There has been disagreement in recent years' about the merits of empirical studies, pioneered by Ridker and Henning (R-H) in this Review,2 measuring the relationship between property values and air pollution within a metropolitan area. In these studies multiple regressions of property values on air pollution and other housing characteristics, and sometimes on income, are performed for crosssectional data within a metropolitan area. Unfortunately, the debate has centered on the prediction of changes in aggregate property values in response to changes in overall pollution levels. This has obscured the central issue, which is the measurement of the costs of pollution from the point of view of willingness-to-pay.3 Where the discussion has touched on this question, it has failed to recognize a straightforward argument by which the use of these empirical studies for cost-benefit analysis can be justified. Anderson and Crocker (A-C) and Polinsky and Shavell (P-S) both use the unrealistically strong assumption of identical tastes to argue that the regression can identify the parameters of a demand curve.4 Freeman (1971, p. 416) correctly points out that, in the real world, such a regression cannot isolate demand from supply elements; but he apparently does not realize how much information can be culled from the properties of the resulting equilibrium situation.5

THE age profile of individual asset holdings is frequently supposed to follow a hump pattern, increasing during the working lifetime and declining in later years. The theoretical explanation of such a relationship is firmly established, since it is a characteristic feature of life-cycle saving models. However, the empirical evidence has never been critically examined. A number of studies based on sample survey information have been regarded as confirming this hump pattern, but on closer examination the evidence is far from conclusive. Moreover the survey results conflict fundamentally with alternative estimates of the age-wealth relationship derived from estate tax data. This paper begins in section II by examining this basic conflict. In the following section the relevance of cross-section studies is questioned, and a cohort is identified whose lifetime wealth characteristics can be studied. The sequence of observed wealth distributions for this cohort is obtained by selecting successive ten years age groups from the Estate duty statistics at intervals of a decade. Section IV is devoted to an analysis of the variation in the composition of any cohort as it ages. These composition changes arise from the fact that wealthier individuals have a lower mortality rate and therefore tend to become a larger proportion of the surviving cohort independently of accumulation behaviour. In these circumstances the characteristics of the representative individual will not necessarily correspond to the representative behaviour of the group. It is, however, possible to correct for this change in composition so that the empirical estimates can be compared with the predictions of economic theory.

The principal problem with previous estimates of the effect of welfare programs on labor supply' is that the specification of the labor supply equation misrepresents the intercept and slope of the budget line for low-income individuals. Labor supply has typically been posited to be a function of the market wage rate unadjusted for the welfare tax rate and other income2 including actual welfare benefits.

Journal Article Spatial Equilibrium, the Theory of Rents, and the Measurement of Benefits from Public Programs: A Comment Get access A. Myrick Freeman, III A. Myrick Freeman, III Bowdoin College Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 89, Issue 3, August 1975, Pages 470–473, https://doi.org/10.2307/1885264 Published: 01 August 1975

The Stable (or Pareto-Lévy) distribution has been of considerable interest in describing the behavior of security prices ever since the important work by Mandelbrot [6], [7] and Fama [1]. The aforementioned contributions focused on the empirical hypothesis that security price data are better fitted by theoretical distributions with infinite variance rather than finite variance. Specifically, in the case of Stable distributions, the “characteristic exponent” is less than two, and the data are not adequately fitted by a normal distribution. Remarkably, however, although almost the entire body of literature addressing empirical questions with respect to the distribution of security prices investigages the behavior of the (natural) logarithm of security price relatives, to this author's knowledge no paper exists which analyzes the portfolio choice implications of the assumption that the logarithm of the asset returns has a symmetric Stable distribution with infinite variance. Thus, in Fama [2], Samuelson [10], and Ziemba [12], where the problem of selecting an optimal portfolio in Stable markets is the object of concern, one finds that it is assumed that the price-relatives (returns) have a Stable distribution; this rather than the logarithm of the price relatives. And it should be noted that none of these authors suggests that the untransformed price-relatives are better-fitted by a symmetric Stable distribution as compared with the logarithm of the price-relatives.

Abstract Reviews the book "Cost Estimating for Engineering and Management," by Phillip F. Ostwald.

Abstract Reviews the book "Cost Accounting: Principles and Managerial Applications," 3rd ed., by Gerard R. Crowningshield and Kenneth A. Gorman.

Abstract Reviews the book 'Accounting for Social Goals: Budgeting and Analysis of Nonmarket Projects,' by John Leslie Livingstone and Sanford C. Gunn.

Abstract Reviews the book "Fund Accounting: Theory and Practice," by Edward S. Lynn and Robert J. Freeman.