174 research outputs found

    Quality Adjusted Cost Functions for Child Care Centers

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    Using a newly compiled data set, this paper estimates multi- product translog cost functions for 399 child care centers from California, Colorado, Connecticut, and North Carolina. Quality of child care is controlled by a quality index, which has been shown to be positively related to child outcomes by previous research. Nonprofit centers that receive public money, either from the state or federal government, (which is tied to higher standards), have total variable costs that are 18 percent higher than other centers, keeping quality of services constant. No statistically significant differences between general categories of for-profit and non-profit centers are detected. Furthermore, various types of nonprofits are not distinguishable from their for-profit counterparts. In agreement with previous studies, the data show that the average quality of center-based child care is between 'minimal' and 'good', and it costs 13 cents per hour per child to increase this average quality to the level considered developmentally appropriate by child care experts.

    Can Consumers Detect Lemons? Information Asymmetry in the Market for Child Care

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    This paper applies direct tests for adverse selection and moral hazard in the market for child care. A unique data set containing quality measures of various characteristics of child care provided by 746 rooms in 400 centers, as well as the evaluation of the same attributes by 3,490 affiliated consumers (parents) is employed. Comparisons of consumer evaluations of quality to actual quality show that, after adjusting for scale effects, parents are weakly rational. The hypothesis of strong rationality is rejected, indicating that parents do not utilize all available information in forming their assessment of quality. Parent characteristics impact the accuracy of their evaluations. An analysis of easy-to-observe versus difficult-to-observe aspects of quality reveals that parents are trying to extract signals more heavily in cases of difficult-to-observe items. A comparison of parent assessments to results obtained from standard quality production functions reveals that, for the most part, parents interpret the signals incorrectly. The results demonstrate the existence of information asymmetry and adverse selection in the market. There is some limited evidence for moral hazard as nonprofit centers with very clean reception areas tend to produce lower level of quality for unobservable items. These results provide an explanation for low average quality in the child care market.

    Ugly Criminals

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    Using data from three waves of Add Health we find that being very attractive reduces a young adult's (ages 18-26) propensity for criminal activity and being unattractive increases it for a number of crimes, ranging from burglary to selling drugs. A variety of tests demonstrate that this result is not because beauty is acting as a proxy for socio-economic status. Being very attractive is also positively associated adult vocabulary test scores, which suggests the possibility that beauty may have an impact on human capital formation. We demonstrate that, especially for females, holding constant current beauty, high school beauty (pre-labor market beauty) has a separate impact on crime, and that high school beauty is correlated with variables that gauge various aspects of high school experience, such as GPA, suspension or having being expelled from school, and problems with teachers. These results suggest two handicaps faced by unattractive individuals. First, a labor market penalty provides a direct incentive for unattractive individuals toward criminal activity. Second, the level of beauty in high school has an effect on criminal propensity 7-8 years later, which seems to be due to the impact of the level of beauty in high school on human capital formation, although this second avenue seems to be effective for females only.

    Joblessness and Perceptions about the Effectiveness of Democracy

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    Using micro data on more than 130,000 individuals from 69 countries, we analyze the extent to which joblessness of the individuals and the prevailing unemployment rate in the country impact perceptions of the effectiveness of democracy. We find that personal joblessness experience translates into negative opinions about the effectiveness of democracy and it increases the desire for a rouge leader. Evidence from people who live in European countries suggests that being jobless for more than a year is the source of discontent. We also find that well-educated and wealthier individuals are less likely to indicate that democracies are ineffective, regardless of joblessness. People's beliefs about the effectiveness of democracy as system of governance are also shaped by the unemployment rate in countries with low levels of democracy. The results suggest that periods of high unemployment and joblessness could hinder the development of democracy or threaten its existence.unemployment duration, democracy, education, development, World Values Survey

    Who Shall Live and Who Shall Die? An Analysis of Prisoners on Death Row in the United States

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    Using data on the entire population of prisoners under a sentence of death in the U.S. between 1977 and 1997, this paper investigates the probability of being executed on death row in any given year, as well as the probability of commutation when reaching the end of death row. The analyses control for personal characteristics and previous criminal record of the death row inmates. We link the data on death row inmates to a number of characteristics of the state of incarceration, including variables which allow us to assess the degree to which the political process enters into the final outcome in a death penalty case. Inmates with only a grade school diploma are more likely to receive clemency, and those with some college attendance are less likely to have their sentence commuted. Blacks and other minorities are less likely to get executed in comparison to white inmates. Female death row inmates and older inmates are also less likely to get executed. If an inmate's spell on death row ends at a point in time where the governor is a lame duck, the probability of commutation is higher in comparison to a similar inmate whose decision is made by a governor who is not a lame duck. If the governor is female, she is more likely to spare the inmate's life; and if the governor is white, the likelihood of dying is higher in comparison to the case where the decision is made by a minority governor.

    Carrots, Sticks and Broken Windows

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    This paper investigates the impact of economics conditions (carrots) and sanctions (sticks) on murder, assault, robbery, burglary and motor vehicle theft in New York City, using monthly time-series data spanning 1974-1999. Carrots are measured by the unemployment rate and the real minimum wage; sticks are measured by felony arrests, police force and New York City residents in prison. In addition, the paper tests the validity of the 'broken windows' hypothesis, where misdemeanor arrests are used as a measure of broken windows policing. The broken windows hypothesis has validity in case of robbery and motor vehicle theft. The models explain between 33 and 86 percent of the observed decline in these crimes between 1990 and 1999. While both economic and deterrence variables are important in explaining the decline in crime, the contribution of deterrence measures is larger than those of economic variables.

    The Determinants of the Willingness to be an Organ Donor

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    The total value of life lost due to death because of waiting for an organ transplant is greater than $4 billion annually in the United States, and the excess demand for organs has been increasing over time. To shed light on the factors that impact the willingness to donate an organ, we analyze data from the United States and the European Union. The rate of willingness to donate an organ is 38 % among young adults in the U.S., and it is 42 % in Europe. Interesting similarities emerge between the U.S. and Europe regarding the impact of gender, political views and education on the willingness to donate. In the U.S. Blacks, Hispanics and Catholics are less likely to donate. In Europe, individuals who reveal that they are familiar with the rules and regulations governing the donation and transplantation of human organs are more likely to donate. In both data sets individuals who had some encounter with the health care sector %u2013either through a recent emergency room visit (in the U.S.), or perhaps because of a long-standing illness (in the E.U), are more likely to become organ donors. Mother%u2019s education has a separate positive impact.

    Guns, Drugs and Juvenile Crime: Evidence from a Panel of Siblings and Twins

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    Using a nationally-representative panel data set of U.S. high school students (AddHealth data) that contains a relatively large sample of siblings and twins, the paper investigates the impacts of gun availability at home and individual drug use on robbery, burglary, theft and damaging property for juveniles. Using a variety of fixed-effects models that exploit variations over time, the results show that gun availability at home increases the propensity to committing robbery, burglary and theft by about two percentage points for juveniles but has no impact on damaging property. It is unlikely that gun availability is merely a measure of the unobserved home environment because gun availability does not influence other risky or bad behaviors of juveniles. The results show that having access to guns increases the probability of being cut or stabbed by someone and of someone pulling a knife or gun on the juvenile. Estimates obtained from models that exploit variations over time and between siblings and twins indicate that the median impact of cocaine use on the propensity to commit various types of crimes is 23 percentage points. The impact of using inhalants or other drugs is an increase in the propensity to commit crime by 14 and 18 percentage points, respectively.
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