Volume 17, Number 1, Winter 1996-97
New Faculty Join the Department of Economics
Machina Visits the Department
Marjorie McElroy Appointed Chair of the Department
Dan Graham Begins Term as Director of Graduate Studies
Henry Grabowski Becomes New DUS
Reconstructing the Emergence of Market Pricing Mechanisms
W. Kip Viscusi Accepts Cogan Chair in Law and Economics
The Graduate Program Announces its New Ph.D. Recipients
Undergraduates Complete Honors Theses
Department Expands Homepage on the World Wide Web
Hurricane Fran Hits North Carolina
This fall the Department of Economics was pleased to welcome four new regular faculty members as well as a distinguished scholar who will visit each fall semester. Much excitement accompanied their arrival. Over the last five years, the number of faculty in the Department had steadily decreased due to retirements, deaths, and transfers. While the Department remains smaller than the ideal, the addition of these new members brings the total number of faculty in the Department to within seven of the total faculty count of five years ago. With their wide variety of interests, each new faculty member makes a unique contribution to the intellectual life of the Department. They are introduced below.
Assistant Professors
Mark Coppejans joined the Duke faculty as an Assistant Professor of Economics. He earned his Ph.D. in economics from Northwestern University in June 1996 and his A.B. in economics and applied mathematics from the University of California at Berkeley in 1990. He is interested in theoretical econometrics including series estimators and time series. This year at Duke he is teaching corporate finance to undergraduates and econometrics to graduate students.
Coppejans expects to find synergy with the work of George Tauchen and Ronald Gallant who have similar research interests. In his limited free time when he is not pursuing economics, he enjoys soccer and music.
Gregory S. Crawford came to the Duke Department of Economics this fall after studying economics at Stanford University and receiving his A.B. in economics from the University of Pennsylvania. His research interests include industrial organization and applied econometrics, particularly empirical topics in the economics of regulation. He teaches industrial organization and principles of economics.
"I think it's great, except for the weather," was Crawford's initial reaction to arriving at Duke only to be immediately greeted by hurricane Fran. He has, however, found much to enjoy about North Carolina including the short ten minute drive to the country which he finds reminiscent of his home state of Wisconsin. In his rare moments of free time, Crawford enjoys playing bridge and basketball. In addition, he and his wife Julie Hanson, who recently received her doctorate in art history from Stanford, are film buffs.
Holger Sieg joined the Duke faculty as an Assistant Professor of Economics after receiving his Ph.D. from Carnegie Mellon University. Born in Bochum, Germany, he attended Universities in Regensburg and Freiburg, before graduating from the University of Bonn in 1992. His research interests focus on combining economic modeling with rigorous econometric theory, and he has written several papers about estimating dynamic continuous choice models. This year at Duke he teaches econometrics and public finance.
Despite the headaches of moving to a new place, Sieg has found Duke much to his liking. He is joined in North Carolina by his fiancée Carolyn Levine who is on the faculty at the Fuqua School of Business. Sieg enjoys sports, especially golf, and he gives high marks to the golf course at the Washington Duke Inn. He is also an avid reader and gardener.
Associate Professors
Lin Zhou is an Associate Professor of Economics here at Duke. Before coming to Duke, he taught at Yale University for seven years, and he has also held visiting positions at several universities in Asia and Europe. From 1992 to 1994, Zhou was an Alfred P. Sloan Research Fellow. He received his Ph.D. in economics from Princeton University in 1989, and he earned his B.S. in mathematics from Fudan University in China in 1982. His research interests are in microeconomics, mathematical economics, and collective decision theory.
Zhou has only the highest praise for Duke calling it a "wonderful" and "friendly" place where he enjoys working with his colleagues. Even though he jokes that economists are boring, Zhou has numerous interests outside the Economics Department. He enjoys spending time with his family including his wife, Fang Lin, and his two daughters ages five and six. He also likes to play bridge and listen to music.
Research Professors
A Research Professor at Duke, Gianni Toniolo is also a Professor of Economics at Ca'Foscari University in Venice, Italy. This distinguished scholar joins the Department each fall semester over the next six years. Toniolo received his Laurea (doctor of economics) degree cum laude at the University of Venice and did post-graduate studies and research at Harvard. He has held visiting positions at the University of Connecticut, St. Antony's College at Oxford (UK), Hitotsubashi University (Tokyo), the University of California at Berkeley, and All Souls College at Oxford (UK). He is a Research Fellow at the Centre for Economic Policy Research in London and a member of the European Academy. He is also Dean of the Academic Council of the Venice International University, a new institution of which Duke University is a founding member.
Toniolo's research has focused on the economic development of Italy, Europe, and Japan during the 19th and 20th centuries. His research also encompasses topics related to financial institutions and the history of central banking. At Duke, he teaches a variety of courses on economic history.
The Department hosted several visitors this semester, among them was Mark Machina who is profiled below.
Mark J. Machina is visiting Duke University's Department of Economics for the fall semester from the Department of Economics at the University of California, San Diego. Machina received his Ph.D. from the Massachusetts Institute of Technology in 1979. He has also visited at Columbia University, the University of Cambridge, Princeton University, the Australian National University, the People's University of China, and the University of Wyoming. Currently, he serves as a co-editor of the journal Theory and Decision. His research interests include decision making under uncertainty and exploration of the bounds of what might be explainable by the economic approach. While at Duke, Machina's teaching responsibilities include microeconomic theory and mathematical economics.
Machina describes Duke as a "classy place" where the students fully deserve the ranking of fourth best - "At least!" When considering what he likes to do when not pursuing economics, Machina jokes, "I don't know yet."
Marjorie McElroy has been appointed Chair of the Department of Economics through August 31, 1999. She previously served as the Acting Chair from May 1995 through August 1996. She succeeds Neil De Marchi who had held the position of Department Chair since 1992.
Professor Marjorie McElroy joined the Duke Economics faculty in 1970 after receiving her Ph.D. from Northwestern University and spending a year at Bell Laboratories. She has been a visiting professor at the University of Chicago, the University of Illinois, and the University of Virginia. The National Science Foundation has supported her research in the areas of financial economics, demand systems and production, and the economics of the family. Her current research concentrates on labor economics and the economics of the family, with special attention to the interplay of bargained family decisions and marriage markets. McElroy has served on the National Science Foundation Panel in Economics and The American Economic Association's Committee on the Status of Women in the Economics Profession, and she currently serves on the Board of Directors of the National Bureau of Economic Research. She teaches a 200-level seminar on the economics of the family and a graduate course in labor economics, as well as directing both the Labor Workshop and the Labor Lunch.
This fall Daniel Graham began serving a three year term as Director of Graduate Studies (DGS). He immediately encountered two challenges. He first had to contend with a large increase in undergraduate enrollments and a corresponding shortage of both money and graduate student teaching assistants and graders. Secondly, the graduate program underwent a review by the Executive Committee of the Graduate Faculty. In the face of these obstacles, however, Graham says, "Everyone involved has been so helpful ... that the challenges have been fun."
Graham has several goals in mind for the Graduate Program while it is under his direction. In the short term, he plans to computerize operations to a greater extent to allow for better record keeping and data analysis. In the long term, he hopes to encourage students to take greater advantage of the wide assortment of fields available at Duke including History of Political Economy, Environmental Economics, Health Economics, Soviet Economics, and others. Graham feels that, "A taste of these fields in the first year would expose our students to more of the faculty and provide concrete examples of the uses to which the core can be put."
Graham succeeds Kent Kimbrough who had held the position of DGS for the past four years. In reflecting on his predecessor's achievements, Graham gives enthusiastic praise to Kimbrough's ability to attract high quality students to the program and his development of a well organized administrative framework. Graham describes as "daunting" the prospect of following in the footsteps of Kimbrough and George Tauchen, the two previous Directors of Graduate Studies.
Although he hadn't thought of himself as an administrator, Graham was attracted to the position of DGS by the opportunity for greater interaction with students. "I've always enjoyed our students ... and it occurred to me that as DGS I would see a lot more of them than I did by teaching. I also found the prospect of playing more of a supporting role appealing."
The first incoming graduate student class following Graham's appointment to DGS consists of 17 Ph.D. students, five Masters students, and three joint J.D./M.A. students. Thirteen of the students come from countries other than the United States, including Bulgaria, Costa Rica, Korea, China, Sri Lanka, Taiwan, and Thailand. The Ph.D. students come from undergraduate institutions such as Northwestern, Cornell, Duke, Peking University, and the National Taiwan University, where their average undergraduate GPA was 3.65. The Ph.D. class is 24% female and 76% male. Two of the students are supported by two year IMF Scholarships and eight are graduate award recipients.
Graham received his Ph.D. from Duke University in 1969 and joined the Duke faculty that same year. He has held the position of Professor of Economics and Law at Duke since 1984. His research interests include topics in microeconomic theory involving uncertainty such as cost-benefit analysis and insurance and incentives.
This fall Henry G. Grabowski assumed the position of Director of Undergraduate Studies (DUS). He succeeded Edward Tower who had served as DUS for the previous four years.
Under Tower's guidance, the undergraduate program grew steadily both in and out of the classroom according to Grabowski. The curriculum was expanded, particularly at the upper level, and special emphasis was placed on developing courses which appeal to the diverse interests of Duke's economic majors. Over the past four years, new undergraduate courses in finance, accounting, health economics, and environmental economics have been introduced. The honors program has also grown both in terms of the range of courses offered each semester and the number of students writing honors papers. A grant from the Allen Starling Johnson, Jr. Fund has allowed instructors to invite visitors to their undergraduate classes to discuss relevant topics in economics. The Johnson Fund has also supported a series of distinguished lectures tailored to undergraduates. Speakers in the series have included professors who have served with the Council of Economic Advisors, Carl Schwab of the Schwab Investment Group, and an economist who was appointed to analyze the economic issues in the baseball players strike.
In his new role as DUS, Grabowski intends to build upon the past successes of the undergraduate program. His goals for the curriculum are to offer a diverse set of seminars and to provide advanced courses that appeal to undergraduate interests. Grabowski is enthusiastic about the introduction of a new Bachelor of Science major in economics which will cater to students who want to take more quantitative courses. The B.S. major was approved by the Arts and Science Council just this November. Grabowski also plans to extend undergraduate involvement in faculty research by encouraging independent studies and honors theses and by providing students with opportunities to work on mini-projects with faculty.
Grabowski hopes to revive Omicron Delta Epsilon (ODE), the economics honor society. Much of the credit for the past development of ODE belongs to Thomas Havrilesky, who passed away last year. Ed Tower has agreed to take over the faculty sponsorship of the organization. In the past, ODE has been very active in sponsoring events for undergraduates, including an annual Homecoming panel of alumni who speak on their experiences in the workplace.
This is a particularly challenging time to assume the position of DUS. The undergraduate major at Duke is growing during a period of diminished faculty size and budgetary tightening. The number of students taking the principles and intermediate classes has increased by 30 percent over the last four years. Grabowski speculates that this is due to the fact that Duke has created a more "user-friendly" economics major.
Grabowski received his Ph.D. from Princeton University in 1967. He worked at Yale University and the National Bureau of Economic Research before coming to Duke in 1972. Since 1983, he has directed the Program in Pharmaceuticals and Health Economics at Duke. He also served as Chair of the Department from 1989-92. His research interests include industrial organization, economics of innovation, and government regulation of business.
By Neil De Marchi
Neil De Marchi spent much of his sabbatical year (1995-96) grubbing away at, and interpreting, documents which reveal facets of a sustained relationship between two 17th century art dealers, one in Antwerp, Belgium and the other in Paris, France.
The Antwerp dealer put local painters to work on orders received from Paris; he also had them make some things on his own account. The Paris dealer served as his agent. Selling conditions in the Paris market varied in unpredictable ways; moreover, the strength of commitment of the Paris dealer (agent) was not clear at the outset. The Antwerp dealer had to discover the strength of his agent's commitment and at the same time judge how far he would have to defer to his agent's knowledge of local market conditions. Both principal and agent had outside options.
A clear sequence appeared in the pricing arrangements characterizing this relationship. During an initial phase in which the two had to feel each other out, there was prior agreement on price, while the Antwerp dealer charged modest gross profit margins. There followed a phase in which the Antwerp dealer tried a shipment including unusually high-quality works at prices (and margins) also above the norm for him. He may have intended this as an experiment to test the strength of his agent's commitment. The two engaged in some protracted bargaining sequences, at the end of which most of the conceding had been done by the principal. A third phase saw them reverting to a posted prices regime but with a sale-or-return clause (to forestall unilateral discounting by the agent which had been an unfortunate feature of the bargaining). The experiment of phase two did not clearly distinguish between commitment and knowledge of local conditions, but the Antwerp dealer had independent, on-the-spot information about market conditions in Paris at this time, and he seems to have decided that his agent was sufficiently committed and certainly had superior local knowledge.
While the discovery procedure was not perfect, the sequence nonetheless had a certain rationale to it: bargaining tends to generate more information about the underlying equilibrium than posted prices in circumstances where local selling conditions vary in unpredictable ways. The sequence - from tentative posted prices to discrete double auction to posted prices with sale-or-return - thus makes more sense than maintaining a simple posted price regime. Moreover, posted prices following a discovery phase with heavy concessions forced on the principal also seems sensible, given that the sale-or-return clause was invoked to take account of surprises in the local (Paris) market.
Alternative pricing mechanisms have been more extensively explored in experimental economics than in the game theoretic literature dealing with bargaining under complete or incomplete information. The alternatives here appeared as a sequence, and this sequence should be replicable in a setting where an economic agent can choose the institution (here a pricing rule) while trying to discover salient features of the other trader(s). Graduate student Matt Raiff is exploring the possibility of running such a game in his class on experimental economics. Meanwhile, one aspect of the variability in local market conditions, namely changes in taste, is being explored in collaboration with Hans Van Miegroet, Associate Professor of Art and Art History at Duke.
By V. Kerry Smith
An environment that fosters learning must be one that is resilient to change. While this makes the departure of a valued colleague easier to understand and respond to, it does not diminish its personal and professional significance. After spending twelve of the twenty years of his professional life with Duke (first with Fuqua from 1981 to 1985, and then as the George G. Allen Professor of Law and Economics from 1988 to 1996), W. Kip Viscusi decided to return "home" to Harvard. This fall, Kip became the John F. Cogan Jr. Professor of Law and Economics and Director of the Program on Empirical Legal Studies in the Harvard Law School, although concurrently he remains an Adjunct Professor of Economics at Duke.
During his eight years with the Department, Kip has been a significant force in its research and teaching program. With Mark Machina (from the University of California at San Diego, and currently visiting the Department this fall), Kip launched the Journal of Risk and Uncertainty (JRU) from Duke. In the past eight years, he established the JRU as the leading specialty journal for analytical and empirical analysis of problems involving risk and uncertainty. The JRU provides the primary forum for scholars from economics, psychology, decision sciences, and statistics who consider problems involving risk (John Payne of Fuqua and Kerry Smith of the Department currently serve as JRU Associate Editors).
Three of the books from Kip's research while at Duke received the American Risk and Insurance Association's Kulp Memorial Award for best book published in that year on risk and insurance issues. To win once is impressive, but to do so three times in a row will be a tough record for anyone to top.
The litany of Kip's accomplishments, publications, editorial positions, and resulting impact could easily fill several newsletters. Rather than itemize the work that contributed to his impact on economic analysis and policy, it is more effective (and impressive) to focus on just three of the ways economics has changed as a result of his activities. This description also illustrates how he has influenced and been influenced by his colleagues here at Duke. In 1976 (when he received his Ph.D.), economists had begun to discuss the ways one might describe how people made decisions in the workplace that involved "accepting" some risk of injury or death for increased compensation. Today, twenty years later, estimates of risk trade-offs (i.e. the monetary measures of the value of a statistical life) are routinely used in benefit-cost analyses for health, safety, and environmental policies. More than any other economist, this is due to Kip. His latest estimates with Mike Moore of Fuqua provide the reference point for all of these evaluations.
The second area is equally significant. Over this same time, policy makers came to realize that the information provided about consumer products (or activities) could be analyzed and evaluated as a policy choice. Kip's work with Wes Magat and Joel Huber of Fuqua framed the policy and intellectual debate in this area. Subsequent work in environmental and health policies as well as in decisions about product safety finds its intellectual roots in their research. Whether it is the specific issues associated with the nutritional labels on food, the role of informational warnings for cigarettes, or the more generic questions of regulation versus information policies, Kip's research has defined how economic models of people's behavior can be used to inform the private and the public choices involved.
Lastly, we are just beginning to see the effects of his most recent research projects involving Superfund hazardous waste sites. Policy makers' understanding of whether the priorities are right and how activities to clean up sites actually respond to risks to people are all being transformed by his findings with Jay Hamilton of the Department and the Sanford Institute, and an array of Economic graduate students (Harrell Chesson, Chris Dockins, Ted Gayer, and Jahn Hakes to name a few). Using the combined tools of spatial analysis, this research team has assembled a sample of Superfund sites and evaluated the estimated risks they impose on people. Not only does this effort provide the first comprehensive evaluation of these risks, but it does so in sufficient detail to describe who bears the risk, as well as the importance of the uncertainties in our estimates of the processes leading to risks involved. The findings from this effort will be central to how the next Congress redefines the Superfund program.
A prodigious scholar, Kip's research involved his colleagues both in the Economics Department and around the University. Because of these partnerships, Kip will continue to be involved in the research and educational programs of the Department. We expect to continue to see him frequently in the foreseeable future. Indeed, once he has acquired first hand experience with real winters, his commutes may well be from "here to there" rather than the reverse.
Mark Y. An has recently made presentations at numerous conferences. He presented "Indirect Inference with Applications to Labor Market Transitions" at a conference at the University of Montreal entitled Optimization Days: International Conference on Simulation Methods in Econometrics. At the Santa Fe Institute Workshop on Social Interactions, he spoke on the topic "Toward the Econometrics of Social Interactions." He also attended the International Symposium on Tax Reform in China held in Ontario, Canada, and he gave the paper "Toward the Optimal Size of the Government Revenue: What Can be Learned from International Comparison." He plans to present "A Bivariate Proportional Hazard Model and Statistical Inference with Grouped Data" at the Econometric Society Winter Meetings in New Orleans during January.
Edwin Burmeister made a presentation to the Boston Security Analysts Society in October entitled "Economy-Wide Surprises and Portfolio Management."
Philip J. Cook published the paperback edition of his book with Robert H. Frank, The Winner-Take-All Society. This book has also appeared in Portuguese under the title Tudo ou Nada. In addition, Cook recently edited a symposium entitled "Kids, Guns, and Public Policy" for the Fall 1996 issue of Law & Contemporary Problems.
Gregory S. Crawford presented his paper "The Impact of the 1992 Cable Act on Consumer Demand and Welfare" at the Telecommunications Policy Research Conference in Washington, D.C. in October. This paper was an award winning graduate student paper at Stanford University. Crawford also made a presentation on the 1992 Cable Act at the Cato Institute.
Neil B. De Marchi has recently published articles on "The Taste-less Theory of Choice Meets Novelty" with Marina Bianchi in Pluralism in Economics and "Pricing Invention: 'Originals,' 'Copies,' and their Relative Value in Seventeenth Century Netherlandish Art Markets" with Hans J. Van Miegroet in Studies in the Economics of the Arts edited by V. Ginsburgh and P.M. Menger. De Marchi spent the 1995-1996 school year on sabbatical in Antwerp and Paris.
Craufurd Goodwin received the University Scholar/Teacher of the Year Award. He is the fifteenth recipient to receive this very distinguished award. President Keohane presented the award to him at the Founders' Day Convocation this December.
Henry G. Grabowski organized a major international conference at Duke with Frank Sloan on the topic of cost-effectiveness analyses in public and private decision making. The papers from the conference, including "The Use of Cost-Effectiveness Analysis by the Public and Private Sector," by Grabowski and Sloan, will be published in Social Science and Medicine. In March, Grabowski testified before the U.S. Senate Judiciary Committee on "The Effects of the Waxman Hatch Act on Drug Innovation and Genetic Competition." He has also given a presentation on "International Patent Policies and Pharmaceutical Innovation" at the University of Vienna and a presentation on "Public Policies and Pharmaceutical Innovation" to government regulatory officials in Warsaw, Poland. At an OECD Workshop in Paris, Grabowski presented "Financing Health Care Pharmaceuticals and Biotechnology." Grabowski's recent publications include "The Roles of Government in the Drug Regulation Process: Lessons from Other Nations" in Health Financing and Health Economics edited by Paul Gross, "Longer Patents for Increased Genetic Competition: The Waxman Hatch Act After One Decade" with John Vernon in Pharmco Economics, and "Economic Scales and Tests" with Ron Hansen in Quality of Life and Pharmacoeconomics in Clinical Trials edited by B. Spilker.
Helen F. Ladd was appointed co-chair of a National Research Council/National Academy of Sciences Committee on Education Finance. For the next three years, this committee will be investigating a broad set of issues related to the equity, adequacy, and productivity of the U.S. educational system.
Jim Leitzel is the 1996-97 Atlantic Fellow in Public Policy. The Atlantic Fellowships were established one year ago to provide mid-career U.S. public policy professionals with an opportunity to live and work in the United Kingdom. Leitzel is located in the Department of Economics at the University of Essex where his research focuses on the regulation of firearms.
Hervé Moulin recently presented invited lectures at several international conferences. At the conference on Justice, Political Liberalism and Utilitarianism in honor of John Harsanyi and John Rawls which took place at the Université de Caen in France, he presented "Procedural versus Endstate Justice: An Impementation Viewpoint." At the Third Meeting of the Society for Social Choice and Welfare at the University of Maastricht in the Netherlands, Moulin gave the talk "Strategyproofness: News from the Front." He also presented "Strategyproof Cost-Sharing" at the Seventh International Conference on Game Theory held at the State University of New York at Stony Brook. Moulin was a visiting professor at the University of Cergy-Pontoise in France where he delivered a short course on cost sharing. He has also been elected President of the Society for Social Choice and Welfare. His recent publications include "Cost-sharing under Increasing Returns: A Comparison of Simple Mechanisms" in Games and Economic Behavior and "Traffic Based Cost Allocation in a Network" with Dominque Henriet in the Rand Journal of Economics.
V. Kerry Smith received a grant from the North Carolina Sea Grant Program for the project "Integrating Market and Non-Market Impacts of Environmental Regulations for Net Benefit Measurement: Nutrient Control and Coastal Resources." He is also the Co-Principal Investigator with George van Houtven on a grant from the U.S. Environmental Protection Agency for "Valuing Reductions in Environmental Sources of Infertility Risk Using the Efficient Household Framework." Smith continues to serve as the Director of the Center for Environmental and Resource Economics. This August, the Center ran the fourth successful Camp Resources which focuses on research underway in the Southeast on resource and environmental economics. In October, Smith gave the keynote address entitled "Environmental Valuation: Past and Future" at the Workshop on International Environment Problems and Policy in Ede, The Netherlands. He recently published his new book Estimating Economic Values for Nature: Methods for Non-Market Valuation. Other forthcoming publications include "Do Contingent Valuation Estimates Pass a 'Scope' Test? A Meta Analysis" with L. Osborne in the Journal of Environmental Economics and Management and "Marine Debris, Beach Quality and Non-Market Values" with X. Zhang and R.B. Palmquist in Environmental and Resource Economics.
George Tauchen continues to receive support from a three year grant from the National Science Foundation "Estimation and Visualization of Nonlinear Structural Models." In May, he spent eight days at the Institute for Advanced Studies in Vienna, Austria where he presented a series of seven Lectures on Financial Econometrics. He also presented an invited address to the Seventh World Congress of the Econometric Society in Tokyo, Japan entitled "New Minimum Chi-Square Methods in Empirical Finance." The address is forthcoming in the collected volume of invited symposia for the Seventh World Congress published by Cambridge University Press. Over the past year, he has also given seminars and presentations at Papeu Fabra University in Barcelona, Spain, the Center for Estudio Macroeconomics in Madrid, Spain, the University of Bern in Bern, Switzerland, and the Technical University of Vienna in Vienna, Austria, among many others. Tauchen's recent and forthcoming publications include "Which Moments to Match" with A.R. Gallant in Econometric Theory, "Volume, Volatility, and Leverage: A Dynamic Analysis" with H. Zhang and M. Liu in the Journal of Econometrics, and "Estimation of Stochastic Volatility Models with Diagnostics" with A.R. Gallant and D. Hsieh in the Journal of Econometrics.
W. Kip Viscusi accepted a permanent position at Harvard Law School as the John F. Cogan Jr. Professor of Law and Economics, and he moved to Cambridge during the summer. He remains an Adjunct Professor with the Duke Department of Economics.
E. Roy Weintraub was named the Director of the new Center for Social and Historical Studies of Science. The Center links faculty and students working in areas related to the study of science including those with interests in economics, history, philosophy, and literature. In addition, Weintraub recently published a paper on Debreu and Bourbaki in Science in Context. He also presented a paper on Vito Volterra and Griffith Conrad Evans at the World Congress for the History of Science which took place in Liege, Belgium.
Dennis Tao Yang received a grant from the CCK Foundation for the project "Fertility, Family Behavior, and Welfare: Mainland China's One-Child Policy" with Marjorie McElroy. He was also awarded a grant from the Luce Foundation, the CCK Foundation, and the Vice Provost Office at Duke for "Acquisition and Analysis of Population Census of China" with Nan Lin. During the summer of 1996, Yang was a World Bank-Peking University Research Fellow. He has recently given his presentation "Human Capital, Entrepreneurship, and Farm Household Earnings" at UNC, Stanford, Northwestern, and Peking University, and he is scheduled to present at the 1997 AEA meetings in New Orleans. At the Association for Asian Studies meetings in Hawaii, he presented "Rural-Urban Disparity and Sectoral Labor Allocation in China" which he is also scheduled to present at an ASSA/CES joint session in New Orleans. Yang's forthcoming publications include "Education and Off-Farm Work" in Economic Development and Cultural Change, "Education in Production: Measuring Labor Quality and Management" in the American Journal of Agricultural Economics, and "China's Land Arrangements and Rural Labor Mobility" in China Economic Review.
In Memorial
In memory of Thomas Havrilesky, all royalties from the book The New Hedonics Primer for Economists and Attorneys edited by John O. Ward and Thomas R. Ireland will be donated to the National Association of Forensic Economics. Three of Havrilesky's papers are also published in this volume.
Dorothy Armento celebrated her tenth anniversary as a Duke employee at a special luncheon where she received a certificate from the University in honor of her dedicated service.
Barbara Boon, long time employee of the University, retired from her position as Research Secretary for Professor Hervé Moulin this July. Boon had worked for the Department for close to eight years, and she had been at Duke for a total of 19 years, many of which were spent at the Medical Center. The Department held a retirement party for Boon and presented her with gifts chosen to help her occupy her newly acquired free time including a rocking chair and large quantities of spirits. Boon has found retirement much to her liking, and she is reveling in all of her options. She has plans to travel and take classes and perhaps even find a part time job.
Anne Hobin celebrated twenty years of service to Duke this year for which the University awarded her a certificate and a ring.
Priscilla Lane assumed the position of Staff Assistant for Professor Moulin. Lane comes to the Department of Economics from the Literature Program at Duke. She finds her new job enjoyable because of "the variety of the tasks" and the opportunity to meet "so many interesting people." When not in the Social Sciences building, Lane enjoys a diverse range of interests including quilting, reading, and kayaking.
Kris McGee transferred from her position as Research Secretary for Professor W. Kip Viscusi in the Economics Department to a new position as Staff Assistant for Professor V. Kerry Smith in the School of the Environment. McGee had worked in the Department of Economics for three years. Although her new position is demanding, McGee is enjoying her new responsibilities which include overseeing several grants, working with the Center for Environmental and Resource Economics, and supervising work study students. The staff held a luncheon for McGee at Papagayo's to wish her luck in her new endeavors.
Gail McKinnis received a Presidential Award honorable mention this spring. The Presidential Awards are the top awards given to University employees and are presented for "outstanding job performance, special accomplishments and overall contributions to the Duke community." McKinnis accepted her award from President Nannerl O. Keohane at a luncheon on March 27. Among her many accomplishments, McKinnis has been instrumental in the development of the Departmental homepage.
Rhonda Wioskowski celebrated her tenth anniversary with the University this year. She received a certificate, a Duke pen, and a lapel pin.
In Sympathy
The Department of Economics extends its sympathy to Dorothy Armento on the death of her husband Frank Walter Nicklo who passed away on September 19, 1996. A memorial mass for Nicklo was held at St. Thomas Moore Catholic Church in Chapel Hill on October 3.
Congratulations to the students who received their Ph.D. in 1996. They are listed below with their job placements, thesis titles, and dissertation supervisors.
Roberto Ayala, Economist, Central Bank of Ecuador, "Econometric Issues in Valuation of Nonmarketable Goods," Mark An.
Harrell Chesson, Post Doctoral Research Fellowship, Centers for Disease Control, Atlanta and Morgantown, GA, "Ambiguous Environmental Risks and Business Decisions," W. Kip Viscusi.
Chris Dockins, Research Economist, Environmental Protection Agency, Washington, DC, "What's Worst? What's First? Conservatism, Risk Assessment and Priorities at Hazardous Waste Sites," W. Kip Viscusi.
Eric Gaier, Research Economist, Logistics Management Institute, Washington, DC, "Essays on the Role of Information Quality in Common Value Auctions and Signaling Games," Robert Marshall.
Leonardo Giacchino, Economist, National Economic Research Associates, Boston, MA, "The Persistence of Dollarization Processes," Kent P. Kimbrough.
Brett Katzman, Assistant Professor, Miami University, "A Theoretical and Empirical Investigation of Multi-Unit Auctions with Diminishing Marginal Valuations," Robert Marshall.
Ming Liu, Assistant Professor, Chinese University of Hong Kong, "Essays in Long Memory and Stock Market Volatility," George Tauchen.
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 an honors thesis. The following is a list of Undergraduate Honors Theses completed for Spring 1996 including student name, thesis title, and faculty advisor.
Joseph Ambrose, "NAFTA and the Apparel Sector: A Study in Trade Diversion" (Tower).
Gustavo Antorcha, "Is the Federal Reserve Predictable?" (Peretto/Tower).
Merrick J. Axel, "A Cost-Benefit Analysis of the Separation of Commercial and Investment Banking: A Recommendation for Repeal of the Glass-Steagall Act of 1933" (Pearce).
Arnold Baker, "Into the Dustbin of History: Economists and Asia-Pacific Economic Cooperation" (Goodwin).
Perry Cahall, "The AFDC Dilemma: A Problem of Incentives and Tradeoffs" (Goodwin).
Paul Denaro, "The Flat Tax: An Analysis of the Economics Discipline" (Goodwin).
Jonathan Frankel, "The Economics of Demographic Transitions: Past and Present" (Kelley).
Carla Funari, "Cable Regulation: How Does Governmental Regulation Influence the Cable-Provider Industry?" (Goodwin).
Dylan Golden, "Opportunity, Choice, and Education: Subsidizing the Demand Side of the Educational Market" (Goodwin).
James Griffith, "Economics and the Treatment of Copyright" (Goodwin).
Felicia Gross, "An Analysis of Super 301 Trade Sanctions" (Tower).
Tyree W. Harris, "America's Privatization Debate: Why We Kept the Public Domain" (Goodwin).
Katherine Harrison, "Explaining the Anomalies: An Experimental Test of the Determinants of Giving in Public Goods Experiments" (Raiff).
Todd J. Hirsch, "Derivatives, Risk, Regulation" (Bronfenbrenner).
Gregory Kerman, "Divorce and the Education Gap: Debunking Traditional Explanations/Remedies" (McElroy).
Chol-Ho Kim, "Voluntary Export Restraint: A Disguised Protection Costing All Americans" (Goodwin).
Richmond D. Mathews, "The Efficiency of the Market for Corporate Control: An Analysis of Takeover Wealth Effects, Tender Offer Regulation, and Takeover Defenses" (LaBlanc).
Edward Meyer, "Corporate Takeovers" (Goodwin).
Richard S. Parisi, "First Mover Advantage in the Generic Pharmaceutical Industry" (Grabowski).
Robert A. Pleasant, "Economic Science and Social Security Analysis: A Lakatosian Perspective" (Goodwin).
Andrea F. Scadron, "Multiple Sclerosis and Insurance Coverage" (Sloan).
Jed Silversmith, "The Balanced Budget Amendment: An Analysis of Its Support" (Goodwin).
David Thomas, "The Balance Between Ideologically-Driven Contributions Versus Access-Driven Contributions by Lobbies at Different Levels in the U.S. Political Structure" (Tower).
David A. Anderson (M.A. '90, Ph.D. '92) was named National Endowment for the Humanities Distinguished Assistant Professor of Economics at Centre College in Danville, Kentucky. The two-year professorship includes research funding and a stipend. Anderson recently published a book entitled Dispute Resolution: Bridging the Settlement Gap which suggests alternative approaches for reducing the costs and improving the outcomes of legal disputes.
Joseph H. Davis III (M.A. '95) currently serves as an Economist with Regional Financial Associates, Inc. in West Chester, Pennsylvania. His book reviews have recently been accepted for publication in the Journal of International Economics and the Journal of Regional Science. In October 1996, he was married to Elizabeth Casey.
Timothy J. O'Neill (Ph.D. '79) earned a promotion to Chief Economist and Executive Vice-President at the Bank of Montreal in October 1994. He had served as Deputy Chief Economist and Senior Vice-President at the Bank since 1993.
R. Gerald Saylor (Ph.D. '66) is the Director of Market Economics at Deere & Company in Moline, Illinois. He was elected as the Director of the National Association of Business Economists in September 1995, and he is also a member of the National Business Economic Issues Council.
Information about the Department is available via the Department of Economics homepage. Visitors to the homepage can access information on research by the faculty, classes for students, the history of the department, and a host of other topics. The homepage also advertises job openings in the Department and introduces potential employers to graduate students on the job market. Recent additions to the web site include detailed information on economic journals edited at Duke and a schedule of all the workshops offered by the Department. A directory of Ph.D. alumni is currently being developed for the homepage.
The Department web site was initially established in the fall of 1994 by Forrest Smith. In the fall of 1995, the computing committee, chaired by Allen Kelley, determined that the homepage should be expanded. Since that time, due in large part to the efforts of Kelley and Gail McKinnis, the homepage has become a widely accessed resource from both inside and outside the Department.
Hurricane Fran roared through North Carolina the night of Thursday, September 5 leaving a path of destruction that prompted Governor Jim Hunt to label it "the worst disaster we've had in this century." The Governor declared much of North Carolina a disaster area and asked residents to stay at home on Friday.
Fran traveled from Cape Fear, North Carolina inland through Wilmington to the Triangle. The widespread destruction in the Triangle brought life to a virtual halt. Many property owners incurred extensive damage to their homes. Most Triangle residents lost power, and many had no phone service and no drinkable water for days or weeks after the hurricane. Due to downed trees and electrical wires, many roads were impassable, and the lack of traffic signals added to the danger, resulting in numerous highway deaths. As a result, for the three days following the hurricane, curfews were in effect in the Triangle. Restaurants and food stores were closed due to lack of power. Triangle residents without power to refrigerate or cook food improvised by eating snack foods and grilling meat from the freezer before it could spoil. Ice and batteries were in high demand as people tried to preserve the food in their refrigerators and stay in touch with the outside world through battery operated radios.
While Duke University benefited from being one of the only places in the area with electrical power in the days following Fran, major damage was still sustained on campus during the storm. Hundreds of trees around campus were downed by the storm with many of them causing damage to vehicles. Duke Forest suffered immense losses and was closed indefinitely for safety reasons. One Duke employee was killed Friday morning in a car wreck related to the hurricane.
Members of the Economics Department were not immune from the damaging effects of Hurricane Fran. Holger Sieg lost three trees to the storm, one of which toppled onto the home he had just purchased this summer and caused considerable damage. Sieg bemoaned the fact that as a good economist he had purchased a home owner's policy with a large deductible, so he will pay much of the repair costs out-of-pocket. Providing some economic insight into the storm, Sieg said he was impressed with how well the market for tree removal worked. While the waiting list for a professional tree removal service was lengthy, Sieg was able to hire a qualified amateur who removed the tree from his house within two days. In his final evaluation of the storm, Sieg mentioned the positive effects of the storm, saying it allowed him to meet his new neighbors who were very gracious in loaning him tools and other supplies.
Henry Grabowski's property also suffered heavy losses during the storm. He describes hearing "whistling and falling during the night" and waking up to trees downed all over his property, four or five of which were resting on his roof. One of his neighbors lost 70 trees to the storm. At first, he was unable to drive down his street due to the number of fallen trees, but gradually the road was cleared. He was also without power for four days. He describes the experience as "a difficult period."
Stories throughout the Department were similar, with many of the faculty, staff, and students confronting lengthy power outages and extensive property damage. The recovery will take many months. But amidst all the destruction, there were some bright spots. A spirit of cooperation reigned, as neighbors who had perhaps been strangers before the storm pitched in to help each other clean up debris, repair property damage, and put their lives back together.
Editor: Tracy Kuczak
Contributors: Neil De Marchi and V. Kerry Smith
Special thanks to: Kate Anderson, Barbara Boon, Mark Coppejans, Gregory Crawford, Peggy East, Henry Grabowski, Daniel Graham, Anne Hobin, Priscilla Lane, Mark Machina, Marjorie McElroy, Kris McGee, Gail McKinnis, Holger Sieg, Gianni Toniolo, and Lin Zhou