When Postmaster General Creswell penned his concern about the impact 2 of electronic diversion on his postal organization, the year was 1872. General Creswell, it turned out, fretted unnecessarily. Facsimile did not achieve commercial viability until roughly a century after his tenure as Postmaster General and today that technology is fading rapidly from the communication scene. Moreover, it never appears to have significantly affected physical letter volumes. However, if General Creswell were leading a major postal organization today, he likely would feel threatened by the potential of Internet communication to cause electronic diversion of physical mail. Should recent technology developments cause the oft-predicted (but so far incorrect) inflection point that would mark the beginning of declining mail volumes. the implications from a management standpoint will be profound. The relatively fixed nature of postal costs suggest that volume declines must be offset though improved productivity, reduced cost of inputs, revenue from new products that share common costs, or reduced level of universal service.

South Africa's peaceful transition to democracy has gained it world recognition. This book gives a frank report on contemporary South African society and the challenges which the new nation faces. Sixteen social scientists, experts in fields as wide-ranging as economics, politics, and development planning, have compiled a social report on South Africa two years into democracy. The volume covers critical concerns which impact on the well-being of the average South African. The dozen chapters in the book present facts and figures as well as in-depth commentary on social issues which South Africa must address. The authors discuss the legacies of the past, including poverty and social inequality; problems of transition ranging from trauma to crime; and the hopes for the future which lie in economic growth and development, a deeper understanding of democracy, and a healthy dose of optimism. The book draws on information from a wide variety of sources including government statistics, independent social surveys, community research, and opinion polls. This rich data weaves a tapestry of the quality of life in South Africa for Africa watchers and the general public.

The character of economic life] in a society is dependent upon, among 2 other things, its political-legal-economic institutional setting. Within that institutional structure, the individuals who comprise that society attempt to cooperate with one another to their mutual advantage so as to accommodate their joint utility-maximizing endeavors. In addition, these same individuals call upon certain societal institutions to adjust the con flicting claims of different individuals and groups. In this regard, a society is perceived as both a cooperative venture for mutual advantage where there are an identity of interests and, as well, an arena of conflict where there exists a mutual interdependence of conflicting claims or interests. The manner in which a society structures its political-legal-economic institutions 1) to enhance the scope of its cooperative endeavors and 2) to channel internal political-legal-economic conflicts toward resolution, shapes the character of economic life in that society. In contemplating the structure of its institutions intended to promote cooperation and channel conflict, a society confronts several issues. At the most general level an enduring issue is how a society both perceives and then ideologically transmits (perhaps teaches or rationalizes), inter nally and/or externally, its perceptions of so-called "cooperative en deavors" and "arenas of conflict." There can be no doubt that the resultant structure of a society's institutions will reflect that society's perception as to what cooperation entails and what conflict constitutes."

Along with the renewed interest in the Austrian school of economics over the last two decades, important advances have been made in applying its princples to concrete issues that typically face market economics. However, very little has been done in the area of externalities and the concept of social efficiency. The overarching purpose of this book is to establish a sound theoretical basis for further empirical and public policy analysis in the area of externalities. In order to do this, a general theory of welfare economics is required. The author offers an alternative to the conventional neoclassical welfare paradigm -- his construct does not include perfect competition or general equilibrium. After the author develops his theory of welfare economics, he interprets externalities in light of the theory and discusses policy remedies and directions for further research.

Profits in the Long Run asks two questions: Are there persistent differences in profitability across firms? If so, what accounts for them? This book answers these questions using data for the 1000 largest US manufacturing firms in 1950 and 1972. It finds that there are persistent differences in profitability and market power across large US companies. Companies with persistently high profits are found to have high market shares and sell differentiated products. Mergers do not result in synergistic increases in profitability, but they do have an averaging effect. Companies with above normal profits have their profits lowered by mergers. Companies with initially below normal profits have them raised. In addition, the influence of other variables on long-run profitability, including risk, sales, diversification, growth and managerial control, is explored. The implications of antitrust policy are likewise addressed.

This study analyses the functioning of the peasant economy in Peru in the context of the present predominantly capitalist system. The central themes are the economic relationships of the peasantry to the rest of the economy of the country and the role of the peasant economy in the entire system, together with the changes that have taken place in that role over time. These themes are investigated by means of a study in detail of a sample of peasant communities in the most traditional and backward region of Peru, the southern sierra. The historical process has generated in Peru one of the most extreme cases of inequality, rural poverty and cultural duality. Nowhere else does the notion of 'economic duality' seem more applicable. Thus an investigation of the case of Peru has methodological value for the understanding of the peasant economy throughout Latin America, and the results of this survey have important implications for the whole region.

At the very heart of the conception of the present volume lies the conviction that social economics is a highly pluralistic discipline, inspired and enriched by several often radically different world views, Schumpeterian visions, and at times even quite antagonistic social doctrines. Yet, in spite of all these differences, social economists can nevertheless be seen and also approached as some kind of economic brotherhood for various reasons dissatisfied with the austere "value-free" diet offered by the pOSitivistic neoclassical paradigm. What all social economists seem to have in common is a profound interest in values and the process of valuation in order to more fully understand both economic behavior and the possibilities of improving the economic system. Such a distinguishing characteristic is also well articulated and enshrined in Article I of the Constitution of the Association of Social Economics where we are told that the aims and objectives of the Association shall be: 1. To foster research and publication centered on the reciprocal relationship between economic science and broader questions of human dignity, ethical values, and social philosophy, [and to] encourage the efforts of all scholars who are dedicated to exploring the ethical presuppositions and implications of economic science. 2. To consider the personal and social dimensions of economic problems and to assist in the formulation of economic policies consistent with a concern for ethical values and pluralistic community and the demands of personal dignity.

Orio Giarini The "Geneva Association" (International Association for the Study of Risk and Insurance Economics) was founded in 1973. The main goal was to stimulate and organize objective research in the field of risk, uncertainty, and insurance, in a world in which such issues were clearly becoming of greater and greater relevance for all economic actors. This was a pioneer ing effort, especially as economic theory and the teaching of economics were still anchored to the key notion of general equilibrium under an assumption of certainty. Thus, we had to start our work almost from scratch. One of the first initiatives was to bring together in Geneva, in June of 1973, all the academics in Europe already involved in risk and insurance economics. We found eight from five different countries who never had met before. This seminar chaired by Raymond Barre, the first president of The Geneva Association, was the first of an annual series that became known as the seminar of "The European Group of Risk and Insurance Economists." Since then more than 100 economists from most European countries as well as participants from two other continents and in particular from the United States have taken part in this seminar."

For people interested in risk management, medical activity represents a stimulating field of study and thought. On the one hand, progress in medical knowledge and technology tends to reduce the risks to survival that individuals would face in the absence of appropriate diagnostic or therapeutic instruments. On the other hand, new medical technologies simultaneously create their own specific risks, sometimes simply because their effects are less well-known than those of established ones. In a sense any medical progress simultaneously generates new risks while destroying old ones. Moreover, unlike many financial risks that can be either divided or transferred to others (e.g. through diversification, insurance or social security) the personal aspects of medical risks are by essence indivisible and non-transferable. As a result, they are in a sense more threatening than financial risks for risk averse patients. These two facts explain and justify the growing interest in risk economics for the fields of medical decision making and health economics. In Risk and Medical Decision Making, part 1 is developed inside the expected utility (E-U) model and analyses how comorbidity risks affect the well-known "test-treatment" thresholds. Part 2 is devoted to a specific non E-U model with the same purpose: how would one define a threshold in this context and how would one value a diagnostic test? In each of these two parts both diagnostic and therapeutic risks are considered.

In order to survive as a social institution a firm needs a constitutional social contract, even though implicit, among its stakeholders. This social contract must exist if an institution is to be justified. The book focuses on two main issues: To find out the terms of the hypothetical agreement among the firm's stakeholders in an ex ante perspective and to understand the endogenous mechanism generating appropriate incentives that induce to comply with the social contract itself, as seen in the ex post perspective.

This book aims to develop an institutional approach to general economic equi librium. Thus far, institutional economics has essentially been confined to purely verbal discourse. Here I argue the case that general equilibrium theory forms a well rounded basis for the development of an institutional economic the ory. The fundamental economic trade mechanism underlying this refocusing is that of the Edgeworthian barter mechanism modelled through the equilibrium notion of the core of an economy. There is an extensive literature that links the core with the Walrasian price mechanism, which is explored in this book. Next I develop an alternative model of explicitly nonsovereign trade in the setting of an institutionally structured economy. In this book the core and several of its extensions are considered to be descriptions of the equilibrium allocations resulting from institutionalized barter processes, thereby providing a basis of an institutionally based economic theory. Traditionally finite economies have been assessed as the most natural represen tations of real life economies, in particular of market economies. Many funda mental insights have been developed. In the first half of the book I summarize the most influential and important results in the literature on finite economies regarding the relationship of the Walrasian model of a perfectly competitive market system and the Edgeworthian theory of individually based, pure barter processes. I use the axiomatic method as the main methodological framework according to which I construct my models."

Biotechnology is a rapidly developing sector of the economy for coun tries throughout the world. This rapid development has led to heated debate over its risks and benefits. Advocates of biotechnology point to the potential benefits offered by products that promise to elimi nate disease, provide for more efficient diagnostic techniques, treatments and drugs, yield increased food production, and so forth. Others fear that the rapid developments of this technology have occurred without appropriate consideration having been given to the ethical ramifications, the potential health risks and long-term envi ronmental impacts, implications for income distribution, and potential for abuse. Consumers and producers share concern for the future of biotechnology: the realities and even the perceptions, informed or otherwise. This book is the outcome of a research project on Biotechnology and the Consumer sponsored by the Office of Consumer Affairs of Industry Canada. The project was designed to foster informed public policy on biotechnology and in particular, to contribute to and inform the Canadian government's development of a Canadian Biotechnology Strategy. The Office funded a group of authors to prepare a series of analytical papers on a range of consumer and informational issues related to biotechnology. This project also involved an interim workshop in which the authors presented their papers, and culmi nated in a symposium on Biotechnology and the Consumer Interest, held on September 24-25, 1997, in Ottawa, Canada."

Professor Sten Malmquist constructed the Malmquist quantity index and in doing so developed a distance function defined on a consumption space. This function is the consumer analog to the Shephard input distance function of producers and is used in ratio form to define the quantity index. This volume contains new contributions based on Malmquist's work nearly 50 years ago and provides modern perspectives on the value of this research.

Uncertain Decisions: Bridging Theory and Experiments presents advanced directions of thinking on decision theory - in particular the more recent contributions on non-expected utility theory, fuzzy decision theory and case-based theory. This work also provides theoretical insights on measures of risk aversion and on new problems for general equilibrium analysis. It analyzes how the thinking that underlies the theories described above spills over into real decisions, and how the thinking that underlies these real decisions can explain the discrepancies between theoretical approaches and actual behavior. This work elaborates on how the most recent laboratory experiments have become an important source both for evaluating the leading theory of choice and decision, and for contributing to the formation of new models regarding the subject.

R. H. Coase Duncan Black was a close and dear friend. A man of great simplicity, un worldly, modest, diffident, with no pretensions, he was devoted to scholarship. In his single-minded search for the truth, he is an example to us all. Black's first degree at the University of Glasgow was in mathematics and physics. Mathematics as taught at Glasgow seems to have been designed for engineers and did not excite him and he switched to economics, which he found more congenial. But it was not in a lecture in economics but in one on politics that he found his star. One lecturer, A. K. White, discussed the possibility of constructing a pure science of politics. This question caught his imagination, perhaps because of his earlier training in physics, and it came to absorb his thoughts for the rest of his life. But almost certainly nothing would have come of it were it not for his appointment to the newly formed Dundee School of Economics where the rest of the. teaching staff came from the London School of Economics. At Glasgow, economics, as in the time of Adam Smith, was linked with moral philosophy. At Dundee, Black was introduced to the analytical x The Theory o/Committees and Elections approach dominant at the London School of Economics. This gave him the approach he used in his attempt to construct a pure science of politics."

While income redistribution is one of the most important functions of modern governments, the world has changed greatly since this first edition of Economics of Income Redistribution was published in 1983. Pension systems and medical programs are in a state of crisis in many parts of the world and the general political mood is shifting away from income redistribution. Economics of Income Redistribution (2nd edition) brings this work up to date by discussing the economic and political aspects of income redistribution. It examines the classical moral objective of redistribution to assist the poor, as well as income transfer for pensions, education and intra-family gift giving.

This chapter has set out in detail the models which are employed below in order to analyse the labour market effects of changes in tax rates and in alterations in the tax structure. The fundamental mechanisms underlying the different approaches have been pointed out. Moreover, vital assumptions have been emphasised. By delineating the models which are used for the subsequent analyses, implicitly statements have also been made about topics or aspects which this study does not cover. For example, all workers and firms are identical ex ante. However, ex-post differences are allowed for, inter alia, if unemploy ment occurs or if some firms have to close down. These restrictions indicate areas of future research insofar as that the findings for homogeneous workers or firms yield an unambiguous proposal for changes in tax rates or the tax structure in order to promote employment. This is because it would be desir able for tax policy to know whether the predicted effects also hold in a world with ex-ante heterogeneity. Furthermore, the product market has not played a role. Therefore, repercussions from labour markets outcomes on product demand - and vice versa - are absent. 55 Moreover, neither the process of capital accumulation, be it physical or human capital, nor substitution pos sibilities between labour and capital in the firms' production function are taken into account. Finally, international competition is not modelled.

Empirical Studies In Applied Economics presents nine previously unpublished analyses in monograph form. In this work, the topics are presented so that each chapter stands on its own. The emphasis is on the applications but attention is also given to the econometric and statistical issues for advanced readers. Econometric methods include multivariate regression analysis, limited dependent variable analysis, and other maximum likelihood techniques. The empirical topics include the measurement of competition and market power in natural gas transportation markets and in the pharmaceutical market for chemotherapy drugs. Additional topics include an empirical analysis of NFL football demand, the accuracy of an econometric model for mail demand, and the allocation of police services in rural Alaska. Other chapters consider the valuation of technology patents and the determination of patent scope, duration, and reasonable royalty, and the reaction of financial markets to health scares in the fast-food industry. Finally, two chapters are devoted to the theory and testing of synergistic health effects from the combined exposure to asbestos and cigarette smoking.

CLAUDEJEANRENAUD NILS SOGUEL Smoking is a very common habit all over the world. The prevalence rate ranges from 20% - 40% in industrialised countries, and is dramatically increasing in the developing world. Smoking is risky and there is ample scientific evidence to support this statement. We know that smoking is a major cause of disease and premature death, in view of the fact that 3 million people die each year worldwide as a result of their smoking habit. Twenty years ago, the U. S. Surgeon General identified smoking as the single most important cause of morbidity and premature death (USDHEW, 1979). Tobacco consnmption reduces life expectancy vastly. Epidemiological research shows that people who have died from a smoking-related disease would, on average, have lived for an additional 15 years had they not been smokers (Warner, 1987). The economic analysis of tobacco consumption is a complex and challenging issue, which entails addressing many different questions. What is the economic burden of smoking and do smokers "pay their way"? How do individuals perceive their own health risks? What is the effect of the addicting properties of nicotine on the behaviour of a rational, utility maximizing individual? Lastly, what is the most effective way to discourage tobacco consumption? In this context, the assessment of the social burden of smoking using a cost-of-illness framework has played a central role since the beginning of the seventies."

Communications markets have made much progress towards competition and deregulation in recent years. However, it is increasingly clear, in the age of the Internet and the digital revolution, that much more needs to be done, and that new approaches, both at the Federal Communications Commission and in Congress, will be required to complete the task. In this volume, the Progress and Freedom Foundation presents nine papers by communications policy experts and government policymakers that show how to finish the job of deregulating communications markets and reforming the FCC. The Telecommunications Act of 1996 was a landmark piece of legislation for an industry moving from a monopoly orientation towards competition, but additional steps are needed to complete the process of implementing the pro-competitive, deregulatory vision of the act. Bringing together a group of the caliber represented in this book makes possible the best recommendations about the exact nature of those necessary changes. In this volume, the most difficult and politically-charged hot-button issues involving local and long distance competition, universal service, spectrum allocation, program content regulation, and the public interest doctrine are confronted head-on. As importantly, the authors recommend specific reform proposals to be considered by the Federal Communications Commission and Congress. The ideas contained in the experts' essays were presented and debated at a conference hosted by The Progress & Freedom Foundation, which was held in Washington, DC, on December 8, 2000. The Progress & Freedom Foundation studies the impact of the digital revolution and its implications for public policy. It conducts research in fields such as electronic commerce, telecommunications and the impact of the Internet on government, society and economic growth. It also studies issues such as the need to reform government regulation, especially in technology-intensive fields such as medical innovation, energy and environmental regulation.

Postal and Delivery Services: Delivering on Competition is an indispensable source of information and analysis on the current state of the postal and delivery sector. It offers current insight into strategy, regulation as well as the economics of this sector. Issues addressed include international postal policy, the universal service obligation, regulation, competition, entry, the role of scale and scope economies, the nature and role of cost and demand analysis in postal service, productivity, interaction of law and economics, human resources, transition and reform issues.

As the demand for environmental quality is increasing and as the current GATT rules monitored by the WTO are not very suitable for environmental protection, either a new international environmental organization may be formed soon or new environmental regulations may be added to GATT. In either case, understanding of the interactions between trade and the environment will be vital. Trade and the Environment presents both the theoretical and empirical exposition of (i) the impact of trade liberalization on environmental quality; (ii) the impact of environmental regulations on international competitiveness; and (iii) strategic trade and environmental policies. An important feature of Trade and the Environment as compared to earlier books is that it brings together the reciprocal interactions between trade and the environment. It can be used as the main or complementary textbook for a course on trade and the environment.

Information, Innovation and Impacts - a joint project between the Program of Research in International Management and Economy (PRIME) at the University of Ottawa and Statistics Canada - brings together economic, social and statistical views of the impacts of the innovative uses of information. It examines the costs as well as the benefits of rapidly expanding availability of data, of information, and of codified knowledge, and it provides suggestions for future work and research. This project fits into an on-going research program at Statistics Canada to develop indicators for science and technology (S&T) in a more coherent manner, and it fits into the research program of PRIME to better understand the dynamics of innovation in an information economy. Together, Statistics Canada and PRIME strive to tell the story of the activities in S&T systems, their interactions, and the outcomes as actors go about the generation, transmission, or mediation of knowledge, information, and of data, as part of the effective functioning of the system.

Over the past thirty years, urban economic theory has been one of the most active areas of urban and regional economic research. Just as static general equilibrium theory is at the core of modern microeconomics, so is the topic of this book - the static allocation of resources within a city and between cities - at the core of urban economic theory. An Essay on Urban Economic Theory well reflects the state of the field. Part I provides an elegant, coherent, and rigorous presentation of several variants of the monocentric (city) model - as the centerpiece of urban economic theory - treating equilibrium, optimum, and comparative statistics. Part II explores less familiar and even some uncharted territory. The monocentric model looks at a single city in isolation, taking as given a central business district surrounded by residences. Part II, in contrast, makes the intra-urban location of residential and non-residential activity the outcome of the fundamental tradeoff between the propensity to interact and the aversion to crowding; the resulting pattern of agglomeration may be polycentric. Part II also develops models of an urbanized economy with trade between specialized cities and examines how the market-determined size distribution of cities differs from the optimum. This book launches a new series, Advances in Urban and Regional Economics. The series aims to provide an outlet for longer scholarly works dealing with topics in urban and regional economics.

Regulation Under Increasing Competition brings together practitioners, regulators, and economists to examine the important policy and regulatory issues facing the telecommunications and electricity industries. This volume reviews such topics as competitive entry, stranded costs, pricing and market mechanisms. It provides a unique perspective on problems in a newly deregulated environment.