Structural Change and the Kaldor Facts in a Growth Model With Relative Price Effects and Non‐Gorman Preferences

U.S. data reveal three facts: (1) the share of goods in total expenditure declines at a constant rate over time, (2) the price of goods relative to services declines at a constant rate over time, and (3) poor households spend a larger fraction of their budget on goods than do rich households. I provide a macroeconomic model with non‐Gorman preferences that rationalizes these facts, along with the aggregate Kaldor facts. The model is parsimonious and admits an analytical solution. Its functional form allows a decomposition of U.S. structural change into an income and substitution effect. Estimates from micro data show each of these effects to be of roughly equal importance.     

Nutrition considerations in food selection

The importance of nutrition consideration to households in food selection is instrumental in the development of information programs to promote public health and to market healthy food. Using a national telephone survey of 2880 U.S. households, this study examines the role and influence of socio-economic characteristics and lifestyle on a household meal planner’s consideration of four dietary components in food selection. Household income, children in households, geographic location, and gender, age, education, and lifestyle of meal planners affected the consideration of dietary components in food selection. The results provide a basis for developing education programs that focus on the particular dietary consideration of identified demographic subgroups.     

Shocks,Stocks, and Socks: Smoothing Consumption Over a Temporary Income Loss

We investigate how households in temporarily straitened circumstances due to an unemployment spell cut back on expenditures and how they spend marginal dollars of unemployment insurance (UI) benefit. Our theoretical and empirical analyses emphasize the importance of allowing for the fact that households buy durable as well as non‐durable goods. The theoretical analysis shows that in the short run households can cut back significantly on total expenditures without a significant fall in welfare if they concentrate their budget reductions on durables. We then present an empirical analysis based on a Canadian survey of workers who experienced a job separation. Exploiting changes in the unemployment insurance system over our sample period we show that cuts in UI benefits lead to reductions in total expenditure with a stronger impact on clothing than on food expenditures. Our empirical strategy allows that these expenditures may be non‐separable from employment status. The effects we find are particularly strong for households with no liquid assets before the spell started. These qualitative findings are in precise agreement with the theoretical predictions. (JEL: D11, D12, D91, J65)     

THE TAX LITIGATION DECISION: AN ANALYSIS OF THE SMALL CLAIMS DIVISION OF THE U.S. TAX COURT*

One of the more difficult but intriguing problems in the tax field is the decision of when (and how) to settle tax disputes with the Internal Revenue Service (IRS) and when (and how) to litigate. Research in this area of decision making is limited and has concentrated on the probability of winning in the judicial system. This paper examines the tax litigation decision for suits in the Small Claims Division of the U.S. Tax Court. Four examples are presented which involve varying degrees of information regarding the likelihood of a settlement and differing risk attitudes. The maximum amount the taxpayer should be willing to spend in pursuing litigation is derived for each case.     

The Good,the Bad,and the Ugly of Corporate Personhood and Corporate Political Spending: Implications for Shareholders

In the Citizens United v. Federal Election Commission (2010) decision, the Supreme Court rendered an opinion verifying the legality of unions and corporations to spend funds from their general treasuries to finance independent expenditures related to political and electioneering communications. Such speech and communications are constitutionally protected by the First Amendment, according to Justice Kennedy, who wrote the majority opinion (558 U.S. 22, 2010). The dissenting opinion questioned whether such rights should accrue to corporations, since corporations differ from constitutionally‐protected “natural persons” (dissent, 558 U.S. 50 at 2, 2010; Johnson 2011 ). The decision ignited a firestorm of controversy, which renewed interest in the legal concept of corporate personhood. This article reviews key findings in the Citizens United v. FEC case, then describes the historical, legal, and theoretical concepts of corporate personhood with the goal of unbundling the nuanced consequences of the majority and dissenting opinions of the Citizens United v. FEC case. The analysis then turns to a shareholder perspective, with particular emphasis on the implications for shareholders’ rights and responsibilities. It concludes with an exploration of options available to shareholders concerned about how to respond when a corporation uses its resources to communicate political opinions at odds with their own.     

Treating and Drinking Well Water in the Presence of Health Risks from Arsenic Contamination: Results from a U.S. Hot Spot

The Safe Drinking Water Act of 1974 regulates water quality in public drinking water supply systems but does not pertain to private domestic wells, often found in rural areas throughout the country. The recent decision to tighten the drinking water standard for arsenic from 50 parts per billion (ppb) to 10 ppb may therefore affect some households in rural communities, but may not directly reduce health risks for those on private wells. The article reports results from a survey conducted in a U.S. arsenic hot spot, the rural area of Churchill County, Nevada. This area has elevated levels of arsenic in groundwater. We find that a significant proportion of households on private wells are consuming drinking water with arsenic levels that pose a health risk. The decision to treat tap water for those on private wells in this area is modeled, and the predicted probability of treatment is used to help explain drinking water consumption. This probability represents behaviors relating to the household's perception of risk.     

Genetically Modified Organisms and the U.S. Retail Food Labeling Controversy: Consumer Perceptions,Regulation, and Public Policy

In this article, we address the public issue of mandatory Genetically Modified Organism (GMO) retail food labeling in the U.S., first by reviewing the policy arguments both in support and against labeling food containing GMOs; second, by describing the existing U.S. federal regulatory system pertaining to GMO labeling, and why it does not presently require labeling of food containing GMOs; third, by reviewing and interpreting the results of studies of American consumer attitudes toward mandatory GMO retail food labeling; fourth, by evaluating, through the utilization of issue life cycle analysis in the nonmarket environment, where the issue of GMO retail food labeling stands in the national public policy process; fifth, summarizing the state of scientific evidence addressing the safety of GMO foods and the existing regulatory and public policy environment for this issue; and sixth, offering legislative and litigation strategies for the mainstream food nonmarket strategy framework to formally assess the GMO industry to protect their interests and those of American consumers not concerned with GMO food ingredients, while offering a voluntary labeling strategy for firms responding to and recognizing the “rights” of American consumers who “choose” to purchase non‐GMO food products.     

An Agent‐Based Model for Pathogen Persistence and Cross‐Contamination Dynamics in a Food Facility

We used an agent‐based modeling (ABM) framework and developed a mathematical model to explain the complex dynamics of microbial persistence and spread within a food facility and to aid risk managers in identifying effective mitigation options. The model explicitly considered personal hygiene practices by food handlers as well as their activities and simulated a spatially explicit dynamic system representing complex interaction patterns among food handlers, facility environment, and foods. To demonstrate the utility of the model in a decision‐making context, we created a hypothetical case study and used it to compare different risk mitigation strategies for reducing contamination and spread of Listeria monocytogenes in a food facility. Model results indicated that areas with no direct contact with foods (e.g., loading dock and restroom) can serve as contamination niches and recontaminate areas that have direct contact with food products. Furthermore, food handlers’ behaviors, including, for example, hygiene and sanitation practices, can impact the persistence of microbial contamination in the facility environment and the spread of contamination to prepared foods. Using this case study, we also demonstrated benefits of an ABM framework for addressing food safety in a complex system in which emergent system‐level responses are predicted using a bottom‐up approach that observes individual agents (e.g., food handlers) and their behaviors. Our model can be applied to a wide variety of pathogens, food commodities, and activity patterns to evaluate efficacy of food‐safety management practices and quantify contamination reductions associated with proposed mitigation strategies in food facilities.     

Risk-Based Decision Making for Terrorism Applications

This article describes the anti-terrorism risk-based decision aid (ARDA), a risk-based decision-making approach for prioritizing anti-terrorism measures. The ARDA model was developed as part of a larger effort to assess investments for protecting U.S. Navy assets at risk and determine whether the most effective anti-terrorism alternatives are being used to reduce the risk to the facilities and war-fighting assets. With ARDA and some support from subject matter experts, we examine thousands of scenarios composed of 15 attack modes against 160 facility types on two installations and hundreds of portfolios of 22 mitigation alternatives. ARDA uses multiattribute utility theory to solve some of the commonly identified challenges in security risk analysis. This article describes the process and documents lessons learned from applying the ARDA model for this application.     

MANAGERIAL DECISION MAKING UNDER INTRANSITIVE CONDITIONS: AN INTERNATIONAL STUDY OF THE VOTER'S PARADOX

Researchers and scholars have been concerned for many years with the normative aspects of amalgamating individual preferences to form a group decision. The present paper studies how managers actually make decisions involving intransitive preference functions by examining how the Voter's Paradox Conflict (VPC) is actually resolved by homogeneous groups of subjects from five different populations (Denmark, England, Switzerland, U.S. Private, and U.S. Military). The results showed that level of cooperation, the reward structure (real versus imaginary money), and experience with the VPC are the major factors relating to the solution obtained. Nationality differences explained little of the variance in decision outcomes. Intrasitivity in preferences seems to be handled similarly by executives in the countries studied. Interpretations are drawn in the context of cooperative and competitive decision theory and for cross-cultural decision research.     

Forty Years of Food Safety Risk Assessment: A History and Analysis

Before the founding of the Society for Risk Analysis (SRA) in 1980, food safety in the United States had long been a concern, but there was a lack of systematic methods to assess food-related risks. In 1906, the U.S. Congress passed, and President Roosevelt signed, the Pure Food and Drug Act and the Meat Inspection Act to regulate food safety at the federal level. This Act followed the publication of multiple reports of food contamination, culminating in Upton Sinclair's novel The Jungle, which highlighted food and worker abuses in the meatpacking industry. Later in the 20th century, important developments in agricultural and food technology greatly increased food production. But chemical exposures from agricultural and other practices resulted in major amendments to federal food laws, including the Delaney Clause, aimed specifically at cancer-causing chemicals. Later in the 20th century, when quantitative risk assessment methods were given greater scientific status in a seminal National Research Council report, food safety risk assessment became more systematized. Additionally, in these last 40 years, food safety research has resulted in increased understanding of a range of health effects from foodborne chemicals, and technological developments have improved U.S. food safety from farm to fork by offering new ways to manage risks. We discuss the history of food safety and the role risk analysis has played in its evolution, starting from over a century ago, but focusing on the last 40 years. While we focus on chemical risk assessment in the U.S., we also discuss microbial risk assessment and international food safety.     

Do Users Ignore Spatial Data Quality? A Decision‐Theoretic Perspective

Risk analysis (RA) has been proposed as a means of assessing fitness for use of spatial data but is only rarely adopted. The proposal is that better decisions can be made by accounting for risks due to errors in spatial data. Why is RA so rarely adopted? Most geographical information science (GISc) literature stresses educational and technical constraints. In this article we propose, based on decision theory, a number of hypotheses for why the user would be more or less willing to spend resources on RA. The hypotheses were tested with a questionnaire, which showed that the willingness to spend resources on RA depends on the presence of feedback mechanisms in the decision‐making process, on how much is at stake, and to a minor extent on how well the decision‐making process can be modeled.     

The influence of retailing trends on the food industry

This article is concerned with retailing trends and the food industry with reference to countries of the EEC, Sweden and the U.S.A. The author examines trends in various sectors of the food market, relating U.S. and European activity and considers the influences of the future growth of mass merchandisers on manufacturers and suppliers.     

Flexible manufacturing systems performance in U.S. automotive manufacturing plants: a case study

Flexible manufacturing systems (FMS) philosophy is a key weapon in achieving global manufacturing competitiveness. It encompasses a wide range of dimensions to improve all aspects of operational performance metrics. The aim of the study is to examine the current state of flexibility adoption in U.S. automotive manufacturing facilities and its impact on operational performance metrics. It utilizes survey questionnaire developed based on previous work in U.S. manufacturing industry. The survey was originally distributed to 420 facility managers in the U.S. domestic automotive industry. It was revealed that 70% of the respondents had implemented all 15 flexibility dimensions listed in the questionnaire. The data analysis conducted shows that implementation of certain flexibility dimensions will lead to significant improvement in specific operational performance metrics. This considerable finding can be used as a guide for manufacturing managers to achieve certain objectives in operational performance improvement in a rapidly changing environment.     

Effects of the Canada-U.S. Trade Agreement on U.S. agricultural exports

This paper investigates the effects of the Canada-U.S. Trade Agreement (CUSTA) on U.S. exports of agricultural products. Econometric analysis found that CUSTA has had a large impact on many U.S. agricultural export categories. All of the consumer-oriented products (except wine and beer), five of the intermediate products, and four of the bulk products had significant CUSTA effects. It is clear that the CUSTA effects have been larger for consumer-oriented food products. There is also evidence that U.S. affiliate sales in Canada have stimulated U.S. exports of consumer-oriented products and intermediate products.     

Risk,Media, and Stigma at Rocky Flats

Public responses to nuclear technologies are often strongly negative. Events, such as accidents or evidence of unsafe conditions at nuclear facilities, receive extensive and dramatic coverage by the news media. These news stories affect public perceptions of nuclear risks and the geographic areas near nuclear facilities. One result of these perceptions, avoidance behavior, is a form of "technological stigma" that leads to losses in property values near nuclear facilities. The social amplification of risk is a conceptual framework that attempts to explain how stigma is created through media transmission of information about hazardous places and public perceptions and decisions. This paper examines stigma associated with the U.S. Department of Energy's Rocky Flats facility, a major production plant in the nation's nuclear weapons complex, located near Denver, Colorado. This study, based upon newspaper analyses and a survey of Denver area residents, finds that the social amplification theory provides a reasonable framework for understanding the events and public responses that took place in regard to Rocky Flats during a 6-year period, beginning with an FBI raid of the facility in 1989.     

Analysis of the Treatment, by the U.S. Department of Energy, of the FEP Hydrothermal Activity in the Yucca Mountain Performance Assessment

The U.S. Code of Federal Regulations, 10 CFR Part 63, stipulates that the expected performance of the geological high-level nuclear waste repository must be demonstrated through a total system performance assessment (TSPA). The TSPA represents an analysis that identifies all features, events, and processes (FEPs) that might affect the disposal system and examines the effects of the identified FEPs upon the performance of the system. Secondary minerals from the thick unsaturated zone of Yucca Mountain were deposited from waters with temperatures up to 70-90 degrees C. U-Pb dating constrained the ages of the elevated temperatures to the period between 10 and 5-6 million years ago. Relatively youthful circulation of thermal waters (hydrothermal activity) would be of concern for the safety of the disposal facility. A phenomenological model was advanced by the U.S. Department of Energy (DOE), which proposed that the minerals were deposited by infiltrating meteoric waters that were heated upon contact with the bedrock; it was hypothesized that the latter was conductively heated by a shallow silicic magma body. The model rendered processes responsible for elevated water temperatures inconsequential for the safety of the proposed nuclear waste facility. However, attempts by DOE at validating the model by means of numeric thermal simulations and analogue system observations were unsuccessful. Regulations specify two criteria for exclusion of a FEP from consideration in the TSPA: low probability and low consequence. The lack of a plausible phenomenological model makes it impossible to apply either of these two criteria to the FEP Hydrothermal Activity. Despite the lack of a valid criterion for exclusion, it was excluded from the TSPA. Both the development of DOE's thermal model and the formal FEP analysis were associated with deviations from DOE's quality assurance regulations.     

A Quantitative Theory of Unsecured Consumer Credit with Risk of Default

We study, theoretically and quantitatively, the general equilibrium of an economy in which households smooth consumption by means of both a riskless asset and unsecured loans with the option to default. The default option resembles a bankruptcy filing under Chapter 7 of the U.S. Bankruptcy Code. Competitive financial intermediaries offer a menu of loan sizes and interest rates wherein each loan makes zero profits. We prove the existence of a steady‐state equilibrium and characterize the circumstances under which a household defaults on its loans. We show that our model accounts for the main statistics regarding bankruptcy and unsecured credit while matching key macroeconomic aggregates, and the earnings and wealth distributions. We use this model to address the implications of a recent policy change that introduces a form of “means testing” for households contemplating a Chapter 7 bankruptcy filing. We find that this policy change yields large welfare gains.     

A case of wrongful use of quality management. Summit Health, Ltd., v. Pinhas

Summit Health, Ltd., v. Pinhas liberalized the jurisdiction of the Sherman Antitrust Act to include cases of intrastate hospital credentialing. The U.S. Supreme Court decision eased the requirements for plaintiffs to sue when they perceived that health care organizations were acting as monopolies. The court removed the defense that a plaintiff had to prove that the decision of a health care organization affected interstate commerce for the case to be heard in court. Important as the case is in antitrust law, however, greater lessons can be gained by health care organizations from analyzing the events that led to the lawsuit.     

Global Maize Trade and Food Security: Implications from a Social Network Model

In this study, we developed a social network model of the global trade of maize: one of the most important food, feed, and industrial crops worldwide, and critical to food security. We used this model to analyze patterns of maize trade among nations, and to determine where vulnerabilities in food security might arise if maize availability was decreased due to factors such as diversion to nonfood uses, climatic factors, or plant diseases. Using data on imports and exports from the U.N. Commodity Trade Statistics Database for each year from 2000 to 2009 inclusive, we summarized statistics on volumes of maize trade between pairs of nations for 217 nations. There is evidence of market segregation among clusters of nations; with three prominent clusters representing Europe, Brazil and Argentina, and the United States. The United States is by far the largest exporter of maize worldwide, whereas Japan and the Republic of Korea are the largest maize importers. In particular, the star‐shaped cluster of the network that represents U.S. maize trade to other nations indicates the potential for food security risks because of the lack of trade these other nations conduct with other maize exporters. If a scenario arose in which U.S. maize could not be exported in as large quantities, maize supplies in many nations could be jeopardized. We discuss this in the context of recent maize ethanol production and its attendant impacts on food prices elsewhere worldwide.