Expectations, Capital Gains, and Income

A theoretical framework for the measurement of income under uncertainty is developed that addresses some long-standing controversies about the treatment of capital gains. The consequences for economic analysis and policy making are potentially serious, because the treatment of capital gains can significantly affect some major macroeconomic aggregates, including national income and savings, balance of payments deficits, government deficits, and depreciation. (JEL O47 , P44 , Q32 )     

Deposit Insurance,Institutions, and Bank Interest Rates

Many recent institutional reforms of the financial system have relied on the introduction of an explicit scheme of deposit insurance. This instrument aims at two main targets, contributing to systemic stability and protecting depositors. However, it may also affect the interest rate spread in the banking system, which can be viewed as an indicator of either inefficiency or market power in this financial segment. This paper provides an empirical investigation of the effect of deposit insurance and other institutional and economic variables on bank interest rates across countries. We find that deposit insurance increases the lending–deposit spread in banking. The main effect seems to arise not from the deposit side though, but from an increase in the lending rate. We interpret this result as evidence of the presence of moral hazard problems related to this instrument. We also find that higher quality of institutions is associated with lower spreads, thus contributing to eroding sources of market power in the banking sector.     

Campus attitudes toward alcohol and drugs in a deep southern university.

In our zeal to deal with alcohol and drug abuse, we may have a distorted picture of what the majority of college students actually think about alcohol and drug use. Students in this study done at a public university located in the Deep South report being generally intolerant of substance abuse.     

Screening for patients with alcohol problems: severity of patients identified by the CAGE.

Primary care physicians are well situated to identify patients with substance abuse problems and motivate them to seek appropriate assistance, but active programs are the exception. A study in a community setting was undertaken to assess the CAGE (the first letters of key words in a series of four questions about drinking: cut down; annoyed; guilty; and eye-opener), instrument in the routine screening for alcohol problems in both new and established patients. The screening process identified subjects for a pilot evaluation of a motivational interview designed to encourage problem-solving behavior. This article focuses on the screening results and the use of the CAGE instrument. During June and July of 1990, 687 patients of two primary care physicians belonging to a large group practice were asked to complete a health questionnaire that included the CAGE. Those who responded affirmatively to at least two of the four CAGE questions were requested to participate in follow-up assessment of problems associated with alcohol and health. The type and severity of alcohol problems experienced by patients who scored positive on the CAGE are described. Prevalence of a positive score on the CAGE was 8.6 percent with males, smokers, and blue collar and unemployed persons being more likely to score positive. The positive predictive value was .68. Primarily, persons with moderate alcohol problems were identified. Results show that the CAGE instrument is a useful screening device for identifying those with mild to moderate substance abuse problems, increasing the opportunity for intervention prior to serious medical complications. The instrument is easily administered, and has demonstrated relatively high levels of sensitivity and specificity. When combined with assessment and motivational interviews, the CAGE shows promise in the secondary prevention of substance abuse and related health problems.     

The Farm Crisis and Mental Health: A Longitudinal Study of the 1980s1

Abstract This paper examines rural/urban differences and trends in mental health during the farm crisis of the 1980s in a large panel sample from a midwestern state. A community research perspective, which attributes differences to life styles, culture, and community context, is contrasted with an economic stress perspective, which focuses on individual differences in economic circumstances as determinants of rural-urban differences in mental health. Survey samples from 1981, 1986, and 1989 are used to examine differences among seven categories of community type. Multiple regression analysis of the trend and panel data provide support for both the individual economic distress and community context models.     

Will taxpayers ever like taxes?: Responses to the U.S. Tax Reform Act of 1986

Major policy changes like the 1986 Tax Reform Act (TRA) in the United States provide natural experiments to study attitudinal and behavior responses to law. Surprisingly, public evaluations of the TRA became increasingly negative after passage, while general support for the tax system became more positive in response to the changes. To explain this puzzle, we propose a dynamic model of taxpayer attitudes that is consistent with the observed loose linkage between logically-connected concepts. We briefly review the political context, objectives and impacts of the 1986 Tax Reform Act, and present several studies testing the impact of self-interest, prior beliefs, and social discussion on changes in attitudes and behavior.Results suggest that the complexity of taxes and difficulty in knowing objective impacts weakens the role of self-interest in attitudinal changes, thereby strengthening the role of prior beliefs and discussion. Evaluations of tax laws are most responsive to more politically-oriented influences.     

Informal Work in Nonmetropolitan Pennsylvania1

Abstract It is well recognized that the informal economy—unregulated economic activities that generate real or in-kind income—features prominently in the day-to-day lives of many in the developing world. Researchers have begun to explore the informal economy in developed countries but this work has focussed primarily on urban areas to the neglect of rural areas. In this paper the nature and correlates of informal work in nonmetropolitan Pennsylvania are described through an analysis of survey data on 505 families. Results indicate that participation in informal activities is widespread, is not more typical of the poor, does not contribute greatly to family income on average but does help many poor families weather difficult economic times, is both economically and noneconomically motivated, and, net of other sociodemographic variables, is positively related to rurality of residence and formal labor supply.