Revenue-neutral tax policies under price uncertainty: reply

In their comment on my 1990 article, Yeh, Suwanakul, and Mai extend my analysis-which focused attention exclusively on firm output-to allow for simultaneous endogeneity of price, aggregate output, and numbers of firms. They show that, with downward- sloping demand, industry output adjusts positively to revenue-neutral changes in the marginal rate of taxation. This result is significant for two reasons. First, we are more often interested in predictions about aggregate phenomena than we are in predictions about individual firms. Indeed, firm-level predictions are frequently irrefutable since firm data are often unavailable. Second, the authors derive their result under a set of conditions that appear to be more general than those invoked in my 1990 article. In particular, they circumvent the need to invoke specific assumptions about the nature of firms' aversions toward risk. I consider this a useful extension and I appreciate the careful scrutiny of my paper.

Budget constrained tax policy under price uncertainty: implications for supply control

Tax policies that constrain net transfers between the farm sector and the fisc are modeled under price uncertainty. Increasing the level of tax on profits causes the firm to expand output. Implications are derived for supply control and the distributions of profits and net receipts at the fisc.

The potential inefficiency of using marketing margins in applied commodity price analysis, forecasting and risk management

This paper examines the implications of using marketing margins in applied commodity price analysis. The marketing-margin concept has a long and distinguished history, but it has caused considerable controversy. This is particularly the case in the context of analyzing the distribution of research gains in multi-stage production systems. We derive optimal tax schemes for raising revenues to finance research and promotion in a downstream market, derive the rules for efficient allocation of the funds, and compare the rules with an without the marketing-margin assumption. Applying the methodology to quarterly time series on the Australian beef-cattle sector and, with several caveats, we conclude that, during the period 1978:2 - 1988:4, the Australian Meat and Livestock Corporation optimally allocated research resources.

A coherent procedure for inferring conduct

We exploit a theory of price linkages that lends itself readily to empirical examination using Markovchain, Monte Carlo methods. The methodology facilitates classification and discrimination among alternative regimes in economic time series. The theory and procedures are applied to annual series (1955-1992) on the U.S. beef sector

Evolution of discrimination in populations at equilibrium between selfishness and altruism

Where there is genetically based variation in selfishness and altruism, as in man, altruists with an innate ability to recognise and thereby only help their altruistic relatives may evolve. Here we use diploid population genetic models to chart the evolution of genetically-based discrimination in populations initially in stable equilibrium between altruism and selfishness. The initial stable equilibria occur because help is assumed subject to diminishing returns. Similar results were obtained whether we used a model with two independently inherited loci, one controlling altruism the other discrimination, or a one locus model with three alleles. The latter is the opposite extreme to the first model, and can be thought of as involving complete linkage between two loci on the same chromosome. The introduction of discrimination reduced the benefits obtained by selfish individuals, more so as the number of discriminators increased, and selfishness was eventually eliminated in some cases. In others selfishness persisted and the evolutionary outcome was a stable equilibrium involving selfish individuals and both discriminating and non-discriminating altruists. Heritable variation in selfishness, altruism and discrimination is predicted to be particularly evident among full sibs. The suggested coexistence of these three genetic dispositions could explain widespread interest within human social groups as to who will and who will not help others. These predictions merit experimental and observational investigation by primatologists, anthropologists and psychologists. Keywords: Population genetics, Diploid, Heritability, Prosocial, Behaviour genetics

Evidence on caste based discrimination

Caste based quotas in hiring have existed in the public sector in India for decades. Recently there has been debate about introducing similar quotas in private sector jobs. This paper uses a correspondence study to determine the extent of caste based discrimination in the Indian private sector. On average low-caste applicants need to send 20% more resumes than high-caste applicants to get the same callback. Differences in callback which favor high-caste applicants are particularly large when hiring is done by male recruiters or by Hindu recruiters. This finding provides evidence that differences in callback between high and low-caste applicants are not entirely due to statistical discrimination. High-caste applicants are also differentially favored by firms with a smaller scale of operations, while low-caste applicants are favored by firms with a larger scale of operations. This finding is consistent with taste-based theories of discrimination and with commitments made by large firms to hire actively from among low-caste groups.

House price dynamics and their reaction to macroeconomic changes

This article applies a three-regime Markov switching model to investigate the impact of the macroeconomy on the dynamics of the residential real estate market in the US. Focusing on the period between 1960 and 2011, the methodology implemented allows for a clearer understanding of the drivers of the real estate market in “boom”, “steady-state” and “crash” regimes. Our results show that the sensitivity of the real estate market to economic changes is regime-dependent. The paper then proceeds to examine whether policymakers are able to influence a regime switch away from the crash regime. We find that a decrease in interest rate spreads could be an effective catalyst to precipitate such a change of state.

Memory as discrimination: what distraction reveals

Recalling information involves the process of discriminating between relevant and irrelevant information stored in memory. Not infrequently, the relevant information needs to be selected from amongst a series of related possibilities. This is likely to be particularly problematic when the irrelevant possibilities are not only temporally or contextually appropriate but also overlap semantically with the target or targets. Here, we investigate the extent to which purely perceptual features which discriminate between irrelevant and target material can be used to overcome the negative impact of contextual and semantic relatedness. Adopting a distraction paradigm, it is demonstrated that when distracters are interleaved with targets presented either visually (Experiment 1) or auditorily (Experiment 2), a within-modality semantic distraction effect occurs; semantically-related distracters impact upon recall more than unrelated distracters. In the semantically-related condition, the number of intrusions in recall is reduced whilst the number of correctly recalled targets is simultaneously increased by the presence of perceptual cues to relevance (color features in Experiment 1 or speaker’s gender in Experiment 2). However, as demonstrated in Experiment 3, even presenting semantically-related distracters in a language and a sensory modality (spoken Welsh) distinct from that of the targets (visual English) is insufficient to eliminate false recalls completely, or to restore correct recall to levels seen with unrelated distracters . Together, the study shows how semantic and non-semantic discriminability shape patterns of both erroneous and correct recall.

The probability of sale and price premiums in withdrawn auctioned properties

This paper examines the impact of the auction process of residential properties that whilst unsuccessful at auction sold subsequently. The empirical analysis considers both the probability of sale and the premium of the subsequent sale price over the guide price, reserve and opening bid. The findings highlight that the final achieved sale price is influenced by key price variables revealed both prior to and during the auction itself. Factors such as auction participation, the number of individual bidders and the number of bids are significant in a number of the alternative specifications.