The fatality and injury costs of expenditures

All production activities generate health risks to workers. This article employs input-output analysis in conjunction with job-risk data by industry to construct measures of the direct and indirect risks imposed by expenditures. Both fatalities and nonfatal injuries (which include illnesses) are considered. The occupational-risk component of expenditures is generally in the range of 3–4% of costs, with nonfatal injuries contributing the larger share. Expenditure levels that generate a fatality or a lost-workday injury are provided by industry, as are a variety of other measures that consider both created and avoided risks pertinent to risk-risk analyses and cost-effectiveness analyses, respectively.Viscusi's research was supported by EPA Cooperative Agreement number CA-814-388-02 with Duke University. Zeckhauser's research was supported by grant number SES91-11056 from the Decision, Risk and Management Science division of the National Science Foundation. Wassily Leontief and Mark Dreyfus provided excellent input. Please direct all correspondence to Professor Viscusi.     

Risk communication and attitude change: Taiwan's national debate over nuclear power

This article reports the first analysis of the effects of a national risk-communication program that disseminated the facts about the risks associated with nuclear power plants. It relies upon a unique set of circumstances in Taiwan. The state-operated power corporation sponsored a national debate in an effort to promote greater public consensus on the need for a fourth nuclear power plant. This analysis uses statedrisk perceptions and attitudes toward the plant to evaluate the effect of the debate. The results are based on a panel of households interviewed before and after the debate. They suggest that the debate did not reduce respondents' perceived risks from nuclear power and had little perceptible effect on the attitude changes of our sample. The only systematic influences detected on the observed attitude changes imply that respondents reacted counter to the debate's objectives, and thus the debate seems likely to continue to erode support for the new plant.The authors are, respectively, Associate Research Fellow, Institute of Economics, Academic Sinica; and University Distinguished Professor of Economics, North Carolina State University, and Resources for the Future University Fellow. Thanks are due Jin Long Liu for his excellent research assistance in developing these results, to Kip Viscusi for constructive comments, and to Barbara Scott for her helpful editing of earlier drafts of this article. Partial support for Smith's research was provided by National Science Foundation grant SES-8911372.     

Utility of Gambling when Events are Valued: an Application of Inset Entropy

The present theory leads to a set of subjective weights such that the utility of an uncertain alternative (gamble) is partitioned into three terms involving those weights—a conventional subjectively weighted utility function over pure consequences, a subjectively weighted value function over events, and a subjectively weighted function of the subjective weights. Under several assumptions, this becomes one of several standard utility representations, plus a weighted value function over events, plus an entropy term of the weights. In the finitely additive case, the latter is the Shannon entropy; in all other cases it is entropy of degree not 1. The primary mathematical tool is the theory of inset entropy. The work of Luce and Marley was supported in part by National Science Foundation grant SES-0452756 to the University of California, Irvine, and by the Natural Sciences and Engineering Research Council (NSERC) of Canada Discovery Grant 8124 to the University of Victoria for Marley. That of Ng was supported in part by the NSERC of Canada Discovery Grant 8212. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation.     

Discounting and the evaluation of lifesaving programs

The evaluation of lifesaving programs whose benefits extend into the future involves two discounting issues. The intragenerational discounting problem is how to express, in age-j dollars, reductions in an individual's conditional probability of dying at some future age k. Having discounted future lifesaving benefits to the beginning of each individual's life, one is faced with the problem of discounting these benefits to the present—the intergenerational discounting problem. We discuss both problems from the perspectives of cost-benefit and costeffectiveness analyses. These principles are then applied to lifesaving programs that involve a latency period.The authors are, respectively, Associate Professor of Economics, Univesity of Maryland and Senior Fellow, Resources for the Future; and Senior Fellow and Vice President, Resources for the Future. We thank the National Science Foundation for their support under grant DIR-8711083.     

The structure of random utility models

I am grateful to Joseph B. Kadane for numerous constructive suggestions offered during discussions of this research. The financial sponsorship of the U.S. Department of Transportation through grant DOT-OS-4006 is also acknowledged. The opinions and conclusions expressed herein are solely those of the author.Assistant Professor of Economics, School of Urban and Public Affairs, Carnegie-Mellon University.     

Comparing the effectiveness of market-based and choice-based environmental policy

This paper examines the welfare effects of market-based (permits, taxes) and choice-based (voluntary emission certifications, eco-labels) environmental policy. My analysis shows that choice-based eco-labels can be a welfare-improving policy. However, these welfare gains occur through “green” consumer surplus as opposed to (social benefiting) emission reductions while emission taxes and permits increase welfare by causing “dirtier” or less efficient firms to leave the market. Although greater environmental conscientiousness makes eco-labeling an effective tool to improve overall welfare, eco-labels are not as effective at reducing environmental damage relative to traditional market-based emission taxes or permits. Using research on consumer preferences and previously implemented environmental policies, the effectiveness of traditional emission taxes and eco-labeling programs are estimated. The results suggest that consumers participation in the eco-labeled product market benefits producers, but overall, eco-labeling programs are an inefficient policy tool relative to traditional market-based emission taxes or permits.     

Rank- and sign-dependent linear utility models for finite first-order gambles

Finite first-order gambles are axiomatized. The representation combines features of prospect and rank-dependent theories. What is novel are distinctions between gains and losses and the inclusion of a binary operation of joint receipt. In addition to many of the usual structural and rationality axioms, joint receipt forms an ordered concatenation structure with special features for gains and losses. Pfanzagl's (1959) consistency principle is assumed for gains and losses separately. The nonrational assumption is that a gamble of gains and losses is indifferent to the joint receipt of its gains pitted against the status quo and of its losses against the status quo.Reprints may be obtained from either author. Luce's work was supported, in part, by the National Science Foundation grant IRI-8996149 to the University of California, Irvine.     

A Learning-Efficiency Explanation of Structure in Language

This paper proposes a learning-efficiency explanation of modular structure in language. An optimal grammar arises as the solution to the problem of learning a language from a minimal number of observations of instances of the use of the language. Agents face symmetry constraints that limit their ability to make a priori distinctions among symbols used in the language and among objects (interpreted as facts, events, speakers intentions) that are to be represented by messages in the language. It is shown that if it is commonly known that the object space is modular and messages are strings, then modularity of the language is sufficient and (essentially) necessary for learning efficiency. Journal of Economic Literature Classification Number: C72.I am grateful to Hsueh-Ling Huynh, Bart Lipman, Ariel Rubinstein and Birger Wernerfelt for stimulating discussions and comments. Many thanks are due to the anonymous referee for suggestions that have helped to improve the focus and presentation of the paper. I have benefitted from comments by seminar participants at Arizona State University, Boston University, the University of California-San Diego, the University of Pittsburgh, the Wissenschaftszentrum Berlin für Sozialforschung (WZB), the Midwest Mathematical Economics Meetings, and the Summer in Tel Aviv (SITA). This research was supported by a Grant from the National Science Foundation.     

Economic,social and environmental effects of reducing dairy methane emissions through market-based policies: An application of the Livestock Policy Simulation Model

Several technological approaches to mitigate methane dairy emissions are available; however, assuming that technological change alone generates the necessary incentives to accelerate emissions reduction is risky. Without adequate market signals, producers might choose not to use the technologies available or to the desired extent. Addressing this economic problem requires altering producers’ and consumers’ behaviour by introducing incentives or constraints. Employing the livestock policy simulation model, we examine the effects of reducing methane emissions in the dairy sector under different market-based policy instruments. We used the primary dairy sector in Uruguay as a case study. The results show that a policy mix combining a set of market-based instruments can be more effective than a single policy instrument alone.     

The Reprofessionalization of Social Work: Collaborative Approaches for Achieving Professional Recognition

Correspondence to Dr Karen Healy, School of Social Work and Applied Human Sciences, Education Building, Level 7, The University of Sydney, Australia. E-mail: k.healy{at}social. uq.edu.au or Dr Gabrielle Meagher, Political Economy, School of Economics and Political Science, The University of Sydney, Australia. E-mail: G.Meagher{at}econ.usyd.edu.au Summary Contemporary practice theories assume that social workers havethe capacity to enact their work as a thoughtful, analytic andcreative activity, and that these capacities are, or shouldbe, recognized and supported in human services organizations.However, emerging evidence from the front line of social servicespractice suggests that, despite public policy rhetoric emphasizingservice quality, the practice environment is characterized bya lack of support for, if not outright hostility towards, professionalsocial work. In this paper we will consider how the social workprofession can collectively improve the recognition of theirwork as professional activity. We discuss the deprofessionalizationof social services work and analyse collaborative strategiesfor achieving recognition, specifically the formation of professionalassociations and trade unions. We will focus our discussionon emerging convergences between new professionalism and thenew political unionism. Finally, we consider how these new developmentscan enhance the industrial and cultural recognition of humanservices work.     

Recent developments in modeling preferences: Uncertainty and ambiguity

In subjective expected utility (SEU), the decision weights people attach to events are their beliefs about the likelihood of events. Much empirical evidence, inspired by Ellsberg (1961) and others, shows that people prefer to bet on events they know more about, even when their beliefs are held constant. (They are averse to ambiguity, or uncertainty about probability.) We review evidence, recent theoretical explanations, and applications of research on ambiguity and SEU.Thanks to Jonathan Baron, James Dow, Peter Fishburn, Itzhak Gilboa, Gordon Hazen, Howard Kunreuther, Tomas Phillipson, David Schmeidler, Amos Tversky, the editor, and several anonymous referees for corrections and helpful comments. Camerer's contribution to this work was supported by the National Science Foundation, grant no. SES 88-09299. Weber's contribution was supported by the Deutsche Forschungsge-meinschaft, grant no. WE 993/5-1.     

Violations of dominance in pricing judgments

The dominance principle states that the judged price of gamble A should be equal to or greater than the judged price of gamble B whenever A's outcomes are equal to or better than the corresponding outcomes of B, holding everything else constant. Subjects often violate the dominance principle by assigning a higher price to a gamble with some probability of winning a positive amount, Y, otherwise zero, than to a superior gamble with the same chances of winning Y, otherwise winning X. Violations also occur with losses. Results are consistent with a configural-weight theory in which the decision weight for each outcome depends on the rank of the outcome with respect to the other outcomes in the lottery and the value of the outcome (zero vs. nonzero).The authors thank Shi-jie Chang, Duncan Luce, and Lisa Ordóñez for comments on an earlier draft. This research was supported by a National Science Foundation grant to the first author (BNS-8451368). Requests for reprints should be sent to Barbara Mellers, Dept. of Psychology, University of California, Berkeley, CA 94720.     

Skinner on the prediction and control of behavior

While prediction is a necesary requirement for the acceptance of a scientific theory, the prediction and control of behavior is not a neutral criterion for evaluating psychological theories. Appeal to prediction and control of behavior as a criterion, or objective of psychological theory is intelligible only if Skinner's conception of man is accepted. Emphasis upon control as criterion, as elaborated by Skinner, is not only inadequate but also dangerous. Finally some questions are raised about the relationship between psychological theories and methodology, and background conceptions of man.Preparation of this paper was supported in part by a grant from the National Science Foundation (Grant No. SOC75-08464), and it was written while the author was a visiting scholar at Standford University. I am grateful to D. Bullock, Maria I. Lacey, Howard Rachlin and E. E. Smith for helpful comments.     

Individual rationality and the concept of social welfare

This paper, written in October 1974, deals with some game aspects of the social choice problem. The question asked is whether there exists a social decision rule satisfying the conditions imposed by Arrow over all the preference profiles that may logically arise under it (in the sense of being compatible with individual rationality). This question is answered in the affirmative. The meaning of this result is that if Arrow's condition of unrestricted domain is modified so as to exclude any profile which contradicts individual rationality, then an Arrovian social welfare function can be shown to exist (subject to the assumption that whenever the social outcome is in doubt, individuals use the maximin criterion in order to choose their voting strategy).This research was written up in October 1974 at Northwestern University and was partially supported by the National Science Foundation.     

Meritocracy in the awarding of research grants? Evidence from Social Science Korea

In 2010, the Korean government launched a new funding scheme for social scientists, Social Science Korea (SSK). Contrary to conventional grant programs, the SSK adopted a competition scheme among research teams by eliminating those who failed to pass annual evaluations, while, at the same time, emphasizing cooperation and interdisciplinary research. Substantial research has documented the determinants of receiving research grants in Western countries, but little is known about how these determinants operate in Korean academia. Using results from the stage evaluations of the SSK, we estimate logistic regression models. The results indicate that factors of meritocracy, such as publication record, strongly affect the likelihood of success, but so do political factors, such as a PI obtaining his or her doctoral degree from a foreign institution. The importance of a PI’s gender and age, and of being located in Seoul, is not supported by the data.     

A differential approach to the repeated prisoner's dilemma

The repeated prisoner's dilemma game is converted into a differential game by assuming that the players, instead of making decisions individually for each repetition of the prisoner's dilemma game, make decisions on the ratio of cooperative and noncooperative games that they wish to play over the next few moves, and that the actual plays are then determined using this ratio and a randomizing procedure. Although it sounds like a significant departure, this assumption is probably not too different from reality.Since each player can always obtain by his own action at least the payoff which he would receive from the noncooperative-noncooperative pair of strategies, that part of the differential game which is dominated by such a dual noncooperative strategy for either player is an unlikely outcome. This dominated area can be readily computed for any game, including those with more than two players.Formal testing with empirical data was impossible because of uncertainty about the proper null hypothesis. Nevertheless, experimental results reported by Rapoport are consistent with the theory.The authors are, respectively, Graduate Research Asistant in Economics and Professor of Economics and Public Choice at Virginia Polytechnic Institute and State University.     

The Challenges for Scientists in Avoiding Plagiarism

Although it might seem to be a simple task for scientists to avoid plagiarism and thereby an allegation of research misconduct, assessment of trainees in the Responsible Conduct of Research and recent findings from the National Science Foundation Office of Inspector General regarding plagiarism suggests otherwise. Our experiences at a land–grant academic institution in assisting researchers in avoiding plagiarism are described. We provide evidence from a university–wide multi–disciplinary course that understanding how to avoid plagiarism in scientific writing is more difficult than it might appear, and that a failure to learn the rules of appropriate citation may cause dire consequences. We suggest that new strategies to provide training in avoiding plagiarism are required.     

Framing,probability distortions,and insurance decisions

A series of studies examines whether certain biases in probability assessments and perceptions of loss, previously found in experimental studies, affect consumers' decisions about insurance. Framing manipulations lead the consumers studied here to make hypothetical insurance-purchase choices that violate basic laws of probability and value. Subjects exhibit distortions in their perception of risk and framing effects in evaluating premiums and benefits. Illustrations from insurance markets suggest that the same effects occur when consumers make actual insurance purchases.Presented at the Conference onMaking Decisions about Liability and Insurance, The Wharton School, University of Pennsylvania, Philadelphia, PA, 6–7 December, 1991. This research is supported by National Science Foundation Grant SES88-09299. The authors thank Jon Baron, Colin Camerer, Neil Doherty, Paul Kleindorfer, Amos Tversky, and two anonymous referees for many helpful comments. We particularly acknowledge the efforts of Matthew Robinson and Penny Pollister for their help with data analysis.     

A conditional expected utility model for myopic decision makers

An expected utility model is formulated and axiomatized which allows the decision maker to specify his actions in the form of partial rather than complete contingency plans, and to simultaneously choose goals and actions in end-mean pairs. Both utility and probability are conditioned on selected goals and actions, and both are defined over the same set of events. For adaptive sequential decision problems this symmetrical treatment of utility and probability permits the expected utility criterion function to be directly updated in each decision period via transitional utility assessments in a manner analogous to Bayes' rule for updating probability distributions.This study is a condensed revised version of discussion papers [14] and [15]. Research underlying this paper was supported by National Science Foundation Grants GS-31276X and GS-35682X. Valuable comments by Professors J. S. Chipman, C. Hildreth, L. Hurwicz, I. Richards, and M. K. Richter are gratefully acknowledged.     

Advances in prospect theory: Cumulative representation of uncertainty

We develop a new version of prospect theory that employs cumulative rather than separable decision weights and extends the theory in several respects. This version, called cumulative prospect theory, applies to uncertain as well as to risky prospects with any number of outcomes, and it allows different weighting functions for gains and for losses. Two principles, diminishing sensitivity and loss aversion, are invoked to explain the characteristic curvature of the value function and the weighting functions. A review of the experimental evidence and the results of a new experiment confirm a distinctive fourfold pattern of risk attitudes: risk aversion for gains and risk seeking for losses of high probability; risk seeking for gains and risk aversion for losses of low probability.This article has benefited from discussions with Colin Camerer, Chew Soo-Hong, David Freedman, and David H. Krantz. We are especially grateful to Peter P. Wakker for his invaluable input and contribution to the axiomatic analysis. We are indebted to Richard Gonzalez and Amy Hayes for running the experiment and analyzing the data. This work was supported by Grants 89-0064 and 88-0206 from the Air Force Office of Scientific Research, by Grant SES-9109535 from the National Science Foundation, and by the Sloan Foundation.