Reelection, growth and public debt
. European Journal of Political Economy Forthcoming
, 101889. Publisher's VersionAbstract
In this work we examine how economic growth affects public debt when interacted with reelection prospects. Reelection considerations shorten political time horizons and give rise to political myopia that exacerbates debt accumulation. That laxer institutional reelection restrictions (e.g., no term limits) mitigate this effect due to electoral accountability is well known. Incorporating growth, we find that this mitigation can be reversed because less myopic, and more accountable, incumbents put more emphasis on smoothing the effects of growth across generations. We test these predictions using an annual-based panel of U.S. states over the period 1963–2010. Our identification strategy rests on constitutionally-entrenched differences in gubernatorial term limits that provide plausibly exogenous variation in reelection prospects, and aggregate national TFP shocks that are exogenous to individual states. Our estimates indicate that when reelection is possible a one standard deviation positive income shock induces, within the same year, a relative increase of approximately $40 in real per capita public debt.
Optimal water pricing: Accounting for environmental externalities
. Ecological Economics Forthcoming
, 106429. Publisher's VersionAbstract
A pricing-based mechanism that implements the optimal water policy while accounting for environmental externalities is developed. The analysis is presented in the context of a comprehensive water economy, stressing the tradeoffs between water use in the provision of ecosystem services vs. other uses. A distinction is made between conveyed and instream environmental water, which turns out to have important policy implications. It is shown that the allocation of instream water can be implemented by properly incorporating the (marginal) instream value of water within the shadow (in situ) price of natural water. The regulation of conveyed environmental water requires a quota-price combination. An example based on Israel's water economy is presented.
Does Parental Quality Matter? Evidence on the Transmission of Human Capital Using Variation in Parental Influence from Death, Divorce, and Family Size
. Journal of Labor Economics Forthcoming
, 000-000. Publisher's VersionAbstract
This paper examines the transmission of human capital from parents to children using variation in parental influence due to parental death, divorce, and the increasing specialization of parental roles in larger families. All three sources of variation yield strikingly similar patterns that show that the strong parent-child correlation in human capital is largely causal. In each case, the parent-child correlation in education is stronger with the parent who spends more time with the child and weaker with the parent who spends relatively less time parenting. These findings help us understand why educated parents spend more time with their children.
Resource windfalls and public debt: A political economy perspective
. European Economic Review Forthcoming
, 103371. Publisher's VersionAbstract
Can natural resource windfalls increase public debt in democracies? Adopting a political economy perspective, we show that the answer is in the affirmative. Resource windfalls increase both the government’s income and wealth. The former mitigates the need to borrow, whereas the latter encourages further borrowing (as it improves its terms), implying an ambiguous pure effect of resource windfalls on debt. Re-election considerations shorten political time horizons and give rise to political myopia. We show that higher political myopia, induced by more stringent (institutional) re-election restrictions, magnifies the wealth effect, turning positive the effect of resource windfalls on debt. We test the model’s predictions using a panel of U.S. states over the period 1963-2007. Our identification strategy rests on constitutionally-entrenched differences in gubernatorial term limits that provide plausibly exogenous variation in re-election prospects, and geographically-based cross-state differences in natural endowments. Our baseline estimates indicate that a resource windfall of $1 induces an increase of approximately ¢20 in the public debt of states with more stringent re-election restrictions.
Advertising Influences Food Choices of University Students With ADHD
. Journal of Attention Disorders Forthcoming
. Publisher's VersionAbstract
Objective: Previous research in adults with ADHD showed high rates of obesity and unhealthy food choices. There is evidence that contextual cues, for example, advertisements, influence food choices. This study assessed the sensitivity of university students with ADHD to advertised food. Method: University students (N = 457) with and without ADHD participated in a cafeteria field experiment. Food choices were examined in periods of advertising either healthy or unhealthy sandwiches. Results: Students with ADHD (a) chose less healthy food items, (b) were more influenced by advertising, (c) showed the same overall healthy food choices as controls when exposed to healthy advertising. Conclusion: Students with ADHD chose unhealthier foods at the cafeteria but were also more influenced by advertising. Healthy food advertisements raised their healthy food choices. As this population has strong association with unhealthy dietary patterns, it is important to investigate the influence of food cues on their eating habits.