Rand W. Ressler

Advertising and information: an empirical study of search, experience and credence goods

Investigates empirically the importance of buyer characteristics as well as product and service classifications on the informational content of advertising supply by sellers utilizing Yellow Pages advertisements from six US cities. The analysis and tests extend the categories used in previous tests by including so-called “credence goods” by analysing the impact of alternative buyer characteristics as proxies for time and information costs. The intra-city and, to a lesser extent, inter-city comparisons lend support to the contemporary theory of advertising as information.

Estimates, Bias and “No Sales” in Latin-American Art Auctions, 1977–1996

Estimate bias and “no-sales” are investigated in the context of Latin American Art auctions conducted in New York between 1977 and 1996. We find that, using a new method for calculating bias, both Sothebys and Christies overestimated art (oil-on-canvas pieces) by 2.7 percent. The inclusion of “no-sales” raises that proportion to a full one-third of the art traded. Utilizing a binomial probit analysis, moreover, we find that the estimate “window” is negatively and significantly related to the likelihood of a “no sale” at auction.

Marginal Deterrence and Multiple Murders

This paper examines empirically the state-level impact of capital punishment on multiple murder rates for the period 1995–1999. In baseline tests—tests employing mixed panel data and using an estimation technique combining aspects of both fixed- and random-effects models—we show that executions reduce the single murder rate and that the use of electrocution reduces the murder rate beyond that resulting from lethal injection. These results are not unique. The unique finding of our analysis is that multiple murders are not deterred by execution in any form, quite possibly because the marginal cost of murders after the first is approximately zero. Finally, we offer a brief historical analysis of how the principle of marginal deterrence has been used and suggest how it might be applied in the matter of multiple murders.

An economic model of cohabitation and divorce

Abstract The positive correlation between the rates of cohabitation and divorce has long been established. This paper seeks to determine the direction of causation between these two variables. A simultaneous equations model is specified with cohabitation and divorce rates as endogenous variables and using data aggregated to the state level for 1990. This procedure suggests that the divorce rate is a significant factor in explaining variations across states in the cohabitation rate, and that the divorce rate is itself influenced by cohabitation behavior. This finding strengthens the results put forth by various economic and sociological single equation studies. This synthesis of information and data provided by sociologists with economic theory and methodology, suggests further research in modelling demographic variables as joint outcomes of the same process.

An empirical note on the impact of college athletics on tuition revenues

The economics and sociology literature has given much attention to the proper role of athletics in the mission of institutions of higher education. This discussion has turned into a debate; one argument holds that athletics fit nicely into the mission of most colleges. However, it has also been argued that athletics impede the students and faculty from achieving their academic potential. We argue that college athletics can increase the demand to attend the institution and lower the price elasticity of demand of non-resident students. This, in turn, increases the level of financial resources available to the institution. We model the percentage of out-of-state students as being dependent upon athletic success (among other variables) and find a positive and significant relationship between the two. In addition, potential net revenue gains from athletic success are provided for specific institutions.

A Note on Elasticity and Price Dispersions in the Music Recording Industry

The present note examines price dispersions inthe music recording industry between new release andmid-line (older) recordings. The model employs theframework developed within the industrial economicsliterature and provides empirical results suggestingthat new release prices are lower than those ofmid-level recordings. This result follows fromdiffering buyer characteristics and varying levelsof close substitutes, leading to higher demandelasticities for new release recordings. Finally,the theoretical expectations should hold in thepresence of either significant scale economies ormodest minimum efficient scales of production.

Full wages, part-time employment and the minimum wage

The economic effects of the minimum wage have become increasingly ambiguous. Historically, economists have asserted that increases in the minimum wage result in increases in unemployment. This relationship has been challenged recently by Card and Krueger, Katz and Krueger, and Card. These authors have provided empirical evidence that seems to indicate that there is no relationship between various economic variables (such as level of employment, and product price, among others) and the minimum wage. In addition, these authors have not provided a cogent presentation of the effects of the minimum wage on part-time employment. This study examines, from a theoretical standpoint, the effects of the minimum wage on employment. Furthermore, we emphasize the distinction between money wages and full wages; and the role that part-time employmentplays in the analysis. After incorporating these factors into a theoretical presentation, we provide empirical evidence by way of an OLS regression. We conclude that firms re...

Congressional Memberships as Political Advertising: Evidence from the U.S. Senate

The present article analyzes signaling by elected officials of moderate or centrist legislative behavior from a benefits/costs perspective. To do so, we provide statistical evidence regarding the tendency of senators to join the U.S. Senate Centrist Coalition, a congressional membership organization of moderate legislators. We find that changes in party loyalty, perhaps due to changes in constituent preferences, and U.S. Senate tenure are both important determinants of membership in the Centrist Coalition. Tests also point out that freshman senators are more likely than more senior senators to seek membership as a form of information provision.

Is offering a degree in law an effective strategy for increasing state educational appropriations

This paper examines the relationship between universities which house law schools and appropriations per student. Specifically, it is hypothesized that universities with law schools will have higher state appropriations, other things the same, because these universities are likely to have more alumni in the state legislature. This argument is supported by both Ordinary Least Squares and Two Stage Least Squares analysis.