The public demand for smoking bans

Smoking bans are gaining widespread support in the United States and other countries. While supporters argue that bans are necessary to resolve market failures associated with negative externalities, the Coase Theorem predicts that, under various conditions, private markets internalize negative externalities. We examine the smoking issue within the framework of the Coase Theorem and hypothesize that smoking bans misallocate air space resources shared by smokers and nonsmokers. Because smoking bans shift ownership of scarce resources, they are also hypothesized to transfer income from one party (smokers) to another party (nonsmokers). Supporting evidence for these hypotheses is provided by an examination of a comprehensive smoking ban imposed in San Luis Obispo, CA.     

Friends in high places: The wealth effects of JFK's assassination on the assets of LBJ's supporters

This paper uses anecdotal evidence to identify a group of firms that had significant ties to President Lyndon Johnson and determines the effect of Johnson's unexpected rise to the Presidency on the market value of these firms. The unexpected nature of President Kennedy's death eliminates the confounding event problem typically associated with election results. We are able to identify four separate portfolios of firms that had political ties to Lyndon Johnson. Our research suggests that the market expected significant benefits to accrue to these firms as a result of Johnson's becoming President. When Catholic John Kennedy and Johnson were running together in 1960 a joke hop-scotched around the parties in Texas and Washington that Kennedy had told Johnson, “Lyndon, when we get elected I'm going to dig a tunnel to the Vatican,” and Lyndon had replied, “That's OK with me as long as Brown & Root gets the contract” (Dugger, 1982: 286).