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5 - MARKET CORRECTIONS

Arye L. Hillman
Arye L. Hillman
Affiliation:
Bar-Ilan University, Israel
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Summary

In this chapter we shall study market corrections due to externalities and paternalism. Section 1 describes prospects for private resolution of externalities. Section 2 considers resolution of externalities by government. Section 3 considers paternalistic public policies.

An externality is a cost or benefit not expressed in a market and therefore not internalized in buyers' or sellers' market decisions.

Whereas externalities arise when people's behavior or decisions affect others:

Paternalistic public policies are a response to the perception that people are making decisions that harm themselves or are failing to make decisions from which they would benefit.

We shall see, however, that paternalism can also arise with regard to what some people do to other people.

Externalities and Private Resolution

As we did with public goods, we first describe attributes of externalities and investigate outcomes through private voluntary action without government. We again begin using Robinson Crusoe for illustration.

Attributes of externalities

Robinson Crusoe alone on the island fishes in a stream. Crusoe has no formal property rights to the fish in the stream. Absence of property rights does not matter as long as Crusoe is alone on the island. When another person arrives and sets up a factory upstream that pollutes the water in the stream in which Crusoe fishes, the stream no longer supports the same number of fish and Crusoe incurs a loss. The owner of the factory has imposed a negative externality on Crusoe.

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Public Finance and Public Policy
Responsibilities and Limitations of Government
 , pp. 307 - 404
Publisher: Cambridge University Press
Print publication year: 2009

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References

Scitovsky, T., 1955. Two concepts of external economies. Journal of Political Economy 17:143–51. Reprinted in Arrow, K. J. and Scitovsky, T. (Eds.), 1969. Readings in Welfare Economics. Richard D. Irwin, Homewood IL, pp. 242–55.Google Scholar
Buchanan, J. M., and Stubblebine, C., 1962. Externality. Economica 29:371–84.CrossRefGoogle Scholar
Cornes, R., and Sandler, T., 1985. On commons and tragedies. American Economic Review 73:787–92.Google Scholar
Meza, D., and Gould, J. R., 1987. Free access versus private property in a resource: Income distribution compared. Journal of Political Economy 100:1317–25.CrossRefGoogle Scholar
Buchanan, J. M., 1980. Rent seeking under external diseconomies. In Buchanan, J. M., Tollison, R. D., and Tullock, G. (Eds.), Toward a Theory of the Rent-Seeking Society. Texas A&M Press, College Station, pp. 183–95.Google Scholar
Cheung, S. N. S., 1973. The fable of the bees: An economic investigation. Journal of Law and Economics 16:11–35.Google Scholar
Meade, J. E., 1952. External economies and diseconomies in a competitive situation. Economic Journal 62:54–67. Reprinted in Arrow, K. J. and Scitovsky, T. (Eds.), 1969. Readings in Welfare Economics. Richard D. Irwin, Homewood IL, pp. 185–98.CrossRefGoogle Scholar
Donohue, J. J. III, and Siegelman, P., 1998. Allocating resources among prisons and social programs in the battle against crime. Journal of Legal Studies 27:1–45.CrossRefGoogle Scholar
Becker, G., 1971. The Economics of Discrimination. University of Chicago Press, Chicago IL.CrossRefGoogle Scholar
Lott, J. R., 1998. More Guns, Less Crime: Understanding Crime and Gun-Control Laws. University of Chicago Press, Chicago, IL.Google Scholar
Avery, C., Heymann, S. J., and Zeckhauser, R., 1995. Risks to selves, risks to others. American Economic Review, Papers and Proceedings 85:61–6.Google Scholar
Geoffard, P.-Y., and Philipson, T., 1997. Disease eradication: Private versus public vaccination. American Economic Review 87:222–330.Google Scholar
Leavitt, J. W., 1995. Typhoid Mary strikes back: Bacteriological theory and practice in early 20th-century public health. Isis 86:617–18.CrossRefGoogle Scholar
Philipson, T., and Posner, R., 1995. Private Choices and Public Health: The AIDS Epidemic in an Economic Perspective. Harvard University Press, Cambridge MA.Google Scholar
Young, W., 1998. Atomic Energy Costing. Kluwer Academic Publishers, Boston and Dordrecht.CrossRefGoogle Scholar
Coase, R. C., 1960. The problem of social cost. Journal of Law and Economics 3:1–45.CrossRefGoogle Scholar
Frey, B. S., Oberholzer-Gee, F., and Eichenberger, R., 1996. The old lady visits your backyard: A tale of morals and markets. Journal of Political Economy 104:1297–315.CrossRefGoogle Scholar
Gerrard, M. B., 1994. Whose Backyard, Whose Risk: Fear and Fairness in Toxic and Nuclear Waste Siting. MIT Press, Cambridge MA.Google Scholar
Kunruether, H., and Easterling, D., 1990. Are risk-benefit trade-offs possible in siting hazardous facilities?American Economic Review 80:252–6.Google Scholar
Smith, V. K., and Huang, J.-C., 1995. Can markets value air quality? A meta-analysis of hedonic property value models. Journal of Political Economy 103:296–315.CrossRefGoogle Scholar
Pigou, A. C., 1962 (4th edition). The Economics of Welfare. Macmillan, London (1st edition, 1920).Google Scholar
Fullerton, D., and Heutel, G., 2007. The general equilibrium incidence of environmental taxes. Journal of Public Economics 91:571–91.CrossRefGoogle Scholar
Buchanan, J. M., and Tullock, G., 1975. Polluters' profits and political response: Direct controls versus taxes. American Economic Review 65:139–47.Google Scholar
Ellerman, A. D., Joskow, P. L., Schmalensee, R., Montero, J.-P., and Bailey, E. M., 2000. Markets for Clean Air: The U.S. Acid Rain Program. Cambridge University Press, New York.CrossRefGoogle Scholar
Ellerman, A. D., Buchner, B. K., and Carraro, C. (Eds.), 2007. Allocation in the European Emissions Trading Scheme: Rights, Rents, and Fairness. Cambridge University Press, Cambridge U.K.CrossRef
Requate, T., 1998. Incentives to innovate under emission taxes and tradeable permits. European Journal of Political Economy 14:139–65.CrossRefGoogle Scholar
Rauscher, M., 1990. Can cartelization solve the problem of tropical deforestation?Weltwirtschaftliches Archiv 126:378–87.CrossRefGoogle Scholar
Aidt, T. S., 1998. Political internalization of economic externalities and environmental policy. Journal of Public Economics 69:1–16.CrossRefGoogle Scholar
Dijkstra, B. R., 1999. The Political Economy of Environmental Policy. Edward Elgar, Cheltenham, U.K.Google Scholar
Hillman, A. L., 1982. Declining industries and political-support protectionist motives. American Economic Review 72:1180–7. Reprinted in Ethier, W. J. and Hillman, A. L. (Eds.), 2008. The WTO and the Political Economy of Trade Policy. Edward Elgar, Cheltenham U.K., pp. 43–50.Google Scholar
Peltzman, S., 1976. Toward a more general theory of regulation. Journal of Law and Economics 19:241–4.CrossRefGoogle Scholar
Hillman, A. L., and Ursprung, H. W.. 1992. The influence of environmental concerns on the political determination of trade policy. In Anderson, K. and Blackhurst, R. (Eds.), The Greening of World Trade Issues. University of Michigan Press, Ann Arbor, pp. 195–220.Google Scholar
Körber, A., 1998. Why everybody loves Flipper: The political economy of the U.S. dolphin-safe laws. European Journal of Political Economy 14:475–509.CrossRefGoogle Scholar
Murdoch, J. C., and Sandler, T., 1997. The voluntary provision of a pure public good: The case of reduced CFC emissions and the Montreal Protocol. Journal of Public Economics 63:331–49.CrossRefGoogle Scholar
Schelling, T. C., 1992. Some economics of global warming. American Economic Review 82:1–15.Google Scholar
Stern, N., 2007. The Economics of Climate Change: The Stern Review. Cambridge University Press, Cambridge U.K.CrossRefGoogle ScholarPubMed
Stern, N., 2008. The economics of climate change. American Economic Review 98:1–37.CrossRefGoogle Scholar
Lomberg, B., 2001. The Skeptical Environmentalist: Measuring the Real State of the World. Cambridge University Press, Cambridge U.K.CrossRefGoogle Scholar
Marsiliani, L., Rauscher, M., and Withagen, C. (Eds.), 2002. Environmental Policy and the International Economy. Kluwer Academic Publishers, Boston and Dordrecht.Google Scholar
Petrakis, E., and Xepapadeas, A., 1996. Environmental consciousness and moral hazard in international agreements to protect the environment. Journal of Public Economics 60:95–110.CrossRefGoogle Scholar
Schultze, G., and Ursprung, H. W. (Eds.), 2001. Globalization and the Environment. Oxford University Press, Oxford.
Cassing, J. H., and Kuhn, T., 2003. Trade in trash: Optimal environmental policy in the presence of international trade in waste. Review of International Economics 11:496–511.Google Scholar
Congleton, R. D., 1992. Political institutions and pollution control. Review of Economics and Statistics 74:412–21.CrossRefGoogle Scholar
Easterly, W., 2001. The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. MIT Press, Cambridge MA.Google Scholar
Hillman, A. L., 2002. The World Bank and the persistence of poverty in poor countries. European Journal of Political Economy 18:783–97.CrossRefGoogle Scholar
Arrow, K. J., 1997. Invaluable goods. Journal of Economic Literature 35:757–65.Google Scholar
Besley, T., 1988. A simple model of merit good arguments. Journal of Public Economics 35:371–83.CrossRefGoogle Scholar
Hillman, A. L., 1978. Notions of merit want. Public Finance 35:213–26.Google Scholar
Musgrave, R., 1959. The Theory of Public Finance. McGraw Hill, New York.Google Scholar
Pazner, E. A., 1972. Merit wants and the theory of taxation. Public Finance 27:460–72.Google Scholar
Horrell, S., and Humphries, J., 1995. The exploitation of little children: Child labor and the family economy in the industrial revolution. Explorations in Economic History 32:485–516.CrossRefGoogle Scholar
Landes, W. M., and Solomon, L. C., 1972. Compulsory schooling legislation: An economic analysis of law and social change in the nineteenth century. Journal of Economic History 22:54–91.CrossRefGoogle Scholar
Moehling, C. M., 1999. State child labor laws and the decline of child labor. Explorations in Economic History 36:72–106.CrossRefGoogle Scholar
Sloan, F. A., Ostermann, J., Picone, G., Conover, C., and Taylor, Jr D. H.., 2004. The Price of Smoking. MIT Press, Cambridge MA.Google Scholar
Viscusi, W. K., 1990. Do smokers underestimate risks?Journal of Political Economy 98:1253–69.CrossRefGoogle Scholar
Becker, G. J., and Murphy, K. M., 1988. A theory of rational addiction. Journal of Political Economy 96:675–700.CrossRefGoogle Scholar
Hamish, S., 1992. Rationality and the market for human blood. Journal of Economic Behavior and Organization 19:125–45.Google Scholar
Titmuss, R. M., 1970. The Gift Relationship: From Human Blood to Social Policy. George Allen and Unwin, London.Google Scholar
Chesson, H., Harrison, P., and Kassler, W. J., 2000. Sex under the influence: The effects of alcohol policy on sexually transmitted disease rates in the U.S. Journal of Law and Economics 43:215–38.CrossRefGoogle Scholar
Edin, K., and Lein, L., 1997. Making Ends Meet: How Single Mothers Survive Welfare and Low-Wage Work. Russell Sage Foundation, New York.Google Scholar
Edlund, L., and Korn, E., 2002. A theory of prostitution. Journal of Political Economy 110:181–214.CrossRefGoogle Scholar
Posner, R., 1992. Sex and Reason. Harvard University Press, Cambridge MA.Google Scholar
Cutler, D. M., Glaeser, E. C., and Shapiro, J. M., 2003. Why have Americans become obese?Journal of Economic Perspectives 17:93–118.CrossRefGoogle Scholar
Rosin, O., 2008. The economic causes of obesity: A survey. Journal of Economic Surveys 22:617–47.CrossRefGoogle Scholar
Akerlof, G. A., 1991. Procrastination and obedience. American Economic Review 81:1–19.Google Scholar
Laibson, D., 1997. Golden eggs and hyperbolic discounting. Quarterly Journal of Economics 112:443–77.CrossRefGoogle Scholar
Loewenstein, G., and Elster, J. (Eds.), 1992. Choice over Time. The Russell Sage Foundation, New York.
McCaffery, E. J., and Slemrod, J. (Eds.), 2006. Behavioral Public Finance. Russell Sage Foundation, New York.
Gamoran, H., 1971. The biblical law against loans on interest. Journal of Near Eastern Studies 30:127–34.CrossRefGoogle Scholar
Persky, J., 2007. From usury to interest. Journal of Economic Perspectives 21:227–36.CrossRefGoogle Scholar
Stegman, A., 2007. Payday lending. Journal of Economic Perspectives 21:169–90.CrossRefGoogle Scholar
Allais, M., 1953. Le comportement de l'homme rationnel devant le risque: critique des postulats et axiomes de l'école Américaine. Econometrica 21:503–46.CrossRefGoogle Scholar
Simon, H. A., 1955. A behavioral model of rational choice. Quarterly Journal of Economics 68:99–118.CrossRefGoogle Scholar
Slovic, P., Monahan, J., and Macgregor, D. G., 2000. Violent risk assessment and risk communication: The effect of using actual cases, providing instructions, and employing probability versus frequency formats. Law and Human Behavior 24:271–96.CrossRefGoogle Scholar
Matulich, S., and Currie, D. M. (Eds.), 2009. Handbook of Frauds, Scams, and Swindles. CRC Press, Francis & Taylor Group, Boca Raton FL.
Crossette, B., 2000. Culture, gender, and human rights. In Harrison, L. E. and Huntington, S. P. (Eds.), Culture Matters: How Values Shape Human Progress. Basic Books, New York, pp. 178–99.Google Scholar
Sen, A. K., 1970. The impossibility of a Paretian liberal. Journal of Political Economy 78:152–7.CrossRefGoogle Scholar
Levy, D. A., and Peart, S. J., 2004. Statistical prejudice: From eugenics to immigrants. European Journal of Political Economy 20:5–22.CrossRefGoogle Scholar
Peart, S. A., and Levy, D. M., 2008. Darwin's unpublished letter at the Bradlaugh–Besant trial: A question of divided expert judgment. European Journal of Political Economy 23:343–53.CrossRefGoogle Scholar
Meadowcroft, J. (Ed.), 2008. Prohibitions. Institute of Economic Affairs, London.
Baumol, W. J., and Bradford, D. F., 1972. Detrimental externalities and non-convexity of the production set. Economica 39:160–76.CrossRefGoogle Scholar
Starrett, D. A., 1972. Fundamental non-convexities in the theory of externalities. Journal of Economic Theory 4:180–99.CrossRefGoogle Scholar
Scitovsky, T., 1955. Two concepts of external economies. Journal of Political Economy 17:143–51. Reprinted in Arrow, K. J. and Scitovsky, T. (Eds.), 1969. Readings in Welfare Economics. Richard D. Irwin, Homewood IL, pp. 242–55.Google Scholar
Buchanan, J. M., and Stubblebine, C., 1962. Externality. Economica 29:371–84.CrossRefGoogle Scholar
Cornes, R., and Sandler, T., 1985. On commons and tragedies. American Economic Review 73:787–92.Google Scholar
Meza, D., and Gould, J. R., 1987. Free access versus private property in a resource: Income distribution compared. Journal of Political Economy 100:1317–25.CrossRefGoogle Scholar
Buchanan, J. M., 1980. Rent seeking under external diseconomies. In Buchanan, J. M., Tollison, R. D., and Tullock, G. (Eds.), Toward a Theory of the Rent-Seeking Society. Texas A&M Press, College Station, pp. 183–95.Google Scholar
Cheung, S. N. S., 1973. The fable of the bees: An economic investigation. Journal of Law and Economics 16:11–35.Google Scholar
Meade, J. E., 1952. External economies and diseconomies in a competitive situation. Economic Journal 62:54–67. Reprinted in Arrow, K. J. and Scitovsky, T. (Eds.), 1969. Readings in Welfare Economics. Richard D. Irwin, Homewood IL, pp. 185–98.CrossRefGoogle Scholar
Donohue, J. J. III, and Siegelman, P., 1998. Allocating resources among prisons and social programs in the battle against crime. Journal of Legal Studies 27:1–45.CrossRefGoogle Scholar
Becker, G., 1971. The Economics of Discrimination. University of Chicago Press, Chicago IL.CrossRefGoogle Scholar
Lott, J. R., 1998. More Guns, Less Crime: Understanding Crime and Gun-Control Laws. University of Chicago Press, Chicago, IL.Google Scholar
Avery, C., Heymann, S. J., and Zeckhauser, R., 1995. Risks to selves, risks to others. American Economic Review, Papers and Proceedings 85:61–6.Google Scholar
Geoffard, P.-Y., and Philipson, T., 1997. Disease eradication: Private versus public vaccination. American Economic Review 87:222–330.Google Scholar
Leavitt, J. W., 1995. Typhoid Mary strikes back: Bacteriological theory and practice in early 20th-century public health. Isis 86:617–18.CrossRefGoogle Scholar
Philipson, T., and Posner, R., 1995. Private Choices and Public Health: The AIDS Epidemic in an Economic Perspective. Harvard University Press, Cambridge MA.Google Scholar
Young, W., 1998. Atomic Energy Costing. Kluwer Academic Publishers, Boston and Dordrecht.CrossRefGoogle Scholar
Coase, R. C., 1960. The problem of social cost. Journal of Law and Economics 3:1–45.CrossRefGoogle Scholar
Frey, B. S., Oberholzer-Gee, F., and Eichenberger, R., 1996. The old lady visits your backyard: A tale of morals and markets. Journal of Political Economy 104:1297–315.CrossRefGoogle Scholar
Gerrard, M. B., 1994. Whose Backyard, Whose Risk: Fear and Fairness in Toxic and Nuclear Waste Siting. MIT Press, Cambridge MA.Google Scholar
Kunruether, H., and Easterling, D., 1990. Are risk-benefit trade-offs possible in siting hazardous facilities?American Economic Review 80:252–6.Google Scholar
Smith, V. K., and Huang, J.-C., 1995. Can markets value air quality? A meta-analysis of hedonic property value models. Journal of Political Economy 103:296–315.CrossRefGoogle Scholar
Pigou, A. C., 1962 (4th edition). The Economics of Welfare. Macmillan, London (1st edition, 1920).Google Scholar
Fullerton, D., and Heutel, G., 2007. The general equilibrium incidence of environmental taxes. Journal of Public Economics 91:571–91.CrossRefGoogle Scholar
Buchanan, J. M., and Tullock, G., 1975. Polluters' profits and political response: Direct controls versus taxes. American Economic Review 65:139–47.Google Scholar
Ellerman, A. D., Joskow, P. L., Schmalensee, R., Montero, J.-P., and Bailey, E. M., 2000. Markets for Clean Air: The U.S. Acid Rain Program. Cambridge University Press, New York.CrossRefGoogle Scholar
Ellerman, A. D., Buchner, B. K., and Carraro, C. (Eds.), 2007. Allocation in the European Emissions Trading Scheme: Rights, Rents, and Fairness. Cambridge University Press, Cambridge U.K.CrossRef
Requate, T., 1998. Incentives to innovate under emission taxes and tradeable permits. European Journal of Political Economy 14:139–65.CrossRefGoogle Scholar
Rauscher, M., 1990. Can cartelization solve the problem of tropical deforestation?Weltwirtschaftliches Archiv 126:378–87.CrossRefGoogle Scholar
Aidt, T. S., 1998. Political internalization of economic externalities and environmental policy. Journal of Public Economics 69:1–16.CrossRefGoogle Scholar
Dijkstra, B. R., 1999. The Political Economy of Environmental Policy. Edward Elgar, Cheltenham, U.K.Google Scholar
Hillman, A. L., 1982. Declining industries and political-support protectionist motives. American Economic Review 72:1180–7. Reprinted in Ethier, W. J. and Hillman, A. L. (Eds.), 2008. The WTO and the Political Economy of Trade Policy. Edward Elgar, Cheltenham U.K., pp. 43–50.Google Scholar
Peltzman, S., 1976. Toward a more general theory of regulation. Journal of Law and Economics 19:241–4.CrossRefGoogle Scholar
Hillman, A. L., and Ursprung, H. W.. 1992. The influence of environmental concerns on the political determination of trade policy. In Anderson, K. and Blackhurst, R. (Eds.), The Greening of World Trade Issues. University of Michigan Press, Ann Arbor, pp. 195–220.Google Scholar
Körber, A., 1998. Why everybody loves Flipper: The political economy of the U.S. dolphin-safe laws. European Journal of Political Economy 14:475–509.CrossRefGoogle Scholar
Murdoch, J. C., and Sandler, T., 1997. The voluntary provision of a pure public good: The case of reduced CFC emissions and the Montreal Protocol. Journal of Public Economics 63:331–49.CrossRefGoogle Scholar
Schelling, T. C., 1992. Some economics of global warming. American Economic Review 82:1–15.Google Scholar
Stern, N., 2007. The Economics of Climate Change: The Stern Review. Cambridge University Press, Cambridge U.K.CrossRefGoogle ScholarPubMed
Stern, N., 2008. The economics of climate change. American Economic Review 98:1–37.CrossRefGoogle Scholar
Lomberg, B., 2001. The Skeptical Environmentalist: Measuring the Real State of the World. Cambridge University Press, Cambridge U.K.CrossRefGoogle Scholar
Marsiliani, L., Rauscher, M., and Withagen, C. (Eds.), 2002. Environmental Policy and the International Economy. Kluwer Academic Publishers, Boston and Dordrecht.Google Scholar
Petrakis, E., and Xepapadeas, A., 1996. Environmental consciousness and moral hazard in international agreements to protect the environment. Journal of Public Economics 60:95–110.CrossRefGoogle Scholar
Schultze, G., and Ursprung, H. W. (Eds.), 2001. Globalization and the Environment. Oxford University Press, Oxford.
Cassing, J. H., and Kuhn, T., 2003. Trade in trash: Optimal environmental policy in the presence of international trade in waste. Review of International Economics 11:496–511.Google Scholar
Congleton, R. D., 1992. Political institutions and pollution control. Review of Economics and Statistics 74:412–21.CrossRefGoogle Scholar
Easterly, W., 2001. The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. MIT Press, Cambridge MA.Google Scholar
Hillman, A. L., 2002. The World Bank and the persistence of poverty in poor countries. European Journal of Political Economy 18:783–97.CrossRefGoogle Scholar
Arrow, K. J., 1997. Invaluable goods. Journal of Economic Literature 35:757–65.Google Scholar
Besley, T., 1988. A simple model of merit good arguments. Journal of Public Economics 35:371–83.CrossRefGoogle Scholar
Hillman, A. L., 1978. Notions of merit want. Public Finance 35:213–26.Google Scholar
Musgrave, R., 1959. The Theory of Public Finance. McGraw Hill, New York.Google Scholar
Pazner, E. A., 1972. Merit wants and the theory of taxation. Public Finance 27:460–72.Google Scholar
Horrell, S., and Humphries, J., 1995. The exploitation of little children: Child labor and the family economy in the industrial revolution. Explorations in Economic History 32:485–516.CrossRefGoogle Scholar
Landes, W. M., and Solomon, L. C., 1972. Compulsory schooling legislation: An economic analysis of law and social change in the nineteenth century. Journal of Economic History 22:54–91.CrossRefGoogle Scholar
Moehling, C. M., 1999. State child labor laws and the decline of child labor. Explorations in Economic History 36:72–106.CrossRefGoogle Scholar
Sloan, F. A., Ostermann, J., Picone, G., Conover, C., and Taylor, Jr D. H.., 2004. The Price of Smoking. MIT Press, Cambridge MA.Google Scholar
Viscusi, W. K., 1990. Do smokers underestimate risks?Journal of Political Economy 98:1253–69.CrossRefGoogle Scholar
Becker, G. J., and Murphy, K. M., 1988. A theory of rational addiction. Journal of Political Economy 96:675–700.CrossRefGoogle Scholar
Hamish, S., 1992. Rationality and the market for human blood. Journal of Economic Behavior and Organization 19:125–45.Google Scholar
Titmuss, R. M., 1970. The Gift Relationship: From Human Blood to Social Policy. George Allen and Unwin, London.Google Scholar
Chesson, H., Harrison, P., and Kassler, W. J., 2000. Sex under the influence: The effects of alcohol policy on sexually transmitted disease rates in the U.S. Journal of Law and Economics 43:215–38.CrossRefGoogle Scholar
Edin, K., and Lein, L., 1997. Making Ends Meet: How Single Mothers Survive Welfare and Low-Wage Work. Russell Sage Foundation, New York.Google Scholar
Edlund, L., and Korn, E., 2002. A theory of prostitution. Journal of Political Economy 110:181–214.CrossRefGoogle Scholar
Posner, R., 1992. Sex and Reason. Harvard University Press, Cambridge MA.Google Scholar
Cutler, D. M., Glaeser, E. C., and Shapiro, J. M., 2003. Why have Americans become obese?Journal of Economic Perspectives 17:93–118.CrossRefGoogle Scholar
Rosin, O., 2008. The economic causes of obesity: A survey. Journal of Economic Surveys 22:617–47.CrossRefGoogle Scholar
Akerlof, G. A., 1991. Procrastination and obedience. American Economic Review 81:1–19.Google Scholar
Laibson, D., 1997. Golden eggs and hyperbolic discounting. Quarterly Journal of Economics 112:443–77.CrossRefGoogle Scholar
Loewenstein, G., and Elster, J. (Eds.), 1992. Choice over Time. The Russell Sage Foundation, New York.
McCaffery, E. J., and Slemrod, J. (Eds.), 2006. Behavioral Public Finance. Russell Sage Foundation, New York.
Gamoran, H., 1971. The biblical law against loans on interest. Journal of Near Eastern Studies 30:127–34.CrossRefGoogle Scholar
Persky, J., 2007. From usury to interest. Journal of Economic Perspectives 21:227–36.CrossRefGoogle Scholar
Stegman, A., 2007. Payday lending. Journal of Economic Perspectives 21:169–90.CrossRefGoogle Scholar
Allais, M., 1953. Le comportement de l'homme rationnel devant le risque: critique des postulats et axiomes de l'école Américaine. Econometrica 21:503–46.CrossRefGoogle Scholar
Simon, H. A., 1955. A behavioral model of rational choice. Quarterly Journal of Economics 68:99–118.CrossRefGoogle Scholar
Slovic, P., Monahan, J., and Macgregor, D. G., 2000. Violent risk assessment and risk communication: The effect of using actual cases, providing instructions, and employing probability versus frequency formats. Law and Human Behavior 24:271–96.CrossRefGoogle Scholar
Matulich, S., and Currie, D. M. (Eds.), 2009. Handbook of Frauds, Scams, and Swindles. CRC Press, Francis & Taylor Group, Boca Raton FL.
Crossette, B., 2000. Culture, gender, and human rights. In Harrison, L. E. and Huntington, S. P. (Eds.), Culture Matters: How Values Shape Human Progress. Basic Books, New York, pp. 178–99.Google Scholar
Sen, A. K., 1970. The impossibility of a Paretian liberal. Journal of Political Economy 78:152–7.CrossRefGoogle Scholar
Levy, D. A., and Peart, S. J., 2004. Statistical prejudice: From eugenics to immigrants. European Journal of Political Economy 20:5–22.CrossRefGoogle Scholar
Peart, S. A., and Levy, D. M., 2008. Darwin's unpublished letter at the Bradlaugh–Besant trial: A question of divided expert judgment. European Journal of Political Economy 23:343–53.CrossRefGoogle Scholar
Meadowcroft, J. (Ed.), 2008. Prohibitions. Institute of Economic Affairs, London.
Baumol, W. J., and Bradford, D. F., 1972. Detrimental externalities and non-convexity of the production set. Economica 39:160–76.CrossRefGoogle Scholar
Starrett, D. A., 1972. Fundamental non-convexities in the theory of externalities. Journal of Economic Theory 4:180–99.CrossRefGoogle Scholar

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  • MARKET CORRECTIONS
  • Arye L. Hillman, Bar-Ilan University, Israel
  • Book: Public Finance and Public Policy
  • Online publication: 05 June 2012
  • Chapter DOI: https://doi.org/10.1017/CBO9780511813788.006
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  • MARKET CORRECTIONS
  • Arye L. Hillman, Bar-Ilan University, Israel
  • Book: Public Finance and Public Policy
  • Online publication: 05 June 2012
  • Chapter DOI: https://doi.org/10.1017/CBO9780511813788.006
Available formats
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  • MARKET CORRECTIONS
  • Arye L. Hillman, Bar-Ilan University, Israel
  • Book: Public Finance and Public Policy
  • Online publication: 05 June 2012
  • Chapter DOI: https://doi.org/10.1017/CBO9780511813788.006
Available formats
×