David A. Macpherson

Trinity University · Department of Economics

If enacted into law, the Fair Calculations Act would require forensic economists to ignore an injured party's gender when forecasting the loss in future earnings. We discuss how this would affect the size of awards for men and women, and some of the issues that would arise if the law is enacted. Of particular interest is the extent to which gender...

This study uses employment data on California county-industry pairs (CIPs) between 1990 and 2016 to test whether minimum wage increases caused employment growth to slow most in the CIPs with a large share of low wage workers. Evidence supports the hypothesis, and we use the estimates to simulate the effect of a 10% increase in the minimum wage. The...

This study examines the importance of incorporating age-earnings profiles into the estimation of future earnings. Using data from the 2000 Census of the Population and the 2001-2015 American Community Surveys, we estimate age-earnings profiles for seven different education groups after controlling for period and cohort effects. We compare estimates...

This study tests whether the employer mandate under the Affordable Care Act (ACA) increased involuntary part-time (IPT) employment. Using data from the Current Population Survey between 1994 and 2015, the authors find that IPT employment in 2015 exceeded predictions based on economic conditions and the structure of the labor market. Of greater impo...

This chapter recounts Lawrence R. Klein's story. Klien received the Nobel Prize in 1980. Klien was born in 1920, studied in Berkeley, and was a scholar at MIT. He worked with Paul Samuelson; and he pushed for the greater acceptance of macroeconomics in the academic world. He also worked on researching methodologies using the mathematical method. In...

This chapter is about George J. Stigler who was awarded the Nobel prize in 1982. Stigler was born in 1911. After earning his doctorate at the University of Chicago in 1938, he became a full professor and worked at several American universities. He then later became director for the Center for the Study of the Economy and the State, University of Ch...

This chapter describes the work of James M. Buchanan who received the Nobel Prize in 1986. Born in 1919, Buchanan received his doctorate from the University of Chicago in 1948. He was affiliated with several universities from 1948 until 1969 when he was appointed university distinguished professor at the Virginia Polytechnic Institute and State Uni...

This chapter considers the career of William F. Sharpe who received the Nobel Prize in 1990. Sharpe was born in 1934 and received his B.A., M.A., and Ph.D. all from the University of California. He started his career in 1961 as assistant professor at the University of Washington. From 1967 to 1973 he worked as a professor at several other universit...

This chapter outlines Peter A. Diamond's transition from a math major to a public policy analyst and public policy-oriented economic theorist. He was awarded the Nobel Prize in 2010. Diamond was born in 1940 and earned his doctorate in economics at MIT in 1963. He became professor in 1970 and he later became department chairman at MIT in 1985. Diam...

This chapter looks at the career of Myron S. Scholes who received the Nobel Prize in 1997. Born in 1941, Scholes went to McMaster University for his B.A. and completed his Ph.D. at the University of Chicago in 1969. He became a professor at the Graduate School of Business, University of Chicago, and a professor of finance, emeritus, at Stanford Uni...

This chapter describes the life of Paul A. Samuelson, who received the Nobel Prize in 1970. It examines the years of his development as an economist. He was born in 1915, and studied economics at the University of Chicago, Midway, in the 1930s, and received his Ph.D from Harvard in 1941. While still an undergraduate student, he discerned that mathe...

This chapter looks at the life of Franco Modigliani who was awarded the Nobel Prize in 1985. Born in Rome in 1918, he earned his academic degrees in 1944 from the University of Rome and from the New School for Social Research. He later became a professor of economics and finance at MIT, and later an institute professor, emeritus. He stayed in that...

This chapter looks at the work of Robert M. Solow, who was awarded the Nobel Prize in 1987. Solow was born in 1924 and recieved his B.A., M.A., and Ph.D.from Harvard University. He started out serving as assistant and associative professor of statistics. He was then appointed as professor of economics. He progressed to become institute professor an...

This chapter describes the life and work of Kenneth J. Arrow who was awarded the Nobel Prize in 1972. Arrow was born in 1921, attended City College, and received his Ph.D. from Columbia University. He held the position of professor of economics, statistics, and operations research at Stanford University from 1953–1968. He was interested in the hist...

This chapter looks at the career of Milton Friedman and those that were an influence on his becoming a Nobel Prize recipient in economics in 1976. Friedman was born in 1912 and went to Rutgers University. He would have entered the actuarial profession, but for two extraordinary teachers: Arthur F. Burns, who would become chairman of the Federal Res...

This chapter deals with the life and work of Douglass C. North who was awarded the Nobel Prize in 1993. North was born in 1920 and recieved his B.A. and Ph.D. from the University of California, Berkeley. He held several teaching jobs after graduating before becoming professor of economics at the University of Washington in 1960. He was appointed Sp...

This chapter deals with the work of Robert E. Lucas, Jr., who was awarded the Nobel Prize in 1995. Lucas was born in 1937 and earned his Ph.D. from the University of Chicago in 1964. He was a professor of economics at Carnegie Mellon University from 1970–74 and became a distinguished service professor of economics at the University of Chicago from...

This chapter presents the career of James J. Heckman as an economist and examines how he became a Nobel Prize awardee. Heckman was born in 1944 and earned his M.A. and Ph.D. from Princeton University. He was appointed professor of economics in 1977 and later served as a distinguished service professor of economics at the University of Chicago. His...

This chapter looks at the career of Eric S. Maskin, Nobel Prize recipient in 2007. Maskin was born in 1950 and completed his doctorate in mathematics at Harvard University in 1976. Ken Arrow, Leo Hurwicz, and Andy Postlewaite influenced Maskin's decision to switch his specialism to economics. He became a professor of economics at MIT in 1981 and an...

This chapter examines Thomas C. Schelling's career. Schelling received a Nobel Prize in 2005. He was born in 1921 and earned a Ph.D. in economics from Harvard. He worked as professor of economics at Yale and Harvard, and later served as a distinguished university professor, emeritus, at the University of Maryland. Schelling was involved in the desi...

This chapter describes the work of Gary S. Becker as an economist of diverse interests, and as a Nobel Prize awardee. Becker was born in 1930 and received his M.A. and Ph.D. from the University of Chicago. He was appointed professor of economics at Columbia University in 1960 and a senior research fellow at Hoover Institute (Stanford) in 1990, a po...

This chapter looks at the life of Edward C. Prescott who received a Nobel Prize in 2004. Prescott was born in 1940 and earned his Ph.D. at Carnegie Mellon University in 1967. He was a senior adviser at the Federal Reserve Bank of Minneapolis and later, chair and professor of economics at Arizona State University. Along with Robert Townsend, he exte...

This chapter examines the life of Edmund S. Phelps, another Nobel Prize awardee. Phelps was born in 1933 and received his Ph.D. f Yale in 1959. He was appointed professor of economics at the University of Pennsylvania in 1966 and served as a director at Columbia University until 2001. The chapter looks at his struggle to depart from the scientism a...

This chapter describes the work of Joseph E. Stiglitz as an economist. Stiglitz received a Nobel Prize in 2001. Stiglitz was born in 1943 and earned his Ph.D. at MIT in 1967. He was appointed professor of economics at Stanford University in 1974, and currently is a university professor at Columbia University. At MIT he tried to explain which assump...

This chapter describes the life philosophy of Paul Krugman as an economist. In 2008 he became a Nobel Prize recipient. Krugman was born in 1953 and earned his Ph.D. at MIT in 1977. He was appointed professor at MIT in 1996 and he moved to Princeton University in 2000. He was preoccupied with the Asian financial crisis of 1997–98 and warned that it...

This chapter looks at the career of Vernon L. Smith who received a Nobel Prize in 2002. Smith was born in 1927 and acquired his Ph.D. from Harvard University in 1955. He is currently professor of economics and law and chairman in finance and economics at Chapman University. He has made his career out of the study of markets. He wants to explain why...

This book is an informal history of modern economic thought as told through autobiographical chapters by twenty-three Nobel Prize laureates in Economics. The chapters not only provide unique insights into major economic ideas of our time but also shed light on the processes of intellectual discovery and creativity. This edition adds four recent Nob...

Few papers have analyzed the potential linkages between mispricing and the specific demographic and political traits of those impacted. The existence of mispricing may have adverse and potentially unintended impacts on certain demographic groups, leading to significant public policy concerns. The current study uses census tract data and rating fact...

This study argues that the promotion of union goals could have positive, negative, or neutral effects on risk adjusted return performance. Moreover, the union's ability and incentive to use pension assets to promote union goals will vary with the design of the pension. Using panel data on over 36,000 pension plans drawn from IRS Form 5500 filings,...

We compare the ability of two common compensation structures, efficiency wages (EW) and deferred compensation (DC), at inducing effort from workers. We test predictions on effort provision and elicit preferences between the two wage structures. The theoretical predictions on effort are generally well supported, although we find over-provision of ef...

According to federal law in 2013, employers can take a credit of up to $5.13 for tips received by workers in satisfying the minimum wage requirement of $7.25. This study uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment, hours, and earnings in th...

According to federal law in 2012, employers can take a credit of up to $5.13 for tips received by workers in satisfying the minimum wage requirement of $7.25. This study uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment and earnings in the U.S. r...

This study shows that the wage premium paid by large firms fell over the past 20 years and that the decline in the size premium has been most pronounced among the least educated work force. Empirical evidence supports several explanations for the decline in the size premium. First, there has been a convergence in the returns to worker characteristi...

This paper focuses on business interruption litigation and how to compute lost profits as a remedy. The main contribution of the paper is development of a general model of economic damages which assesses lost profits by measuring the incremental changes in revenue, variable costs, and fixed costs. Prior treatments can be understood as special cases...

Abstract Catastrophic risk financing is a critical issue for many states. At the epicenter of the debate is the role of the state government in helping homeowners finance catastrophic storm risk. In general, states have used a variety of pre- and postloss strategies, including rate regulation, residual markets, guaranty funds, and postloss assessme...

Catastrophic risk financing is a critical issue for many states. At the epicenter of the debate is the role of the state government in helping homeowners finance catastrophic storm risk. In general, states have used a variety of pre- and postloss strategies, including rate regulation, residual markets, guaranty funds, and postloss assessment struct...

Catastrophic risk financing is a critical issue for many states. At the epicenter of the debate is what the role of the state should be in helping homeowners finance catastrophic storm risk. In general, states have used a variety of pre-and post-loss strategies including rate regulation, residual markets, guaranty funds, and post-loss assessment st...

Since 1990, most pension plans have shifted the responsibility for directing pension assets to the employee. This study summarizes some of the possible explanations for this rapid shift toward participant direction and uses IRS Form 5500 data to investigate the effect of worker and plan characteristics on the likelihood of making a switch. The stud...

Catastrophic risk financing is a critical issue for many states. At the epicenter of the debate is the role of the state government in helping homeowners finance catastrophic storm risk. In general, states have used a variety of pre- and post-loss strategies, including rate regulation, residual markets, guaranty funds, and post-loss assessment stru...

Hurricane models are a significant tool used in estimating loss costs in catastrophe-prone areas. While the major hurricane loss cost models consider a consistent set of factors, there are variations in how the factors are treated in the models. This can lead to considerable variation in the modeled average annual losses (AALs), even at the exposur...

Hedonic pricing models that include a variable measuring the number of days a property was on the market produce varied coefficients, with most being negative. This study uses meta-regression to examine the relationship between selling price and time-on-the-market (TOM) for residential properties. The meta-regression model tests whether the TOM coe...

Since its inception, the effectiveness of no-fault legislation has been highly debated. While some research suggests that no-fault laws are effective in reducing costs, other evidence suggests that the current no-fault systems may not meet the original objectives. This study takes a closer look at the relation of no-fault legislation and premiums....

This paper uses simulation methods to determine the optimal mix of assets in a pension plan that has half of its assets in company stock. The optimal share is shown to vary with workers' risk aversion, non-pension wealth, and the financial characteristics of the underlying stock. Relative to a strategy that blends company stock with all bonds, ther...

This study examines the consequences of a pension fund investing in the stock of the sponsoring firm. Using a merger of data on pension asset holdings from IRS Form 5500 filings and financial data on the company's stock from CRSP, two broad questions are addressed: First, what factors influence the extent of a pension funds' investments in the empl...

This paper investigates trends in pension coverage rates with a focus on the source of low coverage rates among workers at small firms. An important finding is that, over the past 15 years, pension coverage rates rose most at small firms, primarily because the earnings of workers grew most among those at small firms. The study also examines how fir...

This paper examines the extant literature on horizontal and vertical inequity in the taxation of real property. Some major conclusions from the literature are: (a) horizontal inequity may occur from unequal knowledge of market participants, unequal negotiating skills of buyers and sellers, and actions by officials to limit property tax increases; (...

This study examines the capitalization of property taxes in real property. Capitalization theory would suggest that property values depend on the level of public services and taxes within a community. Differences in taxes relative to public services should be reflected in property values. Studies on property tax capitalization have essentially test...

Over the past 20 years, the defined benefit (DB) plan has been replaced by the defined contribution (DC) plan as the most popular form of pension plan. This study examines the likely consequences of this transformation for both the level and distribution of future pension wealth using a sample of DB and DC plans from the Survey of Consumer Finances...

All sectors of the real estate industry have seen remarkable growth over the past ten years with double-digit growth in both sales volume and selling price occurring in the past five years (Hagerty and Hilsenrath, 2006). As an indication of both the size of the title insurance industry and growth that this industry has experience, title insurance p...

Survival risk of new businesses is a challenging issue to incorporate into lost profits analyses used in litigation, an issue some financial experts and courts ignore rather than consider explicitly. This paper considers several ways to make qualitative and quantitative adjustments for the survival rates of new businesses. The paper concludes firm-...

This paper provides a meta regression analysis of the nine housing characteristics that are appear most often in hedonic pricing models for single-family housing: square footage, lot size, age, bedrooms, bathrooms, garage, swimming pool, fireplace, and air conditioning. Meta regression analysis is useful for comparing the estimated regression coeff...

Over the past 20 years, the defined benefit plan has been replaced by the defined contribution plan as the most popular form of pension plan. This study examines the likely consequences of this transformation for both the level and distribution of future retirement wealth using a sample of defined benefit and defined contribution plans from the Sur...

This paper uses data from the April 1993 Pension Supplements to the Current Population Survey to investigate the impact of employer matching and employee tenure on participation levels in 401(k) plans. While earlier studies examine similar issues, this study makes several advances. First, consistent with the theory that employers may use matching c...

A house is made up of many characteristics, all of which may affect its value. Hedonic regression analysis is typically used to estimate the marginal contribution of these individual characteristics. This study provides a review of recent studies that have used hedonic modeling to estimate house prices. The findings indicate that slanted versus fla...

Among recent retirees, women receive substantially less retirement income from Social Security and private pensions than men. Increases in women's labor market attachment and earnings relative to men over the past 50 years provide some optimism for an improvement in female retirement income, particularly for married women. This study shows that wom...

This study examines several issues surrounding the tendency for some pension funds to invest in their own company's stock. After reviewing the existing literature describing the benefits and costs of investing in company stock, the legislative environment surrounding company stock holdings is reviewed. Using data from Internal Revenue Service Form...

Among recent retirees, women receive substantially less retirement income from Social Security and private pensions than men. Increases in women's labor market attachment and earnings relative to men over the past 50 years provide some optimism for an improvement in female retirement income, particularly for married women. This study shows that wom...

This paper presents conflicting evidence on trends in private sector union and nonunion wages. The BLS quarterly Employment Cost Index (ECI), constructed from establishment surveys, uses fixed weights applied to wage changes among matched job quotes. The ECI shows a substantial decrease in wage growth for union relative to nonunion workers. The ann...

Assessing the price evolution of houses on the basis of average sales prices, as is current practice in Belgium, might be misleading due to changing characteristics of the houses sold in the periods observed. A hedonic index which takes into account changes in characteristics is more appropriate. We use the budget surveys of the Belgian Statistical...

Wages for black and white workers are substantially lower in occupations with a high density of black employees, following standard controls. Such correlations can exist absent discrimination or as a result of discrimination. In wage level equations, partial correlations fall sharply after controlling for occupational skills. Longitudinal estimates...

It is well established that Black and Hispanic workers accumulate leszs wealth for retirement than white workers. This study provides evidence on whether racial and ethnic differences in private pension coverage and benefit levels contribute to the wealth differentials. Using data from the Current Population Survey, Survey of Consumer Finances and...

This note describes the construction and provision of an Internet database providing private and public sector union membership, coverage, and density estimates compiled from the Current Population Survey (CPS). Economy-wide estimates are provided beginning in 1973, estimates by state, detailed industry, and detailed occupation begin in 1983, and e...

This study uses panel data to examine the wage and employment dynamics of minimum wage workers. Compared with workers earning above the minimum, minimum wage workers are much more likely to be new entrants or to exit the labor market. Changes in industry, occupation, and access to job training are particularly important to improving the wages of mi...

This paper provides a meta regression analysis of the nine housing characteristics that are appear most often in hedonic pricing models for single-family housing: square footage, lot size, age, bedrooms, bathrooms, garage, swimming pool, fireplace, and air conditioning. Meta regression analysis is useful for comparing the estimated regression coeff...

Affordable housing encompasses a substantial body of literature on a number of issues such as housing policy, affordable housing supply, barriers to homeownership, measuring affordability and housing goals. Some major conclusions from the literature are: (1) housing programs should be tailored to local housing conditions; (2) minorities and immigra...

This study uses panel data to examine the wage and employment dynamics of minimum wage workers. Compared with workers earning above the minimum, minimum wage workers are much more likely to be new entrants or to exit the labor market. Changes in industry, occupation, and access to job training are particularly important to improving the wages of mi...

This note describes the construction of time-consistent national and state-level estimates of union density for the years 1964 through 1999. Two sources of data are combined to produce these estimates, the Current Population Survey (CPS), a monthly survey of U.S. households, and the discontinued BLS publication Directory of National Unions and Empl...

This paper describes the construction of time-consistent national and state-level estimates of union density for the years 1964 through 2000. Two sources of data are combined to produce these estimates, the Current Population Survey (CPS), a monthly survey of U.S. households, and the discontinued BLS publication Directory of National Unions and Emp...

This study surveys active real estate brokers obtaining information on involvement in affinity programs and referral/relocation networks. Some results regarding affinity involvement are: (a) 13% of respondents reported affinity affilliations, 75% reported no affiliations, and 12% indicated plans to become involved within the next year; (b) about ha...

This study examines changes in house prices relative to the level of and change in percent racial/ethnic composition for certain counties in Tampa and Orlando, Florida. Repeat-sales transactions between 1971 and 1997 are used to create a constant quality price index for each city. The index for Tampa shows that the average annual house price apprec...

Data from the Current Population Surveys reveal that between 1979 and 1993 the gap in pension coverage between workers with less than 12 years of education and those with more than 16 years of education nearly tripled among men and more than quadrupled among women. The empirical analysis reveals that differences in labor market characteristics rela...

Transformation of the airline labor market continues long after deregulation. Airline wages changed little immediately following deregulation, implying either the absence of regulatory rents or maintenance of product market power and union strength. Analysis for 1973-97, however, indicates that prior to recent gains, the relative earnings of air tr...

This paper examines covariates of the occupational age structure and the openness of jobs to older workers. Using a large number of data sets, which together span the years 1983-98, the authors focus on the structure of compensation, job skill requirements, and working hours and conditions as the principal determinants of occupational access. Older...

An in-depth analysis was made of how quickly most people move up the wage scale from minimum wage, what factors influence their progress, and how minimum wage increases affect wage growth above the minimum. Very few workers remain at the minimum wage over the long run, according to this study of data drawn from the 1977-78 May Current Population Su...