Institutional Affiliation: Australian National University
|Inequality and Market Concentration, When Shareholding is More Skewed than Consumption|
with , , : w25395
Economic theory suggests that monopoly prices hurt consumers but benefit shareholders. But in a world where individuals or households can be both consumers and shareholders, the impact of market power on inequality depends in part on the relative distribution of consumption and corporate equity ownership across individuals or households. The paper calculates this distribution for the United States, using data from the Survey of Consumer Finances and the Consumer Expenditure Survey, spanning nearly three decades from 1989 to 2016. In 2016, the top 20 percent consumed approximately as much as the bottom 60 percent, but had 13 times as much corporate equity. Because ownership is more skewed than consumption, increased mark-ups increase inequality. Moreover, over time, corporate equity has bec...
Published: Joshua Gans & Andrew Leigh & Martin Schmalz & Adam Triggs, 2019. "Inequality and market concentration, when shareholding is more skewed than consumption," Oxford Review of Economic Policy, vol 35(3), pages 550-563. citation courtesy of
|Competing Approaches to Forecasting Elections: Economic Models, Opinion Polling and Prediction Markets|
with : w12053
We review the efficacy of three approaches to forecasting elections: econometric models that project outcomes on the basis of the state of the economy; public opinion polls; and election betting (prediction markets). We assess the efficacy of each in light of the 2004 Australian election. This election is particularly interesting both because of innovations in each forecasting technology, and also because the increased majority achieved by the Coalition surprised most pundits. While the evidence for economic voting has historically been weak for Australia, the 2004 election suggests an increasingly important role for these models. The performance of polls was quite uneven, and predictions both across pollsters, and through time, vary too much to be particularly useful. Betting markets prov...
Published: Leigh, Andrew and Justin Wolfers. “Competing Approaches to Forecasting Elections: Economic Models, Opinion Polling and Prediction Markets.” Economic Record 82, 258 (September 2006): 325-337. citation courtesy of
|Happiness and the Human Development Index: Australia is Not a Paradox|
with : w11925
In "Happiness and the Human Development Index: The Paradox of Australia," Blanchflower and Oswald (2005) observe an apparent puzzle: they claim that Australia ranks highly in the Human Development Index (HDI), but relatively poorly in happiness. However, when we compare their happiness data with the HDI, Australia appears happier, not sadder, than its HDI score would predict. This conclusion also holds when we turn to a larger cross-national dataset than the one used by Blanchflower and Oswald, when we analyse life satisfaction in place of happiness, and when we measure development using GDP per capita in place of the HDI. Indeed, in the World Values Survey, only one other country (Iceland) has a significantly higher level of both life satisfaction and happiness than Australia. Our finding...
Published: Leigh, Andrew and Justin Wolfers. “Happiness and the Human Development Index: Australia is Not a Paradox.” Australian Economic Review 39, 2 (June 2006): 176-184. citation courtesy of
|What Do Financial Markets Think of War in Iraq?|
with , : w9587
We analyze financial market data in order to produce an ex-ante assessment of the economic consequences of war with Iraq. The novel feature of our analysis derives from the existence of a market for Saddam Securities,' a new future traded on an online betting exchange that pays only if Saddam Hussein is ousted. A variety of tests suggest that this future's price provides a plausible estimate of the probability of war. The spot oil price has moved closely with the Saddam Security, suggesting that war raises oil prices by around $10 per barrel. Futures prices imply that markets expect these large immediate disruptions to dissipate quickly, with prices returning to pre-war levels within about a year and a half. Evidence on the long-run effects is fragile, and while prices are probably expect...