Diana Strassmann

Effluent fees and market structure

Abstract This paper explores the efficiency properties of a system of effluent fees in a mixed economy in which polluting agents take a variety of organizational forms: private monopoly, the managerial firm, regulated firms, and public bureaus. The analysis, including some crude empirical estimates, suggests that the welfare gains from pollution control are likely to dwarf in magnitude the potential losses from the various imperfections in the economy. The tentative conclusion is that the case for a system of fees that is invariant with respect to organizational form is not seriously compromised by likely deviations from competitive behavior.

The use of effluent fees to regulate public sector sources of pollution An application of the niskanen model

Abstract The economics literature on environmental policy makes a compelling case for the use of effluent fees to control polluting activities. This analysis, however, proceeds from the assumption of profit maximizing behavior by polluters. Since (non-profit-maximizing) public agencies are a major source of environmental damage, this paper investigates the likely response of bureaucrats to effluent fees in terms of some extended versions of the Niskanen model of bureaucratic behavior. We find that, at least for a range of plausible cases, such fees can induce significant reduction in polluting activities. The results are sufficiently encouraging to make the extension of fees to public agencies worthy of serious consideration.

Wage differentials and asymmetric mobility

Abstract We explore whether a priority given to a husbands career within a family could partly explain the gender wage gap. We show that restrictions preventing women from pursuing job opportunities, regardless of location, are likely to depress womens relative pay more than will restrictions requiring women to place a high value on non-pecuniary aspects of jobs. However, neither restriction is likely to have a large effect in the absence of interaction with investment in firm-specific human capital. The effects of such restrictions on wage differentials are likely to be large enough that empirical studies which do not examine wages, human capital investment and job search in a simultaneous equations framework could produce results which are seriously biased.

Feminist Economic Methodologies

With this issue, we inaugurate a new article series on feminist economic methodologies. Feminist economists have shifted the landscape of economic inquiry by showing that the full range of economic life extends far beyond the market. The burgeoning feminist economic literature, including several articles in this issue, explores market decisions and behaviors as interdependent with nonmarketed activities, and human well-being as influenced by all aspects of life, not just those easily captured through monetary measures. For example, when public services are cut in the name of economic growth, women tend to pick up new unpaid caring tasks in the household while scrambling to find paid employment, leading to serious hardship. Models that ignore nonmarketed aspects of economic life are therefore inherently flawed and clearly unaccountable to the whole human experience. But feminist efforts to bring more rigor to economic analysis require vigilance in avoiding similar lapses in argument. Including the whole spectrum of human lives in the informational base of economic theories is not simple. To do so well requires careful negotiation through complex methodological challenges and pitfalls. Much of the nonmarket sector is difficult to measure and model in familiar ways. Traditional measures based on simple market values do not provide adequate information on the range or importance of unpaid activities required by human life, nor do such measures capture the ways unpaid activities are interdependent with markets. Efforts to understand how policies may influence human well-being are therefore fraught with methodological challenges. Additionally, traditional statistical methods used by economists are open to misuse and can lead to insufficiently supported conclusions. There is much at stake in bringing a higher level of rigor to all forms of economic argument. This journal has long paid careful attention to the analytic and empirical robustness of the articles we publish, ranging from our internationally diverse reviewing process to our longstanding policy on statistical reporting. Our new article series on feminist economic methodologies is intended to provide an ongoing venue for exploring methodological issues of particular importance to feminist economists. We hope that the series will also lead to improved scholarly norms for empirical Feminist Economics 14(2), April 2008, 1 – 2