Recursos de colección

Caltech Authors (155.447 recursos)

Repository of works by Caltech published authors.

Group = Social Science Working Papers

Mostrando recursos 1 - 20 de 821

  1. Reconciliation and the Size of the Budget

    Ferejohn, John A.; Krehbiel, Keith
    Reconciliation has become a regular feature of the congressional budget process. We address the question of whether or under what conditions the budget process with reconciliation (modeled as selection of the size of the budget first and its division second) produces smaller budgets than a piecemeal appropriations process in which the size of the budget is determined residually. The theoretical result is that reconciliation sometimes results in relatively large budgets. A testable implication of the theory is that given a choice of how stringently reconciliation is to be employed, congressmen will jointly consider preferences and the expected outcomes under the...

  2. A Theory of Auditing and Plunder

    Border, Kim C.; Sobel, Joel
    Taxpayers know their income but the IRS does not. The IRS can audit taxpayers to discover their true income, but auditing is costly. We characterize optimal policies for the IRS when it is free to choose tax levies, audit probabilities and penalties. The main results are that optimal policies involve taxes which are monotonically increasing in reported incomes and audit probabilities are monotonically decreasing in reported income. In general optimal schemes involve stochastic auditing of reports and rebates for telling the truth. A theory of optimal plundering is described.

  3. The Economics of Tax Compliance: Fact and Fantasy

    Graetz, Michael J.; Wilde, Louis L.
    This paper reviews the current state of theoretical and empirical knowledge regarding compliance with the federal income tax laws. We focus on the validity of certain myths that have come to dominate tax compliance discussions. Toward that end, we discuss three general categories--empirical work, theoretical methodology and fiscal policy recommendations--that seem to require more careful assessment and formulation.

  4. Speculation or Specification? A Note on Flanigan and Zingale

    Kousser, J. Morgan
    Flanigan and Zingale's "Alchemists' Gold" reviewed the classic problem of inferring individual-level relationships from aggregate data, attacked the specification error approach to it, and sought to replace Goodman's ecological regression with an informal and largely untestable procedure first proposed by Shively in 1974. They illustrated the Shively strategy by comparing evidence from the national CPS/SRC survey to state-level aggregate data from the 1968 and 1972 elections. In this note, I seek to show that their criticisms are misconceived and that ecological regression can, in many typical circumstances, lead to acceptably precise and much less vague judgments about the individual relationships than...

  5. A Note on the Independence of Irrelevant Alternatives in Probabilistic Choice Models

    Bjorn, Paul A.; Vuong, Quang H.
    The purpose of this note is to show that there is no necessary relationship between the independence of irrelevant alternatives (IIA) property and stochastic independence of the errors in probabilistic choice models.

  6. Econometric Modeling of a Stackelberg Game with an Application to Labor Force Participation

    Bjorn, Paul A.; Vuong, Quang H.
    Following Bjorn and Vuong (1984), a model for dummy endogenous variables is derived from a game theoretic framework where the equilibrium concept used is that of Stackelberg. A distinctive feature of our model is that it contains as a special case the usual recursive model for discrete endogenous variables [see e.g., Maddala and Lee (1976)]. A structural interpretation of this latter model can then be given in terms of a Stackelberg game in which the leader is indifferent to the follower's action. Finally, the model is applied to a study of husband/wife labor force participation.

  7. Parameterization and Two-Stage Conditional Maximum Likelihood Estimation

    Lien, Da-Hsiang Donald; Vuong, Quang H.
    This paper considers the case where, after appropriate reparameterization, the probability density function can be factorized into a marginal density function and a conditional density function such that one of them involves fewer parameters. Then, two types of two-stage conditional maximum-likelihood estimators, 2SCMLEI and 2SCMLEII, can be considered according to whether the marginal or the conditional density has fewer parameters. Our first result indicates that, under some identification assumptions, there is a connection between the number of parameters in the marginal (or conditional) density functions under the two reparameterizations. Moreover, conditions for asymptotic equivalence and numerical equivalence between these two-stage...

  8. Game Forms for Nash Implementation of General Social Choice Correspondences

    McKelvey, Richard D.
    Several game forms are given for implementing general social choice correspondences (SCC's) which satisfy Haskin's conditions of monotonicity and No Veto Power. The game forms have smaller strategy spaces than those used in previously discovered mechanisms: the strategy for an individual consists of an alternative, two subsets (of alternatives), and a player number. For certain types of economic and political SCC's, including a-majority rule, the Walrasian, and Lindahl correspondence, the strategy space reduces to an alternative and a vector, where the number of components of the vector is at most twice the dimension of the alternative space.

  9. Axiomatizations of the Mixed Logit Model

    Saito, Kota
    A mixed logit function, also known as a random-coefficients logit function, is an integral of logit functions. The mixed logit model is one of the most widely used models in the analysis of discrete choice. Observed behavior is described by a random choice function, which associates with each choice set a probability measure over the choice set. I obtain several necessary and sufficient conditions under which a random choice function becomes a mixed logit function. One condition is easy to interpret and another condition is easy to test.

  10. Must Historians Regress? An Answer to Lee Benson

    Kousser, J. Morgan
    In a recent symposium published in Historical Methods, Lee Beneon, once a forceful proponent of more systematic methods and models in history, announced that it had all been a mistake. Applied to human affairs, Occam's Razor merely result a in useless carnage. Women are too complex and contradictory to fit in to any simple theories, much less laws, and any attempt to formulate or test any such statements merely misleads. To redeem social science and save the world, we should abandon the attempt to postulate abstract, value-free, and often mathematicized hypotheses and to validate them through the use of sophisticated...

  11. Toward "Total Political History"

    Kousser, J. Morgan
    How is the segmented and disoriented world of contemporary historical scholarship, in particular, that of American political history, to be reintegrated and revived? Instead of imposing a substantive synthesis, which would narrow the discipline's focus by excluding many interesting topics, I propose that historians adopt a common approach--rational choice theory--that has proven useful in economics and political science. Using notions drawn from rational choice and examples primarily from the American Civil War and Reconstruction period, I examine the assumptions behind and arguments for three theories in intellectual/cultural history--republicanism, "political culture," and positive/negative liberalism. I then try to spell out some of...

  12. The Returns to Insulation Upgrades: Results from a Mixed Engineering Econometric Model

    Dubin, Jeffrey A.; Henson, Steven E.
    This paper estimates a new model of residential electricity demand. It differs from previous work in two ways. First, we utilize individual monthly billing data in a pooled time-series/cross-section framework. Second, we use an engineering/thermal load technique to model the household apace-heating technology. This allows more precise separation of the effects of economic variables from those of weather, and permits simulation of the effects of various conservation policies. We estimate the model using data from the Pacific Northwest, and use the results to analyze three conservation measures: a price increase, a reduction in thermostat settings, and an improvement of insulation levels....

  13. Evidence of Block Switching in Demand Subject to Declining Block Rates - A New Approach

    Dubin, Jeffrey A.
    This paper considers the problem of forecasting demand subject to a non-linear rate schedule. We develop an empirical model of electricity demand subject to a quantity determined rate schedule and suggest a new procedure to estimate population taste variation. Using micro-level data from the 1975 Washington Center for Metropolitan Studies (WCMS) survey, we provide evidence on the prevalence and extent of block switching.

  14. Equilibrium Search Models as Simultaneous Move Games

    Wilde, Louis L.
    In many of the existing equilibrium search models, sellers as a group are leaders and buyers as a group are followers to the extent that the latter are assumed to know the distribution of prices but not the price-seller correspondence before they make their information acquisition decisions. A natural way to weaken this strong version of "rational expectations" is to treat the problem as a simultaneous move game in which buyers must make their information acquisition decisions before they see the actual distribution of prices. This paper explores the implications of this modification of the existing literature in the context...

  15. Congressional Roll Call Voting Strategies: Application of a New Test to Minimum Wage Legislation

    Krehbiel, Keith; Rivers, Douglas
    [No abstract]

  16. A Rationale for Restrictive Rules

    Krehbiel, Keith
    Congressmen often claim to dislike restrictions on their opportunities to offer amendments to legislation in the Committee of the Whole. Yet restrictive rules of various forms not only are quite common but often are voted into existence explicitly or implicitly. Whenever a modified closed rule from the Rules Committee receives a majority vote, members explicitly accept the restrictions that such rules place on amendments. Whenever a bill is passed under suspension of the rules, the requisite two-thirds vote is an implicit acceptance of restrictions, because the vote has the effect of not only passing the legislation, but passing it unamended....

  17. Political Power in the International Coffee Organization: A Research Note

    Bates, Robert H.; Lien, Da-Hsiang Donald
    In recent decades, international commodity agreements have been proposed as a way of promoting “development." Behrman, McNicol and others have analyzed them from a purely economic point of view. Fisher, Krasner, and others have adopted a more political perspective. In this article, we seek to advance the political analysis of such agreements. We do so by studying the allocation of export entitlements in the International Coffee Organization (ICO). In the ICO, as in other international organizations, political processes replace markets in the allocation of source resources. In the case of the ICO, allocational decisions are made by majority rule. Given...

  18. Comparing Models of Electric Utility Behavior

    Rothwell, Geoffrey S.
    Several models of electric utility behavior have been suggested and tested. Among them are profit and revenue maximization and cost and revenue minimization. The latter being the stated objective of many public utilities. These four models are compared empirically by examining power plant choice from 1970 to 1977. The net present value (profit) model yields the highest estimated likelihood and its parameters are consistent with a priori theory. Firms were attempting to maximize their return, while minimizing fixed and variable costs. Also, I find no evidence that the difference between the allowed rate of return and the cost of capital...

  19. The Tax Compliance Game: Toward an Interactive Theory of Law Enforcement

    Graetz, Michael J.; Reinganum, Jennifer F.; Wilde, Louis L.
    The existing paradigm for the economic analysis of tax compliance provides an inadequate theory of the revenue collection process. Even as a purely economic model, its exclusive focus on individual taxpayers' decision-making promotes an unduly restrictive vision of the compliance problem and potential responses to it. In this paper we outline a more comprehensive theoretical basis for analyzing tax compliance, and illustrate it with a simple model. We believe our approach to be a significant improvement in the economic theory of law enforcement because it views the noncompliance problem as an interactive system. In our theoretical construct, individual decision-making not...

  20. Responsibility, Liability, and Incentive Compatibility

    Page, Talbot
    In this paper I ask what should be the assignment of liability for risks of toxic chemicals, and more generally. I develop a theory of liability, based on two principles. The first is responsibility as own-cost-bearing and is justified on the grounds of fairness. The second is efficiency and is justified on the grounds of welfare. These two principles provide a joint foundation to the theory of incentive compatibility, which is an important consideration in the design of liability systems.

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