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Basis risk or residual risk arising from disparity between an index's estimate of losses and actual losses is inherent in index-based insurance products. We approximate basis risk as the false negative probability (FNP) within pasture, rangeland, and forage (PRF) rainfall index insurance for the south-central coastal region of California. We estimate the FNP on average that at least one of two selected coverage intervals will fail to provide an indemnity when a loss is realized at 48%. The average FNP is reduced to only 11% when considering whether both selected intervals fail to provide an indemnity when a loss is realized. [ABSTRACT FROM AUTHOR]

This study examines consumer willingness to pay (WTP) for packaged ice cream with local, private label, and national brands at the retail level. Data were collected through in-person surveys conducted at retail grocery outlets in Utah in 2012. Study results suggest that shoppers are willing to pay significantly more for the national and local brands over the retailer’s private label brand. In fact, the local brand with the state-sponsored designation (Utah’s Own) had a WTP equal to that of the national brand. The use of local designations or labels is important as shoppers were not willing to pay a premium for the local brands in absence of the locally produced or state-sponsored designation label. Additionally, consumer WTP for different brands and the degree of response to local designations varies substantially by consumer attributes. These differences suggest that locally designated products do not compete directly with private label products in the market. This study provides clear evidence of the value of state-sponsored designations, as well as locally produced labeling for food products marketed in a traditional retail setting. [ABSTRACT FROM AUTHOR]

As the US pursues health care reform, it is important to understand the patterns in demand for, and opposition to, public provision of medical treatments. Using data from a nationally representative survey, we develop and estimate a utility-theoretic choice model to quantify demand for publicly provided medical treatment policies. We find diminishing marginal utility for increased recoveries and avoided premature deaths. We also show how the utility associated with different types of treatment policies varies with the socio-demographic group that would benefit (e.g. men, women, children, and seniors) and the program's duration and scope. Our model further permits utility, and hence willingness to pay, to vary with each respondent's own gender, age, race, income, community ethnic fractionalization and immigrant composition, as well as the respondent's expected private benefits from the policy and attitude toward government interventions and overall health care funding allocations. Self-interest is a prevailing finding. [ABSTRACT FROM AUTHOR]

Using richly detailed data on fourth‐ and fifth‐grade students in the North Carolina public school system, I find evidence that students are assigned to classrooms in a non‐random manner based on observable characteristics for a substantial portion of classrooms. Moreover, I find that this non‐random assignment is statistically related to class size for a number of student characteristics and that failure to control for classroom composition can severely bias traditionally estimated class size effects. Teacher‐fixed effects and classroom composition controls appear to be effective at addressing selection related to classroom composition. I find heterogeneity in class size effects by student characteristics – students who struggle in school appear to benefit more from class size reductions than students in the top of the achievement distribution. I find that smaller classes have smaller achievement gaps on average and that class size reductions may be relatively more effective at closing achievement gaps than raising average achievement; however, class size effects on both average achievement and achievement gaps are small. [ABSTRACT FROM PUBLISHER]

Abstract: Using a national survey and a discrete choice experiment format, we estimate demand for environmental polices to improve health. We use a richly detailed community-level approach that describes illnesses avoided, premature deaths avoided, policy duration, and the affected population size. We allow preferences for policy attributes to vary systematically with the scenario design, with the source of risk and type of health threat, and with respondent characteristics. Using a willingness to pay (WTP) framework similar to that used for studies of individual risk, we find that omission of illness information leads to an upward bias in estimates of the value of avoided premature deaths and that individuals view avoided deaths and avoided illnesses as substitutes. We also find evidence of strongly diminishing marginal utility in policy scope. Differences in marginal WTP from different sources of risk or types of illness appear very small relative to differences associated with respondent characteristics and/or perceptions. Self-interest strongly dominates altruistic considerations. [Copyright &y& Elsevier]

Abstract: We develop a simple model of teacher behavior that offers a solution to the “class size puzzle” and is useful for analyzing the potential effects of the No Child Left Behind Act. When teachers must allocate limited classroom time between multiple instructional methods, rational teachers may respond to reductions in class size by reallocating classroom time in a way that reduces average educational achievement. This result is possible even when students are not sorted by ability. Teacher preferences for the achievement of heterogeneous students play a fundamental role in our model, and we derive necessary conditions for reductions in average educational achievement. We also provide an analysis of the distributional consequences of changes in class size and teacher preferences. Monte Carlo simulations predict both positive and negative class size effects, suggesting that the model supports the findings of several leading econometric studies. [Copyright &y& Elsevier]

This study uses a conditional logit with systematically varying parameters model to analyze consumer survey data collected at farmers’ markets in Utah. The purpose of this study is to examine consumption preferences and willingness to pay for differentiated fresh produce among farmers’ market shoppers in Utah. Three primary differentiating claims, namely conventionally grown of unknown origin, conventionally grown local (in-state), and organically grown of unknown origin, are investigated. Results indicate that consumer preferences and willingness to pay are higher for the conventionally grown local origin claim, emphasizing the importance of local origin labeling for directed marketed fresh produce. This claim was especially preferred among frequent farmers’ market shoppers and those who spend above average. Those who receive WIC and/or food stamp benefits show lower preferences for fresh produce. The shoppers are significantly sensitive to price increases. This study implies that marketing strategies and policy regulations aiming at promoting local, organic, labeling, and reinforcing repeated farmers’ market customers can positively impact purchasing preferences and willingness to pay for production-method-based and origin labeled products. [ABSTRACT FROM PUBLISHER]

This paper investigates relationships among casino revenue, crime rates, and the number of visitors in Las Vegas, Nevada. Numerous studies have attempted to assess the impact of casino activities on crime rates but have provided inconclusive results. Some studies have found that casino activities increase crime rates, while others find no significant relationship between casino gambling and crime rates. But all studies that have found casinos increase crime rates do not adjust the crime rate for the number of visitors to the area. The impact of casino activities on crime rates disappears, however, when crime rates are adjusted for visitors. This study revisits the question with consideration for the potential endogeneity among variables. This paper addresses endogeneity concerns by estimating the impact of casino activities on crime using a system of equations to represent casino activities, adjusted crime rates, and visitors. Three stage least squares is used to estimate the system. Results show that the impact of casino activities on crime rates persists even after crime rates are adjusted for the visitors. Efforts to reduce crime can be effective in boosting the Las Vegas regional economy. [ABSTRACT FROM AUTHOR]