No abstract

A model of risk reduction is used to analyze personal bankruptcy rates. The model shows how state and federal laws can affect the quantity of resources that lenders devote to reducing the risk of making bad loans. Unanticipated events cause changes in bankruptcy rates because they alter the costs and benefits of bankruptcy to both creditors and debtors. Results of other studies are shown to be consistent with this model. Data for 1980 are then used to test the model. Asset exemption laws have a significant impact on bankruptcy rates that is consistent with the model. Unanticipated economic events are also found to have significant effects on bankruptcy rates.

As state and local governments have devoted a rising share of their resources to crime-related programmes, concerns have arisen that spending on other programmes such as education will fall. Coupled with growing public concerns over performance of the public education system, and expectations that prison populations will rise as states pass and enforce more stringent sentencing laws, it is not surprising that some view the expansion of crime-related programmes as troublesome. One hypothesis is that education and crime-related programmes directly compete for government ex penditures so that what one programme gains the other must lose as in a ® xed-pie situation. A competing hypothesis is that spending on these two public programmes are unrelated and therefore higher crime-related spending may also lead to higher taxes or public debt issuance, or to reduction in spending on programmes other than education. We estimate a three equation model of spending on crime-related pro grammes, spending on education, and the crime rate from which we directly test whether spending on crime and education in¯uence each other.

Many countries are either introducing or proposing to introduce taxes on fat in foods as an attempt to curb growing rates of obesity. It is argued here that such taxes would be uneconomic, ineffective, discriminate racially, encourage rent‐seeking behaviour and result in various adverse unintended consequences.

This article explores a wide range of issues that proponents of setting minimum prices for alcohol must resolve before they can safely claim their proposals improve public health and decrease public health care costs. Problems range from inability to know ‘correct’ prices and why tacking on pricing regulations to markets already taxed makes sense, to various unintended adverse consequences such as generating higher demand for illegal drugs and alcohol. It also remains unclear why advocates would not prefer to raise taxes since this is the typical method that economists propose to correct markets in which harm spills over to innocent parties.