In 1987 the federal government permitted states to raise the speed limit on their rural interstate roads, but not on their urban interstate roads, from 55 mph to 65 mph. Since the states that adopted ...the higher speed limit must have valued the travel hours they saved more than the fatalities incurred, this institutional change provides an opportunity to estimate an upper bound on the public’s willingness to trade off wealth for a change in the probability of death. Our estimates indicate that the adoption of the 65‐mph limit increased speeds by approximately 4 percent, or 2.5 mph, and fatality rates by roughly 35 percent. Together, the estimates suggest that about 125,000 hours were saved per lost life. When the time saved is valued at the average hourly wage, the estimates imply that adopting states were willing to accept risks that resulted in a savings of $1.54 million (1997 dollars) per fatality, with a sampling error roughly one‐third this value. We set out a simple model of states' decisions to adopt the 65‐mph limit that turns on whether their savings exceed their value of a statistical life. The empirical implementation of this model supports the claim that $1.54 million is an upper bound, but it provides imprecise estimates of the value of a statistical life.
The 1980s brought a whirlwind of change to Communist Party politics and the Soviet Republic. By mid-decade, Gorbachev's policies of perestroika and glasnost had opened the door to democratic reform. ...Later, mounting public unrest over the failed economy and calls for independence among many republics ended with the dissolution of the Soviet Union in 1991. Often overlooked in these events, yet monumental to breaking the Communist Party's institutional stranglehold, were the KGB anti-corruption campaigns of 1982-1987. Inthis original study,Luc Duhamel examines the KGB at its pinnacle of power. The appointment of former KGB director Yuri Andropov as general secretary of the Communist Party in 1982 marked the height of KGB influence. For the first time since Stalin, Beria, and the NKVD, there was now an unquestioned authority to pursue violators of Soviet law, including members of the Communist Party. Duhamel focuses on the KGB's investigation into Moscow's two largest trade organizations: the Chief Administration of Trade and the Administration of the Moscow Fruit and Vegetable Office. Like many of their Soviet counterparts, these state-controlled institutions were built on a foundation of bribery and favoritism among Communist Party members, workers, and their bosses. This book analyzes the multifarious networks of influence peddling, appointments, and clientelism that pervaded these trade organizations and maintained their ties to party officials. Through firsthand research into the archives of the Andropov-era KGB and the prosecutor general's office, Duhamel uncovers the indictment of thousands of trade organization employees, the reprimand of Communist Party members, and the radical change in political ideology manifested by these proceedings. He further reveals that despite aggressive prosecutions, the KGB's power would soon wither, as the agency came under intense scrutiny because of its violent methods and the ghosts of the NKVD. The reinstatement of Moscow city government control over the trade organizations, the death of Andropov, and the rising tide of democratic reform would effectively end the reign of the KGB and its anticorruption campaigns.
We examine the determinants of cross-sectional differences in insider ownership, debt, and dividend policies. These policies are related not only directly, but also indirectly, through their ...relationship with operating characteristics of firms. To distinguish these effects, we examine the determinants of the three policy choices within a system of equations. Our empirical results support the hypothesis that levels of insider ownership differ systematically across firms. Further, high insider ownership firms choose lower levels of both debt and dividends. Finally, the effects of profitability, growth, and investment spending on debt and dividend policy support a modified “pecking order” hypothesis.
Exchange rate movements exert tremendous impact on the domestic and external economic activities of open economies. This paper deals specifically on how the international trade is affected by ...fluctuations in the exchange rates of key currencies.
The Expansionary Fiscal Contraction (EFC) hypothesis predicts that a major fiscal consolidation leads to an economic expansion under certain circumstances. We test this hypothesis, and the implied ...non-linear responses of the economy to large and small changes in fiscal policy, using data from the 1983 Danish fiscal reform. We use a structural VAR/event study methodology following Blanchard and Perotti (2002) that explicitly allows us to distinguish between normally marginal changes in fiscal policy and comprehensive fiscal reforms. We find that 'marginal changes' in fiscal policy (expenditure and tax changes) have the expected Keynesian effects on output and consumption. However, we find no evidence that the large fiscal consolidation in Denmark slowed the economy after controlling for a host of exogenous shocks and business cycle effects. Rather, we find some support for the hypothesis that the exogenous fiscal contraction in Denmark was a credible regime shift and, together with other reforms undertaken at the time, increased both private consumption and aggregate output.
This paper examines the contributions of family planning programs, economic development, and women's status to Indonesian fertility decline from 1982 to 1987. Methodologically we unify seemingly ...conflicting demographic and economic frameworks into a single "structural" proximate-cause model as well as controlling statistically for the targeted (nonrandom) placement of family planning program inputs. The results are consistent with both frameworks: 75% of the fertility decline resulted from increased contraceptive use, but was induced primarily through economic development and improved education and economic opportunities for females. Even so, the dramatic impact of the changes in demand-side factors (education and economic development) on contraceptive use was possible only because there already existed a highly responsive contraceptive supply delivery system.
This article isolates sources of misspecification in neoclassical investment Euler equations without ad hoc alterations of the basic model. First, allowing for nonlinear marginal investment ...adjustment costs improves model performance slightly. Some further improvement results from isolating firms whose optimality conditions hold even in the presence of fixed costs of adjustment or costly reversibility. Finally, I identify which instruments contribute to model failure via standard GMM-based tests and also via the empirical likelihood estimator of Imbens, which allows testing overidentifying restrictions individually. Both methods show that financial instruments contribute to rejection of the overidentifying restrictions for all firms; however, only the empirical likelihood estimator shows that they are a source of failure for firms that attain an interior optimum.
In the 1960's Benoit Mandelbrot and Eugene Fama argued strongly in favor of the stable Paretian distribution as a model for the unconditional distribution of asset returns. Although a substantial ...body of subsequent empirical studies supported this position, the stable Paretian model plays a minor role in current empirical work.
While in the economics and finance literature stable distributions are virtually exclusively associated with stable Paretian distributions, in this paper we adopt a more fundamental view and extend the concept of stability to a variety of probabilistic schemes. These schemes give rise to alternative stable distributions, which we compare empirically using S&P 500 stock return data. In this comparison the Weibull distribution, associated with both the nonrandom-minimum and geometric-random summation schemes dominates the other stable distributions considered-including the stable Paretian model.
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