452 research outputs found
Do State Laws Affect the Age of Marriage? A Cautionary Tale About Avoidance Behavior
This paper investigates the response of young people in the United States to state laws dictating the minimum age at which individuals could marry, with and without parental consent. We use variation across states and over time to document behavioral responses to laws governing the age of marriage using both administrative records from the Vital Statistics and retrospective reports from the U.S. Census. We find evidence that state laws delayed the marriages of some young people, but the effects are much smaller in Census data than in Vital Statistics records. This discrepancy appears to be driven by systematic avoidance behavior of two kinds. First, some young people marry outside their state of residence, in states with less restrictive laws. Second, many young people appear to have evaded minimum age of marriage laws by misrepresenting age on their marriage certificate. This avoidance was especially pronounced in earlier years, when few states required documented proof of age and when there was greater gain to marrying out of state because of wider variation in laws. Our results have important implications about the quality of administrative data when it is poorly monitored; about the effect of laws when agents can avoid them; and about the validly of estimates using cross-state variation in laws as an instrumental variable. By contrasting two data sources, we achieve a more complete picture of behavioral response than would be possible with either one alone.
A Unifying Model of How the Tax System and Generally Accepted Accounting Principles Affect Corporate Behavior
This paper models the impact of the tax system and GAAP on the real and financial reporting decisions of corporations. It provides a first step toward joint evaluation of taxation and financial reporting in the standard economic analyses of corporate behavior. The key finding is that value arises from real decisions that provide firms with discretion in their tax and financial reporting. This desire for flexibility modifies the optimal decisions of firms, in theory, and we provide examples that illustrate this behavior in the real world.
Automobile Fuel Economy Standards: Impacts, Efficiency, and Alternatives
This paper discusses fuel economy regulations in the United States and other countries. We first describe how these programs affect fuel use and other dimensions of the vehicle fleet. We then review different methodologies for assessing the costs of fuel economy regulations and discuss the policy implications of the results. We also compare the welfare effects of fuel economy standards with those of fuel taxes and assess whether these two policies complement each other. Finally, we review arguments in favor of a “feebate” system, which imposes fees on inefficient vehicles and provides rebates for efficient vehicles.fuel economy regulations, costs, welfare effects, climate change, feebates
Who benefits when firms game corrective policies?
Firms sometimes comply with externality-correcting policies by gaming the measure that determines policy. We show theoretically that such gaming can benefit consumers, even when it induces them to make mistakes, because gaming leads to lower prices by reducing costs. We use our insights to quantify the welfare effect of gaming in fuel-consumption ratings for automobiles, which we show increased sharply following aggressive policy reforms. We estimate a structural model of the car market and derive empirical analogs of the price effects and choice distortions identified by theory. We find that price effects outweigh distortions; on net, consumers benefit from gaming
Who benefits when firms game corrective policies?
Firms sometimes comply with externality-correcting policies by gaming the measure that determines policy. We show theoretically that such gaming can benefit consumers, even when it induces them to make mistakes, because gaming leads to lower prices by reducing costs. We use our insights to quantify the welfare effect of gaming in fuel-consumption ratings for automobiles, which we show increased sharply following aggressive policy reforms. We estimate a structural model of the car market and derive empirical analogs of the price effects and choice distortions identified by theory. We find that price effects outweigh distortions; on net, consumers benefit from gaming
More Mixed Colonies in Ants
At the meeting of the Academy two years ago (King, \u2749) nine mixed colonies of ants containing Formica reflexa and Formica fusca were reported. Seven of these had failed to survive the winter following their discovery; of the other two, found in 1948, only one survived the winter of 48-49 and contained only F. reflexa in 1949. This pure colony of F. reflexa, the only one ever reported, was deserted by the early summer of 1950. Two new mixed colonies were found in 1949 near the Iowa Lakeside Laboratory, Dickinson County, Iowa: only one of these survived the winter of 49-50; during the summer of 1950 it was still mixed. The rarity of pure colonies of this species tends to confirm the suggestion of Buren (\u2742) that F. reflexa is a permanent social parasite on Formica fusca
An Ant Colony which Moved over Two Hundred Feet
Colonies of Formica rufa melanotica Emery construct the most conspicuous ant nests in the region of the Iowa Lakeside Laboratory; 85 nests of this species have been found in 40 acres of prairie. These nests are often two feet in diameter: a thatched mound composed of short lengths of grass, twigs and other plant debris; well-developed mounds are often 18 inches high with an outer rampart of earth upon which the plant material forms a thatch. More numerous than these nests of melanotica are the smaller earthen mounds of the prairie ant, Formica cinerea neocinerea Wheeler: 72 nests of the latter species have been found in an area of about 2½ acres
On the Half-Life of Nests of Formica obscuripes Forel.
In these Proceedings for 1953 (p. 656) we discussed the duration of nets of Formica obscuripes Forel. We now have data for two additional years which establish certain facts only indicated earlier. The survey was started during the summer of 1945 on the grounds of the Iowa Lakeside Laboratory in Dickinson County, Iowa. Nests of the thatching ant were marked with metal tags on wire stakes and were plotted by compass readings from conspicuous features of the surroundings. The survey was repeated each summer; new nests were located and marked, and the loss of old nests recorded. The data are presented in table 1
The Value of Honesty: Empirical Estimates from the Case of the Missing Children
How much are people willing to forego to be honest, to follow the rules? When people do break the rules, what can standard data sources tell us about their behavior? Standard economic models of crime typically assume that individuals are indifferent to dishonesty, so that they will cheat or lie as long as the expected pecuniary benefits exceed the expected costs of being caught and punished. We investigate this presumption by studying the response to a change in tax reporting rules that made it much more difficult for taxpayers to evade taxes by inappropriately claiming additional dependents. The policy reform induced a substantial reduction in the number of dependents claimed, which indicates that many filers had been cheating before the reform. Yet, the number of filers who availed themselves of this evasion opportunity is dwarfed by the number of filers who passed up substantial tax savings by not claiming extra dependents. By declining the opportunity to cheat, these taxpayers reveal information about their willingness to pay to be honest. We present a novel method for inferring the characteristics of taxpayers in the absence of audit data. Our analysis suggests both that this willingness to pay to be honest is large on average and that it varies significantly across the population of taxpayers.
Car Notches: Strategic Automaker Responses to Fuel Economy Policy
Notches --- where small changes in behavior lead to large changes in a tax or subsidy --- figure prominently in many policies, but have been rarely examined by economists. In this paper, we analyze a class of notches associated with policies aimed at improving vehicle fuel economy. We provide several pieces of evidence showing that automakers respond to notches in fuel economy policy by precisely manipulating fuel economy ratings so as to just qualify for more favorable treatment. We then describe the welfare consequences of this behavior and derive a welfare summary statistic applicable to many contexts.
- …