The 1990 Clean Air Act Amendments initiated the first large-scale use of the tradable permit approach to pollution control. The theoretical case for this approach rests on the assumption of an efficient market for emission rights. The authors' empirical analysis shows that the emission rights market created by the 1990 Amendments had become reasonably efficient by mid-1994. They also show that the auctions specified in the Amendments to jump-start trading had become a small part of the overall market. Finally, the authors demonstrate that the strategic bidding behavior discussed in the literature has had no effect on market prices.

America is a nation filled with guns and gunowners. Using the General Social Survey, we investigate who owns guns. Gunowners resemble neither criminals nor victims, although they do hunt. Waiting periods appear to have little effect on the overall level of gun ownership, but they do lower the propensity to own guns among people who have been arrested. Living around other gunowners increases gun ownership. Guns appear to be a substitute for the legal system, because gun ownership is highest among people who do not trust the government and where the availability of police is lowest. Guns also are associated with a general taste for violent retribution.

[Implicit taxes reflect the extent (if any) to which tax-favored assets bear lower pretax returns than do tax-disfavored assets of similar risk. Prior research on implicit taxes has met with mixed results, particularly in equity securities, because of the difficulty in separating tax effects from effects caused by cross-sectional differences in risk. We avoid problems of risk by essentially comparing each security to itself before and after an unexpected change in the manner in which dividends are taxed to corporate investors. We find strong evidence of implicit taxes in preferred stocks. Extensive testing using the same event date indicates that no similar implicit tax effect exists in common stocks.]

[This study investigates the relationship between insider trading and fraud. We find that in the presence of fraud, insiders reduce their holdings of company stock through high levels of selling activity as measured by either the number of transactions, the number of shares sold, or the dollar amount of shares sold. Moreover, we present evidence that a cascaded logit model, incorporating insider trading variables and firm-specific financial characteristics, differentiates companies with fraud from companies without fraud.]

The method of simulated scores (MSS) is presented for estimating limited dependent variables models (LDV) with flexible correlation structure in the unobservables. We propose simulators that are continuous in the unknown parameter vectors, and hence standard optimization methods can be used to compute the MSS estimators that employ these simulators. The first continuous method relies on a recursive conditioning of the multivariate normal density through a Cholesky triangularization of its variance-covariance matrix. The second method combines results about the conditionals of the multivariate normal distribution with Gibbs resampling techniques. We establish consistency and asymptotic normality of the MSS estimators and derive suitable rates at which the number of simulations must rise if biased simulators are used.

This paper studies tax reforms in a dynamic model of a global economy calibrated to current U.S. and European tax policies. World capital markets add consumption-smoothing and income-redistribution effects that alter closed-economy predictions. In the absence of taxes on foreign interest, welfare gains of eliminating U.S. income taxes are enlarged by up to 34 percent at the expense of European losses caused by transitional declines in consumption and leisure and a permanent capital outflow. In contrast, if foreign interest is taxed, the same tax reform reduces U.S. welfare 0.7 percent and increases European welfare 1.8 percent.