My interest in X-Efficiency (XE) dates back to 1978. At the time, I was writing the dissertation for my Ph. D. at Washington State University. My dissertation was concerned with the role of attitudes in the school-to-work transition among young men. I was advised by Professor Millard Hastay (a member of my committee) to look at Leibenstein's "new" book, Beyond Economic Man. One of the things that caught my attention was his behavioral description of (selective) rationality. It seemed that Leibenstein' s behavioral description of a (selectively) rational individ ual was very similar to what psychologists such as Abraham Maslow were reporting as being the product of a particular motivational system. In other words, I was impressed with the idea that what Leibenstein was referring to as X-inefficiency was being discussed by psychologists as "the way it (often) is. " So from the beginning I always considered the concept ofX-(in)efficiency to be a valuable one for understanding human behavior. I have since come to believe that this is particularly true when considering behavior in non-market environments, i. e. , within the firm. Work on this book, however, can most realistically said to have started with work which I began in 1982 while I was a Visiting Scholar at Harvard University. Professor Leibenstein suggested that I consider how some empirical evidence which was being cited as evidence for the role of property rights might also be consistent with XE theory. (The consistency, in both directions, is considerable.

Constitutional political economy is a research program that directs inquiry to the working properties of rules and institutions within which individuals interact and to the processes through which these rules and institutions are chosen or come into being. This book makes the case for an approach to constitutional political economy that is grounded in consistent, hard-nosed public choice analysis. Effective institutional design is simply not feasible unless the designers build their structures to withstand rational choice pressures from the political market place. If mean, sensual man is here to stay, then let us, in our better moments, incorporate that knowledge into the institutions that must govern his behavior. A distinguished list of public choice scholars pursue this approach against a varying backcloth of constitutional issues relevant to the United States, Canada, Western Europe, the transition economies and the third world.

In nearly every realm of daily life there is an invisible velvet rope that divides how we live. On one side, appointments are secured, queues are skipped and doors are opened. On the other, people fight for an empty seat on the plane, a place in line at a theme park or even a hospital bed. Schwartz shows how business innovators have stepped in to exploit the gap between the rich and everyone else, shifting services away from the masses and finding new ways to profit by serving the privileged. The frictionless world of VIP experiences seems like good business, but as this model expands, the costs are mounting. Schwartz's gripping account takes us on a glittering, behind-the-scenes tour of this new reality - and shows the toll the velvet rope divide is taking on society.

The class is theory of price regulation assumed that the regulator knows the fIrm's costs, the key piece of information that enables regulators to pressure fmns to choose appropriate behaviors. The "regulatory problem" was reduced to a mere pricing problem: the regulator's goal was to align price with marginal cost, subject to the constraint that revenues must cover costs. Elegant and important insights ensued. The most important was that regulation was inevitably a struggle to achieve second-best outcomes. (Ramsey pricing was a splendid example. ) Reality proved harsh to regulatory theory. The fmn's costs are by no means known to the regulator. At best, the regulator may know how much is currently spent to provide services, but hardly what costs would be if the fmn vigorously pursued effIciency. Even if the current cost curve were known to the regulator, technologies change so swiftly that today's costs are a very poor indicator of tomorrow's, and those are the costs that will determine the fIrm's future decisions. With the burgeoning attention to information considerations and game theory in economics, the regulator's problem of eliciting host information about cost has received considerable attention. In most cases, however, it has been in context that are both static and stylized; such analyses rarely capture many of the essential elements of real world regulatory issues. This volume represents a fresh approach. It reflects Glenn Blackmon's twin strengths, a keen analytic mind and important experience in the regulatory arena.

Students in Technical and Agricultural faculties spend only a limited amount of time on general economics, environmental economics and resource economics. However, while their knowledge of economics may be limited, they often have adequate mathematical skills. The objective of The Economic Metabolism, therefore, is to present these three branches of economics in an integrated, mathematically oriented way, so that the subjects can be taught together, without losing time on separate economics courses. While the approach adopted is mathematical, the mathematics used is certainly not too difficult for the target group: university students in technical and/or agricultural faculties will be used to far more difficult mathematics. After studying the book, the basic/intermediate level student should be able to understand the basic principles of economics, especially microeconomics; understand the economic principles of environmental policy; understand the economic principles of resource extraction; apply the standards for efficiency and sustainability; and apply the theory to practical problems.

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.

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.

This book focuses on the empirical analysis of productivity in services at the firm level. Productivity studies are still scarce in services, especially in view of the major role of the services sector in modern developed economies and the increasing concern about its performance. The services industries studied in this volume are quite diverse, with a strong representation of financial services. All analyses are performed on the microlevel, being based on cross-sectional or panel data for samples of firms of widely varying sizes. They focus on a variety of topics ranging from comparing the efficiency of different categories of service firms or exploring the impact of mergers and deregulation on productivity performance to assessing the magnitude of returns to scale and scope or investigating the properties of different parametric or nonparametric methods to estimate cost and production functions. Perhaps the most valuable feature of all these studies is the authors' care and ingenuity in putting the data together, measuring variables and extracting relevant information. After reading the book, one is inclined to consider that services may not be all that different from goods.

"EURO." The name of the single currency for the European Union has not been chosen casually by the Heads of State and Government during the Madrid Council of December 1995. After tough discus sions, it has been unanimously accepted. The intention was to recall to every single citizen that this new money would be his money, that it would be the expression of the new European environment carefully built since the "fifties" to avoid any return to war and barbarism in Europe. Confidence and positive expectations for a better future put in the European construction have thus been clearly linked to the confidence in the new European currency and vice-versa. Euro notes and coins will be the first expression, clear, material and universal (for any European citizen being young or old, rich or poor, but also for the rest of the world) of a European identity alongside the national one. Obviously, it is of the outmost importance that the change over to the euro, be as smooth and as citizen-friendly as possible."

Road pricing (tolls, etc.) as a means of generating revenue for infrastructure investment has become a major policy option in both Europe and North America. It can also be used as a policy in the management of traffic demand and flow, environmental objectives, and optimal resource allocation as regards the size of investments. Road pricing is assumed to be able to solve many problems simultaneously -- congestion control, pollution reduction, and investment financing. This volume assembles and assesses theoretical knowledge, empirical results and experiences of actual road pricing. In addition, the impact of new information technology on future policy formulation is considered.

Decision Theory and Decision Analysis: Trends and Challenges is divided into three parts. The first part, overviews, provides state-of-the-art surveys of various aspects of decision analysis and utility theory. The second part, theory and foundations, includes theoretical contributions on decision-making under uncertainty, partial beliefs and preferences. The third section, applications, reflects the real possibilities of recent theoretical developments such as non-expected utility theories, multicriteria decision techniques, and how these improve our understanding of other areas including artificial intelligence, economics, and environmental studies.

Economics of the U.S. Commercial Airline Industry: Productivity, Technology and Deregulation illustrates the impact of upstream technological change in capital goods (aircraft and aircraft engines) on demand, productivity, and cost reduction in the U.S. airline industry for the years 1970-1992. The aim is to separate supply-side technology push from demand pull in determining investment in aircraft in the US airline industry. The focus of inquiry in this study is at the company level, so the measures are sensitive to company differences such as financial costs, payload, and existing aircraft inventory rather than industry averages. This monograph builds on the new developments in econometric modeling and has a substantial technical component. The quantitative results lead to implications for understanding technology and its impact on the airline industry, as well as for formulating regulatory policy.

Superfund liability). This is an issue that is currently having an dramatic impact on the industry. The impact is being felt in transactions involving the potential sale of properties, insuring operations, development of new properties, joint ventures, or more generally, practically every phase of the mining firms operation. The second issue focuses on an environmental topic that has not been specifically addressed in federal legislation, although it has been indirectly considered, that is global warming or the "greenhouse effect." One of the interesting aspects to this environmental problem is the uncertainty associated with it at every phase of the analysis. The predictions of the general circulation models of climatologists are questioned due to the uncertainty of ocean effects, urbanization, etc. (see Burness & Martin, Chapter 5). The economic models are criticized for the uncertainty associated with the benefit estimates from reducing greenhouse gases, particularly carbon dioxide (COJ, concentrations in the atmosphere as well as estimates of the cost of reducing GHG concentrations and/or emissions. This raises the interesting question of what is the optimal policy and what will be the impact of this policy(s) on the mining sector, given the uncertainty. The first of these two topics is addressed by V. Kerry Smith and Ronald G. Cummings, et al. Professors Smith and Cummings were chosen due to their pioneering work in the area of valuation of nonmarket goods, particularly involving the use of survey methods.

companies to diversify may outweigh the costs of doing so, and that some traditional regulatory concerns may be excessively restrictive. The papers by Hillman, Harris, and Jang and Norsworthy, while all relating to individual industries, have lessons for other regulated industries. Hillman's paper, "Oil Pipeline Rates: A Case for Yardstick Regulation," deals with the important topic of yardstick regulation for oil pipelines. While his application is highly specific, the potential application of yardstick regulation goes beyond oil pipelines. He reviews the evolution in the law regulating oil pipelines. While showing that some progress has been made in introducing economic efficiency considerations into regulation, he provides a careful critique of the operation of existing regulation and suggests an alternative based upon a yardstick approach. His approach seeks to use competitive market prices as the yardstick, with administration of price discrimination limited to dealing with possible "favoritism" to subsidiaries and affiliates. "Telecommunications Services as a Strategic Industry: Implications for United States Public Policy" by Harris and "Productivity Growth and Technical Change in the United States Telecommunications Equipment Manufacturing Industries" by Jang and Norsworthy provide important insights for telecommunications.

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.

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."

In the future, as our society becomes older and older, an increasing number of people will be confronted with Alzheimer's disease. Some will suffer from the illness themselves, others will see parents, relatives, their spouse or a close friend afflicted by it. Even now, the psychological and financial burden caused by Alzheimer's disease is substantial, most of it borne by the patient and her family. Improving the situation for the patients and their caregivers presents a challenge for societies and decision makers. Our work contributes to improving the in decision making situation con cerning Alzheimer's disease. At a fundamental level, it addresses methodo logical aspects of the contingent valuation method and gives a holistic view of applying the contingent valuation method for use in policy. We show all stages of a contingent valuation study beginning with the design, the choice of elicitation techniques and estimation methods for willingness-to-pay, the use of the results in a cost-benefit analysis, and finally, the policy implica tions resulting from our findings. We do this by evaluating three possible programs dealing with Alzheimer's disease. The intended audience of this book are health economists interested in methodological problems of contin gent valuation studies, people involved in health care decision making, plan ning, and priority setting, as well as people interested in Alzheimer's disease. We would like to thank the many people and institutions who have pro vided their help with this project.

The Allocation of Limited Entrepreneurial Attention examines the implications of allocating limited entrepreneurial attention among activities or projects. This book maintains that attention is simultaneously limited in that a decision maker can pay attention to only one thing at a time, and entrepreneurial in that it may be allocated to evaluating a potential new project for possible adoption. However, since the outcome of the allocation of attention is not certain, the number of projects among which attention can be allocated is stochastic and the maximum number of projects is endogenously determined by the optimal allocation of limited entrepreneurial attention and describes the implications of this analysis for a number of economic problems.

Insurance is a concept, a technique, and an economic institution. It is a major tool of risk management, and plays an important role in the economic, social, and political life of all countries. Economic growth throughout the world has even expanded the role of insurance. Theory and Practice of Insurance aims to describe the significance of insurance institutions, the reasons they exist and how they function. The author emphasizes fundamental principles in risk and insurance, using an international frame of reference. This volume begins with an introduction to the concept of risk, then proceeds to cover insurance and its relationship to the economy; the principles of risk management and insurance; and the characteristics and performance of insurance companies.

Economics is taught in some form in the secondary schools of nations throughout the world. The subject is rarely taught in elementary schools, and while economics courses are offered in universities, the majority of students end their formal education with secondary school. Thus, the best opportunity for the economic education of the youth of a nation occurs in secondary schools. This book examines economic education at this critical level of the educational system. The teaching of economics in secondary schools varies across countries. These differences occur because of history, the structure of education, and other national factors. At the same time, there are common elements in the economic education of many countries, especially in content coverage. This contrast between the common features and the uniqueness of economic education in secondary schools of major industrial nations exemplifies the international perspective presented in this book. The international perspective is developed in the six sections of the volume. The first section discusses why nations should include economics in school curricula, and presents a framework for teaching economics that should have global appeal. Dissension and consensus on economic issues among North American and European economists are examined in the second section. The third section surveys the U.S. research literature on precollege economic education and assesses the current state of economics instruction in U.S. schools. The economics curricula and educational practices in seven other nations -- the U.K., Canada, Japan, Germany, Austria, Korea, and Australia -- are described in the fourth and fifth sections. The fifth section also presents international comparisons of economic understanding based on national testing in six of those nations. The sixth and final section explores the role of economic education in centrally planned economies, and its effects on the transition to a market economy, using Russia, Bulgaria, and China as case studies.

Title IV of the Clean Air Act Amendments effectively transfers an environmental property right, the difference in unrestricted emissions and the yearly endowment, 3 from certain fIrms to the public domain. Phase I is to reduce annual SOz emissions of 261 large (100 MW or more) utility generating units with emissions greater than 2. 5 IbslmmBtu. The yearly endowment during Phase I is equal to 2. 51bslmmBtu times the 1985-1987 baseline energy usage. Phase I standards are required to be met by 1995, an exception being units that install certain control technologies. In this case, units may postpone compliance until 1997 and may receive bonus 4 allowances. Phase II begins in the year 2000 and applies to any utility units (25 MW or more) with emissions above 1. 2 Ibs/mmBtu. The endowment is 1. 2 Ibs/mmBtu times baseline fuel use (U. S. Environmental Protection Agency 1990). 5 Hahn and Noll (1982), Bohi and Burtraw (1992), Lock and Harkawik (1991), and Walther (1991) discuss interactions between traditional rate-of-return regula- tion and overlaying environmental regulations, particularly tradable emission allowances, in the electric utility industry. Lock and Harkawik (1991) and Niemeyer (1991) discuss utility planning in this regard. Bohi and Burtraw (1992) fmd that a utility's environmental investment incentives will vary depending on cost recovery rules and argue that symmetry in treatment of investments in allowances and control technology is necessary if the utility is to be provided with the incentive to minimize costs of compliance.

oil is the lifeblood of the World's economy. It was a critical element in two World Wars and in the Cold War, and, as recent events in the Middle East confirm, people are willing to fight for it. The cheap energy it provides, especially for transport and agriculture, was one of the main factors that made possible the economic prosperity and growth that the World has enjoyed for the past fifty years and more. People rely on it everywhere, and in many forms, and they have become so accustomed to its ready availability that they take it for granted. To conceive of a world without traffic jams and airliners is unthinkable, and while not so obvious, oil lies behind every supermarket shelf, fuelling the tractor that ploughs the field and the delivery van that brings the consumer his food. Yet everyone knows that it is a finite and irreplaceable commodity, formed long ago in the geological past. What no one knows is just how finite it is. This book is an effort to try to answer that question : not in detail, but at least in orders of magnitude. More useful than the figures themselves is the discussion of the elements involved in addressing the subject. While it is impossible to predict the precise pattern of future production, which will be affected by many unforeseeable factors, one can at least begin to think in terms of resource constraint instead of an ever expanding supply of oil.

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 his book "Jurassic Park" (and in the movie based on the book), Michael Crichton describes a crazed professor who through techniques of genetic engineering manages to recreate the dinosaurs and giant ferns of 65 million years past. Once the giant Tyrannosaurus Rex is brought to life. a powerful dynamics sets in: evolution. The prehistoric world embarks on a collision course with man. Researching his book, Crichton had been reading up on paleontology and on the mathematical theory of evolution, catastrophes, and chaos. Crichton explains some of the twists of nonlinear mathematics that are rewriting not only thermodynamics, physics, and chemistry (that all grapple with evolving and turbulent processes) but also paleontology, genetics, medicine and even anthropology. Collapse and chaos is not limited to prehistoric animal kingdoms and ancient civilizations. The collapse of the Soviet Union and the political and economic chaos in its aftermath demonstrate that modern civilizations are just as vulnerable. This book aims at reexamining some main portions of the discipline of economics from the point of view of economic change and creativity. There are two aspects to this perspective. First, diversity and complexity. The range of different kinds of high technology products available to consumers and producers increases rapidly. Each product is the result of a long and complex production hierarchy. As these hierarchies grow, they deliver ever more diversified and complex high tech goods. Other hierarchies fall by the wayside.

Leon N. Moses In June 1991, the Transportation Center at Northwestern University sponsored Hazmat Transport '91: A National Conference on the Transportation of Hazardous Materials and Wastes. The faculty associated with the center were aware that there had been many professional, industrial and government conferences and meetings on the subject. However, they believed that the unique capacity of the Transportation Center to bring together leaders from industry and government, as well as leading scholars from economics, law, engineering, psychology and sociology who have done research on the problems associated with the transportation of hazardous materials and wastes (hazmats), could produce a set of integrated insights and understandings that would go well beyond those of previous conferences. The papers that make up this volume were all delivered at Hazmat Transport '91. From a legislative point of view, they tend to deal with issues associated with the Hazardous Materials Transportation Act of 1975 (HMTA), the original act passed to regulate the transportation of hazardous materials, and the Hazardous Materials Transportation Uniform Safety Act of 1990 (HMTVSA). There were talks and papers presented at the conference that focused on other recent legislation and transportation issues with which HMTUSA does not deal. The conference proceedings volume also had discussions and papers on significant managerial and regulatory issues that could not be included in this volume because of constraints on its size. Therefore, this essay is made up of three parts.