Re: income and substitution effect

I do agree that one of the few applications of i. and s. effects is to labor supply (this was mentioned in my first post). (This is because labor is one of the few goods where the income effect is likely to be large.) Hence that is the context in which I teach the material. It is appalling, th

Re: Median Voter, Welfare State and World Power

Note that the U.S. has lower welfare spending, higher military spending *and* lower government spending over all than Europe. Thus if the U.S. government spent as much as the Europeans we could have just as large a welfare and a warfare state. The fact that we don't indicates that at a minimum

Re: income and substitution effect

So far we have that i. and s. effects are useful to a) teach Marshallian demand b) teach difference between nominal and real income c) students going on to graduate school d) useful but for reasons that can't be remembered! :) e) useful as a hurdle/signal f) not useful at the intermediate/mba l

income and substitution effect

Almost every intermediate micro text spends a great deal of time on income versus substitution effects. This is a somewhat tricky concept for students to understand so one would hope that the payoff to learning the idea is high. But what is the payoff? One of the few applications is to labor

Re: Lott

Yes, Bill's points about surveys are technically correct but Kleck was aware of these issues and tried to design a survey to handle them as best as is possible. See Kleck's papers for details. Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 2

Lott

What doesn't come through in the Lott material on Slate is that the 98% figure is one sentence in a big book. The vast bulk of Lott's work on shall-issue laws is based on publicly available data. The best figure on defensive gun use involving brandishment only is from a survey by Kleck and it is

Re: SUVs

the best piece I have seen on these issues is in Regulation. Here http://www.cato.org/pubs/regulation/regv24n1/coate.pdf Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314 Web Page: http://mason.gmu.edu/~atabarro/ and

Re: Bubblemania

Bryan D Caplan wrote: Another annoying thing about the "I told you there was a bubble" people is that a good chunk of the stock market crash can be attributed to the 9/11 attacks (more specifically, indirect effects via policy changes). If ever there were a random shock, it was 9/11. Shame on

Re: Accountancy vs Entrepreneurship

Accounting costs is the correct term. Most micro textbooks contain a discussion of the difference between accounting and economic costs. Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314 Web Page: http://mason.gmu.edu/~

Re: [Fwd: a non-profit oddity]

Fabio wrote "Movie studios owners only care about profits, while opera owners consume both money and art." Quite right. You can find a general model of this sort of behaviour with implications in: Cowen, Tyler and Alexander Tabarrok. 2000. A Economic Theory of Avant-Garde and Popular Art, or H

Zimbabwe

Nice piece from the Economist, posted by Brad DeLong, on the insanity of economic policies in Zimbabwe. It's like something out of the dark ages, i.e. the 1960s and 70s. Alex http://www.j-bradford-delong.net/movable_type/archives/001179.html -- Alexander Tabarrok Department of Economics, MSN

fat tax

Jonathan Rauch has a very clever piece on the recent idea to tax fat foods. Only Rauch has a much "better" idea. Now why didn't I think of that? Alex http://www.theatlantic.com/issues/2002/12/rauch.htm -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA,

Re: The Cigarette Standard

The classic paper on this issue: The Economic Organization of a P.O.W. Camp, R.A. Radford, Economica, November, 1945 http://academic.bellevue.edu/~jpatton/micro/pow.html Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314 and

Re: EU

Basically you are talking about expected utility theory without the independence axiom. See Mark Machina “Choice Under Uncertainty: Problems Solved and Unsolved,” Journal of Economic Perspectives 1 (Summer 1987) 121-154. Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason Un

Re: Self-assesment vs. Rationality

The best way to think about RE is that it is a consistency stricture that says that the agents in your model of the economy should not be less informed than you are. If you know the model then they should too and the equilibrium defined accordingly. Note that this perspective leaves it op

Re: SV: Economists job market/search costs

In my view, there are costs to going out early and few benefits. First, there is the nightmare scenario in which you get a job that requires you to teach while still trying to finish your dissertation - beware, these rocks have sunk many a ship. You should not go out unless you are confide

Re: insuring against changes in home prices

Cyril Morong wrote: > Alexander Tabarrok wrote: > >now being offered on a limited basis. This is an interesting product in > that the idea is in large part driven by academics like Robert Shiller. > > http://www.forbes.com/2002/08/28/0829whynot.html > > see also the chapter on macro m

Re: Return to Education and IV

The focus of the discussion has been on whether college students do the math of attending college. Perhaps a better question is whether those young people not in college have done the math. Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel

insuring against changes in home prices

Insurance against changes in home prices is for the first time now being offered on a limited basis. This is an interesting product in that the idea is in large part driven by academics like Robert Shiller. http://www.forbes.com/2002/08/28/0829whynot.html see also the chapter on macro markets in

Re: Return to Education and IV

Bill is quite correct that variation in "discount rates," (which could also be something like how much you enjoy schooling for its own sake) can explain the fact that IV estimates are higher than OLS estimates. Bryan's question, however, can be rephrased as not how do you explain the data (low abil

patent paper and bepress

Warning: Some shameless self-promotion as well as promotion of bepress.com My most recent paper, Patent Theory versus Patent Law, has just been published by the B.E. journal, Contributions to Economic Analysis & Policy. You can find the article and abstract here (abstract is also below) http:

Krugman on productivity

Krugman finally gets back to economics and says something pretty smart about productivity, unemployment and growth. http://www.wws.princeton.edu/~pkrugman/jobs.html Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314 and Dir

recommended paper

Sherwin Rosen's paper "Potato Paradoxes" in the December 1999 JPE is well worth reading. I believe this was his last paper. Nominally, the paper is about a new explanation for Giffen like behavior but more generally it is about the interesting dynamics that can occur when a good has a dual r

textbook marginal cost examples

A few years ago I cribbed some nice examples of marginal versus average cost from a microeconomics textbook. The examples involved case studies of Franklin National Bank and Continental Airlines. Now I can't locate the original discussion. Does anyone know the source? Thanks Alex Tabarrok Dep