AN ANALYSIS OF INFORMATIONAL RESTRICTIONS ON THE LENDING DECISIONS OF FINANCIAL INSTITUTIONS

Lenders are assumed to use formal credit scoring schemes in order to evaluate borrower credit worthiness. Variables used in these schemes may be measured with error resulting in credit scores which include the effects of biased parameter estimates, and in lending decisions that appear to be discriminatory although lenders are not prejudiced. Regulations which restrict the information used in credit scoring schemes may produce undesirable credit supply results. Theoretical models are supplemented with illustrative empirical analysis of mortgage lending in which use of information on property location is prohibited. The empirical results indicate that the quantitative impact of such regulations is modest.     

RULES OR POLITICS?: AN EMPIRICAL ANALYSIS OF ITC ANTI-DUMPING DECISIONS

This research analyzes the International Trade Commission's anti-dumping decisions from 1980 to 1986. The results suggest that commissioners use criteria consistent with the instructions set forth in U.S. legislation. The analysis also indicates that political variables help predict commissioner decisions. Petitions involving Senate oversight committee members' constituencies may be systematically favored in the process. Evidence of possible bias toward less-developed-country exports is presented as well. The methodology also yields estimates of commissioner-specific fixed effects.     

SAFETY FIRST, BANKRUPTCY, AND THE PRICING AND INVESTMENT DECISIONS OF THE FIRM

The paper analyzes the impact of imposing a constraint on the probability of bankruptcy for the pricing and investment choices of firms. Two models are presented in which a firm faces stochastic demand; in one costs are known with certainty, and in the other costs of production are probabilistic. In both cases the constraint induces a reduction in optimal price if demand is elastic. For less elastic demand, price increases may be indicated. With constant costs, the constraint lowers optimal investment. The results are applicable to the analysis of rating agencies' behavior, or to the design of bond covenants, especially for public utilities.     

AN EXPERIMENTAL TEST ON RETIREMENT DECISIONS

As part of the current debate on the reform of pension systems, this paper presents an original experimental test where subjects face three different payoff sequences with identical expected value. Two central questions are analyzed. First, whether the distribution of retirement benefits across time influences the retirement decision. And second, whether actuarially fair pension systems distort the retirement decision. The results indicate both that a lump-sum payment rather than annuity benefits is far more effective in delaying the retirement decision and that recent reforms that encourage the link between lifetime contributions and pension benefits to delay the retirement decision should take into account timing considerations. ( JEL C91, H55, J26)     

SURVEY MEASURES OF FAMILY DECISION PROCESSES FOR ECONOMETRIC ANALYSIS OF SCHOOLING DECISIONS

In this article, we consider the collection of novel subjective data on family processes of schooling decisions. In particular, we review recent progress on survey measurement of expectations, information, and locus of decision of American families within the context of secondary schooling, and we discuss possible future developments by providing concrete examples from recent exploratory efforts. We argue that collection of data on adolescents' and parents' perceptions of the available school options and the application‐and‐admission rules, their subjective expectations about short‐ and long‐term consequences of alternative choices, and their assessments of the locus of decision making within families could greatly enhance economic modeling and contribute to effective econometric analysis of schooling decisions. (JEL C83, D19, D79, D83, D84, I21, I26, J24)     

AN EMPIRICAL ANALYSIS OF ADOPTION

This paper estimates the supply of adoptions using a decision-making economic framework of desired fertility and family size. The empirical results show that the decision to place a child for adoption is negatively related to a woman's labor force participation, the size of Aid to Families with Dependent Children payments and the unemployment rate, and is positively related to her marital status, education, and religious affiliation. The price and availability of abortions are found to have no statistically significant effect on the adoption decision. Furthermore, state regulations designed to encourage adoptions have no impact on the adoption option.     

AN ANALYSIS OF IMPORT EXPANSION POLICIES

Voluntary Import Expansion is a policy under which one country (Japan) agrees to import a minimum quantity of a commodity from another country (U.S.) It turns out that Japan is better off under an equivalent export subsidy; the U.S. is better off under a VIE; and the welfare of a third-country is higher under a policy which improves its term of trade. The "optimum" VIE for the U.S. results in a trade equilibrium point where the U.S. fnter curve is of unitary elasticity. We also consider the case of a U.S. export which is Giffen good in Japan.     

AN ECONOMIC ANALYSIS OF BANKRUPTCY STATUTES

Personal bankruptcy statutes are analyzed as social insurance agreements. The risk-sharing and incentive effects resulting from changes in bankruptcy laws are studied. It is shown that increasing the leniency of bankruptcy statutes may have unambiguous short-term benefits to potential bankrupts, but may be detrimental in the long-run.     

AN ECONOMIC ANALYSIS OF RIOT PARTICIPATION

This paper examines the behavior of riot participants in the context of an expected utility maximization model. The basic hypothesis is that a riot presents the participants with a constantly changing set of opportunities, and that their behavior can only be understood in light of these changing returns and costs. The model is tested using data collected by the National Advisory Committee on Civil Disorders. The results are consistent with the hypothesis of maximizing behavior.     

AN ANALYSIS OF THE LAFFER CURVE

The Laffer curve shows the relationship between tax revenue and the personal income tax rate, with tax revenue being a presumably concave function of the tax rate and equal to zero at tax rates of zero percent and 100 percent. If the personal income tax rate is reduced, then tax revenue will decrease (increase) if the economy is on the positively (negatively) sloped section of the Laffer curve. This paper derives a sufficient condition for the economy to be on the positively sloped section of the Laffer curve. In light of the current knowledge of the elasticities of supply of labor and supply of saving, it is difficult to escape the conclusion that a decrease in U.S. personal income tax rates will decrease tax revenue.     

DETERMINANTS OF VOLUNTARY OVERTIME DECISIONS

This paper develops and estimates a model of the labor supply for overtime work when some workers' choices are constrained by mandatory overtime provisions of employers. Economic incentives are shown to have a significant effect on workers' overtime decisions. Policy simulations suggest that an increase in the overtime premium would lead to greater voluntary overtime work, as would a lowering of the level of weekly hours after which the mandatory premium takes effect. The estimated effects of these changes are not quantitatively large, indicating that workers are fairly insensitive to changes in monetary incentives in making overtime decisions.     

AN ANALYSIS OF THE IMPACT OF CONGRESSIONAL TERM LIMITS

We examine the impact of a six-term tenure limit on members of the U.S. House of Representatives. The first part of this study develops a methodological framework for simulating the quantitative impact of term limits. The second part of this study uses this framework to estimate the effects of term limits on (i) the value of holding office, (ii) turnover, and (iii) the size of the Democratic majority in the House. Both steady-state and transition period effects are explored.     

AN ECONOMIC ANALYSIS OF THE DEMAND FOR ABORTIONS

This study uses an economic model of fertility control to estimate the demand for abortions. The results show that the fundamental law of demand holds for abortions, with the price elasticity of demand equal to –.81. Abortions are a normal good with an income elasticity of demand equal to .79. The demand for abortions is also positively related to the labor force participation of women and to being unmarried. Catholic religion, education and the poverty status of women were found to have no statistically significant impact on the demand for abortions.     

AN ECONOMIC ANALYSIS OF A HYBRID LIABILITY RULE

This article considers a legal setting with a tort liability rule that includes both a care-based component (such as negligence) and a non–care-based component (such as no liability). Children trespassers are sometimes protected by a doctrine known as attractive nuisance. Attractive nuisance acts as a hybrid liability rule in its application—it applies the negligence rule to accidents involving some types of children, and the no-liability rule to accidents involving other types of children. A standard economic model of torts is applied to a trespass setting, and the potential efficiency of a hybrid liability rule is examined.     

THE PARENTAL ALLIANCE FOLLOWING DIVORCE: AN OVERVIEW

The empirical literature on the postdivorce parental alliance was reviewed with a focus on implications for clinical interventions by family therapists. Variables of cooperation and conflict between parents, individual parenting style, and personal adjustment were significantly interrelated and a range of co-parenting behaviors related to these variables was documented. A typology of divorcing families can be useful in predicting risks for child difficulties and in developing appropriate parenting plans. Clinical interventions need to be tailored to the unique characteristics and resources of a given family and can speak to multiple points of the family system.     

URBANIZATION, SECULARIZATION, AND BIRTH SPACING: A CASE STUDY OF AN HISTORICAL FERTILITY TRANSITION

This article presents an analysis of the effect that urban secularization of religious pronatalism had upon established birth-spacing behavior over the course of the fertility transition in the population of nineteenth-century Utah. First, a model of variance in birth intervals attributable to age at marriage, age of childbearing termination, and completed family size over the duration of childbearing thus defined, is presented. Second, this model is elaborated by incorporating five specific hypotheses concerning the effects of urbanism, secularization, and their interaction, upon interbirth intervals. Although a pattern of urban secularization is found, the uniformity of social and behavioral changes suggests that relatively homogeneous demographic behavior was produced on the frontier by the largely external locus of secularizing influences in the mainstream eastern American community.     

AN ECONOMIC ANALYSIS OF STATE SUPPORT FOR HIGHER EDUCATION

There are few practical problems in which the economist has a more direct interest than those relating to the principles on which the expense of the education of children should be divided between the state and the parents.–A lfred M arshall , Principles of Economics