The illusion of fiscal illusion: Unsticking the flypaper effect

Recognizing that it is difficult to prove a negative, this paper marshals evidence in support of the hypothesis that the widely documented flypaper effect of federal grants to state and local governments is purely a statistical artifact. A review of previous studies and a monte carlo investigation suggest that the use of an inappropriate functional form may generate an illusory flypaper effect. A local expenditure equation is then estimated in alternative specifications with ten years of state level data. Empirical results confirm the sensitivity of the flypaper effect to specification, and tests of fit unambiguously favor one functional form. That specification yields no statistical evidence of a flypaper effect.     

A Case Study: Sale of Railway Consulting Services

Queensland Rail has developed a market niche in South East Asia, where it advises on profitable narrow-guage rail operations. This article outlines the extent of Queensland Rail involvement with the region and offers practical advice for commercial dealings with one important customer, Vietnam.     

Experimental psychologist as advocate or impartial educator

An important ethical issue surrounds the role of experimental psychologists as experts, namely, whether the expert psychologist should assume the role of advocate or impartial educator. In actual practice, a number of concrete dilemmas arise. These concern the external validity of the studies, the omission of information, and the conducting of special purpose studies, among others. Problems arise whether one plays the role of an advocate or an educator, for which the APA Ethical Principles provide little guidance. A Darwinian (survival of the fittest expert) approach is suggested as a temporary remedy.The author's research relevant to this article has been supported by grants from the National Science Foundation and the National Institute of Mental Health.