Among fraternal pairs from the Wisconsin Longitudinal Study_(1980), the authors model the effects of measured and unmeasured family back ground factors, mental ability, and schooling on occupational status and earnings. The models are estimated from incomplete data with corrections for measurement error, and they permit direct comparisons of within- and between-family regressions. The authors find no evidence that the effects of family background lead to a bias in the effect of mental ability on schooling or in the effects of schooling on occupational status or earnings.

Among fraternal pairs from the Wisconsin Longitudinal Study, we model the effects of measured and unmeasured family background factors, mental ability, and schooling on occupational status and earnings. The models are estimated from incomplete data with corrections for measurement error, and they permit direct comparisons of within- and between-family regressions. We find no evidence that the effects of family background lead to a bias in the effect of mental ability on schooling or in the effects of schooling on occupational status or earnings. Family background does have large independent effects on ability, schooling, and, to a lesser degree, socioeconomic attainment.

[The formulation of optimal policy in linear rational expectations models is studied using methods analogous to the classical design techniques utilized in linear systems engineering. Specifically, the policy-maker's present-value-like objective function is converted, using the convolution transform, to an equivalent frequency domain, "spectral utility" function. Then the residue calculus and Wiener-Hopf methods are used to maximize spectral utility through the choice of a complex function which represents a sequence of distributed lag coefficients to be applied to current and past values of instrument variables. The solution to this problem is a closed form expression for the decision rule of the dominant player in a particular type of linear-quadratic dynamic game.]

A hstract-This research investigates innovative behavior in the U.S. steel industry under the assumption that basic oxygen and large electric furnaces are competing technologies. The empirical model of innovation is based on recent theoretical research. The coefficients are estimated by a seemingly unrelated Tobit approach. The research finds innovation is strongly influenced by a demonstration effect. Adoption is also influenced by potential cost savings and technical progress. There is no evidence that large U.S. steel producers modernized more slowly than their smaller rivals. The large electric furnace becomes sufficiently attractive by 1980 that firms choose not to adopt basic oxygen.

A bstract-A portfolio choice model is formulated which focuses on the possibility of inflation hedging motives in housing demand in the 1970s. An asset demand equation is used to estimate the capitalization of inflation expectations into house prices through tax, mortgage, and hedging effects. The empirical results indicate that, even after accounting for tax and mortgage effects, the hedging motive was significant in bidding up house prices. One implication is that the tax effects of inflation may have been overstated in previous research that ignored inflation risk.

A bstract-A statistical model of household automotive transportation demand is developed which nests the Koyck distributed lag model and four alternatives as special cases. These various specifications are tested with data from the Panel Study of Income Dynamics. For households who changed residence during the observation period 1973-1978, the Koyck model is rejected in favor of a model which allows price and income effects to vary freely for two years prior to settling into a geometric declining pattern. The maximum single year income impact, for these households, is in the year following the income change. Prices appear to have an initial negative impact on miles driven followed by a strong positive impact in the third year. This latter effect may be related to the acquisition of a more fuel efficient vehicle stock.

Reviews the book "Lake Wobegon Days," by Garrison Keillor.