SCHOOL QUALITY AND INFORMATION DISCLOSURE: EVIDENCE FROM THE HOUSING MARKET

In this article, we investigate the relationship between school quality and information disclosure in housing markets. When presented with the option of identifying their local public school in a real estate listing, we find that sellers with homes assigned to higher‐performing schools are more likely to provide this information. We find more evidence of selective disclosure in 2001–2002 than in 2006–2007, when the costs of gathering and disclosing information on school assignments and quality were lower. Furthermore, we find more evidence of strategic behavior among sellers of large single‐family units that presumably appeal to families with children. After controlling for school quality, information disclosure does not appear to affect housing prices. Taken together, our results support the findings of the education literature on the importance of school quality capitalization in residential real estate and they provide the first evidence of strategic information disclosure in housing markets. (JEL L15, I20, R31)     

MEASURING CRACK COCAINE AND ITS IMPACT

Numerous social indicators turned negative for Blacks in the 1980s and rebounded a decade later. We explore whether crack cocaine explains these patterns. Absent a direct measure, we construct a crack prevalence index using multiple proxies. Our index reproduces spatial and temporal patterns described in ethnographic accounts of the crack epidemic. It explains much of the 1980s rise in Black youth homicide and more moderate increases in adverse birth outcomes. Although our index remains high through the 1990s, crack's deleterious social impact fades. Changes over time in behavior, crack markets, and the user population may have mitigated crack's damaging impacts. (JEL K42, J15, I30)     

Early School Leaving among Immigrants in Toronto Secondary Schools

Les données du Conseil scolaire du district de Toronto sont utilisées pour déterminer quelles sont les répercussions de vivre sous le seuil de faible revenu (SFR) sur le décrochage à l'école secondaire, en tenant compte du statut de la génération d'immigrants ainsi que d'une diversité de facteurs de risques (par exemple, le pays d'origine, l'âge à l'entrée de l'école secondaire, la réussite scolaire). Les résultats ont indiqué que la mesure SFR du voisinage constituait un prédicteur significatif du décrochage scolaire, indépendamment du statut d'immigrant. L'explication du taux de décrochage des immigrants à partir du facteur de la génération n'a obtenu que peu de soutien. La région d'origine s'est avérée un prédicteur marquant du décrochage où l'on constatait des différences entre les groupes d'immigrants et entre les étudiants immigrants et les étudiants originaires du pays. While education statistics confirm that there is little difference in the dropout rates of native‐born and immigrant youth, analyses of Toronto District School Board (TDSB) data have revealed significant variation in school persistence within immigrant groups. Among newcomer youth, the decision to leave school early has been reported to be strongly influenced by socioeconomic status as well as such factors as country of origin, age at arrival, generational status, family structure, and academic performance. While living in low‐income conditions is thought to place both foreign‐ and Canadian‐born youth at risk of poor school performance and early school withdrawal, their substantially higher incidence of poverty suggests that today's immigrant youth are likely to face greater obstacles to academic success that may in turn have detrimental, long‐term consequences. This paper uses TDSB data to investigate the extent to which living below the low‐income cutoff affects the likelihood of dropping out of secondary school, while taking into account generational status as well as a variety risk factors, noted above. Policy implications are discussed.     

PRIMARY AND SECONDARY REFORM

An import competing industry hires lobbyists to obtain protection, where binding quotas may be utilized in the trade regime. Rent seekers compete with one another to obtain valuable import licenses. Rent seeking and lobbying are assumed to involve similar skills, so that a reform of the rent-seeking sector will have feedback effects on lobbying and vice versa. We show that the feedback effects from reform targeting the lobbying activity (primary reform) often tend to reinforce the original reform, while reforms targeting the rent-seeking sector (secondary reform) tend to have negative feedback effects on the reform process. ( JEL D72, F13)     

CRITICAL ISSUES IN THE PRACTICE OF MARKET DESIGN

The years since 1994 have witnessed the emergence of market design as a new discipline within economics, in which research and practice exert powerful mutual influences in matching and auction markets. The problem of designing well‐functioning auction markets has led economic designers to revisit such fundamental issues as the definitions of commodities, the ways participants communicate with markets, the trade‐offs between the incentives provided for truthful reporting and other attributes of mechanism performance, and the determinants of the scope of markets, especially whether and how trade in different goods is linked. (JEL D44, C78)     

The Impact of "No Opinion" Response Options on Data Quality: Non-Attitude Reduction or an Invitation to Satisfice?

According to many seasoned survey researchers, offering a no-opinionoption should reduce the pressure to give substantive responsesfelt by respondents who have no true opinions. By contrast,the survey satisficing perspective suggests that no-opinionoptions may discourage some respondents from doing the cognitivework necessary to report the true opinions they do have. Weaddress these arguments using data from nine experiments carriedout in three household surveys. Attraction to no-opinion optionswas found to be greatest among respondents lowest in cognitiveskills (as measured by educational attainment), among respondentsanswering secretly instead of orally, for questions asked laterin a survey, and among respondents who devoted little effortto the reporting process. The quality of attitude reports obtained(as measured by over-time consistency and responsiveness toa question manipulation) was not compromised by the omissionof no-opinion options. These results suggest that inclusionof no-opinion options in attitude measures may not enhance dataquality and instead may preclude measurement of some meaningfulopinions.     

Insensitivity to the Value of Human Life: A Study of Psychophysical Numbing

A fundamental principle of psychophysics is that people's ability to discriminate change in a physical stimulus diminishes as the magnitude of the stimulus increases. We find that people also exhibit diminished sensitivity in valuing lifesaving interventions against a background of increasing numbers of lives at risk. We call this psychophysical numbing. Studies 1 and 2 found that an intervention saving a fixed number of lives was judged significantly more beneficial when fewer lives were at risk overall. Study 3 found that respondents wanted the minimum number of lives a medical treatment would have to save to merit a fixed amount of funding to be much greater for a disease with a larger number of potential victims than for a disease with a smaller number. The need to better understand the dynamics of psychophysical numbing and to determine its effects on decision making is discussed.