Robert S. Goldfarb

AN ECONOMIC THEORY OF CIGARETTE ADDICTION

In this paper we present a model in which individuals act in their own best interest, to explain many behaviors associated with cigarette addiction. There are two key features of the model. First, there is an explicit representation of the withdrawal effects experienced when smokers attempt to quit smoking. Second, there is explicit recognition that the negative effects of smoking generally appear late in an individuals life. Among the things we use the model to explain are: (1) how individuals can become trapped in their decision to smoke; (2) the conditions under which cold-turkey quitting and gradual quitting may occur; and (3) a reason for the existence of quit-smoking treatments.

Can remittances compensate for manpower outflows: The case of Philippine physicians

Abstract This paper addresses questions about the desirability of skilled migration which generates remittance flows. Focusing on Filipino physicians, the paper explores under what conditions remittances from Filipino doctors practicing overseas might be sizeable enough to compensate the nation for the losses associated with doctor emigration. While data limitations and questions about the correct social welfare function preclude definitive empirical results, the analysis does indicate in the Philippine case that it may pay to train doctors for export.

An Indirect Test of Efficient City Sizes

Abstract This paper develops a model which demonstrates necessary conditions for efficient distribution of labor across areas given the presence of agglomeration economies and congestion externalities. An indirect empirical test for efficient allocation is formulated based on a comparison of estimated agglomeration economies with the compensating variation in occupation-specific wages needed to attract workers to larger cities. The results of this test suggest that there are specific city size ranges where necessary conditions for efficient allocation of resources are not met, particularly for cities in the 1.5 to 2.5 million population range. Current claims that continued growth of the largest U. S. cities is inefficient are not confirmed by the empirical results.

Making Sense of Competing Nursing Shortage Concepts

Widespread and continuing discussions of nursing shortages frequently involve divergent concepts of shortage that can have differing policy implications. This article explains the shortage concepts used by economists, hospital administrators, and government policy makers. It discusses measurement problems and suggests possible improvements. It then sets forth the divergent policy implications of competing shortage concepts. The articles aim is to promote greater clarity in analyses of nursing shortages and more fruitful conversations among participants who use different notions of shortages.

New on Paternalism and Public Policy

Bill News (1999) thoughtful paper has performed the valuable service of clarifying the meaning and the policy implications of paternalism. His careful formulation delimits the domain of justified state paternalism. Having argued successfully, in our view, for a narrow ambit, New proceeds to identify situations that justify paternalism. This comment is written in the spirit of a friendly reformulation that refines and improves the specification of when paternalism is justified. Our argument is two-fold. First, we argue that News formulation, properly understood, will not readily permit the paternalistic interventions he argues are justified. Second, we identify a class of potentially justified interventions that have paternalistic aspects, but which are neither strictly paternalistic nor market-failure remedies.

Methodological issues in forecasting: Insights from the egregious business forecast errors of late 1930

This paper examines some economic forecasts made in late 1930 that were intended to predict economic activity in the United States in order to shed light on several methodological issues. We document that these forecasts were extremely optimistic, predicting that the recession in the US would soon end, and that 1931 would show a recovery. These forecasts displayed egregious errors, because 1931 witnessed the largest negative growth rate for the US economy in any year in the twentieth century. A specific question is what led forecasters to make such serious and substantial empirical errors. A second more general issue involves the methodology of forecasting. The 1930 forecasts were sometimes based on explicit analogies with previous serious business cycles. Modern forecasting approaches are based on techniques that may not be recognized as analogies. Using the 1930 forecasts, we examine the implicit‐analogy content of forecasts, and what might render such implicit analogies valid or invalid. This 1930 forecast example also resonates beyond the confines of economic methodology because forecasts about the Great Depression are of continuing interest to the profession at large, and we produce a forecast series not previously available.

INEQUALITY OF WHAT AMONG WHOM?: RIVAL CONCEPTIONS OF DISTRIBUTION IN THE 20TH CENTURY

Distribution concerns who gets what. But does “who” refer to the personal distribution of income among individuals or the functional distribution of income among suppliers of productive factors? For nearly 150 years, Anglophone distribution theory followed the Ricardian emphasis on functional distribution – the income shares of labor, land, and capital. Only beginning in the 1960s, and consolidated by a research outpouring in the early 1970s, does mainstream economics turn to the personal conception of distribution. This essay documents Anglophone (primarily American) economics’ move from functional to personal distribution, and tries to illuminate something of its causes and timing.

Does ‘Civic Duty’ ‘Solve’ The Rational Choice Voter Turnout Puzzle?

Rational choice models of voter turnout try to account for why people vote by including on the ‘benefits’ side of the cost-benefit calculus some term representing either the collective benefits of voting or the satisfaction the individual derives from the very act of voting, a strategy subject to a number of telling criticisms. After a background discussion of three competing perspectives on this rational choice strategy, which we term the ‘accepter,’ ‘yes, but’ and ‘rejecter’ views, we address the following issues. First, how one’s view of ‘rationality’ affects the appropriateness of including ‘satisfaction from voting’ and related concepts in the rational choice model. Second, as a formal analytical matter, can a ‘sense of civic duty to vote’ be comfortably incorporated into the rational choice model of turnout? What other recent related embellishments have been made to that model? Third, even if ‘civic duty’ can be formally incorporated, would this defeat the efficacy of the rational choice model? Fourth, why the answer to the previous question might differ for economists versus political scientists. Fifth, what significant issues are raised by expanding the rational choice model to include civic duty? The analytical contribution of this article is showing how ‘civic duty’ can be incorporated into the rational choice model; the broader conceptual contribution is to evaluate whether and how that innovation advances our understanding of the efficacy of the rational choice approach for understanding voter turnout.

Now you see it, now you don't: emerging contrary results in economics

Abstract A number of empirical literatures in economics display the following pattern of results. First, evidence accumulates to support an empirical result. As time passes, however, contrary results emerge that challenge that initial result. This phenomenon raises important issues about (i) what part empirical findings play in how economists come to believe things; and (ii) how believable inferences are to be made from literatures displaying such contrary results. This paper documents this ‘emerging contrary result’ phenomenon, and investigates the factors causing it. It considerably expands the list of emerging contrary results contained in my 1995 JEM paper. Of more importance, this paper identifies alternative explanations for these instances, and explores whether particular explanations can be plausibly assigned to the 26 examples in this paper.

Do davis-bacon minimum wages raise product quality?

The Davis-Bacon Act requires labor on most federally financed construction projects to be paid a minimum wage, often equal to the union wage. Since contractors are apt to employ higher quality labor at this higher wage, Davis-Bacon supporters argue that higher quality output will result. Contrary to this reasoning, our paper shows that a Davis-Bacon type rule need not improve output quality. The switch to higher quality labor, combined with a competitive bidding process, produces an important possibility of perverse output quality results from Davis-Bacon.