Harold W. Elder

Exclusionary manipulation of markets for pollution rights

Abstract Strategic price manipulation can affect the distribution of transferable pollution rights across polluters and the efficiency of pollution control efforts. Prior research has concentrated on market manipulation by firms seeking only to minimize the sum of pollution rights costs and pollution abatement costs. In this paper we explore the potential for the exclusionary manipulation of pollution permit markets, intended to drive up the costs of ones rivals, and we distinguish between the resource allocation effects of exclusionary manipulation and cost-minimizing manipulation. We find that exclusionary manipulation can sometimes worsen and sometimes ameliorate the abatement inefficiency which occurs under cost-minimizing manipulation, and that an overbuying rule can obviate or at least limit damages from this form of strategic behavior.

Does retirement planning affect the level of retirement satisfaction

Abstract This paper analyzes the relationship between retirement planning and retirement satisfaction. Do individuals think about and plan for retirement? If they do, do they utilize financial planning services? If they plan, are they more satisfied with retirement than those who did not? Data for 1,781 retired individuals from the first wave of the Health and Retirement Study (HRS) are analyzed using an ordered probit model. The results indicate that thinking about retirement and attending planning meetings have a significant positive impact on satisfaction even when income, wealth, marital status and health are included as explanatory variables.

Exploring the Tax Revolt: an Analysis of the Effects of State Tax and Expenditure Limitation Laws

This article explores what has come to be known as the Tax Revolt, which reached Abstract its zenith during the late 1970s with the widespread enactment of fiscal constraints at the state and local level in the United States. The focus here is on expenditure and revenue limitation laws and their effects on the growth of state government. To consider whether these laws have been effective in constraining the growth of government, an empirical analysis is conducted for the states that have enacted such laws. Data is analyzed from these states over a thirty-five year period, and considers the effects on tax growth due to the presence of a limitation measure. The results show quite strongly that revenue and expenditure limitation laws can be effective tools to contain tax burdens. The results also indicate that the form of the constraint is important and that the effect of limitation rules may also be tied to other constraint mechanisms.

Buying a House and the Decision to Use a Real Estate Broker

This study examines the factors that affect the decision by home buyers to use real estate brokers and the subsequent effect this decision has on home prices. Buyers with high opportunity costs and the least amount of information about local market conditions are the most likely to use brokers; a finding consistent with the role of the real estate broker as a market intermediary. Not surprisingly, these were some of the same factors that also have a positive impact on selling price. An important finding of this study is that when selection bias is adequately controlled, the real estate broker has no appreciable, independent impact on selling price. This, in turn, suggests a nonsegmented, highly competitive housing market.

Tax structure and the size of government: An empirical analysis of the fiscal illusion and fiscal stress arguments

ConclusionsThis study attempts to fulfill a number of objectives. One is the (possible) reconciliation of two divergent strains of thought concerning the size of government: fiscal illusion and fiscal stress. In this respect, the results show little evidence of fiscal illusion, but provide support for some of the notions associated with the fiscal stress hypothesis, namely the effects of revenue and income variability on the size of government.Second, we try to provide a more complete specification of the size of government model through the addition of variables measuring the degree of tax exportation and the presence of tax-expenditure limitations. In both cases, the additions prove successful: greater tax exportation significantly increases the level of tax revenues and expenditures; and, and in states where there are statutory limitations on taxes or expenditures, we find lower levels of tax revenues and expenditures. In addition, our findings clearly show that the results one obtains in investigating fiscal illusion are sensitive to the manner in which the model is specified.Considerable work remains to be done in this area. Obviously, it would be desirable to specify the entire system of equations rather than one reduced form equation in the model. Also, broader and more accurate measures of tax system elasticity would perhaps illuminate the issues more effectively. And finally, the incorporation of modelling the size of government into a more inclusive theory of the public choice of revenues, spending, and government structure would be worthwhile. But these are all beyond the scope of this paper and must be deferred for later study.

Buyer Brokers: Do They Make a Difference? Their Influence on Selling Price and Search Duration

This study focuses on the role of buyer brokers in the home-buying process by examining the effects of brokerage representation on home selling prices and search duration. The results of this study indicate that real estate brokers, no matter the type, have no independent effect on home prices. The principal effect of broker intermediation is a reduction in buyer search time, compared to for-sale-by-owner transactions. The most important finding, however, is that buyer agents are more effective at reducing search time for their clients than more traditional seller agents or non-agent facilitators. Copyright American Real Estate and Urban Economics Association.

The Market for Residential Real Estate Brokerage Services: Costs of Production and Economies of Scale

Although the market for real estate brokerage services has been the subject of intense scrutiny for many years, little empirical evidence has been forthcoming regarding the performance of this market. This paper employs a translog cost function to model the underlying production function for the residential real estate brokerage industry. The results indicate that, except for very large firms, modest economies of scale persist throughout almost the entire range of output. Our results also indicate that while average firm size is increasing, many real estate firms are too small to take full advantage of the cost reductions possible with a larger scale of operation. Equally important, large firms do not command a competitive advantage over smaller firms, as fer as unit costs are concerned.

Buyer Search Intensity and the Role of the Residential Real Estate Broker

This study examines the impact of the real estate broker on the effectiveness of buyer search by focusing on the linkages between search intensity and the duration of search. How long a buyer searches depends on how sensitive the buyer is to within-period search costs and across-period, sequential search costs. High-income individuals and other homebuyers with high within-period search costs tend to search longer and less intensively. Buyers with high across-period search costs, such as out-of-town buyers, tend to search more intensively. Brokers, by reducing the opportunity costs of within-period search, increase buyer search intensity, which in turn reduces actual search time.

Economies of Scope and Density in the Market for Real Estate Brokerage Services

Using a multiproduct translog cost function, this paper examines the case for economies of scope and density in the market for residential real estate brokerage services. Earlier research that treated output as a homogeneous commodity reported modest economies of scale for this industry. The results of this study suggest that the composition of output is an important source of these scale economies, rather than simply the size of the firm. The economies of scope which we find imply that a balanced mix of listing and sales is the least costly type of operation, a result borne out by the product mix found in our sample. The results also show product-specific diseconomies of scale, suggesting that specialization in either listing or sales may be sub-optimal under the current institutional arrangements present in the market. Finally, market density appears to be, at best, only a nominal source of savings for real estate brokerage firms.

Beliefs and actions: expectations and savings decisions by older Americans

Abstract To understand the interaction of savings behavior, pension fund participation and expectations of retirement well being, we ask two questions. Are expected pension benefits a substitute for accumulated savings in replacing preretirement income? Are individuals’ expectations concerning their retirement standard of living realistic based on their accumulated savings and pension plan participation? First-wave data from the Health and Retirement Study (HRS) are analyzed using a probit regression. The results are consistent with the idea that pension benefits are substitutes for saving and that accumulated savings have a significant impact on the expected standard of living but pension plan participation does not.