Economics Theses and Dissertations
Permanent URI for this collectionhttp://hdl.handle.net/1903/2763
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Item An Empirical Analysis of the Determinants of Initial Occupational Choice by Male High School Graduates(1986) Cox, Donald Francis; Brechling, Frank; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, MD)This dissertation consisted of an empirical analysis of the determinants or initial occupational choice by male high school graduates. The approach used was based on the theory of random utility. According to this approach, the individual selects a particular outcome from a set of possible outcomes based on both observed and unobserved characteristics of the individual and the particular possible outcome. In this analysis, the occupational choice set contained three possible outcomes. These possibilities were civilian sector employment, military service and college enrollment. For empirical analysis, a sample of 1,748 male high school graduates was drawn from the National Longitudinal Survey of Youths (1979-1981). The empirical model consisted of a mixed discrete/continuous simultaneous 4 equation system. Three estimation strategies were used. The first was a sample two stage logit/ordinary least squares procedure. The second was a modified two stage logit/ordinary least squares procedure that corrected for self-selectivity bias. the third strategy consisted of a modified two stage logit/ordinary least squares procedure that corrected for both self-selectivity and choice-based sampling bias. The estimation results indicate that the decision to enlist is most sensitive to the net income of the individual's family and the predicted civilian sector wage. The military experience of the individual's father and the desire to acquire additional training are also important in this decision. In addition, the differences in the estimates across the three estimation procedures illustrate the importance of correcting for sample biases.Item Fiscal Illusion in Public Finance: A Theoretical and Empirical Study(1989) Marshall, Frances Louise Lightsey; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md)This study of fiscal illusion begins by surveying existing studies of its nature and consequences: finding no consensus upon its definition proposes a comprehensive one: "the misperception by one or more individuals of the value of one or more fiscal parameters." No specifications of source, locus, nature, duration, variables affected, or direction of bias are presumed, and none are precluded. The issue of aggregation of individual perceptions, often preempted as definitional, is found to be crucial in interpreting the existing literature. The theoretical portion of the study uses the standard consumer choice model and the median voter model, again finding that the method of aggregating individual choices is crucial. It demonstrates that high average and total levels of fiscal illusion can be consistent with efficient social outcomes and that survey evidence is inappropriate for assessing the importance of fiscal illusion. It further finds that the impact of fiscal illusion on individual welfare provides a source of potential gain for agents who can dispel that illusion in individuals who may be decisive for the outcome of the collective choice process. An examination of the incentives of various agents to dispel illusion concludes that, though the existing literature evinces a recurrent concern that fiscal illusion results in misallocation of resources to and within the public sector, especially through the public officials' manipulation of citizens' perceptions, there exists a considerable array of forces that have significant power to limit the ability of such illusion to impose important burdens upon the electorate. The work concludes with an empirical study of the fiscal illusion hypothesis, in which estimates of the dollar magnitudes of the state tax "windfalls" resulting from the federal Tax Reform Act of 1986 are calculated and, in the estimated model, are found to exert no significant impact upon either the levels of state expenditures or changes in those levels. Because the windfalls are exogenous, this finding is free from the simultaneity issues that have compromised existing empirical studies of fiscal illusion. The results are consistent with the proposition that existing forces effectively limit the sway of fiscal illusion.