Joseph Templeman

Crime and income inequality: An economic approach

ConclusionWhen a given pie is redivided in a less equalitarian manner, it is uncertain whether those already undertaking illegal activity will increase or decrease their activities, since the return to illegal activities is countered by the loss due to punishment (which is more painful to a criminal who failed) on one hand, and from the cost of the sacrifice of utility from legitimate activities on the other hand.If the absolute level of wealth remains constant but relative position declines, an incentive is generated to re-establish a persons standing by joining the crime industry. This is certainly the case at the margin for those close to the boundary of joining, i.e., those who are almost indifferent between joining or remaining within the legal framework.Assuming an individual is already participating in illegal activities, the effect of either an absolute or relative change in his level of wealth on his level of illegal activities is indeterminate. This applies both to the case where the total wealth of the society is fixed and the share of the pie going to the rich rises and the case where the total pie rose but the entire gain went only to the rich.In summary, it has been shown that an increase in wealth inequality has an indeterminate outcome both with respect to the decision of the poor on whether or not to enter the crime “industry” and with respect to the decision of those already participating in illegal pursuits to increase or decrease their level of activity. This conclusion is somewhat contrary to the general consensus of the literature, which appears to hold that increases in wealth inequality will tend to increase both the level of participation in the crime industry and the level of output within the industry.

Simulation study of the price differentiation effect in a stochastic deteriorating inventory with heterogeneous consumers -- freshness sensitivity

A fixed price policy regardless of expiration date may result in unsold inventory and sales loss. Price reduction over time as the expiration date approaches motivates customers to purchase all items, including the ones that are left with only a short interval until their expiration. We conduct a discrete event simulation that captures the main characteristics of this phenomenon. Results show that a moderate differentiation of price increases profits by 6%, a larger differentiation reduces profits. Profits are the highest for freshness-oriented customers. A fixed price policy is preferred in an environment of large variance and expected near term expirations.

A Non-Singular Peaked Laffer Curve: Debunking the Traditional Laffer Curve

This paper has two purposes: first, to demonstrate a utility function of consumption and leisure that leads to a backward-bending supply of labor. The second purpose is to show that in spite of the fact that a Laffer curve of any individual in a society may have one-peak point where tax revenue is at its maximum, the aggregate (macro) Laffer curve is very likely to have multi (or at least dual) peaks. This is caused by the high degree of inequality in wage distribution in most western countries.

The effects of rumours on financial market efficiency

During the last decade the world has faced a tremendous development of information technology and telecommunication. This study investigates the impact of rumours (released on the web) on common stock returns. The findings indicate that the market responds positively to rumours. During the event day and the five preceding days, the abnormal stock return is positive and statistically significant. In particular, the impact is stronger for single than for multi-rumours, for initial rather than subsequent rumours and for realized rumours than for nonrealized rumours.

Dynamic weights approach for off‐line sequencing of supplier selection over a finite planning horizon

Purpose – The purpose of this paper is to develop a user‐oriented decision‐supporting applicable tool for selection of a single supplier out of a group of potential suppliers in a dynamic business environment over a finite planning horizon.Design/methodology/approach – A qualitative and quantitative description of the impact of a change in one or several business environment parameters on current and future supplier choice; the methodology is accompanied by a visual representation of those impacts for the decision maker. The paper presents extended simulation experiments to test the proposed methodology.Findings – A strategy of replacing suppliers over a definite planning horizon based on a forecast of the business environment is significantly (2‐9 per cent) more efficient than a strategy of relying on a single leading supplier throughout the planning horizon. This efficiency gain is greater the more the business environment is dynamic.Practical implications – The proposed methodology is applicable to a b...

Economic implications of in vitro fertilization using willingness to pay

IntroductionFertility levels are determined by social, religious, and cultural factors on one hand, and by financial considerations that affect the demand for children as well as the supply of children on the other. Using theoretical and empirical models we examine the private and social benefit of children, and the private and social welfare differences that are generated by technological innovation in fertility technology.Subjects and methodsA theoretical model measures the marginal private and social benefit when the children’s potential output depends on the natural potential fertility combined with medical fertility technology. It is followed by an empirical model that focuses on the evaluation of the general public’s, and in vitro fertilization patients’ “willingness to pay” for fertility treatments. The economic evaluation method is based on willingness to pay, which is derived from answers to hypothetical questions.ResultsBased on questionnaires distributed between in vitro fertilization actual patients and the general public, the empirical model’s findings are that the average willingness to pay amongst patients is

Interdependent utility and cooperative behavior

5,482, whereas for the general public it is

The Network Industry, Monopoly Regulation, and Social Optimum

4,398. Both the general public as well the actual patients are willing to pay more than the actual average cost of an in vitro fertilization treatment, which is

The Effects of Excise Taxes on Non-Homogeneous Populations

3,257.ConclusionWe find that when considering the appropriate allocation of limited resources, subsidizing fertilization should receive high priority since the net benefits for both patients and society are high.

A new approach to inequality

Abstract In this paper we broaden current models of interdependent utility functions, develop a more general and inclusive model of interdependency, and demonstrate the specific nature of the Pareto improvement achievable through cooperative behavior of all individuals with different tastes who adopt similar (or identical) consumption baskets. The resulting model helps to explain such diverse phenomena as the declining importance of the family unit as well as the trend toward a more diverse consumption pattern among communal groups such as the Israeli kibbutz.