Hugh Sibly

An Estimate of the Range of Equilibrium Rates of Unemployment for Australia

This paper estimates the range of equilibrium rates of unemployment for Australia. The estimation technique nests a unique equilibrium rate of unemployment as a special case. It is found for the period 1965-97 that a range of equilibria of at least 6.6 percentage points of unemployment exists in Australia. The lower limit of this range, which is the minimum rate of unemployment consistent with nonincreasing inflation, was 2-3 per cent in the 1960s, jumped in the early 1970s and was about 5.6 per cent during the 1990s. Copyright 2001 by The Economic Society of Australia.

Social comparisons and reference group formation: Some experimental evidence

We investigate reference group formation and the impact of social comparisons on ultimatum bargaining using a laboratory experiment. Three individuals compete in a real-e¤ort task for the role of the proposer in a three-player ultimatum game. The role of the responder is randomly allocated. The third individual receives a ?fixed payment - our treatment variable - and makes no decision. The existence of a non-responder has a dramatic e¤ect on bargaining outcomes. In the most extreme treatment, more than half of the o¤ers are rejected. Behavior shows individuals exhibit self-serving bias in the way they de?ne their reference groups.(This abstract was borrowed from another version of this item.)

What is the value of forensic science? An overview of the effectiveness of forensic science in the Australian criminal justice system project

Forensic science is increasingly relied upon by law enforcement to assist in solving crime and gaining convictions, and by the judicial system in the adjudication of specific criminal cases. However, the value of forensic science relative to the work involved and the outcome of cases has yet to be established in the Australian context. Previous research in this area has mainly focused on the science and technology, rather than examining how people can use forensic services/science to the best possible advantage to produce appropriate justice outcomes. This five-year project entails an investigation into the effectiveness of forensic science in police investigations and court trials. It aims to identify when, where and how forensic science can add value to criminal investigations, court trials and justice outcomes while ensuring the efficient use of available resources initially in the Victorian and the ACT criminal justice systems and ultimately across Australia and New Zealand. This paper provides an overview of the rationale and aims of the research project and discusses current work-in-progress.

The consequences of using increasing block tariffs to price urban water

Increasing block tariffs (IBTs) are currently used to price urban water in many Australian mainland capitals and a great many cities worldwide. This paper provides a systematic analysis of the impact of the adoption of IBTs to price urban water under the common constraints of scarce supply and cost recovery. The key tools available to policymakers using IBTs are the volumetric rate in the low tier and the threshold level of that tier. This paper shows how variations in these tools influence (i) the fixed charge set by the firm, (ii) the deadweight loss from the IBT and (iii) the bill paid by customers for particular levels of demand. Our analysis suggests that IBTs are neither fair nor efficient. We propose a modification to IBTs that, while retaining their perception of fairness, results in the efficient allocation of urban water.

Bringing competition to urban water supply

This paper proposes a market-based reform that would introduce competition into the provision of urban water. This proposal calls for a decoupling of infrastructure control and ownership of water whereby the property rights to water would be transferred to private hands. The proposal involves periodically allocation (e.g. by auction) of existing water stock held in urban catchments to virtual suppliers who then compete in providing bulk water. This change when coupled with effective third party access and retail competition would lead to a competitive market for the provision of urban water. The approach aims to address concerns over inefficient pricing and infrastructure provision under the current arrangement.

Pricing and Management of Recreational Activities Which Use Natural Resources

This paper analyses the economic efficiency ofmanagement regimes for the recreational use of anatural resource. Management must determine the useand development of the natural resource. Thefirst-best policy uses price to offset theexternalities of crowding and deterioration. This iscontrasted with two second-best polices which do notuse pricing: unrestricted access and quotas. Acondition under which a relaxation of quota levelincreases efficiency is derived. Under iso-elasticfunctional forms quotas are less efficient thanunrestricted access.

Cycle and Trend in Models of the Range of Equilibria

This paper investigates the potential of models of the range of equilibria to yield a pattern of equilibrium rates of unemployment that is consistent with the observed mix of cycle with no trend in the rate of unemployment. To do this the paper considers a model in which wages are determined by a group of unionised insiders bargaining with an employer. In the model the supply of labour is endogenous. Specifications of the utility function are found which are consistent with the mix of cycle and no trend in the rate of unemployment. Of these it is concluded that loss aversion in the evaluation of wage relativities is a crucial ingredient for models of the range of equilibria. Copyright 2001 by Blackwell Publishers Ltd/University of Adelaide and Flinders University of South Australia

The Non-Robustness of the Nash-Stackelberg-Hybrid Equilibrium

For a simple, standard sequential search model, the Nash-Stackelberg-Hybrid Equilibrium is shown to be non-robust when the assumption that all firms are constrained to operate the outlet is dropped. Firms open additional outlets to increase market power.(This abstract was borrowed from another version of this item.)

Credit rationing, implicit contracts, risk aversion, and the variability of interest rates

Abstract Recent work on credit rationing has stressed the importance of asymmetric information. This paper considers an alternative explanation based on banks and customers dealing with each other over a planning horizon in which the future is uncertain. Risk averse banks and customers have an incentive to enter into an implicit contract in which interest rate variations are dampened but rationing can occur. Attention is paid to movements in the interest rate which are shown to depend on the nature of the insurance provided by banks and the specification of the cost function associated with processing loans.

The Pricing and Management of Walking Tracks in Tasmania

Walking tracks are an important component of the recreational use of Australian national parks. This paper applies economic theory to the issues associated with the management of walking tracks in Tasmania and, by implication, the rest of Australia. An economic model is developed to assess the implications of three policy regimes (pricing, quotas and unrestricted access) for the management of walking tracks. The model is calibrated to approximate (as best as practicable) the most popular of Tasmanian walking tracks, the Overland Track.