

[This paper provides a general proof of the existence of a proportional price with the interest rate strictly greater than the growth rate associated with any efficient proportional program in the polyhedral technology. Proofs for similar theorems are also given for the programs satisfying the regularity condition in other technologies.]

ordinal approach to welfare comparisons. Given a poverty line, a priori, this index has several appealing properties: (i) it can be computed using readily available information, (ii) it is sensitive to the percentage of the population that is below the line (the head-count ratio), (iii) it depends on the income of the average poor person, and (iv) it depends on the amount of inequality among the poor themselves. In this note, we offer an alternative interpretation and a generalization of Sen's index as an index. These are indices, usually of inequality, that are exact for social evaluation functions. Each index is thus implied by and implies at least one social evaluation function. Essential to the construction of these ethical indices is the notion of the

[We consider the intertemporal problem of optimally consuming a natural resource and exploring for new sources of supply of that resource. Resource consumption yields social utility while the exploration effort controls the uncertainty in the timings of discoveries as well as their magnitudes. The objective is to choose an optimal consumption and exploration policy so as to maximize the expected discounted utility of consumption net of the exploration cost over an infinite planning horizon. We present a controlled storage process model of the problem and under reasonable conditions we characterize the existence and the properties of optimal policies and prices.]

[Using duality theory I show that the Tobin-Houthakker conjecture that a reduction in the ration of one good will increase the consumption of unrationed substitutes and diminish the demand for unrationed complements may not hold in disequilibrium situations.]