Working Paper Series 2003:

Number	Author(s)	Title
0301	Neha Khanna and Florenz Plassmann	On the Future of World Pollution: The Demand for Environmental Quality and the Kuznets Curve Hypothesis
0302	Michael Dillon, E. C. Kokkelenberg, Sean M. Christy	The Effects of Class Size on Student Achievement in Higher Education: Applying an Earnings Function
0303	Kenneth V. Greene and Bong Joon Yoon	Religiosity, Economics, and Life Satisfaction
0304	Florenz Plassmann	Do Economists need to choose between Efficiency and Justice?
0305	Florenz Plassmann and Neha Khanna	Household Income and Pollution: Implications for the Debate about the Environmental Kuznets Curve Hypothesis
0306	Florenz Plassmann and T. Nicolaus Tideman	A Framework for Assessing the Value of Downtown Land
0307	Neha Khanna and Florenz Plassmann	Exposure to Ozone: Do We Count Pollution Where it Matters?
0308	Daniel J. Henderson	The Measurement of Technical Efficiency Using Panel Data
0309	Daniel J. Henderson	Nonparametric Kernel Measurement of Technical Efficiency: A Random Effects Approach
0310	Subal Kumbhakar and Efthymios G. Tsionas	Measuring Technical and Allocative Inefficiency in the Translog Cost System: A Bayesian Approach
0311	Subal Kumbhakar and Efthymios G. Tsionas	Bayesian Analysis of Input-Oriented Technical Efficiency
0312	Luis Orea and Subal Kumbhakar	Efficiency Measurement Using a Latent Class Stochastic Frontier Model
0313	Florenz Plassmann and Neha Khanna	Preferences, Income and the Environment: Understanding the Environmental Kuznets Curve Hypothesis
0314	Florenz Plassmann and Neha Khanna	A Note on 'The Simple Analytics of the Environmental Kuznets Curve'
0315	Martina Vidovic and Neha Khanna	Can Voluntary Pollution Prevention Programs Fulfill Their Promises? Evidence from the 33/50 Program

Number:	0301
Authors:	Neha Khanna and Florenz Plassmann
Title:	On the Future of World Pollution: The Demand for Environmental Quality and the Kuznets Curve Hypothesis.
Abstract:	The income elasticity of pollution is the key factor in the long-term global applicability of the Environmental Kuznets Curve hypothesis. We argue that the threshold income level at which this elasticity changes sign from positive to negative depends on the ability to spatially separate production and consumption. We test our hypothesis by estimating the income elasticities of five pollutants, using 1990 data for the United States. We find that for pollutants for which spatial separation is relatively straightforward, the change in sign occurs at lower incomes than for pollutants for which spatial separation is impossible. Our results suggest that even high income households in the United States have not yet reached the income level at which their demand for better environmental quality exceeds their willingness to accept higher concentrations of some pollutants.
File:	WP0301.pdf

Number:	0302
Authors:	Michael Dillon, E. C. Kokkelenberg, Sean M. Christy
Title:	The Effects of Class Size on Student Achievement in Higher Education: Applying an Earnings Function
Abstract:	This paper uses an earnings function to model how class size affects the grade students earn. We test the model using an ordinal logit with and without fixed effects on 363,023 undergraduate observations. We find that class size negatively affects grades. Average grade point declines as class size increases, precipitously up to class sizes of ten, and more gradually but monotonically through class sizes of 400 plus. The probability of getting a B plus or better declines from 0.9 for class sizes 20 to about 0.5 for class sizes of 120 and almost 0.4 for class sizes of 400.
File:	WP0302.pdf

Number:	0303
Authors:	Kenneth V. Greene and Bong Joon Yoon
Title:	Religiosity, Economics, and Life Satisfaction
Abstract:	No abstract
File:	WP0303.pdf

Number:	0304
Authors:	Florenz Plassmann
Title:	Do Economists need to choose between Efficiency and Justice?
Abstract:	Speech given at the induction of new members into Omicron Delta Epsilon, University of Scranton, April 2003
File:	WP0304.pdf

Number:	0305
Authors:	Florenz Plassmann and Neha Khanna
Title:	Household Income and Pollution: Implications for the Debate about the Environmental Kuznets Curve Hypothesis
Abstract:	The results of many studies that examine the relationship between income and pollution with multi-country, macro-level panel data sets are sensitive to the number and type of countries included in the analysis as well as to model specification. We argue that existing multi-country, macro-level panel data sets are unlikely to yield robust relationships. Using 1990 census tract data for the United States, we find relationships between household income and the concentrations of carbon monoxide, ground level ozone, and coarse particulate matter that are robust with respect to changes in model assumptions and data measurement. Our results suggest that economic growth and increases in household income may by themselves be insufficient to decrease the emissions in the near future. A more viable option for reducing pollution is to raise awareness of its harmful effects so as to alter consumer preferences in favor of higher environmental quality.
File:	WP0305.pdf

Number:	0306
Authors:	Florenz Plassmann and T. Nicolaus Tideman
Title:	A Framework for Assessing the Value of Downtown Land
Abstract:	The estimation of land values in areas that are substantially built up is not trivial, because it requires the separation of observable property values into unobservable building values and land values. We first describe a theoretical framework for the division of property values into these two components. We then develop an empirical framework that we use to estimate land values in downtown Portland, Oregon. We compare our estimates of property values to estimates of local assessors to evaluate the accuracy of our model, and use the estimates of land values to generate a land value map of the downtown area.
File:	WP0306.pdf

Number:	0307
Authors:	Neha Khanna and Florenz Plassmann
Title:	Exposure to Ozone: Do We Count Pollution Where it Matters?
Abstract:	We examine the exposure of racial minorities to ground level ozone in the United States in 1990. We find that minorities are exposed to significantly higher ambient concentrations but not necessarily to a larger number of days when the ambient concentration exceeded the National Ambient Air Quality Standard. This suggests that minority populations are not exposed to greater health risks due to ozone pollution.
File:	WP0307.pdf

Number:	0308
Author:	Daniel J. Henderson
Title:	The Measurement of Technical Efficiency Using Panel Data
Abstract:	This paper surveys the developments and extensions of technical efficiency measurement using panel data. It primarily focuses on both deterministic (where all observations lie on one side of the frontier) and stochastic (where observations lie on both sides of the frontier) production functions. Discussion of deterministic frontiers is divided into two main approaches: Data Envelopment Analysis (DEA - further broken into three separate subsets according to their assumed returns to scale) and the Free Disposable Hull (FDH). For each of these approaches, output-possibility sets and efficiency degrees in output are given. Further, a comparison between the two approaches as well as a brief discussion on the possibility of statistical inference associated with the deterministic frontiers are presented. The section on stochastic frontiers examines both time invariant and time variant measures of technical efficiency. Each topic includes estimation by Random Effects (RE), Fixed Effects (FE) and Maximum Likelihood Estimation (MLE), with and without the presence of heteroskedasticity as well as a discussion on recent developments
File:	WP0308.pdf

Number:	0309
Author:	Daniel J. Henderson
Title:	Nonparametric Kernel Measurement of Technical Efficiency: A Random Effects Approach
Abstract:	This paper uses nonparametric kernel methods in order to estimate production (or cost) frontiers as well as to estimate technical efficiency. A random effects nonparametric estimator is proposed and its structure is defined. Monte Carlo shows that it performs almost as well as the parametric model in estimating inefficiency when the true technology is linear and correctly specified. In contrast, when the technology becomes nonlinear, the nonparametric estimator performs best.
File:	WP0309.pdf

Number:	0310
Authors:	Subal Kumbhakar and Efthymios G. Tsionas
Title:	Measuring Technical and Allocative Inefficiency in the Translog Cost System: A Bayesian Approach
Abstract:	In this paper we propose simulation based Bayesian inference procedures in a cost system that includes the cost function and the cost share equations augmented to accommodate technical and allocative inefficiency. Markov Chain Monte Carlo techniques are proposed and implemented for Bayesian inferences on costs of technical and allocative inefficiency, input price distortions and over- (under-) use of inputs. We show how to estimate a well-specified translog system (in which the error terms in the cost and cost-share equations are internally consistent) in a random effects framework. The new methods are illustrated using panel data on U.S. commercial banks.
File:	WP0310.pdf

Number:	0311
Authors:	Subal Kumbhakar and Efthymios G. Tsionas
Title:	Bayesian Analysis of Input-Oriented Technical Efficiency
Abstract:	This paper deals with Bayesian estimation of input-oriented (IO) technical efficiency using a stochastic production frontier approach. Although the IO technical efficiency concept is commonly used in theoretical works, it is never estimated in practice using a production function. We provide inferences for parameters and efficiency using Bayesian methods based on Markov Chain Monte Carlo techniques, especially the Gibbs sampler with data augmentation. Both cross-sectional and panel data models are developed. To emphasize the point that estimated efficiency, returns to scale, etc., might differ depending on whether one specifies an IO or output-oriented (OO) technical efficiency term within the context of the model, we compare results from the IO and OO models using different priors. The proposed techniques are illustrated using dairy data.
File:	WP0311.pdf

Number:	0312
Authors:	Luis Orea and Subal Kumbhakar
Title:	Efficiency Measurement Using a Latent Class Stochastic Frontier Model
Abstract:	Efficiency estimation in stochastic frontier models typically assumes that the underlying production technology is the same for all firms. There might, however, be unobserved differences in technologies that might be inappropriately labeled as inefficiency if such variations in technology are not taken into account. We address this issue by estimating a latent class stochastic frontier model in a panel data framework. An application of the model is presented using Spanish banking data. Our results show that bank-heterogeneity can be fully controlled when a model with four classes is estimated.
File:	WP0312.pdf

Number:	0313
Authors:	Florenz Plassmann and Neha Khanna
Title:	Preferences, Income and the Environment: Understanding the Environmental Kuznets Curve Hypothesis
Abstract:	We derive a simple expression for the income-pollution path using the standard static model of the Environmental Kuznets Curve (EKC). This expression makes it straightforward to identify general characteristics of utility and pollution functions that lead to an EKC. We show that suitable preferences can always lead to an EKC while there is no technology that yields an EKC for all types of preferences, and we derive a sufficient condition for technology that leads to an EKC for almost all types of preferences. Our results hold for a model with multiple goods with different pollution intensities and for a production economy with non-constant relative price of consumption and environmental effort. We derive our results without assuming specific functional forms and we encompass several other models as special cases.
File:	WP0313.pdf

Number:	0314
Authors:	Florenz Plassmann and Neha Khanna
Title:	A Note on 'The Simple Analytics of the Environmental Kuznets Curve'
Abstract:	In a widely cited paper, Andreoni and Levinson (2001) argue that, under very mild restrictions on preferences, increasing returns to scale in pollution abatement are a sufficient condition for pollution to ultimately fall to zero with income growth. We show that the existence of an Environmental Kuznets Curve depends on the relative magnitudes of the returns to scale in abatement and in gross pollution, rather than on their absolute values. Increasing returns to scale in abatement by themselves are not sufficient for pollution to fall with income unless the returns to scale of abatement exceed the returns to the production of gross pollution.
File:	WP0314.pdf

Number:	0315
Authors:	Martina Vidovic and Neha Khanna
Title:	Can Voluntary Pollution Prevention Programs Fulfill Their Promises? Evidence from the 33/50 Program
Abstract:	We examine incentives for firm participation in the EPA’s 33/50 Program and the impact of this Program on firm emissions. We use a sample of manufacturing firms from 19 industry groups that were invited to participate in the Program in1991. We find that while the Program may have attracted some of the most polluting firms, the decline in emissions observed between 1991 and 1995 was the result of an independent trend rather than a direct consequence of the Program.
File:	WP0315.pdf

Revised: July 3, 2006

Return to previous page...