FACTORS AFFECTING WELFARE GAINS FROM FISHING GEAR RESTRICTIONS

While the use of gear restrictions to regulate fishing activity seldom has the objective of improving economic efficiency, it is capable of achieving that result under some conditions. It can also reduce economic efficiency. This paper explores the way several factors affect the sign and magnitude of welfare gains from fishing gear restrictions. These factors include, among others: the fixity or variability of the price of fish and the presence or absence of diminishing short-run average product of effort. Some generalizations are offered regarding the characteristics of fisheries in which gear restrictions are most likely to produce welfare gains.Resource /Energy Economics and Policy,

Relative Efficiency of Charges and Quantity Controls in Fisheries with Continuous Stock Growth and Periodically Fixed Instrument Levels

This article presents a simple combination discrete-time/continuous-time model that incorporates continuous population dynamics and fishing activity together with periodic, rather than continuous, instrument adjustment into the decision process for choosing the optimal type and level of regulatory instrument. A per-unit tax and an allocated instantaneous harvest rate quota each drive the system along different time paths, and each results in a different present value of the stream of net benefits generated by harvesting the resource. The choice of instruments is fishery specific; it depends on the parameter values of the fishery in question.Environmental Economics and Policy, Resource /Energy Economics and Policy,

Taxes vs. Quotas for Regulating Fisheries Under Uncertainty: A Hybrid Discrete-Time Continuous-Time Model

There is a wide variety of regulatory instruments available for achieving economic efficiency in markets where externalities exist. All of them, when correctly designed, are equally effective, provided that complete information is available and that adjustments to the level of the instruments can be made costlessly. However, with the presence of uncertainty, it is well known that one instrument or another may produce a higher expected present value of net social benefits than the others. How uncertainty affects the choice of instrument specifically in fishery management and in other dynamic optimization settings is less well known. A combination discrete-time and continuous-time stochastic model of a dynamic fishery is used to compare the relative performance of a per unit tax and a quota in this paper. The analysis confirms the conclusion reached in the general literature on optimal instrument choice under uncertainty: which instrument performs most efficiently depends on the specific fishery being regulated.Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty,

Correlated Resource Models of Internet End Hosts

Understanding and modelling resources of Internet end hosts is essential for the design of desktop software and Internet-distributed applications. In this paper we develop a correlated resource model of Internet end hosts based on real trace data taken from the SETI@home project. This data covers a 5-year period with statistics for 2.7 million hosts. The resource model is based on statistical analysis of host computational power, memory, and storage as well as how these resources change over time and the correlations between them. We find that resources with few discrete values (core count, memory) are well modeled by exponential laws governing the change of relative resource quantities over time. Resources with a continuous range of values are well modeled with either correlated normal distributions (processor speed for integer operations and floating point operations) or log-normal distributions (available disk space). We validate and show the utility of the models by applying them to a resource allocation problem for Internet-distributed applications, and demonstrate their value over other models. We also make our trace data and tool for automatically generating realistic Internet end hosts publicly available

You can't take it with you: asset run-down at the end of the life cycle

This article presents evidence on the extent to which households run down their assets after retirement. The authors show that, once corrections are made for several econometric problems, households engage in very little asset decumulation after retirement.Retirement ; Income ; Wealth

Do Heterogeneous Beliefs Matter for Asset Pricing?

We study how heterogeneous beliefs affect returns and examine whether heterogeneous beliefs are a priced factor in traditional asset pricing models. To accomplish this task, we suggest new empirical measures based on the disagreement among analysts about expected (short-term and long-term) earnings are good proxies. Having established that heterogeneity of beliefs matters for asset pricing we turn our attention to estimating a structural model in which we use the forecasts of financial analysts to proxy for the beliefs of agents. Finally, we investigate if the amount of heterogeneity in analysts' forecasts can help explain asset pricing puzzlesHeterogeneous Beliefs, Asset pricing

Trade Costs

This paper surveys the measurement of trade costs --- what we know, and what we don't know but may usefully attempt to find out. Partial and incomplete data on direct measures of costs go together with inference on implicit costs from trade flows and prices. Total trade costs in rich countries are large. The ad valorem tax equivalent is about 170% when pushing the data very hard. Poor countries face even higher trade costs. There is a lot of variation across countries and across goods within countries, much of which makes economic sense. Theory looms large in our survey, providing interpretation and perspective on the one hand and suggesting improvements for the future on the other hand. Some new results are presented to apply and interpret gravity theory properly and to handle aggregation appropriately.

Higher-order perturbation solutions to dynamic, discrete-time rational expectations models

We present an algorithm and software routines for computing nth order Taylor series approximate solutions to dynamic, discrete-time rational expectations models around a nonstochastic steady state. The primary advantage of higher-order (as opposed to first- or second-order) approximations is that they are valid not just locally, but often globally (i.e., over nonlocal, possibly very large compact sets) in a rigorous sense that we specify. We apply our routines to compute first- through seventh-order approximate solutions to two standard macroeconomic models, a stochastic growth model and a life-cycle consumption model, and discuss the quality and global properties of these solutions.Macroeconomics - Econometric models ; Business cycles ; Monetary policy

Borders, Trade and Welfare

International economic integration yields large potential welfare effects, even in a static constant returns competitive world economy. Our method is novel. The effect of border barriers on trade flows is often inferred from gravity models. But their rather atheoretic structure precludes welfare analysis. Computable general equilibrium models are designed for tight welfare analysis, but lack econometric foundation. Our method combines these approaches. Gravity models based on Anderson's (1979) interpretation are full general equilibrium models of a special simple sort. In Anderson and van Wincoop (NBER WP 8079, 2001) we develop and estimate this structure, then calculate the comparative static effects on trade flows of border barriers. In this paper we further deploy the model to explore the comparative statics of welfare with respect to borders, to currency unions and to NAFTA. Our NAFTA exercise does a much better job of replicating the actual trade flow changes than do computable general equilibrium models. An interesting implication is that terms of trade changes are very important, even for small' countries such as Mexico.