CONSUMPTION,SENTIMENT, AND ECONOMIC NEWS

This paper investigates the influence of economic news on consumer sentiment, and examines whether “news shocks”—changes in coverage that would not be expected from incoming data on economic fundamentals—have aggregate effects. Using monthly U.S. data and a structural vector autoregression, I find that (1) sentiment is affected by news shocks; (2) after filtering out effects of news shocks, shocks to sentiment still have positive effects on consumer spending; and (3) news shocks influence both spending and unemployment in significant, though transitory ways. These results are consistent with other evidence of a role of nonfundamental factors in aggregate fluctuations. (JEL E21, E32, D12)     

Development and teaching a computer-assisted course in production planning

Abstract. Course development and student activities are described for a successful computer-assisted senior level course in production planning. Development was guided by the view that students must (1) understand the elements being integrated, (2) understand the problems that are being resolved through integration, and (3) participate in the integration activity. Production planning is treated as a hierarchy of individual decision situations which are to be integrated. Each decision is assisted by a software-based technique. A menu program and a common database were developed to allow a student to become the 'integrator' by directing the information flow among the individual decision situations. The paper describes the development tasks, the course elements, and student activities which provide guidelines for others developing similar courses.     

TECHNOLOGY, CAPITAL SPENDING, AND CAPACITY UTILIZATION

Capacity utilization is a closely watched macroeconomic indicator because rising utilization may signal rising inflationary pressures. However, recent technological changes have increased the flexibility of relationships between inputs and outputs, potentially eroding the predictive value of the utilization rate. This paper examines relationships between technology, capital spending, and capacity utilization. After establishing conceptually that the effect of recent technological changes on capacity utilization is ambiguous, we investigate the effect empirically using panel data on 111 manufacturing industries. Our results suggest that, for the average industry, the technological change of the 1974–2000 period lowered capacity utilization by 0.2–2.3 percentage points. ( JEL D24, E22, E31)     

THE IMPACT OF UNIONIZATION ON MOTOR CARRIER COSTS

Union trucking firms have significantly different cost structures than non-union firms. Further, average costs for union firms are higher than for non-union firms even after controlling for higher unionized labor costs. The translog cost function approach used here incorporates a unique dummy variable technique to test not only for overall differences in union/non-union costs, but also to identify which individual cost function parameters differ between the two types of firms. Results suggest that unionized trucking firms are at a competitive disadvantage in the less regulated, post-1980 trucking industry.     

Assessing Risk: A Public Analysis of the Medfly Eradication Program

The Mediterranean Fruit Fly eradication program provided anopportunity to assess public attitudes toward technologicalrisks. This is a case study of 126 residents from a metropolitanarea who, during the 1981–82 Mediterranean Fruitfly Crisis,were undergoing exposure to aerial spraying with a pesticide.While only one-third of the subjects expressed fear of dangerto their health and to the environment, 94 percent undertookone or more major behavioral precautions. Individual differencesin risk perception were related to perceived benefits of theprogram, political ideology, faith in experts, and media exposure.Individual differences in risk acceptability varied primarilyas a function of risk perception. Federal, state, and businessagencies were perceived as influential in decision making, withindividual citizens having little opportunity for input.