The dynamics of immigration policy with wealth-heterogeneous immigrants

In this paper we consider a simple intertemporal economy in which immigrants, if admitted, bring heterogeneous amounts of capital. We show that under certain conditions there is a level of immigration which maximizes the economy's capital-labor ratio, and that this level of immigration is the preferred choice of a majority of the economy's citizens. We then characterize, in an overlapping generations setting, the dynamics of capital accumulation and immigration policy, which can include multiple steady state equilibria and a sensitivity of immigration levels to changes in the economy's technology growth rate.Emigration and immigration

The dynamic impact of fundamental tax reform part 2 : extensions

In this second of two articles on the economic impact of fundamental tax reform, Gregory Huffman and Evan Koenig extend their earlier framework for analyzing how the adoption of a flat-rate consumption tax would affect the economy over time. They argue that if tax reform is to be successful in stimulating investment and raising long-run living standards, then it is important that ways be found to avoid increasing the rate of labor-income taxation. Increases in labor-income tax rates can undo the positive economic effects of a cut in the rate of capital-income taxation. Conversely, cuts in labor-income tax rates reinforce savings incentives and contribute to higher steady-state levels of consumption. Huffman and Koenig also demonstrate that the economy’s immediate response to tax reform is muted—and the overall adjustment process can be substantially prolonged—when firms find it expensive to add quickly to their stocks of plant and equipment.Taxation ; Tax auditing ; Tax reform

The dynamic impact of fundamental tax reform part 1: the basic model

The Internal Revenue Service remains unpopular, the U.S. savings rate remains low, and pressure to efficiently raise significant new tax revenues seems certain to grow once the baby boom generation reaches retirement age. Consequently, it is likely that alternatives to the current income tax system will receive substantial political and media attention in coming years. In this first of two articles on the economic impact of fundamental tax reform, Evan Koenig and Gregory Huffman describe a framework for analyzing how the adoption of a flat-rate consumption tax would affect the economy over time. Their analysis indicates that replacing the income tax with a consumption tax would have an immediate positive impact on saving and lead, in the long run, to higher levels of consumption, wages, and stock prices and to lower interest rates. In the short run, however, interest rates would probably rise, and consumption and stock prices would probably decline.Taxation

The Nature and Applications of Tryptic Enzymes in Veterinary Practice

Enzymes, or ferments as they were known in earlier times, have been used in medicine for centuries. From the time of Pasteur interest in enzymes has increased till, at the present date, we have active research groups devoting much time and money to the study of the nature and applied uses of a great variety of enzymes

Effects and Value of Verifiable Information in a Controversial Market: Evidence from Lab Auctions of Genetically Modified Food

Food products containing genetically modified (GM) ingredients have entered the market over the past decade. The biotech industry and environmental groups have disseminating conflicting private information about GM foods. This paper develops a unique methodology for valuing independent third-party information in such a setting and applies this method to consumersï¾’ willingness to pay for food products that might be GM. Data are collected from real consumers in an auction market setting with randomized information and labeling treatments. The average value of third-party information per lab participant is small, but the public good value across U.S. consumers is shown to be quite large.

The Value of Verifiable Information in a Controversial Market: Evidence from Lab Auctions of Genetically Modified Food

Two interested parties dominate the current debate on genetically modified (GM) foods: environmental groups and agribusiness companies. For the average consumer to arrive at an informed decision on these new foods, they must rely on information from interested parties. Unfortunately, information from interested parties does not provide an accurate picture of the benefits and risks of new products. This paper examines the effects of information on consumers? demand for new food products, GM-foods, in an environment where information from one or more interested parties is provided. We design and conduct laboratory auction experiments using randomly chosen adult consumers from two large metropolitan areas who are grouped into twelve experimental units and subjected to six randomly assigned information treatments. We find that in this environment, verifiable information has a small but positive value to sample consumers, and the projected annual social value to all processed foods consumed is relatively large for this public good. Such a large potential value may make it worthwhile for the United States to establish a new third party institution that would produce and distribute verifiable information on GM food.

Who Do Consumers Trust for Information? The Case of Genetically Modified Foods

To be effective, groups that disseminate information need the trust of consumers. When multiple groups provide conflicting information on a new product or process like GM-foods, consumers place different levels of trust in the various sources. We present a model of the contributions of personal and social capital of a consumer, and test a multinominal logit model of relative trust in five different sources of information on genetic modification using a unique data set. Among our findings is that an increase in consumer's education lowers the probability of trusting information from government, private industry/organizations, consumer and environmental groups, or other sources relative to information from an independent, third-party source, and conservative religious affiliation reduces the odds of a consumer trusting private industry/organization and increases the odds of trusting nobody relative to an independent, third-party source.

Are U.S. Consumers Tolerant of GM Foods?

Genetically modified (GM) foods have caused many controversies. One important controversy relates to tolerance?the impurity rate that is tolerated before a commodity must be labeled as genetically modified. Currently, the United States does not have a specific tolerance or threshold level for GM foods. This paper uses experimental auctions to determine consumers? acceptance of non-GM foods with zero, 1 percent, and 5 percent tolerance for genetically modified material. Our results indicate that consumers would pay less for food that tolerates GM material, but the discount is not significantly different for foods with 1-percent and 5-percent GM content. Key words: genetically modified (GM) foods, contamination thresholds, laboratory auctions, nth-price auction, vegetable oil, tortilla chips, russet potatoesgenetically modified foods; GM foods; contamination thresholds; laboratory auctions; nth-rice auction; vegetable oil; tortilla chips; russet potatoes

Better Dead Than GM-Fed? Information and the Effects of Consumers' Resistance to GM-Foods in High-Income Countries

This paper addressed the puzzling resistance of Presidents of southern African countries to food aid in 2002, given near certain starvation and long-term negative health effects of malnutrition of their constituents.  First, I show that NGOs led by Greenpeace and Friends of the Earth are disseminating information claiming that GM foods are dangerous to human health and are “Frankenfoods.”  Second, people in European Union countries, who are not in any danger of starvation, have strong preferences for non-GM foods, which they can easily afford.  Over the long term, however, the tastes of EU consumers matter to southern African countries because some of these countries hope to export agricultural products in the future.  GM-food aid, which most likely would contain GM-maize, is seen as a potential contaminant to native African maize varieties, and over the long term to be a threat to south African exports to the EU.  Hence, understanding resistance to GM-food in developed countries is crucial to formulation of better food policies in Africa and to sustainable development.New and important results are reported from a statistical analysis of the market characteristics that push consumers in a high-income country to resist GM foods, with an emphasis on negative information from environmental groups and third-party, verifiable information, which could neutralize misinformation.  For this study, a unique sample of adult consumers participated in laboratory (random nth price) auctions of three food products where labeling and information treatments were randomly assigned to experimental units.  A key finding is that negative GM-information supplied by environmental groups pushes some high income consumers out of the market for GM products and increases the probability that all consumers are out of the market.  However, verifiable information dampens the effectiveness of negative GM-product information.  Hence, a vocal interested source can stymie technology adoption in both rich and poor countries and increase the probability of general malnutrition and micro-nutrient deficiencies and starvation and unsustainable development in poor countries because of the failure to accept food and adopt new GM technology.

The Effects of Prior Beliefs and Learning on Consumers' Acceptance of Genetically Modified Foods

In most environments, information is critical to consumersï¾’ decision making. Consumers have prior beliefs about quality and price of goods and services and obtain new information which is used to update these prior beliefs or to form posterior beliefs, i.e., Bayesian learning. New food products made from herbicide-tolerant and insect-resistant crops using bioengineering, have appeared in U.S. supermarkets starting in 1996. The objective of this paper is to examine in depth the role of consumerï¾’s prior beliefs about genetic modification and of diverse, new information on their willingness to pay for foods that might be genetically modified. One hypothesis is that prior beliefs matter and, second, consumers give less weight to information from interested than disinterested par ties. We use a unique data set collected from a set of economics experiments to show that consumers who had informed prior beliefs behaved as if they placed more trust in the third-party information than in information from interested parties. Participants whose prior beliefs were uninformed revealed greater variation in their bidding behavior than informed participants.