B. Peter Pashigian

The Effect of Environmental Regulation on Optimal Plant Size and Factor Shares

The method for measuring the effects of environmental regulation on the size distribution of industrial plants and the distribution of factor shares described in this paper focuses on the 20 industries with highest per unit pollution abatement costs and the 20 with the lowest costs. The study finds that compliance with environmental laws has not only reduced the number of plants in the affected industries, but has placed a greater burden on small rather than on large plants. Besides redistributing within-industry market shares, environmental regulation has increased the use of capital relative to labor. Although the disproportionate burden placed on small plants in the high abatement cost industries may have been unintended, it is likely that large firms will be less vocal opponents of environmental regulation than are small firms. 22 references, 12 tables.

Internalizing Externalities: The Pricing of Space in Shopping Malls

Consumers are attracted to malls because of the presence of well‐known anchors—department stores with recognized names. Anchors generate mall traffic that indirectly increases the sales of lesser‐known mall stores. Lesser‐known stores can free ride off of the reputations of better‐known stores. Mall developers internalize these externalities by offering rent subsidies to anchors and by charging rent premiums to other mall tenants. We estimate that anchors receive a per foot rent subsidy of no less than 72 percent that which nonanchor stores pay. Anchors pay a lower rent per square foot in larger malls (with several department stores) than in smaller malls (with fewer department stores), even though sales per square foot of anchors are the same in the two types of malls. In contrast, the sales and rent per square foot of other mall stores are higher in superregional malls than in regional malls.

Why Are Products Sold on Sale?: Explanations of Pricing Regularities

This paper reports on interesting changes in markdown pricing practices over time and differences in the pricing within a product line. The price discrimination and the uncertainty hypotheses appear to better explain the data than the peak load hypothesis. Fashion has become more important over time and appears to explain the greater seasonal variation in retail apparel prices in recent years. Differences in uncertainty also explains differences in the pricing of different types of mens dress shirts.

Occupational Licensing and the Interstate Mobility of Professionals

This paper attempts to measure the effect of occupational licensing, restrictions on reciprocity, location specific investment in reputation and earnings on the interstate mobility of professionals. While 34 professional occupations are analyzed, special attention is focused on the legal profession. The comparatively low interstate mobility rate of lawyers may be due to state licensing and restrictions on reciprocity or to the investments made by lawyers to develop local reputations or to the investments made by lawyers in state specific law. Tests are conducted to distinguish among these three hypotheses.

The Market for Lawyers: The Determinants of the Demand for and Supply ofLawyers

Some additional evidence on the comparative effect of income, regulation, and other variables on the demand for lawyers is called for. One objective of this paper is to investigate the speed of adjustment of law schools to shifts in the demand for lawyers. Section I presents a theoretical model of the demand for and supply of lawyers. The empirical counterparts of the variables are introduced in Section II. Section III presents the results of the estimation and Section IV compares the actual number of lawyers with the number that would have existed if lawyers earned a normal return on their investment in legal education. Section V presents other evidence of an excess demand for lawyers and offers several explanations for the speed of adjustment of enrollments in law schools to shifts in the demand for lawyers. The paper ends with a summary of the major findings of the paper.

Fashion, Styling, and the Within-Season Decline in Automobile Prices

Between 1954 and 1989 the seasonal variation in retail new car prices declined, while the annual percentage decline in used car prices lessened. To explain these long-term changes, this article suggests that a rise in the cost of a major model change has reduced the frequency of major model changes, changed the characteristics of new models, and resulted in smaller within-season price declines. New cars of adjacent model years have become closer substitutes as the importance of the annual model change has lessened. The American automobile has slowly become less of a fashion product because it has become increasingly costly to supply frequent styling changes. In contrast, the within-season price decline in womens apparel has increased over time as fashion has become more important. Reasons for the different price patterns are investigated.

Teaching Microeconomics in Wonderland

Authors of intermediate microeconomics textbooks devote relatively more space to imperfectly competitive markets than can be justified by their relative occurrence in actual markets. This gap has persisted for at least 40 years, even with an almost complete turnover of authors between the decades of the 1960s and the 2000s. This portrayal gives students a distorted view of the presence of market imperfections throughout the economy. It appears that many authors have strong beliefs that noncompetitive behavior permeates most markets even though concentration statistics fail to support these views. Authors may overly stress noncompetitive industry analyses to enlarge their advocacy role in public policy discussions and analyses of firm behavior in antitrust cases and consulting.

The Accuracy of Forecasts: A Market Equilibrium Analysis

Some features of the theory 86. — Expected profits of the firm, 88. — Optimal accuracy of forecasts, 91. — Market equilibrium, 92. — Comparative statics, 92. — Conclusion, 96.