Recent Paper Abstracts
Real Wage Behavior in the United States, Britain, and Japan: An ARCH Approach
with Shigeyuki Hamori
Using OECD data from the United States, Britain, and Japan, this research determines that ARCH-class models are valuable for the analysis of volatility in real wage growth rates. It also establishes that asymmetry exists in the response to positive and negative shocks in real wages. Such asymmetry is the strongest in Britain, weaker in the United States, and insignificant in Japan. Finally, ARCH, GARCH, TARCH, and EGARCH models are compared in terms of their predictive power. The TARCH model performed the best with U.S. and Japanese data, whereas the simple ARCH model provided the best fit for British data.
The Aggregate Burden of Crime
This study estimates the total burden of criminal behavior in American society. In addition to aggregating expenses commonly associated with unlawful activity, it considers ancillary costs that have not yet been included into an overall formula for the cost of crime. Beyond the expenses of the legal system, victim losses, and crime-prevention agencies, the burden of crime includes the opportunity costs of victims’, criminals’, and prisoners’ time, the fear of being victimized, and the cost of private deterrence including locks, security systems and alarms, safety lighting and fences, computer security, detective and protective services, insurance against theft, and protective firearms. More accurate information on the repercussions of crime could guide our legal, political, and cultural stance towards crime and allow informed prioritization of programs that curtail criminal activity. The net annual burden of crime and distrust is found to exceed $1 trillion.
A Theory of Quality Signaling in the Marriage Market
with Shigeyuki Hamori
This paper advances the current understanding of marriage markets to include a model of quality signaling. The existing literature describes the division of marital output in great detail, but includes virtually no discussion of the process of estimating a prospective mate’s potential contribution to marital income. Although several relevant traits are readily observable, many of the inputs into marital gains are unseen until well after marital contracts are constituted. The model below helps to explain optimal marital search behavior, the absence of market clearing, the distinctions between marital search and employment search, and the repercussions of misrepresented and misperceived quality on marital relationships.
The tenet that harsher penalties could substantially reduce crime rates rests on the assumption that currently active criminals weigh the costs and benefits of their contemplated acts. Existing and proposed crime strategies exhibit this belief, as does a large and growing segment of the crime literature. This study examines the premise that criminals are able to make informed and rational decisions, presents data on influences affecting criminals, and prescribes crime prevention strategies that respond to the apparent roots of criminal behavior. The results suggest that 77 percent of active criminals and 90 percent of violent criminals are impervious to harsher punishments, either because they perceive no risk of apprehension and conviction, or because they have no knowledge of the punishments for their contemplated crimes.
The Cost Effectiveness of Home Birth
with Rondi Anderson
As the burden of health care costs increases, and a growing number of women are without insurance, home birth offers a safe and cost-effective alternative that is overlooked by all but one percent of expecting mothers. Relative to hospital and birth center births, home births offer lower rates of intrapartum and neonatal mortality, and considerably lower cesarean birth rates. At the same time, on the average, home births offer a savings of 63 percent below the cost of hospital births, and a savings of 49 percent below the cost of birthing center births. This research supports the conclusion that home birth is a cost-effective health care modality. Future prospective research is needed.