Southern Economic Journal

Publisher:
Wiley
Publication date:
2021-02-01
ISBN:
0038-4038

Latest documents

  • Announcements
  • Educational gender gaps

    Cross‐country studies reveal two consistent gender gaps in education—underachievement in school by boys and low rates of participation in STEM studies by girls. Recent economics research has shown the importance of social influences on women's STEM avoidance, but male low achievement has been less‐studied and tends to be attributed to behavior problems and deficient non‐cognitive skills. I revisit the determinants of the gender gap in U.S. educational attainment with a relatively‐advantaged sample of young men and women and find that school behavior and measured skills are not very important drivers of gender differences, particularly in the transition to college. Educational aspirations, on the other hand, are strongly predictive of educational gaps and the gender difference in aspirations cannot be explained, even with rich adolescent data that includes parental expectations and school achievement indicators. These results suggest that gender identity concerns may influence (and damage) the educational prospects of boys as well as girls through norms of masculinity that discourage academic achievement.

  • Issue Information
  • The effects of medical malpractice tort reform on physician supply an analysis of legislative changes from 2009 to 2016

    Advocates of tort reform blame medical malpractice lawsuits for rising healthcare costs, prompting politicians in some states to pass tort reform capping noneconomic damages. In this analysis, I examine the effects of caps on noneconomic damages between 2009 and 2016 on the supply of physicians. I use multiple model specifications, examine physicians in high‐risk specialties, young physicians, and physicians in state‐border counties, and explore the potential for asymmetric effects using instances where tort reform has been declared unconstitutional and removed. I find few statistically significant effects. Supplemental analyses show that this may be because the noneconomic damage caps do not significantly affect malpractice insurance premiums, payouts, or claims in the first place.

  • Sibling donation games: pure‐altruism, strategic‐altruism, and the interaction of familial and public transfers

    Accompanying the rapidly aging populations of high‐income countries are increasing transfers of time and money from adult children to elderly parents (ascending altruism). In this paper we first develop a theoretical model to characterize the general reaction‐functions of two adult siblings choosing transfer amounts (possibly time) to their needy parents under two alternative motivations: pure altruism and strategic altruism. We show that transfers are strategic substitutes under pure altruism and strategic complements under strategic altruism. The Nash‐equilibrium generates distinct predictions associated with each motivation and we then explore some implications of our findings. A result with potentially important policy implications is that the response of children transfers to increased pension payments to the parents depends on the children's motivations. This contrasts with much of the literature which assumes transfers decrease with increased pension payments.

  • Competition between branded and nonbranded firms and its impact on welfare

    We examine a quantity competition among branded and nonbranded firms. The market comprises two consumer segments: one purchases only branded products (the high‐end market), while the other segment's consumers purchase less expensive products (the low‐end market). When branded firms take actions sequentially, we show that the branded leader has an incentive to restrict its quantity to avoid entering the low‐end market. As the follower recognizes this incentive, it can restrict the leader by implementing a quantity constraint, which is affected by the number of nonbranded firms. We find that both the branded leader and follower could benefit from the nonbranded firms and that the leader prefers to have more nonbranded firms in the market than the follower does. Furthermore, we show that the free entry of nonbranded firms could negatively affect total surplus as well as consumer surplus even without any costs, because of the premium pricing of branded products.

  • Announcements
  • Issue Information
  • Firms’ heterogeneity, demand accumulating, and exchange rate pass‐through

    In this article, we study how the export behaviors of new and incumbent exporters differentially respond to exchange rate shocks. We establish a dynamic model, in which new exporters strategically charge a lower price than incumbent exporters to grow their customer base and increase future sales. The model predicts that new exporters adjust their prices more aggressively relative to their incumbent counterparts in response to exchange rate fluctuations. Using a transaction‐level data set containing all Chinese exporters during the 2000–2009 period, we find supporting evidence for the model's predictions: new exporters adjust their price 1.5 times more than incumbent exporters. This, in turn, results in export quantities being less responsive to exchange rate shocks among new exporters. The result holds for a series of robustness checks. The findings imply that there are different degrees of exchange rate pass‐through among new and incumbent exporters.

  • The utilitarian–maximin social welfare function and anomalies in social choice

    Two major criteria of distributive justice are the utilitarian criterion and the maximin criterion. We offer a simple axiomatic characterization of a mixed utilitarian–maximin social welfare function. This social welfare function explains recent empirical violations of the standard cardinal social choice theory such as the social Allais paradox and the social common ratio effect. In addition, it offers a new foundation for the positively skewed wealth distributions in society. It also provides an objective function for mechanism design applications that trades off maximizing surplus and minimizing inequality.

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