Journal Article Social Institutions, Imperfect Information, and the Distribution of Income: Reply Get access David Starrett David Starrett Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 92, Issue 1, February 1978, Pages 185–186, https://doi.org/10.2307/1886006 Published: 01 February 1978
I. Introduction, 261. — II. Conceptual framework, 262. — III. Market signaling, 264. — IV. Credentials models, 267. — V. Internal labor markets, 273. — VI. Social classes and the poverty cycle, 275. — VII. Job switching and the “lemons” principle, 279. — VIII. Conclusions, 282.
Journal Article Marginal Cost Pricing of Recursive Lumpy Investments Get access David A. Starrett David A. Starrett Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 2, June 1978, Pages 215–227, https://doi.org/10.2307/2297336 Published: 01 June 1978 Article history Received: 01 November 1975 Accepted: 01 January 1977 Published: 01 June 1978
Introduction, 673. — I. Existence of feasible proportional programs which are competitive, 677. — II. A nonswitching theorem, 679. — III. Intensity orders and the nonexistent factor-price frontier, 684.
[A general welfare framework is proposed for examining the behavior of a Tiebout type model in which consumers choose among a variety of communities providing local public services. General expressions are derived for measuring fiscal externalities and the second best nature of Tiebout taxation is explored.]
WE PROPOSE to study here the relationship between externalities, public goods, and returns to scale. The ideas behind this connection are certainly not new. Indeed, Marshall frequently spoke of external economies and diseconomies of scale. He had in mind situations in which expansion of one firm conferred external benefits on the industry and led to increased efficiency of the agggregate operations. The quantitative relationship has been explored from time to time in a number of specific contexts. For example, Arrow [1] showed that the presence of learning by doing (a public good) introduced an element of increasing returns into the aggregate relationships. We are after a general quantitative relationship. Our first task is to construct a general measure of returns to scale for multiproduct technologies. A starting point is the theory of homogeneous functions (see Henderson and Quandt [8] for a general discussion of this subject). The degree of returns to scale of a homogeneous function is naturally measured by its degree of homogeneity. This measure is used as a matter of course by economists (see for example, Intriligator [9]) and can be extended to multiproduct technologies. We certainly want our measure to agree with this one for homogeneous functions. However, it is very unlikely that the aggregate technology can be represented by a function which is homogeneous of any particular degree. Thus, we must find a measure which will apply to more general functions. In the next section we develop a measure which has some intuitive appeal and can be shown to be the ideal measure under some circumstances. It can be thought of as a generalization of the well known elasticity of production used by many authors (see, e.g., Carlson [2], Frisch [4] or Johansen [10]). We will show that our measure is a natural one from several different points of view. Having developed a measure, we will use it to quantify the returns to scale effect of public goods (or bads). This is done in Sections 5 and 6.