Stanford University Press has just published the third edition of Thomas J. Miceli’s Law and Economics textbook.
From the publisher:
“Master teacher Thomas J. Miceli provides an introduction to law and economics that reveals how economic principles can explain the structure of the law and make it more efficient.
The third edition of this seminal textbook is thoroughly updated to include recent cases and the latest scholarship, with particular attention paid to torts, contracts, property rights, and the economics of crime. A new chapter organization, ideal for quarter- or semester-long courses, strengthens the book’s focus on unifying themes in the field.
As Miceli tells a cohesive, analytical “story” about law from a distinctly economic perspective, exercises and problems encourage students to deepen their knowledge.”
The Economic Approach to Law, Third Edition
An article by Professor Zhao and his coauthor Ayse Imrohoroglu (USC Marshall) has been posted on VoxChina.org, an independent, non-partisan and nonprofit platform recently initiated by Princeton together with a group of scholars from other institutions including UPenn and CUHK (Shenzhen).
In this article, they discuss their research on the determinants of the Chinese saving rates. They focus on the paper “The Chinese Saving Rate: Long-Term Care Risks, Family Insurance, and Demographics”, in which they find that the combination of the risks faced by the elderly and the deterioration of family insurance due to the one-child policy is an important cause of the increase in China’s saving rate since 1980. This paper is the first major paper growing out of their research agenda on the Chinese economy and its implications for the rest of the world.
Professor Zhao’s article can be found at: http://www.voxchina.org/show-3-43.html
Professor Jungbin Hwang and his co-author Yixiao Sun have had their paper, “Simple, Robust, and Accurate F and t Tests in Cointegrated Systems,” accepted by Econometric Theory as a lead article in a future issue.
In this paper, they propose new, simple, and more accurate statistical tests in a cointegrated system that allows for endogenous regressors and serially dependent errors. The approach involves first transforming the time series using orthonormal basis functions in L-2 space, which have energy concentrated at low frequencies, and then running an augmented regression based on the transformed data and constructing the test statistics in the usual way. The F and t tests developed in this article, are extremely simple to implement have more accurate size in finite samples than existing tests such as the asymptotic chi-squared and normal tests based on the fully modified OLS estimator of Phillips and Hansen (1990) and can be made as powerful as the latter test.
Professor Jungbin Hwang has published the paper “Asymptotic F and t tests in an efficient GMM setting” with his co-author Yixiao Sun in the Journal of Econometrics Volume 198, Issue 2, June 2017, Pages 277-295.
In this paper, they propose a simple and easy-to-implement modification to the trinity of test statistics in the two-step efficient GMM setting and show that the modified test statistics are all asymptotically F distributed under the so-called fixed-smoothing asymptotics. The main contributions of this paper are developing convenient asymptotic F tests whose critical values, i.e., the standard F critical values, are readily available from standard statistical tables and programming environments. For testing a single restriction with a one-sided alternative, the paper also develops an asymptotic test theory using the standard t distribution as the reference distribution.
The American Economic Association has posted an interview with Karthik Muralidharan on “Cycling to School: Increasing Secondary School Enrollment for Girls in India“, the paper that he and Professor Nishith Prakash have published in the American Economic Journal: Applied Economics.
The interview is online at
Biking to a better future
An interview with Karthik Muralidharan about closing the education gender gap in India
Professor Prakash is following up on this work with his new project, ‘Wheels of Change: Impact of Cycles on Female Education and Empowerment in Zambia’. For more information, see Professor Prakash Studies the Impact of Bicycles on Female Education and Empowerment in Zambia
Professor Nishith Prakash and his co-author Professor Kumar (Sam Houston State University) have had their paper titled “Effect of political decentralization and female leadership on institutional births and child mortality in Bihar” accepted for publication at Social Science & Medicine.
In this paper, they investigate the impacts of political decentralization and women reservation in rural local governance on institutional births and child mortality in the state of Bihar in India. Using difference-in-differences methodology, they find a significant positive association between political decentralization and institutional births. They also find that the increased participation of women at local governance led to increased survival rate of children belonging to richer households. They argue that their results are consistent with female leaders having policy preference for women and child well-being.
This project was funded by International Growth Center at London School of Economics (http://www.theigc.org).
Professor Jorge Agüero and his coauthor Trinidad Beleche have had their paper “Health Shocks and their Long-Lasting Impact on Health Behaviors: Evidence from the 2009 H1N1 Pandemic in Mexico” accepted for publication in the Journal of Health Economics.
Abstract: Worldwide, the leading causes of death could be avoided with health behaviors that are low-cost but also difficult to adopt. We show that exogenous health shocks could facilitate the adoption of these behaviors and provide long-lasting effects on health outcomes.
Specifically, we exploit the spatial and temporal variation of the 2009 H1N1 influenza pandemic in Mexico and show that areas with a higher incidence of H1N1 experienced larger reductions in diarrhea-related cases among young children. These reductions continue even three years after the shock ended. Changes in hand washing behaviors are behind these health improvements. Several robustness checks validate our findings and mechanism.
Professor Kanda Naknoi published a sole-authored article in the February 2017 issue of the Canadian Journal of Economics.
The title of her article is “Real Exchange Rate Fluctuations, Wage Stickiness and Tradability“
Abstract: When we classify factors of production by their tradability, the relative wage of nontraded labour influences the real exchange rate through the relative cost of distribution services. We confirm this prediction using monthly data on the sector-level US–Canada real exchange rate and the relative wage of service-producing labour. The relative wage accounts for 40% of the variability of the real exchange rate at a one-month horizon. Furthermore, when we use the effective nontraded labour content to classify goods into nontraded and traded ones, the variability of the price of the nontraded-goods basket accounts for more than half of the variability of the real exchange rate.
Professor Kai Zhao has had his paper titled “Social Insurance, Private Health Insurance and Individual Welfare” accepted for publication in the Journal of Economic Dynamics and Control. In this paper, he develops a quantitative dynamic general equilibrium model to evaluate social insurance policies. The main findings of the paper are that means tested social insurance does not only distort saving and labor supply decisions, but also has a large crowding out effect on the demand for private health insurance. However, despite the distorting effects, the net welfare consequence of eliminating social insurance is still negative. In addition, this paper finds that the existence of social insurance as a last resort is a quantitatively important reason why many Americans choose to be uninsured.
Professor Zhao and his coauthor Ayse Imrohoroglu (USC Marshall) have their paper titled “Intergenerational Transfers and China’s Social Security Reform” accepted for publication in the Journal of the Economics of Ageing. This paper grew out of their research agenda on the Chinese economy and its implications for the rest of the world. In it, they find that a model with two-sided altruism is preferred to a standard pure life-cycle model for studying social security reforms in China due to the prevalence of intergenerational links. They show that the implications of several reforms are quantitatively different from what have been found in existing studies using pure life-cycle models.
Professor Zhao’s research can be found at his personal webpage: https://sites.google.com/site/kaijackiezhao/research
Professor Minkler and Professor Prakash’s paper titled “The Role of Constitutions on Poverty: A Cross-National Investigation” has been accepted by the Journal of Comparative Economics. In this paper, they construct and use a new historical data set on economics and social rights from the constitutions of 195 countries and an instrument variable strategy to answer two important questions.
First, do economic and social rights provisions in constitutions reduce poverty, measured as headcount income and health outcomes? Second, does the strength of constitutional language of the economic and social rights matter? Constitutional provisions can be framed either more weakly as directive principles or more strongly as enforceable law.
The results suggest three findings. First, they do not find an association between constitutional rights generally framed and poverty. Second, they do not find an association between economic and social rights framed as directive principles and poverty. Third, they do find a strong negative association between economic and social rights framed as enforceable law and poverty when we use legal origins as our IV. These results persist for indices of constitutional rights and also when they restrict the sample to non-OECD countries. The policy implication is that constitutional provisions framed as enforceable law provide effective meta-rules with incentives for policymakers to initiate, fund, monitor and enforce poverty reduction policies.