We estimate the importance of preference interdependence from consumption choices. Our strategy follows the literature that tests the constraints imposed by optimality in the evolution of individual consumption. We derive an Euler equation from a preference specification that allows for nonseparabilities across households and across time. The introduction of habits and envy places additional restrictions on the evolution of the optimal consumption path. We use a unique data set that follows a sample of 3,200 households for up to eight consecutive quarters to test these restrictions. Our estimates suggest that, if one defines utility over consumption services, a large fraction of these services is relative, with one fourth of the weight placed in the consumption of the reference group and more than one third of the weight placed on the agent's past consumption.

The literature on inventors has traditionally focused on entrepreneurs who exploited their ideas in their own businesses and on researchers who worked in large fi rms' R&D laboratories. For most of US history, however, it was as common for inventors to profi t from their ideas by selling off or licensing the patent rights. This article traces the different ways in which inventors resolved the information problems involved in marketing their patents. We focus in particular on the patent attorneys who emerged during the last third of the nineteenth century to help inventors fi nd buyers for their intellectual property. s the US patent system has come under increasing attack in recent years, critics have directed much of their ire at fi rms that buy up patents in order to profi t from selling off or licensing the rights. They view these businesses, which they variously call "non-practicing entities," "patent assertion entities," or more derogatively "trolls," as parasites that feed off the creativity of others, threatening legitimate The authors are grateful for the comments and suggestions they have received from Caro-

We are grateful to the late Kenneth Sokoloff for sharing with us his wisdom on the economics of invention. He has been the source of our inspiration on the subject matter. We have also benefited from comments offered by Leah Brooks, Jenifer Hunt, B. Zorina Khan, Naomi Lamoreaux, Mary MacKinnon, Daniel Parent and Jean-Laurent Rosenthal, as well as seminar participants at McGill and Toronto. We would like to thank Lingni Boon, Margaret Gales, Murlinda Kachuri, Mari-Ann Larsen-Volay and William Oman for their research assistance, as well as Yun Xia for his programming assistance in the CIPO data collection. Sutthiphisal acknowledges financial supports from Fonds québécois de la recherche sur la société et la culture (FQRSC) and the Social Sciences and Humanities Research Council of Canada (SSHRC). The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.© 2009 by Shih-tse Lo and Dhanoos Sutthiphisal. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. ABSTRACT A switch to a first-to-file patent regime from its first-to-invent system has become imminent for the U.S. To learn about probable effects of such a policy change, we examine a similar switch that occurred in Canada in 1989. We find that the switch failed to stimulate Canadian R&D efforts. Nor did it have any effects on overall patenting. However, the reforms had a small adverse effect on domestic-oriented industries and skewed the ownership structure of patented inventions towards large corporations, away from independent inventors and small businesses. These findings challenge the merits of adopting a first-to-file patent regime.

This article investigates the impact of “learning-by-producing” on inventive activity. From 1870 to 1910, in both emerging (electrical equipment and supplies) and maturing (shoes and textiles) industries, the geographic association between invention and production was rather weak. Regional shifts in production did not lead to corresponding increases in invention. The location of inventive activity tended to mirror that of individuals with advanced technical skills appropriate to each industry. Consequently, scholars may have overemphasized the importance of learning-by-producing in accounting for geographic differences in inventive activity, and underestimated the significance of technical skills amongst the population.

Technological progress has long been widely recognized as a crucial source of economic growth. Many countries have, accordingly, devoted considerable resources to promote more rapid generation and diffusion of technology in their economies. Yet recent studies reveal a persistence of stark contrasts across countries and geographic space more generally, not only in productivity, but also in the generation of new technological knowledge. What accounts for these geographic disparities is not well understood.