Daniel P. Rich

Airline Deregulation: The Cost Pieces of the Puzzle

This paper analyzes cost changes in the U.S. airline industry in the pre- and postderegulation era using a panel data set of airlines. Specifically, it seeks to disentangle cost changes attributable to technical change, economies of scale and density, and input prices. The authors estimate a purely general index of industry technical change and in turn analyze its determinants. Despite the slowing of productivity growth in the 1980s, deregulation does appear to have stimulated technical change due to more efficient route structures. Copyright 1995 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

On the economic incentives for taking bribes

This paper presents an empirical analysis of the factors affecting bribe taking by public officials. Factors influencing the acceptance of bribes include: the probability of being convicted, severity of punishment, government salary relative to private sector income, the demonstration effect, and the unemployment rate. Our results indicate that higher probability of being convicted discourages the acceptance of bribes as does more severe punishment. Low relative earnings, high unemployment, and the demonstration effect of aggregate advertising all lead to increased bribe taking.

The Measurement of Firm-Specific Indexes of Technical Change

This paper proposes a methodology for obtaining estimates of firm-specific technical change econometrically and contrasts those estimates with a multilateral total factor productivity index. Based on a panel data set of airlines, two measures are contrasted in a variety of ways. To the extent that output characteristics differ as in the case of airlines, the two measures differ significantly. Both measures are regressed on a variety of factors potentially influencing technical efficiency, confirming that improvements in fuel efficiency and load factor have played major roles, with hubbing and competition playing smaller roles, in explaining efficiency improvements. Copyright 1995 by MIT Press.

Organization of Markets for Science and Technology

The traditional concentration of basic research activities in academic settings, with applied research more prevalent in industrial settings, is a distinguishing feature of science and technology markets. This structure arises from a unique combination of product characteristics, and in turn it influences incentives, contractual relationships, and conduct associated with research efforts by organizations and individuals. We propose a conceptual framework that combines ongoing advances in the economics of internal organization with the familiar structure-conduct-performance paradigm. The observed workings of research markets, including responses to recent policy initiatives encouraging collaborative research efforts, are best understood in the context of this comprehensive framework.

Representation type and union success in certification elections

Many different variables have been used to predict union certification election success; however, none of the studies has explored the impact of representation type. Using NLRB election data for the period from April 1980 through September 1990, we found that affiliation of a local union with the AFL-CIO was detrimental to the success rate of unions in single union and contested certification elections. We offer preliminary interpretations based on fundamental economic themes often applied to collective choice and conclude with implications for union organizing policy.

Information, disinformation, and union success in certification and decertification elections

In certification elections, workers consider the purchase of union services whose quality is, ex ante, unobservable. Voters must rely on available signals or indices in forming their expectations. Union members are able to reevaluate their initial purchase decision as more accurate information is obtained through experience. Therefore, participants in decertification elections rely less on sources of imperfect information. Using NLRB data over the period 1966 to 1990, we find evidence consistent with information-related distinctions between the certification and decertification decisions. Our study provides a useful framework for understanding the observed differences between these two types of elections.

Occupational Labour Demand and the Sources of Non-neutral Technical Change*

This article introduces a two-step empirical approach for examining both the nature and sources of non-neutral technical change across multiple occupations. First, conventional labour-demand parameter estimates and unbiased tests for neutrality are obtained in the context of a flexible cost system. The resulting input-specific indices of technical change, unconstrained with respect to time path, facilitate subsequent evaluation of proposed sources. In our application to employment decisions of airline firms, we find labour-saving technical change that is non-neutral across occupations. We also document occupation-specific responses to aircraft technology adoption, route system developments and an unprecedented range of technical change elements.

Microeconomic analysis of parallel markets

Abstract We examine the conditions under which estimating retail demand in planned economies via the relationship between parallel-market price and combined parallel- and official-market output is valid. We find that these conditions hold to differing extents for Soviet meat and milk.