Suchergebnisse

"When consumers exhibit present bias and are time-inconsistent, the standard solution to market failures caused by externalities-Pigouvian pricing-is suboptimal. I investigate policies aimed at externalities for time-inconsistent consumers. Welfare-maximizing policy in this case includes an instrument to correct the externality and an instrument to correct the present bias. Either instrument can be an incentive-based policy or a command-and-control policy. Calibrated to the US automobile market, simulation results from a model with time-inconsistent consumers suggest that the second-best gasoline tax is 18%-30% higher than marginal external damages. These simulations also suggest that social welfare is maximized with a gasoline tax set about equal to marginal external damages and a fuel economy tax that increases the price of an average non-hybrid car by about $750-$2200 relative to the price of an average hybrid car"--National Bureau of Economic Research web site

"A large literature examines the interaction of private and public funding of public goods and charities, much of it testing if public funding crowds out private funding. This paper makes two contributions to this literature. First, the crowding out effect could also occur in the opposite direction: in response to the level of private contributions, the government may alter its funding. I model how crowding out can manifest in both directions. Second, with asymmetric information about the quality of a public good, one source of funding may act as a signal about that quality and crowd in the other source of funding. I test for crowding out or crowding in either direction using a large panel data set gathered from nonprofit organizations' tax returns. I find strong evidence that government grants crowd in private donations, consistent with the signaling model. Regression point estimates indicate that private donations crowd out government grants, but they are not statistically significant"--National Bureau of Economic Research web site

Hausman and McPherson provide an evidential defense of welfare economics, arguing that preferences are not constitutive of welfare but nevertheless provide the best evidence for what promotes welfare. Behavioral economics identifies several ways in which some people's preferences exhibit anomalies that are incoherent or inconsistent with rational choice theory. I argue that the existence of these behavioral anomalies calls into question the evidential defense of welfare economics. The evidential defense does not justify preference purification, or eliminating behavioral anomalies before conducting welfare analysis. But without doing so, the evidential defense yields implausible welfare implications. I discuss how the evidential defense could be modified to accommodate behavioral anomalies.

We continue our examination of the investment performance of nonprofit charities and foundations. This analysis tests hypotheses about what types of organizations do better. Our motivating intuition is that nonprofits with greater focus on investment performance will secure higher returns. Our hypotheses are tested by regressing the rate of return for each organization on various characteristics. As expected, nonprofits whose primary business is predominantly financial, such as insurance providers and pension or retirement funds, consistently earn higher returns. The data also support our hypotheses that larger nonprofits, older nonprofits, and private foundations will tend to outperform. The evidence is mixed as to whether nonprofits that pay higher executive salaries or spend more on management earn higher returns.