# Daniel Jonathan SlottjeSouthern Methodist University | SMU · Department of Economics

Daniel Jonathan Slottje

Ph.d.

## About

173

Publications

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## Publications

Publications (173)

The Gini coefficient is generally used to measure and summarize inequality over the entire income distribution function (IDF). Unfortunately, it is widely held that the Gini does not detect changes in the tails of the IDF particularly well. This paper introduces a new inequality measure that summarizes inequality well over the middle of the IDF and...

This paper introduces a new perspective on Rawls's Difference Principle. We link two distinctive approaches to analysing the social welfare implications of alternative policy actions; the utilitarian approach and the Rawlsian distributive justice approach, together in a cohesive way. While there is a large optimal tax literature, that literature ge...

This paper introduces a new Maximum Entropy based inequality measure that is related to Basmann's class of weighted geometric mean (WGM) measures, but with the added feature that the new measure is flexible enough to describe other characteristics of an observed income distribution function (IDF), a feature that other well-known measures do not pos...

Bentham (17892.
Bentham, J., 1789. Utilitarianism, reproduced by Nabu Public Domain Reprints. http://www.publicdomainreprints.org.View all references) introduced utility as the pursuit of happiness, with happiness defined in his philosophical view as existing if “pleasure” predominated over “pain.” This paper is the first to derive and compare the...

Measuring an individual's human capital at a point in time as the present actuarial value of expected net lifetime earnings has a lengthy history. Calculating such measures requires accurate estimates of worklife expectancy. Here, worklife estimates for men and women in the USA categorized by educational attainment, race, marital status, parental s...

This chapter presents an exposition of the Generalized Fechner–Thurstone (GFT) direct utility function, the system of demand functions derived from it, other systems of demand functions from which it can be derived, and its purpose and the econometric circumstances that motivated its original development. Its use in econometrics is demonstrated by...

The estimation of regression models subject to linear restrictions is a widely applied technique; however, aside from simple examples, the equivalence between the linear restricted case to the reparameterization and the substitution case is rarely employed. We believe this is due to the lack of a general transformation method for changing from the...

International tourism is a major source of export receipts for many countries worldwide. Although it is not yet one of the most important industries in Taiwan (or the Republic of China), an island in East Asia off the coast of mainland China (or the People’s Republic of China), the leading tourism source countries for Taiwan are Japan, followed by...

This paper investigates empirically the impact of real exchange-rate volatility on the export flows of eight Latin American countries over the quarterly period 1973–2004. Estimates of the cointegrating relations are obtained using different cointegration techniques. Estimates of the short-run dynamics are obtained for each country utilizing the err...

Elasticities are often estimated from the results of demand analysis. However, drawing inferences from them may involve assumptions that could influence the outcome. In this paper we investigate one of the most common forms of elasticity which is defined as a ratio of estimated relationships and demonstrate how the Fieller method for the constructi...

In this paper we provide an alternative approach to analyze the demand for international tourism in the Balearic Islands, Spain, by using a neural network model that incorporates time-varying conditional volatility. We consider daily air passenger arrivals to Palma de Mallorca, Ibiza and Mahon, which are located in the islands of Mallorca, Ibiza an...

In this paper we consider estimation of demand systems with flexible functional forms, allowing an error term with a general conditional heteroskedasticity function that depends on observed covariates, such as demographic variables. We propose a general model that can be estimated either by quasi-maximum likelihood (in the case of exogenous regress...

This chapter presents the econometric methods that are used in health economics to model individuals health care costs. These methods are used for prediction, projection and forecasting, in the context of risk adjustment, resource allocation, technology assessment and policy evaluation. The chapter reviews the literature on the comparative performa...

This paper discusses the statistical issues that arise in conducting an economic damages analysis in the context of a litigation matter involving copyrights. Calculating damages in copyright cases turns out to be a natural application for econometric modelling methods. Surprisingly, elementary statistical issues can be a source of significant debat...

As creations of the mind, intellectual property includes industrial property and copyrights. This paper presents an aggregate production function of the generalized Fechner–Thurstone (GFT) form to analyze the impact of an important component of intellectual industrial property, namely patent activity, on technical change in the USA for the period 1...

Supposing that decisionmakers in any country and at any point in time tolerate a certain fixed level of perceived poverty, differences in poverty aversion are called for to explain observed international and intertemporal variations in poverty statistics. Under the Natural Rate of Subjective Poverty hypothesis advanced in this paper, variations in...

This paper explores the impact of copyrights on firm value and on the demand for firm output. Using panel data on franchise value and ticket sales from the National Football League over the 1991–2000 period, we analyze the effect of copyrights (in this case, team logos) using several parametric estimators, the Arellano and Bond [1991. Some tests of...

An a priori test developed by Elderton (1938) is used to examine the distributions of stock returns. The test is known as the kappa criterion (κ-criterion). There have been many functional forms of statistical distributions used to approximate stock return graduations over the past few years. The most prevalent class of distributions analysed have...

Brand names or trademarks carry incredible economic power and prestige. There is increasing recognition by world bodies that intellectual property (IP), whether manifested in patents, trademarks, copyrights or trade secrets, is highly valuable and must be protected through robust IP enforcement. The USA is an interesting natural laboratory as paten...

Each year Congress allocates billions of dollars to states on the basis of unemployment. The stated objectives include assisting unskilled, economically disadvantaged, and dislocated workers; yet unemployment is a poor proxy for identifying such individuals. This paper examines the consequences of altering allocation formulas and concludes that swi...

As U.S. Treasury securities carry the full faith and credit of the U.S. government, they are free of default risk. Thus, their yields are risk-free rates of return, which allows the most recently issued U.S. Treasury securities to be used as a benchmark to price other fixed-income instruments. This article analyzes the time series properties of int...

The effects of antitrust enforcement by the U.S.government on innovation in the U.S. are examined.In this analysis,innovation is measured by the level of patent activity (number of patents filedand the number of patents granted) from 1953 to 2000, which was obtained fromthe U.S. Patent and Trademark Office (USPTO). Data from the Department of Justi...

Summary Patents have become increasingly important, especially over the past two decades. As patent office procedures have adapted to remain abreast of changing economic and scientific circumstances, it has also become increasingly important to define and analyse innovation more precisely. This paper introduces a simple new measure of innovation, t...

This chapter presents the econometric methods that are used in health economics to model individuals health care costs. These methods are used for prediction, projection and forecasting, in the context of risk adjustment, resource allocation, technology assessment and policy evaluation. The chapter reviews the literature on the comparative performa...

This paper presents a “Granger Causality” analysis of the relationship between the antitrust enforcement activities of the Department of Justice and economic growth in the U.S. economy from 1891 to 2002. Professor Posner posed the question 35 years ago about whether there was a relationship between the two economic variables. The empirical results...

The Blinder Oaxaca decomposition method for defining wage differentials (generally referred to as discrimination) from the wage equations of two groups has had a wide degree of application. However, the decomposition measures can very dramatically depending on the definition of the non-discriminatory wage chosen for comparison. This paper uses a fo...

We run income inequality questionnaire in 17 universities in the USA. In the questionnaire we examine how students of economics compare inequality of income distributions, when transfers are made between income recipients. The results are analysed in terms of several personal characteristics of the respondents: family income, ethnicity, sex, geogra...

This paper introduces a simple new measure of inn ovation, the patent success ratio (PSR), namely the ratio of successful patent applications to total patent applications. It has been argued i n the extensive literature on innovation and technology p olicy that patents can serve as an accurate proxy f or innovative activity. This paper suggests tha...

This paper discusses the statistical issues that arise in conducting an economic damages analysis in the context of a litigation matter involving copyrights. Calculating damages in copyright cases turns out to be a natural application for econometric modelling methods. Surprisingly, elementary statistical issues can be a source of significant debat...

This paper analyzes inequality aversion across countries and identifies factors which explain the empirical heterogeneity observed across these countries. We do this by hypothesizing a ‘natural rate’ of subjective inequality across countries and solving for the explicit country-specific value of the inequality aversion parameter that is consistent...

This paper presents new estimates of worklife expectancy and introduces a new methodology for estimating the transition probabilities necessary to derive the worklife estimates. Our procedures incorporate significantly more information into the labor supply decision and result in more precise estimates of worklife expectancy.

The presence of threshold effects or convex damage functions implies that the composition of pollutants may be as important in the determination of health outcomes as the level of pollution. As such, greater specialization in particular environmental hazards may suggest increasing costs from pollution even if overall pollution levels are declining....

The international comparison of market structure is complicated by a lack of adequate and comparable data. This paper addresses the issues encountered in the construction of international market data from financial reports, and provides a method for the comparison of market concentration and industry diversity. A firm-level data set is constructed...

Measures of income inequality based on current income are well known to overstate lifetime income inequality for two reasons: intracohort mobility and the shape of the age-earnings profile. Utilizing the concept of age equivalence scales along with varying assumptions concerning the extent of intracohort mobility, the method presented bounds lifeti...

This paper examines some of the economic and econometric issues that arise in attempting to measure the degree of concentration in an industry and its dynamic evolution. A general axiomatic basis is developed. We offer new measures of concentration over aggregated periods of time and provide a sound statistical basis for inferences. Concentration i...

Stochastic dominance and Lorenz dominance are examples of orderings which require unanimous agreement among an infinite set
of indices. This paper considers various subsets of inequality measures that respect Lorenz dominance, and assesses the extent
to which a small number of indices can reproduce the Lorenz ordering. Using income data for 80 coun...

This paper describes a mode of economic analysis one can use to measure market power in the context of antitrust litigation in the steel plate industry. We describe our framework of analysis, our method of defining the relevant market and the indicia we examine to evaluate the degree of market power exercised by the Defendant in this market.

This study integrates two bodies of work to explore how changes in human capital have impacted the distribution of household permanent income. Introducing a human capital accumulation model, a framework is established - utilizing the special properties of the Gini coefficient - which maps changes in human capital into changes in the distribution of...

The concept of an environmental Gini coefficient has been used recently by several researchers. In line with Paglin's historical critique of the income Gini coefficient, an environmental Paglin-Gini is proposed and estimated, more carefully considering the notion of "perfect environmental inequality." Copyright 2002 by Taylor and Francis Group

In this note we establish Lorenz orderings for the generalized gamma distributions, the generalized beta of the first and second kind proposed by McDonald [Econometrica 52 (1984) 647], and some related submodels.

Using the properties of the Gini coefficient, a structural model is developed to assess the impact of uniform changes in environmental compliance costs on the distribution of per capita emissions across U.S. counties and states, a distribution that places a larger burden on minorities. Using data from the U.S. EPA's Toxic Release Inventory and thre...

Using ARIMA models and entropy, the dynamic evolution of several functions of aggregate income and other attributes of well-being is analysed for statistical 'similarity' in order to determine potentially distinct dimensions in multidimensional analysis of welfare and quality of life in the USA. The entropy metric compares entire distributions and...

This paper analyzes the relationship between the level of income inequality and the quality of the environment (as measured by sulfur dioxide air pollution levels) in the US for the years 1947–1996, using a vector error correction model. We find that air pollution levels do appear to be negatively significantly correlated with the level of income i...

Using ARIMA models and entropy, the dynamic evolution of several functions of aggregate income and other attributes of well-being is analyzed for statistical "similarity" in order to determine potentially distinct dimensions in multidimensional analysis of welfare and quality of life in the US. The entropy metric compares entire distributions and i...

A new method for building parametric-functional families of Lorenz curves, generated from an initial Lorenz curve (which satisfies some regularity conditions), is presented. The method is applied to the exponential family since they use the exponential Lorenz curves as their generating curves. Several properties of these families are analyzed, incl...

A new method for building parametric‐functional families of Lorenz curves, generated from an initial Lorenz curve (which satisfies some regularity conditions), is presented. The method is applied to the exponential family since they use the exponential Lorenz curves as their generating curves. Several properties of these families are analyzed, incl...

This study introduces a new approach that enables, for the first time, the estimation of national and personal human capital (HC) in money value. National HC is estimated on the basis of the life cycle mean earned income by age using sample survey data which are smoothed with local linear filters. Personal HC is treated as a dimensionless latent en...

This paper provides a survey of recent research on the US antitrust system. First we provide an overview of the US antitrust system, describing the roles of the US Department of Justice, the Federal Trade Commission and case law. Second, we provide a new econometric trend analysis on the enforcement of US antitrust law, showing that (1) enforcement...

This article investigates empirically the impact of real exchange-rate volatility on the export flows of 13 less developed countries (LDCs) over the quarterly period 1973-1996. Estimates of the cointegrating relations are obtained using Johansen's multivariate procedure. Estimates of the short-run dynamics are obtained for each country using the er...

In estimating a density function for the duration of unemployment, we consider two departures from what would be ideal conditions. If the so-called digit preference effect produces local distortion in observed samples, we can apply a maximum entropy density estimation method. To establish the functional form of the density, we maximize entropy subj...

The concepts of an environmental Gini coefficient along with a measure of ''pollution elasticity'' are introduced and used to analyze the distribution of pollution across U.S. states from 1988 -- 1996. The special properties of the Gini coefficient allow one to decompose overall pollution inequality into several components based on pollution type a...

The estimation of regression models subject to exact linear restrictions, is a widely applied technique, however, aside from simple examples, the reparameterization method is rarely employed except in the case of polynomial lags. We believe this is due to the lack of a general transformation method for changing from the definition of restrictions i...

This paper focuses on the problem of analyzing how factors impact hunger across states when hunger is ill-defined. Hunger (which is a latent variable) is presumed to depend on macroeconomic, legislation, policy, and demographic variables. Based on the Bayesian method of a posterior odds ratios, we find that the high school graduation rate appears t...

This paper provides a formal test of the null hypothesis of a unit root in the log-level of labor productivity against the alternative of linear trend stationarity with a one-time structural break in the level and slope of the trend at an a priori unknown date. Using some newly developed time series tests, the authors show that the log-level of pro...

A general method for building parametric-functional families of Lorenz curves, generated from an initial Lorenz curve (which satisfies some regularity conditions) is presented. It is shown that these families can be ordered in a manner which leads to a hierarchy of Lorenz curves. The method starts from a generating Lorenz curve L0(p) and builds the...

In abstract mathematics the Gini coefficient of concentration is one of several diverse measures of the degree of the concentration of a purely mathematical, or uninterpreted, distribution function. Camilo Dagum has provided a thoughtful perspective on analyzing the Gini that is unique among modern economists due to his personal relationship with G...

Whenever a neoclassical direct utility function is in close (even perfect) agreement with consumer behavior data, there is always an alternative direct utility function that agrees at least as closely with the same data. Existence of this equally well (if not better) fitting alternative to such a neoclassical direct utility function has considerabl...

The purpose of this chapter is to discuss parametric approximations to the Lorenz curve. There is a relatively large literature on distribution-free statistical Lorenz curves which have been used to analyze the welfare implications of Atkinson’s (1970) notion of Lorenz dominance. This work is discussed in other places in this book. The reader may t...

Articles on econometric methodology with special reference to the quantification of poverty and economic inequality are presented in this book. Poverty and inequality measurement present special problems to the econometrician, and most of these papers analyze how to attack those problems.
The topics and contributions in the book are a very good rep...

This paper considers the similarity between two measures of air pollution/quality control, on the one hand, and widely used indicators of life quality and welfare in the US, on the other. We use statistical cluster analysis based on information measures of similarity and distance. The results indicate the clusters of the US macroeconomic and qualit...

Economists, philosophers and public policy analysts have been concerned with income inequality issues for a century. In the beginning the attention this topic garnered was small, although a steady stream of interest was maintained. Beginning in the middle of the 1980’s, a shift in interest occurred, and a large number of economists began writing ab...

This chapter introduces two flexible functional form approaches to approximate Lorenz curves. The first approach expands the inverse function of an income distribution in an exponential polynomial series and derives the Lorenz curve from it. The required convexity condition can be imposed using a Bayesian method. The second approach approximates th...

The purpose of this chapter is to introduce a new method to compare income distributions. The methodology used here allows us to examine the relationship between the observed income graduation in 1974 and the observed income graduation in 1990 in order to obtain a different perspective on how (and perhaps why) income inequality in the U.S. increase...

Economists have been intrigued by the relationship between unobserved heterogeneity among individuals and the shape of the observed size distribution of earnings for over two hundred years. In this chapter, capability is a description of how an individual combines various attributes in the labor market to produce market outcomes such as observed ea...

Before using ONB and maximum entropy to analyze changes in inequality, this chapter develops the formal theory necessary to do so. That is, in this chapter, we develop mathematical and statistical properties of the maximum entropy (ME) method and then relate it to other well known flexible functional form approaches. First we shall explain what we...

The issue of hunger in America was considered resolved in the 1970s after attracting so much attention in the 1960’s. President Johnson’s War on Poverty was thought to have solved the problem once and for all. The poverty rate in the United States began to fall drastically with the onslaught of the Great Society Programs in the 1960’s and continued...

Presented are new methods and new empirical studies on the subject of income inequality and poverty. The purpose of the book is to explore new ways to analyze recent trends in income inequality and poverty, both from the perspective of quantifying poverty and inequality and quantifyig the impact of various factors on the trends in inequality and po...

The purpose of this paper is to examine the nature of the latent component in the distribution of earnings. The distribution of earnings can be deconvoluted into a latent and an observable component. The observed component is generated by those measurable characteristics of the individual that are interpreted as indicators of productivity. The late...

The U.S. poverty rate, like many other aggregate economic time series, shows considerable persistence. It is logical to consider the model involving a unit root to provide a good description of the data generation process for the poverty rate. We pretest for unit roots in annual U.S. poverty rate data for the postwar period to examine its long-run...

This paper analyzes the quality of life over time in the U.S. In this paper we propose a statistical cluster analysis method based on an informationbased measure. This method is then employed to cluster diverse attributes of the quality of life. Aggregate annual measures of welfare are computed for the U.S. for the period from 1915 to 1987.

This paper introduces two flexible form approaches to approximate Lorenz curves. The first approach expands the inverse function of an income distribution in an exponential polynomial series and derives the Lorenz curve from it. The required convexity condition can be imposed using a Bayesian method. The second approach approximates the Lorenz curv...

An algorithm to compute effective income tax progression is devised for use when taxes are a function of both money income and other socioeconomic attributes and the data is in grouped (summary) form suppressing non-income information. Effective progression can be evaluated at percentiles in the distribution of either money or equivalent income. Th...

The purpose of this paper is to examine the roles macroeconomic performance and policy have had in the increase in income inequality during the 1980s. We estimate a vector autoregression that includes measures of macroeconomic performance — such as unemployment and inflation — and of macroeconomic policy — such as money supply, transfer payments an...

This paper examines the relationship between the size distribution of income and productivity. We are particularly interested in whether or not exogeneity tests indicate that the inequality and productivity relationship runs both ways. Bivariate and multivariate causality tests and impulse response functions from a vector autoregression are calcula...

This paper tests the hypothesis that the time-series process of income inequality has experienced a structural break. The timing of the structural break is treated as an unknown parameter to be estimated from the data because it is not possible to associate a single episodic policy event with the break year and to avoid bias in favor of a unit root...

This paper examines the impact of macroeconomic variables on the level of income inequality in the United States. Here the authors introduce what is known as an index space representation to do so. In an index space representation, income shares are considered as a linear combination of what are known as index functions. An index function is a poly...

In this paper we examine the pay and performance of several hundred major league baseball players and adjust for productivity differences to see if there are any unexplained wage differentials that are correlated with race. The technique used is new to this literature. Frontier estimation, most often used in connection with firm level efficiency me...