CROSS-SUBSIDY ANALYSIS WITH MORE THAN TWO SERVICES

Thirty years have passed since the publication of "Cross-Subsidization:Pricing in Public Enterprises." The article rigorously definedcross-subsidization and is now a standard citation of regulatorsand scholars addressing the pricing of regulated multiproductfirms. The incremental cost test and the stand-alone cost test,however, have often been misunderstood and misapplied. Thisarticle answers the most common questions that have arisen inthe application of these tests for cross-subsidization and correctsthe most common errors that have been committed in their application.     

Reconsidering Peer Influences on Delinquency: Do Less Proximate Contacts Matter?

Much research on adolescent delinquency pivots on the notion of peer influence. The peer effect that is typically employed emphasizes the transmission of behaviors and attitudes between adolescents who are directly linked. In this paper, we argue that to rely solely on those direct social ties to capture peer influence oversimplifies the realities of adolescent society. We use data from the National Longitudinal Study of Adolescent Health to show that indirect peer relations can exercise independent influences on adolescent delinquency. Adolescents actively draw on the examples of friends of friends, and even more distal peers, as they develop their repertoires of action and identity. We argue, however, that this behavior actually reflects adolescents’ ongoing struggle to impress their closest friends and to preserve their social circle. Indeed, the extent to which adolescents are willing to model the behavior of indirect contacts seems to decline as that behavior becomes more dissimilar from that of their close friends. Our findings dovetail with an account of the adolescent as a rational actor who struggles for social acceptance in a complex peer environment which offers conflicting behavioral models.

The increasing labor force participation of older workers and its effect on the income of the aged

The labor force participation rates of men and women aged 62-79 have notably increased since the mid-1990s. The result is a dramatic increase in the share of total money income attributable to earnings. For persons aged 65-69, the earnings share of total income increased from 28 percent in 1980 to 42 percent in 2009. For this age group in the late 1980s and early 1990s, Social Security benefits and earnings were roughly equal shares of total money income (about 30 percent); the earnings share is now more than 12 percentage points larger. When we focus on aged persons who receive Social Security benefits, earnings shares have increased markedly throughout the 62-79 age range since the early 1990s. We show that for aged persons with labor market earnings, those earnings have a large effect on their relative position in the distribution of annual money income of older Americans.