AN EMPIRICAL CHARACTERIZATION OF THE DYNAMIC EFFECTS OF POLICE SPENDING ON VIOLENT AND PROPERTY CRIME

The study estimates the dynamic effects of shocks to police expenditures on measures of violent and property crime rates using annual U.S. state-level data for the period 1960–2015. We employ a structural panel VAR model and achieve identification by imposing the restriction that police spending responds to structural shocks to crime with at least a lag of 1 year. Results indicate that a shock to police spending leads to (a) persistent and significant decreases in violent and property crime rates and (b) significant and persistent negative impacts on crime rates in periods of high crime but little impacts in periods of low crime. Variance decompositions show that shocks to police spending account for moderate to large proportions of the variability of U.S. state-level crime rates. Our findings are robust across separate measures of violent and property crime rates, as well as to the inclusion of additional variables to the baseline panel VAR model. (JEL K42)     

PERCEIVED IMPACT OF DEFAMATION: AN EXPERIMENT ON THIRD-PERSON EFFECTS

This paper explores the intersection of libel law and communicationtheory that occurs when libel juries assess the effect of adefamatory communication on others. The third-person hypothesissuggests that people often assume others will be more affectedby potentially persuasive communications than they are themselves.An experiment was conducted in which students were exposed toa variety of defamatory newspaper articles. The results confirmedseveral predictions. First, readers estimated that others wouldbe more affected by defamatory messages than the readers themselveswould be. Second, this effect was magnified as the "others"became progressively more distant from these readers. Third,when the defamation was attributed to a negatively biased sourcethe effect was also accentuated: readers themselves discountedthe message, while assuming others would be even more influenced.It is suggested that courtroom assessments of the effects ofdefamatory communications on others may be influenced by suchthird-person perceptions.     

LOSS AVERSION AND MANAGERIAL DECISIONS: EVIDENCE FROM MAJOR LEAGUE BASEBALL

Previous research indicates that management changes are important events for organizations, partly because they lead to reversals of poor prior decisions. An unanswered question is why replacing the manager seems to be necessary for reversing poor decisions. One explanation is that managers have an irrational behavioral aversion to admitting mistakes (loss aversion). We test this hypothesis with a research design that mitigates many of the measurement problems associated with investment decisions in traditional corporate settings, and that allows us to distinguish agency cost from loss aversion as explanations. Using Major League Baseball data, we find that new managers, compared to continuing managers, are more likely to divest low‐performing players. Moreover, when the manager is new and the previous manager was responsible for acquiring a player who is underperforming, the likelihood of player divestiture is significantly higher relative to low performers acquired by earlier managers. Experience of the acquiring manager does not affect the likelihood that the manager retains a low performer, suggesting that it is loss aversion, and not career concerns, that motivates acquiring managers to retain low performers. The findings suggest that loss aversion plays a significant role in managerial decisions and managerial turnover. (JEL J6, L8, D8)     

INTERMEDIATE INFORMATION,LOSS AVERSION,AND EFFORT: EMPIRICAL EVIDENCE

The present article empirically explores the impact of intermediate information on contestants' effort. Data involving substituted soccer players of the German Bundesliga indicate only weak evidence of a negative effect of ex ante heterogeneity on effort; in contrast, intermediate information, measured by goal difference at the time of substitution, significantly affects effort. Players exert the greatest effort when their team is leading by one goal and reduce their effort when it is trailing. When intermediate information suggests the contest is already decided, players from both teams reduce effort. This behavior is in line with loss aversion, such that players weight potential losses more than potential gains and adjust their effort accordingly. (JEL Z22, J41, M54)     

THE INCOME EFFECTS OF THE SOURCES OF MONETARY CHANGE: AN HISTORICAL APPROACH*

This paper attempts to answer the question – does the way in which the quantity of money is introduced into the economic system matter or only the amount introduced? The question of the importance of the sources of monetary change has become a key issue between Monetarists and Neo-Keynesians. The approach of the paper is to compare different periods in U. S. monetary history over the time span 1834–1914, which exhibited different sources of monetary change, to see whether the source of monetary change significantly affected the relationship between money and income between these periods, as well as within them. In the majority of cases examined, the income effects of the sources of monetary change were found to be insignificant.     

AN EVALUATION OF A COGNITIVE THEORY OF RESPONSE-ORDER EFFECTS IN SURVEY MEASUREMENT

Previous research has documented effects of the order in whichresponse choices are offered to respondents using closed-endedsurvey items, but no theory of the psychological sources ofthese effects has yet been proposed. This paper offers sucha theory drawn from a variety of psychological research. Usingdata from a split-ballot experiment in the 1984 General SocialSurvey involving a variant of Kohn's parental values measure,we test some predictions made by the theory about what kindof response order effect would be expected (a primacy effect)and among which respondents it should be strongest (those lowin cognitive sophistication). These predictions are confirmed.We also test the "form-resistant correlation" hypothesis. Althoughcorrelations between items are altered by changes m responseorder, the presence and nature of the latent value dimensionunderlying these responses is essentially unaffected.     

AGGREGATE CONSUMPTION AND DEFICIT FINANCING: AN ATTEMPT TO SEPARATE PERMANENT FROM TRANSITORY EFFECTS

Many previous empirical studies of the Ricardian Equivalence Hypothesis have found a relatively high degree of future tax liability discounting such that current deficits appear to have relatively little or no influence on current consumption demand. However, the validity of these empirical estimates can be questioned as they may not have adequately distinguished between permanent and transitory income flows. This paper attempts to address this problem by using cycle-averaging as a simple method of capturing the permanent path of income over time. The empirical evidence generated in this paper rejects the strict debt neutrality proposition of the Ricardian Equivalence Hypothesis.     

DURKHEIM'S MACROFOUNDATIONS OF TIME: AN ASSESSMENT AND CRITIQUE

In this article, Durkheim's theory of time will be assessed in reference to his theory of transactions (organic solidarity). Specifically, Durkheim associated time with a metaphorical conception of the transaction that separated: (1) macrofoundations from microstates, and (2) external constraints from subjective states. This separation led to a conception of time as dominated by linear, rigid sequential, and categorical images. Counterposed to this metaphor are more dynamic, interpersonal, and cybernetic conceptions of temporality and transactions, which can be integrated with Durkheim's scheme to suggest another way of bridging the micro-macro distinction—through the use of time and temporality. This integration will be discussed in relation to five conceptions of time that will, in turn, be used to evaluate and critique Durkheim's macrofoundations. These conceptions are: (1) the evolutionary-transformational, (2) the categorical, (3) the iterative, (4) the rigid sequential, and (5) the negotiated sequential. The article concludes by suggesting that Durkheim's emphasis on the rigid sequential conception can inform and be informed by modern-day emphases on iterative and negotiated sequential conceptions.     

RISK AVERSION AND OVERBIDDING IN FIRST PRICE SEALED BID AUCTIONS: NEW EXPERIMENTAL EVIDENCE

Bidding above the risk‐neutral Nash equilibrium in first price sealed bid auctions has traditionally been ascribed to risk aversion. Later studies, however, offer other explanations and even argue that risk aversion plays no or a minor role. In a novel experimental design, we directly test the relationship between risk aversion and overbidding by systematically varying the distribution of risk attitudes in auction markets. We find a significant relationship between our measure of risk aversion and overbidding. (JEL D44, C91)     

THE EFFECTS OF MARKET PRACTICES IN OLIGOPOLISTIC MARKETS: AN EXPERIMENTAL EXAMINATION OF THE ETHYL CASE

This study reports on the performance of experimental markets characterized by industrial structure and practices similar to those at issue in the Ethyl case. The central question is whether price competition is affected by the practices of advanced notification of price changes and "most-favored nation" contracts or is determined by industrial organization and concentration alone.     

DIRECT AND INDIRECT EFFECTS OF RELIGION ON BIRTH TIMING:

The effect of being Catholic on first-birth timing (hereafter, birth timing) varies according to how the dependent variable is measured. When birth timing is measured as age at first birth, Catholics' is slower than non-Catholics'; measured as duration from marriage, Catholics' is more rapid. Structural equation models for discrete data showing these findings explain that Catholics marry later than non-Catholics. The direct effect of being Catholic is to speed birth timing, while the larger, indirect effect (through marital status) is to slow it.     

TAXONOMY AND THE EFFECTS OF FISCAL AND MONETARY POLICY

This paper reviews the development of monetarist theory and the circumstances under which emphasis shifted to "fiscalism," discusses Bent Hansen's view that the controversy is largely a sham dispute, and suggests two types of research needed to assess, historically and theoretically, the relative practical importance of the two approaches to reduction or elimination of economic instability.     

EFFECTS OF EXPOSURE ON PREVALENCE AND CUMULATIVE RELATIVE RISK: DIRECT AND INDIRECT EFFECTS IN A RECURSIVE HAZARD MODEL

This paper outlines decomposition methods for assessing how exposure affects prevalence and cumulative relative risk. Let     x     denote a vector of exogenous covariates and suppose that a single dimension of time   t   governs two event processes     T ₁  and   T ₂.    If the occurrence of the event     T ₁    determines entry into the risk of the event     T ₂,    then subgroup variation in     T ₁    will affect the prevalence     T ₂,    even if subgroups in the population are otherwise identical. Although researchers often acknowledge this phenomenon, the literature has not provided procedures to assess the magnitude of an exposure effect of     T ₁    on the prevalence of     T ₂.    We derive decompositions that assess how variation in exposure generated by direct and indirect effects of the covariates     x     affect measures of absolute and relative prevalence of     T ₂.    We employ a parametric but highly flexible specification for baseline hazard for the     T ₁  and   T ₂    processes and use the resulting parametric proportional hazard model to illustrate the direct and indirect effects of family structure when     T ₁    is age at first sexual intercourse and     T ₂    is age at a premarital first birth for data on a cohort of non-hispanic white U.S. women.     

HEALTH AND AMENITY EFFECTS OF GLOBAL WARMING

This study shows that climate change would probably reduce mortality in the United States by about 40,000 per year, assuming a 4.5° warmer climate—the IPCC best estimate of temperature change with a doubling of carbon dioxide. Benefits would extend to lower medical costs nationwide. Measuring willingness to pay by wage rates shows that people prefer warm climates and would be willing to give up between $30 billion and $100 billion annually for a 4.5° increase in temperatures. ( JEL Q25, J17, J31)     

THE STATE STREET MILE: AGE AND GENDER DIFFERENCES IN COMPETITION AVERSION IN THE FIELD

Gender differences in “competitiveness,” previously documented in laboratory experiments, are hypothesized to play a role in a wide array of economic outcomes. This paper provides evidence of competition aversion in a natural setting somewhere between the simplicity of a laboratory experiment and the full complexity and ambiguity of a labor market. The “State Street Mile” race offers both male and female participants a choice between two different levels of competition. Large, systematic age and gender differences are observed in the relationship between true ability and the decision to enter the more competitive race. Overall, qualified women and older runners are far less likely than qualified young men to enter a competitive race with prizes. However, the fastest young women unanimously enter the competitive race. Therefore, while we confirm age and gender differences in competitiveness in our field setting, the economic consequences to capable young women are rather small. (JEL J1, J7, M5)