CORRUPTION: TOP DOWN OR BOTTOM UP?

This article studies the impact of corruption on an economy with a hierarchical government. In particular, we study whether centralizing corruption within the higher level of government increases or decreases the total amount of corruption. We show that when the after-tax relative profitability of the formal sector as compared to that of the informal sector is high enough, adding a layer of government increases the total amount of corruption. By contrast, for high-enough public wages and/or an efficient monitoring technology of the bureaucratic system, centralization of corruption at the top of the government hierarchy redistributes bribe income from the lower level to the upper level. In the process, total corruption is reduced and the formal sector of the economy expands.     

The Prevalence of Uncorrected Refractive Errors in Adolescents Incarcerated in a Youth Detention Center

The purpose of this study was to determine the number of residents requiring corrective lenses in a youth detention center for juveniles from 12 to 18 years old over a 2-year period. A greater number of adolescents incarcerated for criminal activity in a detention center had uncorrected refractive errors (34.87 %) as compared to a comparable population in the public school system (22 %). The prevalence of significant refractive errors among incarcerated adolescents in this study is significantly higher than has been reported previously. The current study found a refractive error rate of almost 35 %. This difference can be explained by a number of factors in their social environments and identifies an area for potential intervention to reduce antisocial behavior in this population.     

REPEATED LOBBYING BY COMMERCIAL LOBBYISTS AND SPECIAL INTERESTS

Developing a lobbying model of repeated agency, we explain previously unexplained features of the real‐world lobbying industry. Lobbying is divided between direct representation by special interests to policymakers, and indirect representation where special interests employ professional intermediaries called commercial lobbyists to lobby policymakers on their behalf. Our analytical structure allows us to explain several trends in lobbying. For example, using the observation that in the United States over the last 20 years, policymakers have spent an increasing amount of their time fundraising as opposed to legislating, we are able to explain why the share of commercial lobbyist activity in total lobbying has risen dramatically and now constitutes over 60% of the total. The key scarce resource in our analysis is policymakers' time. Policymakers allocate this resource via implicit repeated agency contracts that are used to incent special interests and commercial lobbyists to provide a mix of financial contributions and information on policy proposals. These implicit agency contracts solve both an information problem in the presence of unverifiable policy information and a contracting problem in the absence of legal enforcement. These repeated relationships, that are often described using the pejorative term “cronyism” in the popular press, may in certain circumstances be welfare improving. (JEL D72, D82, H1, P16)     

The impact of non-bottleneck variation in a manufacturing cell

Protective capacity is the 'extra' capacity placed at non-bottleneck resources to absorb random disruptions in planned levels of performance so that the bottleneck resource continues to be effectively utilized. A full factorial experiment with a simulation model was conducted to explore issues associated with the quantity and location of processing variance in a five-station manufacturing cell. The cell's performance was measured using both mean flow time ( MFT ) and bottleneck shiftiness ( SHIFT ) for 3 patterns of variance for the non-bottlenecks at 5 different levels of variation. In order to investigate the importance of the quantity of added capacity on the variation both a low level of protective capacity (10%) and a high level (50%) were considered. The results indicate that having the higher variation work centres close to the bottleneck provides reduced MFT and SHIFT . The performance measures improved at both the low and high setting of protective capacity.     

Understanding Gaps Between the Risk Perceptions of Wildland–Urban Interface (WUI) Residents and Wildfire Professionals

Research across a variety of risk domains finds that the risk perceptions of professionals and the public differ. Such risk perception gaps occur if professionals and the public understand individual risk factors differently or if they aggregate risk factors into overall risk differently. The nature of such divergences, whether based on objective inaccuracies or on differing perspectives, is important to understand. However, evidence of risk perception gaps typically pertains to general, overall risk levels; evidence of and details about mismatches between the specific level of risk faced by individuals and their perceptions of that risk is less available. We examine these issues with a paired data set of professional and resident assessments of parcel‐level wildfire risk for private property in a wildland–urban interface community located in western Colorado, United States. We find evidence of a gap between the parcel‐level risk assessments of a wildfire professional and numerous measures of residents’ risk assessments. Overall risk ratings diverge for the majority of properties, as do judgments about many specific property attributes and about the relative contribution of these attributes to a property's overall level of risk. However, overall risk gaps are not well explained by many factors commonly found to relate to risk perceptions. Understanding the nature of these risk perception gaps can facilitate improved communication by wildfire professionals about how risks can be mitigated on private lands. These results also speak to the general nature of individual‐level risk perception.     

Efficiency or Competition? A Structural Econometric Analysis of Canada's AWS Auction and the Set‐Aside Provision

In 2008, Industry Canada auctioned 105 MHz of spectrum to a group of bidders that included incumbents and potential new entrants into the Canadian mobile phone market, raising $4.25 billion. In an effort to promote new entry, 40 MHz of spectrum was set‐aside for new entrants. In order to estimate the implicit cost of the set‐aside provision, we estimate the parameters of the bidders' profit function via a maximum match estimator based on the notion of pairwise stability in matches. We find that all telecommunications firms valued both geographic complementarities across auction licenses as well as absolute spectrum. Under a reasonable alternative scenario, our results indicate that the set‐aside led to a total profit loss of approximately 10%.     

Monte carlo evidence on the robustness of conditional moment tests in tobit and probit models

This paper numerically examines the size robustness of various conditional moment tests in misspecified tobit and probit models. The misspecifications considered include the incorrect exclusion of regressors, ignored heteroskedasticity and false distributional assumptions. An important feature of the experimental design is that it is based on an existing empirical study and is more realistic than many simulation studies. The tests are seen to have mixed performance depending on both the original null hypothesis being tested and type of misspecification encountered.