Volume 16, Number 1, Winter 1995-96
Health policy experts and researchers from several countries gathered at Duke University on November 30 and December 1 to explore how cost-effectiveness analysis is being utilized in the health policy decision-making process. The conference was organized by Henry Grabowski and Frank Sloan of the Duke Economics Department. The two-day conference featured new research results by leading individuals in this area who were asked to consider decision making in the United States and six other countries using a common research perspective. The conference was attended by more than 200 individuals.
The focus of the papers was on whether or not policy-makers use cost-effectiveness analysis as they set policy, specifically in the area of pharmaceuticals and other medical technologies and how researchers can make the results of their studies more useful to decision-makers. The U.S. experiences were presented in papers by Susan Horn (HMO Formularies), Henry Grabowski (Pharmaceutical Benefit Management Companies), Frank Sloan (Hospital Formularies), Stephen Soumerai (Medicaid Formularies) and James Blumstein (The Oregon Plan). Uwe Reinhardt presented an overview paper comparing European and U.S. Health Care Systems. The second day of the conference featured papers by David Hailey (Australia), Michael Drummond (U.K.), Matthias von Schulenberg (Germany), Claude Le Pen (France), Frans Rutten (Holland) and Bengt Jonsson (Sweden). A publication of the conference papers is planned for 1996.
The Journal of Risk and Uncertainty has now moved into the number one position in citations among all business and finance journals in the Social Sciences Citation Index. It is, for example, ahead of the Journal of Finance in the finance field. The competition wasn t even close, as the JRU citation score was 24 percent greater.
The JRU's performance among the over 100 economics journals rated by SSCI has been equally dramatic. JRU is now rated number five based on the 1994 SSCI count. Since The Economist magazine is ranked number one, among the legitimate academic journals JRU is now ranked number four. That, for example, puts JRU ahead of the Journal of Political Economy and the American Economic Review.
JRU is based in the Economics Department, and founding editor Kip Viscusi remains at the helm.
Thomas Havrilesky, Professor of Economics at Duke University, died at his home on September 9, 1995, after suffering an apparent heart attack. He was 56. He had been at Duke for 26 years and had taught undergraduate courses in money and banking and macroeconomic theory. For many years he also taught a graduate research seminar in monetary theory and banking policy.
Havrilesky's specialty was the Federal Reserve System and monetary policy. He concentrated on the actual functioning of the Federal Reserve in more detail than previous scholars. In particular, he studied the influence of the Federal Advisory Committee. As Professor Richard Froyen of UNC Chapel Hill pointed out, prior to Havrilesky's work, many scholars viewed this Committee as an innocuous group of bankers with little influence on Fed policy. He showed that its influence on policy was greater than previously acknowledged.
In the same vein, Havrilesky also attempted to measure some aspects of the effects of other bureaucratic institutions on the Fed--the influence of a particular congress-person, the influence of a particular governor. To this end he counted bills passed and classified them as enhancing or threatening the power of the Fed. He also evaluated the reliability of appointments made by a certain governor of the Fed. Most importantly, he developed the SAFER index (based on newspaper quotes and other data in the media) to measure the strength of signals sent by the Administration to the Fed.
In the last ten years Havrilesky hit his stride, attracting a range of coauthors and research associates. (See also Viscusi's remarks on Havrilesky s work, below.) During his career, he published over 100 journal articles and two books. His widely used book, The Pressures on American Monetary Policy (1995, second edition), presented the first evidence on when and how the Federal Reserve's monetary policy responds to influence from both political and private sectors.
Havrilesky received his undergraduate degree from Pennsylvania State University in 1960 and his Ph.D. from the University of Illinois in 1966. In 1989, he helped found the Duke chapter of Omicron Delta Epsilon, the international honor society for undergraduates in economics. He served as its advisor, and, at the time of his death, he also served as the president of the national society.
Professor Havrilesky is survived by four children, Catherine Erin Havrilesky of Los Angeles, Thomas Eric Havrilesky, also of Los Angeles, Dr. Laura Jean Havrilesky of Durham, and Heather Paula Havrilesky of San Francisco. He is also survived by his mother, Pauline Havrilesky of Johnstown, PA, a sister, Paulette Swanson of Florida, a brother, Michael Havrilesky of Florida, and two grandchildren.
Colleagues and friends gathered for a memorial service in Duke Chapel on Wednesday, September 13. Duke's Chaplain, Father Michael Shugrue, conducted the service. Michael Havrilesky read selected readings. Professor Ed Tower spoke as a colleague, Felicia Gross spoke as a student, and two Duke Ph.D. students, Jim Johnson (Ph.D., 1977), Professor at Meredith College, and Robert Schweitzer (Ph.D., 1975), currently Professor and Chair of Finance at the University of Delaware, spoke as well. Further written remarks were offered by the immediate past president and treasurer of Omicron Delta Epsilon.
It is with great honor and deep regret that I stand before you today. While tragic circumstances may have brought us together here, I am nevertheless eager to share with you the insightful, compassionate, altruistic, and stellar person that Dr. Havrilesky was.
It is truly fitting that we are here today in the Chapel to celebrate the life of Dr. Havrilesky. In one sense being here is coming full circle for me. You see, I was lucky enough to have Professor Havrilesky for Economics 130, the class I consider the best at Duke and have constantly encouraged others to take.
On the second day of this class, Dr. Havrilesky spoke of the uncertainty of the future and of the endless possibilities that seemed to await us. He peered around the room and ventured, "Some of you are seniors and are economics majors and will go on to become economists, while others are puzzling over what to major in." Then, with that ever-present gleam in his eye, Dr. Havrilesky invited us to get out of our chairs and look out the window of the Social Sciences building, at the Chapel. "Major in that," was the advice he gave, pointing at the Chapel, "Major in that."
No, Professor Havrilesky was not suggesting that we all become Religion majors, or that the study of economics be abandoned. His message, so simple and yet so profound, has stayed with me throughout my time here: that we should strive to be good economists, but more importantly, that we should be good people. That while economics might teach us immutable laws, that search for truth would always supersede them. That the highest form of understanding we can achieve is human compassion.
Professor Havrilesky was not just concerned with his students comprehension of economic theory, but also with individual enlightenment. This commitment to his students was readily apparent and was characterized by the enormous amount of time and energy he devoted to his students both inside and outside the classroom. Dr. Havrilesky s advice to his students to increase interdependence was advice he practiced by developing and fostering a close relationship with the students at the university.
Professor Havrilesky truly enriched all those with whom he came in contact. He will be missed not only by those students who were fortunate enough to know him but also by those who will never have the chance.
One of Tom's big contributions was to make economics accessible. For example, he published in the widely read popular journal, Challenge. Tom took complicated ideas and reduced them to their essentials and made them relevant. As one of my colleagues remarks, "Any fool can make a simple idea complex, but it takes a genius to make a complex idea simple." Tom made the tools of economics come alive for his students. He was an advocate for the undergraduate and an advocate for economic ideas as applied to ordinary events. He believed in economics.
Some words from Tom: The Chronicle, November 93, telling us how to empower students dissatisfied with Duke teaching:
Auction off classes to the highest bidder and let the professors keep the revenue as salary. In this way good teachers would be rewarded and inadequate teachers would go elsewhere. A vast portion of today's administrative bureaucracy would be forced to find productive work, and as a result, costs and tuition would fall.
Not just professors, he proposed: Make bad central bankers pay for their mistakes and reward them for their successes with money.
The Chronicle, '76: Tuition does not have to go up at Duke, just because it s happening at Yale and Harvard. Why not hold the line on tuition? Let's cut costs. There are plenty of services that the university provides that are very wasteful!
Duke is renowned for the bleakness of its social life and the uptightness of its students. Some of this stems from the absence of a 24-hour commercial area near campus. Instead of allowing a small part of campus to become commercialized (with appropriate Gothic facades), the University purveys mediocre food, bland drink and dreadful recreational services to a captive market for a limited number of hours per week. One result is that the set of social opportunities available to the isolated denizens of Duke ghettos is severely constrained. The university wastes money trying to market services that Duke people would abandon if they had alternatives.
There is no such thing as a free bus. If Duke's version of forced bussing were replaced by a fee- for-service system run by private contract bidders, the University would earn money, not lose it. Alternative modes of transportation would flourish.
Durham Morning Herald '85. The Fed is about as independent of the Reagan administration as Latvia is of Moscow. The Federal Reserve system is nothing more than a very expensive way of politicizing the nation's monetary policy, while allowing Congress and the administration to blame the Fed whenever the economy comes upon hard times.
Tom on the banking crisis: Durham Morning Herald: The deposit insurance system was set up so that premiums paid by banks would not be adjusted to reflect the risks that banks take in their lending practices. This setup is the equivalent of a life insurance company charging Evil Knievel the same life insurance premiums as it would levy on your neighborhood accountant.
George Tauchen reminds us, "Some years back (say 10) the Duke Medical School decided to cut back on the supply of new physicians for the sole purpose of protecting income. There was a round table/panel discussion held to debate the subject. My memory is that Tom was the only person from the department who went over there and exposed the doctors by taking a stand against such a supply- restricting move."
Finally a quote from John Maynard Keynes that seems particularly appropriate:
The master economist must possess a true combination of gifts... He must be mathematician, historian, statesman, philosopher in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in light of the past for the purposes of the future. No part of man s nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician.
I think Keynes would have respected Tom. We certainly do.
Dr. Thomas Havrilesky was a popular professor whose powerful intellect and dynamic style of teaching made learning from him very easy. We can think of no better indicator of Dr. Havrilesky's skill than the fact that his classes were nearly always filled to capacity. In selecting courses for an upcoming semester, Duke students frequently receive the advice, "Take professors, not courses." Dr. Havrilesky was a professor whose name alone would attract a full enrollment, no matter the subject of the course.
Dr. Havrilesky was popular not only for his teaching, but also for his willingness to build relationships with the students of Duke University. Students identified with his enthusiasm for campus life at Duke, viewing him as a fellow student as well as a respected professor. Havro, as his friends often called him, dedicated as much time out of the classroom to undergraduate activities as any of his colleagues. This dedication only added to his effectiveness as a teacher. Dr. Havrilesky will be missed not only by the students who were fortunate enough to know him but also by those who will never have the chance.
Over the past few years, Tom Havrilesky established a reputation as a national leader in the debate over the setting of compensation in accident cases. Until recently, the values used by the courts were simply the present value of lost earnings and related measures. Since that time, several jurisdictions have begun using hedonic value of life estimates pertinent for government regulation policies as measures of the lost pleasures of life.
Thomas Havrilesky was instrumental in fostering this debate over the use of these estimates, which run in the millions. He organized a session at the AEA meetings focusing on this topic and has written several widely cited papers critiquing the approach. His primary objection was that this value of life concept was not an appropriate measure for accident compensation, as its primary intent was for use in measuring the value of deterrence. As one might expect, he also pursued the macro implications of this concept, documenting the prospective bankruptcy of the U.S. economy that would result if this concept were applied on a routine basis in accident cases. His publications on this topic shaped the testimony of economics experts throughout the country and ultimately has influenced the functioning of the U.S. liability system. By any standard, his success in this area was a remarkable achievement. It was also an activity that he thoroughly enjoyed, both because of his national prominence in the debate as well as his strong conviction that the ill conceived use of this economic concept would take the U.S. court system in a harmful direction.
The following poem appeared in the bulletin for Professor Thomas Havrilesky s memorial service in Duke Chapel.
TRIBUTE
When the journey is done,
and the last hymn is sung,
When the eulogy is read,
and the benediction said,
The greatest tribute will have been
the tears that were shed for him.
Roger Waud, Professor of Economics at UNC
The fund will be used to support Omicron Delta Epsilon and other undergraduate programmatic activities in which Tom had an interest.
It's been an exciting year. On December 1, we rolled out a new home page on the WEB. This replaces the old one innovatively constructed by Forrest Smith shortly after the WEB's big bang. Allen Kelley masterminded this new home page and Gail McKinnis spent much of the summer and Fall Semester working on it, including programming in HTML. Forrest Smith and three undergraduates also made substantial contributions. Visitors to our home page can download working papers, faculty profiles, and information on the graduate and undergraduate programs. The present version assists with the graduate-student recruiting while future editions will expand into advising, workshops, a calendar of activities in the area, and graduate student applications. Visit us at http://www.econ.duke.edu. Be sure to send your comments to the Webmaster. (Snail-mail users are welcome to mail me.)
On an experimental basis, this issue of the newsletter eliminates the publications lists. Over the past year, Kip Viscusi alone published an astonishing 16 articles, and faculty publications would have filled three complete pages. You can easily retrieve those publications listings via our home page under faculty profiles. While you're there, read the latest working papers in the Electronic Working Paper Series.
Starting in September, Gianni Toniolo comes on board for the first of six fall semesters as Research Professor of Economics. He will simultaneously remain as Professor of Economics Ca Foscari, University of Venice, Italy. Toniolo is the premier economic historian of twentieth century Italy and has special expertise in European banking as well as in comparative patterns of industrialization and growth. While in residence here he will, among other things, build our program in economic history.
George Tauchen became an elected Fellow of the Econometrics Society, bringing the department total to four (Burmeister, Gallant, Moulin, Tauchen). Last summer, George gave one of the invited lectures at the Seventh World Congress of the Econometric Society in Tokyo, Japan.
We also have an exciting year ahead of us. Due to the generosity of Juanita and Cliff Kreps, we have an ongoing search to fill a distinguished chair in the Department. In addition we are searching for three junior professors and will be going full tilt at the January ASSA meetings. As many of you know, last spring Bob Marshall left to chair the Economics Department at Penn State, and Bill Gentry joined his wife at the Business School at Columbia. In July, Roy Weintraub finished his stint as Acting Dean of Arts and Sciences and we were glad to recapture his extraordinary talents for the Department.
Tom Havrilesky's unexpected death in October was a tragedy for all of us and we have devoted much of this newsletter to him. Although he cannot be replaced, our long history of inter-university cooperation has resulted in three professors from the Triangle pitching in to teach Tom's courses-- Richard Froyen of UNC and Douglas Pierce of NCSU will fill Tom's shoes in monetary economics. Since Tom's course "Changing Role of Markets in the Social System" was unique to Tom, replication would be infeasible. Hence, we took an altogether different tack, and Robert Clark will teach "The Economics of Aging." As many of you know, Bob got his Ph.D. from Duke in 1974 and is currently Professor of Economics at NCSU. He is an internationally known expert in pensions and this fall received a Special Busse Research Award from the Duke Center for Aging.
After very successful terms, this summer Kent Kimborough and Ed Tower will step down as Director of Graduate Studies and Director of Undergraduate Studies, respectively. Both will take well-deserved sabbatical leaves next year. Under Kent's direction our graduate classes have continued to improve and job placements have been excellent. Counting both Ph.D. and Masters students, we now have well over 100 graduate students in residence. Under Ed Tower's direction, the undergraduate Duke Journal continues to thrive, the number of undergraduate research papers continues to grow, and some of our brightest distinguished undergraduates have become T.A.'s. Also, the Johnson Fund brought in distinguished speakers ranging from Robert Eisner of Northwestern to our own Ricardo Zabala (Managing Director of the Pensions and Insurance for Citibank in Chile) to Dale Jorgenson of Harvard. Dan Graham will take over as DGS in June and the new DUGS will be announced in the spring.
Finally, our Chair, Neil De Marchi, took sabbatical leave in May of 1995 and has been in Rome, Australia, Amsterdam, Cambridge. We all wish him well, and I especially wish him a speedy return in September 1996.
Marjorie McElroy
Acting Chair
Susan Athey, who received her Duke Bachelor of Arts degree in 1991, and who majored in Economics, Mathematics, and Computer Science, was the top pick on the job market in Economics last year. As a Duke undergraduate, she worked as Research Assistant to Bob Marshall for over two years. She had worked in Washington, D.C., on Federal procurements, and further investigation of the issues associated with that work resulted in a research program, parts of which were published in the QJE and RAND Journal.
Susan won an NSF dissertation fellowship and attended Stanford, receiving her Ph.D. from the Graduate School of Business in June 1995. As a prospective junior faculty member, she was sought after by two dozen universities, including Berkeley, Harvard, M.I.T., Princeton, Stanford and Yale, ultimately choosing M.I.T. Many economists thought her job paper was the best one on the market.
In her dissertation, "Comparative Statics in Stochastic Problems With Application," she devised an improved method for analyzing risky business decisions, which would help economists answer such questions as what types of exchange-rate risk would make a firm want to cut back its foreign investments, and how does a manufacturing company uncertain over the direction of technological change adjust its investments and other strategies.
This article is based on an article published in The New York Times on Friday, April 21, 1995.
Neil De Marchi has been pursuing his research into the institutions of early modern art markets, focussing during his sabbatical on the rise and behavior of professional dealers in seventeenth century Antwerp. It is emerging that dealers priced as one would expect from a discriminating monopolist. That is to say, where Old Masters and original works were concerned, a dealer would treat each transaction as distinct (in line with each object s being somewhat unique), and price according to circumstances.
For instance, the gross margin would be higher where the buy-in price was low but the end buyer was an aristocrat; and on average the gross margins charged on sales to other dealers were less than those charged to private buyers. This is not surprising, but a surprise has emerged in that the gross margins on copies seem to display similar characteristics to those on originals and Old Masters: the margins vary from transaction to transaction, and there is a very large range. This suggests that copies were anything but exact translations, that so-called copyists were successful in differentiating their product in many cases, and that dealers were able to exploit this differentiation to their own advantage as well. If this tentative reading turns out to be sustainable, it will require a re-thinking of the category copy. Professor De Marchi has been conducting a pilot project to this point, but the work will be pursued in collaboration with Art History Professor Hans Van Miegroet.
Grant Fleming will visit this spring. He currently teaches at Australian National University, specializing in economic history and the history of economic thought. His research interests include Lloyd Metzler (whose papers are in Perkins) and educational philosophy, especially issues relating to undergraduate teaching. He won the 1994 Joseph Dorfman dissertation competition of the History of Economics Society. He will teach undergraduate microeconomics.
Joni Hersch, Professor of Economics at the University of Wyoming, is Visiting Professor of Economics for the academic year. In 1992-93, she held a National Science Foundation Visiting Professorship for Women, and she currently serves on the Board for the American Economic Association Committee on the Status of Women in the Economics Profession (CSWEP). With specialties in labor economics and risk-taking activities, her recent research examines job matching and promotions, the effect of housework on earnings, risk-taking behavior and wage-risk tradeoffs, and the labor market effects of smoking. This spring she will teach labor economics and econometrics.
John Komlos holds a chair in Economic History at Ludwig-Maximilian University in Munich, Germany. He earned his doctorate in history and economics from the University of Chicago. Komlos has published extensively in German, Hungarian, and English on topics including the economic development of both the Hapsburg Monarchy in the 18th century and Austria-Hungary in the 19th century. He visited last fall and taught introductory economic history.
Marji Lines is Associate Professor of Mathematical Economics at the University of Udine, Italy. She holds a doctorate in economics from the University of Utah. Her fields of specialization are econometrics and urban and regional development, including modeling global ecological economic interactions. She visited last fall and taught introductory microeconomics.
Alfredo Medio is Professor of Mathematical Economics at the University of Venice, Italy, and he is the managing editor of Recherche Economiche: An International Review of Economics. He specializes in non-linear dynamics and has published on topics such as multichannel singular system analysis, models of business cycles, and discrete and continuous models of chaotic dynamics. He visited last fall and taught mathematical economics.
Mark An attended the International Conference on Equilibrium Search and Labour Market
Dynamics entitled, Log-concave Probability Distributions: Theory and Non-parametric Testing,
Sandbjerg, Denmark, June 9-12, 1995; The 3rd International Chinese Statistical Association
Statistical Conference, The p*-Formula of Barndorf-Nielsen for Generalized Linear Models (with
Bent Christensen and Nick Kiefer), Beijing, China, August 15-20, 1995; The 7th Econometric
Society Congress, Econometrics of Dynamic Discrete Choices: The Event Planning Approach,
Tokyo, Japan, August 22-29, 1995.
Ed Burmeister gave an invited address to an International Workshop held in Rome, Italy, on May
18 and 19, 1995. The theme of the workshop was "Can One Responsibly Base
Macroeconomic
Policy on One-Good or One-Agent Models?" His address discussed his work
on Sraffa,
heterogeneous capital goods, and the existence of aggregate production functions. He presented an
invited talk entitled, "Forecasting Benchmark Differential Returns," at a
seminar entitled, "Applying
Factor Analysis to Portfolio Management," sponsored by the Boston
Security Analyst Society in
Boston, Mass., on October 20, 1995. On November 2, 1995, he also gave a talk in New York City
to the Alliance-Ibbotson Research Institute about how to control the macroeconomic risk exposures
of a large portfolio of assets.
Phil Cook organized and hosted an academic conference on the markets for firearms that supply
urban youth. The conference was sponsored by the H. F. Guggenheim Foundation and will be
published as a symposium in Law & Contemporary Problems.
Neil De Marchi presented seminars at the University of Sydney, the Australian National
University, Canberra, the Free University, Brussels, The University of Munich and Oxford
University.
Henry Grabowski presented "PharmacoEconomics and
Pharmaceutical Innovation" to the
IFPMA Conference on PharmacoEconomics in the Year 2000, Geneva,
Switzerland, February 1995; "Development of New Pharmaceuticals" to the
Third Princeton Conference on Drug Discovery and
Development, Princeton, New Jersey, May 1995; and "Longer Patents for
Increased Generic
Competition: The Waxman-Hatch Act after One Decade," Tufts University
Conference on Cost
Containment Health Care Reform and Pharmaceutical Innovation, Talloires, France, July 1995.
Gregory La Blanc presented a paper entitled "Secrecy,
Firm-Specific Human Capital, and
Enforceable Debt Contracts in Ancient Regime Public Finance" at the
Economic History Association annual meeting in Chicago in September.
Marjorie McElroy presented an invited paper, "Resources,
Marriage Markets, and Family
Decisions," at the Plenary Session on Il Matrimonio, la Famiglia ed il
Controllo delle Risorse
Economiche, an International Conference on Changes in Family Patterns in
Western Countries,
October 6-8, 1994, Bologna, Italy. She was also an invited participant in the Economics and the
Family Roundtable Session of the American Economic Association Meetings, January 6-8, 1995,
Washington, D.C., where she spoke on, "Marriage Markets and Bargaining."
She also participated
in the National Bureau of Economic Research Meeting on the Well Being of Children, Cambridge,
Mass., May 1995. She continues to be a member of the University of
Wisconsin's Institute for
Research on Poverty's Working Group on the Low-Income Population and to
participate in their
biannual meetings at the University of Wisconsin. As a member of the Board of Directors of the
National Bureau of Economic Research and of its executive committee, McElroy attended their
biannual Board meetings in New York in May and in Boston in October.
Hervé Moulin was invited to the following conferences:
NSF/NBER Decentralization
Conference, University of Illinois at Urbana-Champaign, April 28-30; Canadian Economic Theory
Conference, Montreal; CIRANO guest speaker, May 26-27; Ethical and Economic Analysis of
Freedom, Université de Cergy-Pontoise, France, June 21-22; Invited
Speaker at the World Congress
of the Econometric Society, Tokyo, Japan, August 23-28. He also gave seminars at: University of
Alabama, Tuscaloosa, Department of Economics, February 1995; Johns Hopkins University,
Economics Department, March 1995; Georgetown University, Economics Department, April 1995;
University of Rochester, May 1995.
Pietro Peretto presented "Variety Spillovers and Market
Structure in a Model of Endogenous
Technological Change" at the International Conference on Increasing
Returns and Economic Theory,
in honor of Kenneth J. Arrow, at Monash University, Clayton, Victoria, Australia, September 1995.
This is forthcoming in a volume edited by K. Arrow, K. Ng and X. Yang.
Frank Sloan presented a paper at the European Health Economics Conference, Stockholm,
Sweden in August 1995. He also made a presentation on managed care at the Syndicat National de
L Industrie Pharmaceutique in Paris, France in October 1995.
V. Kerry Smith: Resources for the Future, January 1995, Kennedy
School, May 1995; Speaker,
Nutrient Summit, North Carolina State University, August 1995; Keynote Address, European
Association of Environmental Economics, June 1995, Umea, Sweden;
"Environmental and Trade
Policies: Some Methodological Lessons," Keynote address, Beijer
Institute, Stockholm, September
1995; "Workshop on Benefits Transfer: Concepts and Methods," S. EPA,
October 1995;
"Environmental Amenities and Market Power," with Laura Osborne, Southern
Economic
Association, November 1995; "Source Heterogeneity, Resource
Characteristics and the Performance
of Marketable Permits," with Kurt Schwabe and James Easley, Southern
Economic Association,
November 1995; Panelist, Contingent Valuation Controversy, Southern Economic Association,
November 1995; to present paper at American Economic Association, January
1996 (with Laura
Osborne); to give keynote lecture at Workshop on International
Environmental Problems and Policy, Ede, The Netherlands, October 1996.
George Tauchen visited the Graduate School of Business, University of Chicago, January-March
1995, and was a Visiting Fellow at The Australian National University, Canberra, Australia,
April-June 1995. He had the honor of giving an invited address, "New
Minimum Chi-Square
Methods in Empirical Finance," at the Seventh World Congress of the
Econometric Society, Tokyo,
Japan, August 23-28, 1995. The address will be published as part of the invited symposia for the
Seventh World Congress, Cambridge University Press. He was an invited
speaker at "(EC)2
Conference on Nonparametric and Nonlinear Time Series," Berlin, Germany,
December 11-14,
1994, and co-organizer with William Barnett and Lars P. Hansen of
"Conference on New
Computational Methods for Finance and Econometrics," Washington
University in St. Louis,
September 14-15, 1995. He also participated in Econometrics Seminars at: University of New South
Wales, Sydney, Australia, May 1995; Australian National University, Canberra, Australia, June
1995; Northwestern University, October 1995; Michigan State University, November 1995;
Princeton University, December 1995; as well as a Joint Finance/Probability Seminar, The
Australian National University, Canberra, Australia, May 1995, and a Finance Seminar,
Carnegie-Mellon University, November 1995.
Ed Tower presented a paper at the Southern Economic Association in the fall of 1995.
W. Kip Viscusi was the Keynote Speaker at the Australian conference on Risk, Regulation, and
Responsibility, Institute for Public Affairs and Australian National University, Sydney, 1995.
Dennis Yang chaired a session on "Determinants of Economic
Growth in Developing Countries"
at the American Economic Association annual meetings in Washington D.C., January 1995. He
presented "China's Land Arrangements and Rural Labor Mobility" at the
Allied Social Sciences
Association meetings in Washington D.C., January 1995; invited to a conference on Social Benefits
of Education organized by the U.S. Department of Education in Washington D.C., January 1995;
presented "Rural-Urban Migration Issues in Contemporary China" at a
conference on Capitalist
Reconstructuring and Labor: Asia and Americas 1949-1990 at Duke, February 1995; presented
"The Effects of Institutions on Worker Mobility and Labor Market
Efficiency" at an invited
conference on Reformability of State Enterprises in Shanghai, July 1995.
Professor Charles T. Clotfelter, Professor of Public Policy Studies and of Economics, was named
Z. Smith Reynolds Professor of Public Policy Studies in Trinity College of Arts and Sciences. His
appointment was effective July 1, 1995.
Professor James Hamilton won the Vernon Prize for the best
article, "Testing For Environmental
Racism: Prejudice, Profits, Political Power," published in Volume 14 of
the Journal of Policy Analysis and Management, No. 1, 1995, pp.
107-132.
Based on citations, Marjorie McElroy and Hervé
Moulin were invited to be listed in the third
edition of Who's Who in Economics, edited by Simon James and Mark Blaug.
Hervé Moulin: The Dean of Arts and Sciences and the
Provost Common Funds are supporting
the creation of the Center for Rational Choice for two years. Hervé
Moulin is its director. This
interdisciplinary Center is intended to facilitate the exchange of ideas related to rational choice in
the fields of economics, political science, decision sciences, statistics, sociology, philosophy, and
psychology.
Its main activity this year has been the organization of a very successful seminar series with the
following speakers:
Charles Plott (Caltech)
Frank Sloan is the Principal Investigator for a new grant, Impact of State Health Insurance
Reform on Access to Health Insurance Coverage, sponsored by the Agency for Health Care Policy
and Research, April 1, 1995 to March 31, 1996; Co-Principal Investigator for a new grant,
Economic Evaluation of Pharmaceuticals and Other Medical Technologies: From Theory to
Practice, sponsored by Eli Lilly and Company, Pfizer, and Johnson & Johnson, April 1, 1995 to
March 31, 1996; Principal Investigator for a new grant, The Economic Burden of Multiple
Sclerosis, sponsored by the National Multiple Sclerosis Society, November 1, 1994 to December
31, 1995; Principal Investigator for a grant renewal, Heavy Drinking and Drunk Driving: Which
Deterrents Work? sponsored by the National Institute on Alcohol Abuse and Alcoholism, July 1,
1990, to December 31, 1993, and May 1, 1995, to April 30, 1999.
V. Kerry Smith: Compliance Costs of Environmental Rules for Highways Construction: A Pilot
Study, Center for Transportation and Environment, $92,642.
George Tauchen commenced the second year of a three-year NSF Grant: Estimation and
Visualization of Nonlinear Structural Models.
W. Kip Viscusi was awarded an additional $200,000 from the U.S. Environmental Protection
Agency in support of his project, Economic Research for Long-Term Environmental Risks and
Pollution.
Henry Grabowski: The Effects of Increased Government Purchases on Vaccine R&D,
testimony before the U.S. Congress Subcommittee on Health and the Environment on the Vaccines
for Children s Program, June 1995.
W. Kip Viscusi: Testimony on Regulatory Reform Legislation, Committee on Governmental
Affairs, U.S. Senate, February 15, 1995; Testimony on Superfund Reform, Subcommittee on
Commerce, Trade, and Hazardous Materials, Committee on Commerce, U.S. House of
Representatives, May 23, 1995. He will be a faculty member in the University of Kansas Law School
program for state judges in December, making presentations on three different topics.
Jim Leitzel, whose primary appointment is in the Sanford Institute with a secondary appointment
in Economics, is on leave during the academic year, 1995-96. He is continuing to work on Russian
economic crime, trying to expand his research into various forms of rule-breaking in Western market
economies and is co-directing (with Prof. Herbert Kitschelt, Political Science) the Mellon Seminar
on Collective Actors in Transitional Societies.
Frank Sloan was named Senior Advisor to the State of Delaware Health Planning Committee in
September 1995. He was also named Co-Chair, Study of Adequacy of Nurse Staffing in Hospitals
and Nursing Homes, Institute of Medicine, National Academy of Sciences, 1995.
William Yohe: In January 1996, Professor Yohe will retire from a job he has had since 1989:
helping to organize sessions in computer-assisted learning (CAL) at the annual meetings of the
American Economic Association.
You are old, Father William, the young man said,
In my youth, Father William replied to his son,
Conferences & Presentations
John Staddon (Duke University)
Teddy Seidenfeld (Carnegie Mellon University)
Thomas Schelling (University of Maryland)
Richard Palmer (Duke University)
Daniel Kahneman (Princeton University)
David Kreps (Stanford University)
John Ferejohn (Stanford University)
Robert Aumann (Hebrew University of Jerusalem)
Ariel Rubinstein (Tel Aviv University and Princeton)
The Emeritus
And your hair has become very white,
And yet you incessantly puzzle your head,
Do you think at your age it is right?
I feared it might injure the brain.
But now that I'm positive that I have none,
I do it again and again.
Robert Southey (revised twice)
Martin Bronfenbrenner (revised)
News from the Graduate Program
Congratulations to our Ph.D.'s for 1995. Their thesis titles, (supervisors), and job placements appear below:
Romulo Chumacero, "Intertemporal Asset Pricing without Consumption Data: An Application of the Efficient Method of Moments Estimation Technique" (George Tauchen). Economist, GERENS Consulting Group, Santiago, Chile.
Julie Anne Cronin, "Does Financial Aid Deliver on Its Promise of Equal Opportunity" (Marjorie McElroy). Economist, Office of Tax Analysis, Department of the Treasury.
Zhonglan Dai, "Child Quantity and Child Quality Trade-Off Under the One-Child Policy" (Marjorie McElroy). Full-Time Mother to Adela.
Omer Gokcekus, "How Does Trade Liberalization Affect Economic Performance?: A Microeconometric Analysis of the Effects of Trade Liberalization on the Turkish Rubber Industry in the 1980s" (Ed Tower). Visiting Instructor, Department of Economics, Duke University.
Paul Harrison, "The More Things Change, The More They Stay the Same: Analysis of the Last Two Hundred Years of Stock Market Evolution" (Neil De Marchi). Assistant Professor, Brandeis University.
Mei Hsu, "Determination of Earnings and Changes in the Quality Among Female Immigrants" (Marjorie McElroy). Assistant Professor, Department of Economics, National Chung-Hsing University.
Christian Johnson, "Velocity and Money Demand in an Economy with Cash and Credit Goods" (Kent Kimbrough). Assistant Professor, University of Santiago.
Ahmet Kipici, "The Terms of Trade, Real Exchange Rates and Economic Fluctuations within a Modern Business Cycle Framework" (Kent Kimbrough). Central Bank of Turkey.
Han Young Lie, "Measuring Learning Economies and Evaluating the Infant Industry Argument: A Case of Korea's Manufacturing" (Ed Tower). Research Fellow, Korea Information Society Development Institute.
Rosalie Liccardo Pacula, "The Development of Demand for Intoxicating Substances by Adolescents" (Philip J. Cook). Assistant Professor, University of San Diego.
Robert Slonim, "Learning, Bounded Rationality and Financial Incentives: An Experimental Analysis" (Marjorie McElroy and John Geweke, Co-chairs). AT&T Bell Laboratories.
Robert S. Taylor, "Three Theoretical Essays in Public Economics" (W. Kip Viscusi). Will enter the market for new Ph.D.'s in January.
Anna Paige Wellensiek, "Conditional Heteroskedasticity and the Term Structure of Interest Rates: Theory and Evidence" (George Tauchen). Will enter the market for new Ph.D.'s in January.
It was announced in May, 1995 that Ted Gayer was selected to receive an Alfred P. Sloan Doctoral Dissertation Fellowship for 1995-1996. Leading economics departments in the United States were invited to submit nominations for the fellowships, and a committee of distinguished economists selected the fellowship winners from this pool of graduate student nominees. Ted, a fourth year Ph.D. student, is doing research which examines the roles of objective and subjective risk measurements in determining the welfare effects associated with Superfund toxic waste sites.
Duke graduate and Economics major and member of Duke University's Board of Trustees, Peter M. Nicholas (1964) and his wife Virginia, also a 1964 graduate, recently gave $20 million to the School of the Environment, making it the Nicholas School of the Environment. Nicholas, who is President, Chairman, and CEO of Boston Scientific Corporation, gave the keynote address at the Founder's Day Convocation on December 19 at Duke Chapel. Nicholas's long standing interest in team work and in interdisciplinary research on the environment includes an important role for Economics.
Irving J. Goffman, Ph.D., 1959, died of a heart attack in Miami, Florida, on November 16, 1993. In addition to earning his doctorate, he also earned a master's degree from Duke. He taught economics at the University of Florida from 1959 until 1976. He served as the Chair of the Economics Department from 1970 to 1975. Dr. Goffman was also active in the Civil Rights and anti- Vietnam War movements. In 1976 he was appointed by President Ford to evaluate welfare policies as a Department of Health, Education and Welfare administrator in Washington, D.C. After 18 months, he returned to the University of Florida, where he remained until 1978. Dr. Goffman then started an economics consulting firm in South Florida. He is survived by his wife, Judy Goffman of Gainesville; two daughters, Susan Jones of Lakeland and Sandra Stainsby of Gainesville; his mother, Ethel Goffman of Miami; two brothers, Sheldon Goffman and Herbert Goffman, both of Toronto, Canada; a sister, Marsha Goffman of Miami; and three grandchildren.
Leonard S. Silk, Ph.D., 1947, longtime economics columnist and editorial writer for the New York Times and Business Week, died in New Jersey on February 10, 1995.
Dr. Silk was widely acknowledged as the Dean of American Economic Journalists. He was one of the earliest properly trained scholars to enter economic journalism and, according to Paul A. Samuelson, Nobel laureate in economic science, He had a gift for making the intricacies of economics understandable. An author of fifteen books and scores of articles, Dr. Silk's impact on economic education through the news media was, for almost two decades, without peer.
Dr. Silk was a loyal supporter of Duke Economics and served as a member both of the Board of Visitors of the Institute for Public Policy Sciences, and of the Board of Directors of the Duke University Press.
At the awarding of an Honorary Doctorate of Law Degree in 1978, then Duke University President Terry Sanford cited Dr. Silk's raising significantly the level of discourse on the analysis of social problems and business affairs, stating that his voice has been heard, respected, and heeded.
Two seniors out of nine semi-finalists campus-wide were designated as Faculty Scholars for 1995-96. They were first major Kristen D. Brogden of Charlotte, NC, and second major Nathan C. Larson of Reston, VA. First major Alex Rogers of Nashville, TN, was acknowledged with four others campus-wide for Honorable Mention.
Awardees receive a minimum of $2,000 which goes toward reducing the loan and work-study parts of the regular financial aid package, with any excess given as an honorarium. Students who are not currently receiving financial aid receive a minimum $500 honorarium.
Three of the department's rising seniors, Gustavo Antorcha of Coral Gables, FL, Alejandro Fernandez of West Palm Beach, FL, and Juan Marusich of Corpus Christi, TX, were chosen for admission into the American Economic Association's Summer Minority Program. Only twenty-five students are chosen nationwide each year for this program. Each received $1,500, full scholarship, books, and transportation costs to the AEA's Program at Stanford University, summer quarter 1995.
In November 1994, then junior Matthew L. Altman of Owings Mills, MD, was a delegate to the 46th Annual Student Conference on United States Affairs (SCUSA), held at the United States Military Academy, West Point, NY. His selection was based on a written essay and his GPAs. SCUSA and the Allen S. Johnson, Jr. Fund covered his expenses.
Professor Craufurd Goodwin and undergraduate teaching assistant Alex Rogers delivered their co-authored paper entitled "Cyberpunk and Chicago" at the History of Economics Conference at Notre Dame this past June. The paper was well received and sparked lively conversation among the audience.
The paper examined a subgenre of science fiction called cyberpunk and compared many of its key features to elements of both Thorstein Veblen's and Karl Marx's discussions of technological change and corporations. The paper further examined the likely impacts on the policy process surrounding the National Information Infrastructure. The authors noted that an informal survey of information policy makers revealed that an overwhelming majority of the respondents were more than minimally aware of cyberpunk and its central concerns. They concluded that out-of-favor economic ideas such as Marxism and American Institutionalism are re-entering the policy debate through cyberpunk fiction.
For a copy of the paper, please contact Craufurd Goodwin at 684-3936 or Alex Rogers at 613-2042.
Undergraduates with strong economics records are invited to participate in the department's honors program. Those who wish to graduate with departmental distinction are required to take at least one honors seminar and to write a quality honors paper. In recent years, the number of students involved in the honors program has grown dramatically. Thirteen seniors wrote honors papers in more than double the number who did so in 1994. The Class of 1996 is sure to surpass its predecessors. Craufurd Goodwin, Director of the Honors Program, reports that 23 members of the Class of 1996 have already sent notification that they plan to write papers this school year.
As a result of the honors program, Laura Pinsky (Duke '94) and her thesis advisor Ed Tower published a modified version of Pinsky's honors paper. "Temporary Duty Suspension in the United States" appeared in the Spring 1995 issue of The North American Journal of Economics and Finance. Temporary duty suspension (TDS) is a policy by which the U.S. Congress removes the customs duty on an imported good for a short period of time, usually two to three years. The Pinsky/Tower article documents how the TDS process works and discusses the likely economic effects of the program.
The Economics Honors Program Committee announced that Nathan Goldstein (Duke '95), from Davie, Florida, submitted the best thesis in this year's judging of honors theses papers for the Latin Honors-by-Project from an overall field of 13 candidates. Mr. Goldstein received $300. Paul Friedman, Matthew Maillian, Stephen Moon, and Thomas Paschall all received honorable mention.
Candidates whose papers were accepted for the Project and who graduated with Latin Honors by honors project (one bump up from the honors directed by grade point) were Rogelio Li Choi, Gary M. Cohen (Dec. 1994 graduate), Paul A. Friedman, Nathan G. Goldstein (two bumps up), Lisa Halpern, M. Taylor Hinshaw, Todd W. Latz, Michael R. Lofgren, Matthew Gerard Maillian, Stephen J. Moon, and C. Thomas Paschall. Also graduating with Distinction were Elizabeth Dabbs and Kevin Rivard.
Choy, Rogelio Li, "The Role of Economics and Civil Society on the Public Policy of the Corporate Control Market."
Cohen, Gary M., "A Model for Measuring Voter Behavior as it Pertains to the Election of Candidates to the US House of Representatives Under Varying Congressional Districting Plans."
Dabbs, Ellen Elizabeth, "Super 301: A Triumph of Civil Society over Economic Concerns."
Friedman, Paul, "The Link Between Frequency and Extent of Alcohol Use and Participation in Public Assistance Programs."
Goldstein, Nathan, "Banking on Change: Deposit Insurance Reform and the Risk-Based Premium."
Halpern, Lisa, "Reducing the Amount of Trash Entering Landfills: An Assessment of Privatization and Unit-Based Pricing for Municipal Solid Waste Collection in Southern California."
Hinshaw, Matthew Taylor, "Standing at the Intersection of Philosophy and Economics: The Axiomatic Approach to the Problem of Distributive Justice."
Latz, Todd W., "East German Economic Transformation: An analysis of privatization by the Treuhandanstalt."
Lofgren, Michael R., "North American Free Trade Agreement."
Maillian, Matthew G., "Profit Maximization in Foreign Direct Investment: A Study of Techniques and Firm-Specific Advantages."
Moon, Stephen J., "Reactions to the Phenomenon of Foreign Direct Investment in the United States."
Paschall, Tom, U.S. Immigration Policy: An Analysis of Academic and Civil Society Responses.
Rivard, Kevin, The Advantages and Disadvantages of Implementing a Consumed-Income Tax in the United States.
Last spring marked the appearance of Volume VII of the highly successful Duke Journal of Economics. Edited by Economics major John Evans, it features seven articles as well as nine book reviews by Duke undergraduates and concludes with Bruce Fitzgerald's (Ph.D. 1974) insightful and entertaining address to the annual Spring Banquet of the Duke Chapter of Omicron Delta Epsilon. Visit this and other Duke journals via the home page, http://www.econ.duke.edu.
This issue of Economics at Duke was edited by Kate Anderson and Hall Lovell. Thanks for help from our former editor Forrest Smith. Thanks also to professors Martin Bronfenbrenner, Craufurd Goodwin, Henry Grabowski, Neil De Marchi, Marjorie McElroy, Ed Tower, and Kip Viscusi for their contributions, and to staff members Kate Anderson, Peggy East, and Anne Hobin, and students Drake Paul, Brett Katzman, and Justin Tomljanovic for assistance with production. The html version was concocted by the webmaster.