This paper uses data from 1988 federal income tax returns, which asked taxpayers to report their tax-exempt interest income as an information item, to analyze the distribution of tax-exempt asset holdings. More than three quarters of the tax-exempt debt held by households was held by those with...

The paper discusses five early approaches to the price (and quantity) index number problem. The five approaches are: (1) the fixed basket approach; (ii) the statistical approach; (iii) the test or axiomatic approach; (iv) the Divisia approach and (v) the economic approach. The economic approach...

Critics of Governor Michael Dukakis have suggested that this year?s $400 million overestimate of tax revenues in Massachusetts casts doubt on his putative managerial skills. In this paper, we carefully examine the entire Dukakis forecasting record. We find that the 1988 experience was "unusual?...

In recent months, the governors of several states have suffered major political embarrassments because actual revenues fell, substantially short of the predictions in their respective budgets. Such episodes focus attention on the question of whether states do a "good" job of forecasting...

This study examines regional variation in average subsidy rates for charitable donations. Because the tax incentive for contributions is embodied in an itemized deduction, the subsidy rate for an individual depends on the taxpayer's itemization status and marginal tax rate. It is well know that...

Choices are frequently made from lists where there is by necessity some ordering of options. In such situations individuals can exhibit both primacy bias towards the first option and recency bias towards the last option. We examine this phenomenon in a particularly interesting context: consumer...

An information cascade is a situation in which an agent who observes others chooses the same action irrespective of the value of the agent's private information signal. Theoretical models have found that cascades result in poor information aggregation, inaccurate decisions, and fragility of mass...

This paper compares investor sentiment measures based on consumer confidence surveys with measures extracted from the closed-end fund discount (CEFD). Our evidence suggests that these two kinds of sentiment measures do not correlate well with one another. For a short 2 - 4 year period in which...

Given the historically high equity premium, is it now a good time to invest in the stock market? Economists have suggested a whole range of variables that investors could or should use to predict: dividend price ratios, dividend yields, earnings-price ratios, dividend payout ratios, net issuing...

Our paper offers a minimalist model of a run on a financial market. The prime ingredient is that each risk-neutral investor fears having to liquidate after a run, but before prices can recover back to fundamental values. During the urn, only the risk-averse market-making sector is willing to...