Journal of Political Economy
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Опубликовано на портале: 24-01-2007Andrew Weiss Journal of Political Economy. 1983. Vol. 91. No. 3. P. 420-442.
This paper presents a sorting model of education in with individuals are tested in school. By assuming that higher-ability individuals are more likely to succeed on a given test one can construct a sorting model of education that does not hinge on the more able having lower nonpecuniary costs of schooling. Nash equilibria always exist in this model (even with a continuum of types of individuals); however, some are "unreasonable." To eliminate these unreasonable Nash equilibria, more restrictive definitions of equilibrium are proposed. I also show that when schooling affects productivity - and therefore a worker's probability of passing the test--a sorting equilibrium may be characterized by too little investment in education. This paper extends the important work of Spence (1974), Stiglitz (1975), and Riley (1979a, 1979b) on sorting theories of education by modeling the educational choices of individuals in game-theoretic terms and making two assumptions: (1) individuals are not perfectly informed about their own productivity, and (2) individuals are tested upon their completion of schooling. I also combine the sorting and human capital analyses by allowing education to increase productivity and show that if education increases the productivity of workers as well as enabling the more able workers to sort themselves, these sorting effects may lead to underinvestment in education. This result contradicts the main normative result of screening models of education: If skills are hierarchical, so that if Joe is more productive than Jim at any job he is more productive at all jobs, there is overinvestment in schooling as workers use education to signal their abilities. Although in a pure sorting model education always leads to overinvestment in education while human capital models lead to optimal investment, when both effects are modeled there may be too little investment in education. This result holds even if the more able learn faster in school.
Опубликовано на портале: 02-11-2007Alon Brav, George M. Constantinides, Christopher C. Geczy Journal of Political Economy. 2002. Vol. 110. No. 4. P. 793-824.
We present evidence that the equity premium and the premium of value stocks over growth stocks are consistent in the 1982-96 period with a stochastic discount factor calculated as the weighted average of individual households' marginal rate of substitution with low and economically plausible values of the relative risk aversion coefficient. Since these premia are not explained with an SDF calculated as the per capita marginal rate of substitution with a low value of the RRA coefficient, the evidence supports the hypothesis of incomplete consumption insurance. We also present evidence that an SDF calculated as the per capita marginal rate of substitution is better able to explain the equity premium and does so with a lower value of the RRA coefficient, as the definition of asset holders is tightened to recognize the limited participation of households in the capital market
Опубликовано на портале: 02-11-2007John Y. Campbell, John H. Cochrane Journal of Political Economy. 1999. Vol. 107. No. 2. P. 205-251.
We present a consumption-based model that explains the procyclical variation of stock prices, the long-horizon predictability of excess stock returns, and the countercyclical variation of stock market volatility. Our model has an i.i.d. consumption growth driving process, and adds a slow-moving external habit to the standard power utility function. The latter feature produces cyclical variation in risk aversion, and hence in the prices of risky assets Our model also predicts many of the difficulties that beset the standard power utility model, including Euler equation rejections, no correlation between mean consumption growth and interest rates, very high estimates of risk aversion, and pricing errors that are larger than those of the static CAPM. Our model captures much of the history of stock prices, given only consumption data. Since our model captures the equity premium, it implies that fluctuations have important welfare costs. Unlike many habit-persistence models, our model does not necessarily produce cyclical variation in the risk free interest rate, nor does it produce an extremely skewed distribution or negative realizations of the marginal rate of substitution
Опубликовано на портале: 22-03-2007Severin Borenstein, Nancy L. Rose Journal of Political Economy. 1994. Vol. 102. No. 4. P. 653-683.
The authors study dispersion in the prices an airline charges to different passengers on the same route. This variation in fares is substantial: the expected absolute difference in fares between two passengers on a route is 36 percent of the airline's average ticket price. The pattern of observed price dispersion cannot easily be explained by cost differences alone. Dispersion increases on routes with more competition or lower flight density, consistent with discrimination based on customers' willingness to switch to alternative airlines or flights. The authors argue that the data support models of price discrimination in monopolistically competitive markets.
Differentiated Products Demand Systems from a Combination of Micro and Macro Data: The New Car Market [статья]
Опубликовано на портале: 22-03-2007Steven T. Berry, Ariel Pakes, James A. Levinsohn Journal of Political Economy. 2004. Vol. 112. No. 1. P. 68-105.
In this paper, we exploit new sources of cross-sectional data to estimate a detailed product-level demand system for new passenger vehicles. We use four data sources: on the characteristics of products, on the attributes of the U.S. population of households, on the match between the first and second vehicle choices of the household, and on the match between households attributes and first choice vehicles. We show that these data solve some, but not all, of the traditional problems in estimating differentiated products demand systems and indicate which data sources are important for which problem. The data is rich enough to reveal a rather complex substitution pattern, requiring a quite general modeling framework. Together the data and model make a detailed analysis of industry demand possible.
Education and Self-Selection [статья]
Опубликовано на портале: 05-02-2007Sherwin Rosen, Rober J. Willis Journal of Political Economy. 1979. Vol. 87. No. 5. P. 7-36.
A structural model of the demand for college attendance is derived from the theory of comparative advantage and recent statistical models of self-selection and unobserved components. Estimates from NBER-Thorndike data strongly support the theory. First, expected lifetime earnings gains influence the decision to attend college. Second, those who did not attend college would have earned less than measurably similar people who did attend, while those who attended college would have earned less as high school graduates than measurably similar people who stopped after high school. Positive selection in both groups implies no "ability bias" in these data.
Опубликовано на портале: 22-03-2007Timothy F. Bresnahan, Peter C. Reiss Journal of Political Economy. 1991. Vol. 99. No. 5. P. 977-1009.
This paper proposes an empirical framework for measuring the effects of entry in concentrated markets. Building on models of entry in atomistically competitive markets, the authors show how the number of producers in an oligopolistic market varies with changes in demand and market competition. These analytical results structure the authors' empirical analysis of competition in five retail and professional industries. Using data on geographically isolated monopolies, duopolies, and oligopolies, they study the relationship between the number of firms in a market, market size, and competition. The authors' empirical results suggest that competitive conduct changes quickly as the number of incumbents increases.
Equity, Bonds, and Bank Debt: Capital Structure and Financial Market Equilibrium Under Asymmetric Information [статья]
Опубликовано на портале: 21-06-2006Patrick Bolton, Xavier Freixas Journal of Political Economy. 2000. Vol. 108. No. 2.
This paper proposes a model of financial markets and corporate finance, with asymmetric information and no taxes, where equity issues, bank debt, and bond financing coexist in equilibrium. The relationship banking aspect of financial intermediation is emphasized: firms turn to banks as a source of investment mainly because banks are good at helping them through times of financial distress. This financial flexibility is costly since banks face costs of capital themselves (which they attempt to minimize through securitization). To avoid this intermediation cost, firms may turn to bond or equity financing, but bonds imply an inefficient liquidation cost and equity an informational dilution cost. We show that in equilibrium the riskier firms prefer bank loans, the safer ones tap the bond markets, and the ones in between prefer to issue both equity and bonds. This segmentation is broadly consistent with stylized facts.
Опубликовано на портале: 15-07-2007Glenn Ellison, Edward Ludwig Glaeser Journal of Political Economy. 1997. Vol. 105. No. 5. P. 889-927.
This paper discusses the prevalence of Silicon Valley-style localizations of individual manufacturing industries in the United States. A model in which localized industry-specific spillovers, natural advantages, and random chance contribute to geographic concentration motivates new indices of geographic concentration and coagglomeration. The indices contain controls that facilitate cross-industry and cross-country comparisons. The authors find almost all industries to be more concentrated than a random dart-throwing model predicts but the degree of localization is often slight. They also discuss which industries are concentrated, the geographic scope of localization, coagglomeration patterns, and other topics.
Опубликовано на портале: 05-02-2007Joseph G. Altonji Journal of Political Economy. 1986. Vol. 94. No. 3. P. 176-215.
The sensitivity of the supply of labor to intertemporal variation in the wage is an important issue in macroeconomics, the analysis of social security and pensions, and the study of life-cycle patterns of work. This paper explores two approaches to the measurement of intertemporal substitution that have appeared in the literature. The first approach is to use consumption to control for wealth and unobserved expectations about future wages in the labor supply equation. The second approach is to estimate a first-difference equation for hours in which labor supply from the previous period serves as a control for wealth and wage expectations. The results indicate that the intertemporal substitution elasticity for married men is positive but small.
Law and Finance [статья]
Опубликовано на портале: 29-10-2008Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, Robert W. Vishny Journal of Political Economy. 1998. Vol. 106. No. 6. P. 1113-1155.
This paper examines legal rules covering protection of corporate shareholders and creditors, the origin of these rules, and the quality of their enforcement in 49 countries. The results show that common-law countries generally have the strongest, and French-civil-law countries the weakest, legal protections of investors, with German- and Scandinavian-civil-law countries located in the middle. We also find that concentration of ownership of shares in the largest public companies is negatively related to investor protections, consistent with the hypothesis that small, diversified shareholders are unlikely to be important in countries that fail to protect their rights.
Опубликовано на портале: 17-09-2008Chad Syverson Journal of Political Economy. 2004. Vol. 112. No. 6.
Many studies have documented large and persistent productivity differences across producers, even within narrowly defined industries. This paper both extends and departs from the past literature, which focused on technological explanations for these differences, by proposing that demand-side features also play a role in creating the observed productivity variation.
Monopoly Supply and Monopsony Demand [статья]
Опубликовано на портале: 31-03-2003A.J. Nichol Journal of Political Economy. 1942. Vol. 50. No. 6. P. 861-879.
В работе развиваются новые подходы к понятиям спроса и предложения применительно к анализу монополии и монопсонии. В статье показывается, что при определенных условиях возможно графическое выражение (в координатах цена-количество) предложения монополии и спроса монопсонии.
Опубликовано на портале: 31-01-2007Jeremy I. Bulow, John Geanakoplos, Paul Klemperer Journal of Political Economy. 1985. Vol. 3. No. 93. P. 488-511.
A firm's actions in one market can change competitors' strategies in a second market by affecting its own marginal costs in that other market. Whether the action provides costs or benefits in the second market depends on (a) whether it increases or decreases marginal costs in the second market and (b) whether competitors' products are strategic substitutes or strategic complements. The latter distinction is determined by whether more "aggressive" play (e.g., lower price or higher quantity) by one firm in a market lowers or raises competing firms' marginal profitabilities in that market. Many recent results in oligopoly theory can be most easily understood in terms of strategic substitutes and complements.
Опубликовано на портале: 20-07-2004William Jack Baumol, Edward N. Wolff Journal of Political Economy. 1984. Vol. 92. No. 6. P. 1017-1034.
In the literature, comparisons between absolute levels of productivity in different industries occur frequently. This paper explores the meaning and possible significance of such measures. Prices must be used to permit the required comparison of the outputs of different industries. It is shown that base-year weights produce a valid measure of productivity growth but not of absolute productivity level. Current price weights do yield a valid index of absolute productivity but one that tends to be equal for all industries because of the general equilibrium mechanism that reallocates resources from low-productivity to high-productivity industries.