Experience

Publications

• Reapplying behavioral symmetry: public choice and choice architecture

  Public Choice

  New justifications for government intervention based on behavioral psychology rely on a behavioral asymmetry between expert policymakers and market participants. Public choice theory applied the behavioral symmetry assumption to policy making in order to illustrate how special interests corrupt the suppositions of benevolence on the part of policy makers. Cognitive problems associated with market choices have been used to argue for even more intervention. If behavioral symmetry is applied to the experts and not just to market participants, problems with this approach to public policy formation become clear. Manipulation, cognitive capture, and expert bias are among the problems associated with a behavioral theory of market failure. The application of behavioral symmetry to the expanding role of choice architecture will help to limit the bias in behavioral policy. Since experts are also subject to cognitive failures, policy must include an evaluation of expert error. Like the rent-seeking literature before it, a theory of cognitive capture points out the systematic problems with a theory of asymmetry between policy experts and citizens when it comes to policy making.

• Reapplying behavioral symmetry: public choice and choice architecture

  Public Choice

  New justifications for government intervention based on behavioral psychology rely on a behavioral asymmetry between expert policymakers and market participants. Public choice theory applied the behavioral symmetry assumption to policy making in order to illustrate how special interests corrupt the suppositions of benevolence on the part of policy makers. Cognitive problems associated with market choices have been used to argue for even more intervention. If behavioral symmetry is applied to the experts and not just to market participants, problems with this approach to public policy formation become clear. Manipulation, cognitive capture, and expert bias are among the problems associated with a behavioral theory of market failure. The application of behavioral symmetry to the expanding role of choice architecture will help to limit the bias in behavioral policy. Since experts are also subject to cognitive failures, policy must include an evaluation of expert error. Like the rent-seeking literature before it, a theory of cognitive capture points out the systematic problems with a theory of asymmetry between policy experts and citizens when it comes to policy making.

• Entrepreneurship: Catallactic and Constitutional Perspectives

  Review of Austrian Economics

  The most important distinction between Virginia political economy (VPE) and the other branches of public choice scholarship is a close affinity of the former to Austrian economics. Contributions in both the Virginia and the Vienna (Austrian) traditions have emphasized this connection and highlighted the analytical and ideological interdependencies of the two schools. This paper argues that an application of the Austrian theory of political entrepreneurship to the VPE framework can provide important insights regarding the direction of political change. Kirzner’s theory of entrepreneurship explains that coordination of individual action is possible where price signals provide information. When price signals are absent the entrepreneurial process breaks down. There is common ground between Kirznerian entrepreneurship and Buchanan’s creative action. Scholars at the intersection of the Virginia and the Vienna traditions can use this common ground to make pattern predictions regarding the direction of political change.

• Reapplying behavioral symmetry: public choice and choice architecture

  Public Choice

  New justifications for government intervention based on behavioral psychology rely on a behavioral asymmetry between expert policymakers and market participants. Public choice theory applied the behavioral symmetry assumption to policy making in order to illustrate how special interests corrupt the suppositions of benevolence on the part of policy makers. Cognitive problems associated with market choices have been used to argue for even more intervention. If behavioral symmetry is applied to the experts and not just to market participants, problems with this approach to public policy formation become clear. Manipulation, cognitive capture, and expert bias are among the problems associated with a behavioral theory of market failure. The application of behavioral symmetry to the expanding role of choice architecture will help to limit the bias in behavioral policy. Since experts are also subject to cognitive failures, policy must include an evaluation of expert error. Like the rent-seeking literature before it, a theory of cognitive capture points out the systematic problems with a theory of asymmetry between policy experts and citizens when it comes to policy making.

• Entrepreneurship: Catallactic and Constitutional Perspectives

  Review of Austrian Economics

  The most important distinction between Virginia political economy (VPE) and the other branches of public choice scholarship is a close affinity of the former to Austrian economics. Contributions in both the Virginia and the Vienna (Austrian) traditions have emphasized this connection and highlighted the analytical and ideological interdependencies of the two schools. This paper argues that an application of the Austrian theory of political entrepreneurship to the VPE framework can provide important insights regarding the direction of political change. Kirzner’s theory of entrepreneurship explains that coordination of individual action is possible where price signals provide information. When price signals are absent the entrepreneurial process breaks down. There is common ground between Kirznerian entrepreneurship and Buchanan’s creative action. Scholars at the intersection of the Virginia and the Vienna traditions can use this common ground to make pattern predictions regarding the direction of political change.

• "Income-Expenditure Elasticities of Less-Healthy Consumption Goods"

  Journal of Entrepreneurship and Public Policy

  Purpose To identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies, cakes, chips, candy, donuts, bacon, and carbonated soft drinks – varies across the income distribution by calculating their income-expenditure elasticites. Design/methodology/approach Data on 22,681 households from 2009-2012 from the Bureau of Labor Statistics’ Consumer Expenditure Survey were used. The data were analyzed using ordinary least squares regressions and Cragg’s double hurdle model which integrates (i) a binary model to determine the decision to consume and (ii) a truncated normal model to estimate the effects for conditional (y > 0) consumption. Findings Income had the greatest effect on expenditures for alcohol (0.314), food away from home (0.295), and fast food (0.284). A one percentage-point increase in income (approximately $428 at the mean) translated into a 0.314 percentage-point increase in spending on alcoholic beverages (approximately $1 annually at the mean). Income had the smallest influence on tobacco expenditures (0.007) and donut expenditures (-0.009). Research limitations/implications Percentage of a household’s discretionary budget spent on the studied goods falls substantially as income gets larger. Policies targeting the consumption of such goods will disproportionately impact lower-income households. Originality/value This is the first manuscript to calculate income-expenditure elasticities for the goods studied. The results allow for a direct analysis of targeted consumption policy on household budgets across the income distribution.

• Reapplying behavioral symmetry: public choice and choice architecture

  Public Choice

  New justifications for government intervention based on behavioral psychology rely on a behavioral asymmetry between expert policymakers and market participants. Public choice theory applied the behavioral symmetry assumption to policy making in order to illustrate how special interests corrupt the suppositions of benevolence on the part of policy makers. Cognitive problems associated with market choices have been used to argue for even more intervention. If behavioral symmetry is applied to the experts and not just to market participants, problems with this approach to public policy formation become clear. Manipulation, cognitive capture, and expert bias are among the problems associated with a behavioral theory of market failure. The application of behavioral symmetry to the expanding role of choice architecture will help to limit the bias in behavioral policy. Since experts are also subject to cognitive failures, policy must include an evaluation of expert error. Like the rent-seeking literature before it, a theory of cognitive capture points out the systematic problems with a theory of asymmetry between policy experts and citizens when it comes to policy making.

• Entrepreneurship: Catallactic and Constitutional Perspectives

  Review of Austrian Economics

  The most important distinction between Virginia political economy (VPE) and the other branches of public choice scholarship is a close affinity of the former to Austrian economics. Contributions in both the Virginia and the Vienna (Austrian) traditions have emphasized this connection and highlighted the analytical and ideological interdependencies of the two schools. This paper argues that an application of the Austrian theory of political entrepreneurship to the VPE framework can provide important insights regarding the direction of political change. Kirzner’s theory of entrepreneurship explains that coordination of individual action is possible where price signals provide information. When price signals are absent the entrepreneurial process breaks down. There is common ground between Kirznerian entrepreneurship and Buchanan’s creative action. Scholars at the intersection of the Virginia and the Vienna traditions can use this common ground to make pattern predictions regarding the direction of political change.

• "Income-Expenditure Elasticities of Less-Healthy Consumption Goods"

  Journal of Entrepreneurship and Public Policy

  Purpose To identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies, cakes, chips, candy, donuts, bacon, and carbonated soft drinks – varies across the income distribution by calculating their income-expenditure elasticites. Design/methodology/approach Data on 22,681 households from 2009-2012 from the Bureau of Labor Statistics’ Consumer Expenditure Survey were used. The data were analyzed using ordinary least squares regressions and Cragg’s double hurdle model which integrates (i) a binary model to determine the decision to consume and (ii) a truncated normal model to estimate the effects for conditional (y > 0) consumption. Findings Income had the greatest effect on expenditures for alcohol (0.314), food away from home (0.295), and fast food (0.284). A one percentage-point increase in income (approximately $428 at the mean) translated into a 0.314 percentage-point increase in spending on alcoholic beverages (approximately $1 annually at the mean). Income had the smallest influence on tobacco expenditures (0.007) and donut expenditures (-0.009). Research limitations/implications Percentage of a household’s discretionary budget spent on the studied goods falls substantially as income gets larger. Policies targeting the consumption of such goods will disproportionately impact lower-income households. Originality/value This is the first manuscript to calculate income-expenditure elasticities for the goods studied. The results allow for a direct analysis of targeted consumption policy on household budgets across the income distribution.

• Sin Taxes and Sindustry: Revenue, Paternalism and Political Interest

  The Independent Review

  "The new paternalists advocate using excise taxes to discourage “undesirable” behavior and to offset costs imposed on third parties. But using tax policy to socially engineer behavior gives rise to another social pathology: wasteful political entrepreneurship."

• Reapplying behavioral symmetry: public choice and choice architecture

  Public Choice

  New justifications for government intervention based on behavioral psychology rely on a behavioral asymmetry between expert policymakers and market participants. Public choice theory applied the behavioral symmetry assumption to policy making in order to illustrate how special interests corrupt the suppositions of benevolence on the part of policy makers. Cognitive problems associated with market choices have been used to argue for even more intervention. If behavioral symmetry is applied to the experts and not just to market participants, problems with this approach to public policy formation become clear. Manipulation, cognitive capture, and expert bias are among the problems associated with a behavioral theory of market failure. The application of behavioral symmetry to the expanding role of choice architecture will help to limit the bias in behavioral policy. Since experts are also subject to cognitive failures, policy must include an evaluation of expert error. Like the rent-seeking literature before it, a theory of cognitive capture points out the systematic problems with a theory of asymmetry between policy experts and citizens when it comes to policy making.

• Entrepreneurship: Catallactic and Constitutional Perspectives

  Review of Austrian Economics

  The most important distinction between Virginia political economy (VPE) and the other branches of public choice scholarship is a close affinity of the former to Austrian economics. Contributions in both the Virginia and the Vienna (Austrian) traditions have emphasized this connection and highlighted the analytical and ideological interdependencies of the two schools. This paper argues that an application of the Austrian theory of political entrepreneurship to the VPE framework can provide important insights regarding the direction of political change. Kirzner’s theory of entrepreneurship explains that coordination of individual action is possible where price signals provide information. When price signals are absent the entrepreneurial process breaks down. There is common ground between Kirznerian entrepreneurship and Buchanan’s creative action. Scholars at the intersection of the Virginia and the Vienna traditions can use this common ground to make pattern predictions regarding the direction of political change.

• "Income-Expenditure Elasticities of Less-Healthy Consumption Goods"

  Journal of Entrepreneurship and Public Policy

  Purpose To identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies, cakes, chips, candy, donuts, bacon, and carbonated soft drinks – varies across the income distribution by calculating their income-expenditure elasticites. Design/methodology/approach Data on 22,681 households from 2009-2012 from the Bureau of Labor Statistics’ Consumer Expenditure Survey were used. The data were analyzed using ordinary least squares regressions and Cragg’s double hurdle model which integrates (i) a binary model to determine the decision to consume and (ii) a truncated normal model to estimate the effects for conditional (y > 0) consumption. Findings Income had the greatest effect on expenditures for alcohol (0.314), food away from home (0.295), and fast food (0.284). A one percentage-point increase in income (approximately $428 at the mean) translated into a 0.314 percentage-point increase in spending on alcoholic beverages (approximately $1 annually at the mean). Income had the smallest influence on tobacco expenditures (0.007) and donut expenditures (-0.009). Research limitations/implications Percentage of a household’s discretionary budget spent on the studied goods falls substantially as income gets larger. Policies targeting the consumption of such goods will disproportionately impact lower-income households. Originality/value This is the first manuscript to calculate income-expenditure elasticities for the goods studied. The results allow for a direct analysis of targeted consumption policy on household budgets across the income distribution.

• Sin Taxes and Sindustry: Revenue, Paternalism and Political Interest

  The Independent Review

  "The new paternalists advocate using excise taxes to discourage “undesirable” behavior and to offset costs imposed on third parties. But using tax policy to socially engineer behavior gives rise to another social pathology: wasteful political entrepreneurship."

• Institutional Change and the Importance of Understanding Shared Mental Models

  Kyklos

  Arthur Denzau and Douglass North’s paper “Shared Mental Models: Ideologies and Institutions” seeks to explain differences in economic performance across time and space recognizing that under conditions of uncertainty actors base their decisions “in part upon […] myths, dogmas, ideologies, and ‘half-baked’ theories.” The model Denzau and North develop is firmly rooted in the orthodoxy of economics but emphasizes the significance of shared ideologies and ideas in driving economic change. In this paper, we discuss how the legacy of Denzau and North (1994) should be applied to current and future economic inquiries and, in particular, how it might inform work in development economics, behavioral economics, and in the study of the effects of social norms on economic outcomes. We argue that a perspective that emphasizes the role of the economic actor as entrepreneur in the context of shared mental models and institutions can improve economic analysis in those areas of research, which currently focus on the economist as exogenous policy expert.

• Reapplying behavioral symmetry: public choice and choice architecture

  Public Choice

  New justifications for government intervention based on behavioral psychology rely on a behavioral asymmetry between expert policymakers and market participants. Public choice theory applied the behavioral symmetry assumption to policy making in order to illustrate how special interests corrupt the suppositions of benevolence on the part of policy makers. Cognitive problems associated with market choices have been used to argue for even more intervention. If behavioral symmetry is applied to the experts and not just to market participants, problems with this approach to public policy formation become clear. Manipulation, cognitive capture, and expert bias are among the problems associated with a behavioral theory of market failure. The application of behavioral symmetry to the expanding role of choice architecture will help to limit the bias in behavioral policy. Since experts are also subject to cognitive failures, policy must include an evaluation of expert error. Like the rent-seeking literature before it, a theory of cognitive capture points out the systematic problems with a theory of asymmetry between policy experts and citizens when it comes to policy making.

• Entrepreneurship: Catallactic and Constitutional Perspectives

  Review of Austrian Economics

  The most important distinction between Virginia political economy (VPE) and the other branches of public choice scholarship is a close affinity of the former to Austrian economics. Contributions in both the Virginia and the Vienna (Austrian) traditions have emphasized this connection and highlighted the analytical and ideological interdependencies of the two schools. This paper argues that an application of the Austrian theory of political entrepreneurship to the VPE framework can provide important insights regarding the direction of political change. Kirzner’s theory of entrepreneurship explains that coordination of individual action is possible where price signals provide information. When price signals are absent the entrepreneurial process breaks down. There is common ground between Kirznerian entrepreneurship and Buchanan’s creative action. Scholars at the intersection of the Virginia and the Vienna traditions can use this common ground to make pattern predictions regarding the direction of political change.

• "Income-Expenditure Elasticities of Less-Healthy Consumption Goods"

  Journal of Entrepreneurship and Public Policy

  Purpose To identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies, cakes, chips, candy, donuts, bacon, and carbonated soft drinks – varies across the income distribution by calculating their income-expenditure elasticites. Design/methodology/approach Data on 22,681 households from 2009-2012 from the Bureau of Labor Statistics’ Consumer Expenditure Survey were used. The data were analyzed using ordinary least squares regressions and Cragg’s double hurdle model which integrates (i) a binary model to determine the decision to consume and (ii) a truncated normal model to estimate the effects for conditional (y > 0) consumption. Findings Income had the greatest effect on expenditures for alcohol (0.314), food away from home (0.295), and fast food (0.284). A one percentage-point increase in income (approximately $428 at the mean) translated into a 0.314 percentage-point increase in spending on alcoholic beverages (approximately $1 annually at the mean). Income had the smallest influence on tobacco expenditures (0.007) and donut expenditures (-0.009). Research limitations/implications Percentage of a household’s discretionary budget spent on the studied goods falls substantially as income gets larger. Policies targeting the consumption of such goods will disproportionately impact lower-income households. Originality/value This is the first manuscript to calculate income-expenditure elasticities for the goods studied. The results allow for a direct analysis of targeted consumption policy on household budgets across the income distribution.

• Sin Taxes and Sindustry: Revenue, Paternalism and Political Interest

  The Independent Review

  "The new paternalists advocate using excise taxes to discourage “undesirable” behavior and to offset costs imposed on third parties. But using tax policy to socially engineer behavior gives rise to another social pathology: wasteful political entrepreneurship."

• Institutional Change and the Importance of Understanding Shared Mental Models

  Kyklos

  Arthur Denzau and Douglass North’s paper “Shared Mental Models: Ideologies and Institutions” seeks to explain differences in economic performance across time and space recognizing that under conditions of uncertainty actors base their decisions “in part upon […] myths, dogmas, ideologies, and ‘half-baked’ theories.” The model Denzau and North develop is firmly rooted in the orthodoxy of economics but emphasizes the significance of shared ideologies and ideas in driving economic change. In this paper, we discuss how the legacy of Denzau and North (1994) should be applied to current and future economic inquiries and, in particular, how it might inform work in development economics, behavioral economics, and in the study of the effects of social norms on economic outcomes. We argue that a perspective that emphasizes the role of the economic actor as entrepreneur in the context of shared mental models and institutions can improve economic analysis in those areas of research, which currently focus on the economist as exogenous policy expert.

• The Rise of the Regulatory State Institutional Entrepreneurship and the Decline of Markets for Blood

  The Independent Review

  The regulatory state, some writers claim, arose in response to failures of the legal system. In the case of blood markets, however, regulation came about not from public outcry caused by faulty laws and courts, but from lobbying by interest groups who expected special benefits from regulation.

• Reapplying behavioral symmetry: public choice and choice architecture

  Public Choice

  New justifications for government intervention based on behavioral psychology rely on a behavioral asymmetry between expert policymakers and market participants. Public choice theory applied the behavioral symmetry assumption to policy making in order to illustrate how special interests corrupt the suppositions of benevolence on the part of policy makers. Cognitive problems associated with market choices have been used to argue for even more intervention. If behavioral symmetry is applied to the experts and not just to market participants, problems with this approach to public policy formation become clear. Manipulation, cognitive capture, and expert bias are among the problems associated with a behavioral theory of market failure. The application of behavioral symmetry to the expanding role of choice architecture will help to limit the bias in behavioral policy. Since experts are also subject to cognitive failures, policy must include an evaluation of expert error. Like the rent-seeking literature before it, a theory of cognitive capture points out the systematic problems with a theory of asymmetry between policy experts and citizens when it comes to policy making.

• Entrepreneurship: Catallactic and Constitutional Perspectives

  Review of Austrian Economics

  The most important distinction between Virginia political economy (VPE) and the other branches of public choice scholarship is a close affinity of the former to Austrian economics. Contributions in both the Virginia and the Vienna (Austrian) traditions have emphasized this connection and highlighted the analytical and ideological interdependencies of the two schools. This paper argues that an application of the Austrian theory of political entrepreneurship to the VPE framework can provide important insights regarding the direction of political change. Kirzner’s theory of entrepreneurship explains that coordination of individual action is possible where price signals provide information. When price signals are absent the entrepreneurial process breaks down. There is common ground between Kirznerian entrepreneurship and Buchanan’s creative action. Scholars at the intersection of the Virginia and the Vienna traditions can use this common ground to make pattern predictions regarding the direction of political change.

• "Income-Expenditure Elasticities of Less-Healthy Consumption Goods"

  Journal of Entrepreneurship and Public Policy

  Purpose To identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies, cakes, chips, candy, donuts, bacon, and carbonated soft drinks – varies across the income distribution by calculating their income-expenditure elasticites. Design/methodology/approach Data on 22,681 households from 2009-2012 from the Bureau of Labor Statistics’ Consumer Expenditure Survey were used. The data were analyzed using ordinary least squares regressions and Cragg’s double hurdle model which integrates (i) a binary model to determine the decision to consume and (ii) a truncated normal model to estimate the effects for conditional (y > 0) consumption. Findings Income had the greatest effect on expenditures for alcohol (0.314), food away from home (0.295), and fast food (0.284). A one percentage-point increase in income (approximately $428 at the mean) translated into a 0.314 percentage-point increase in spending on alcoholic beverages (approximately $1 annually at the mean). Income had the smallest influence on tobacco expenditures (0.007) and donut expenditures (-0.009). Research limitations/implications Percentage of a household’s discretionary budget spent on the studied goods falls substantially as income gets larger. Policies targeting the consumption of such goods will disproportionately impact lower-income households. Originality/value This is the first manuscript to calculate income-expenditure elasticities for the goods studied. The results allow for a direct analysis of targeted consumption policy on household budgets across the income distribution.

• Sin Taxes and Sindustry: Revenue, Paternalism and Political Interest

  The Independent Review

  "The new paternalists advocate using excise taxes to discourage “undesirable” behavior and to offset costs imposed on third parties. But using tax policy to socially engineer behavior gives rise to another social pathology: wasteful political entrepreneurship."

• Institutional Change and the Importance of Understanding Shared Mental Models

  Kyklos

  Arthur Denzau and Douglass North’s paper “Shared Mental Models: Ideologies and Institutions” seeks to explain differences in economic performance across time and space recognizing that under conditions of uncertainty actors base their decisions “in part upon […] myths, dogmas, ideologies, and ‘half-baked’ theories.” The model Denzau and North develop is firmly rooted in the orthodoxy of economics but emphasizes the significance of shared ideologies and ideas in driving economic change. In this paper, we discuss how the legacy of Denzau and North (1994) should be applied to current and future economic inquiries and, in particular, how it might inform work in development economics, behavioral economics, and in the study of the effects of social norms on economic outcomes. We argue that a perspective that emphasizes the role of the economic actor as entrepreneur in the context of shared mental models and institutions can improve economic analysis in those areas of research, which currently focus on the economist as exogenous policy expert.

• The Rise of the Regulatory State Institutional Entrepreneurship and the Decline of Markets for Blood

  The Independent Review

  The regulatory state, some writers claim, arose in response to failures of the legal system. In the case of blood markets, however, regulation came about not from public outcry caused by faulty laws and courts, but from lobbying by interest groups who expected special benefits from regulation.

• Encouraging a Productive Research Agenda: Peter Boettke and the Devil's Test"

  Journal of Private Enterprise

  Peter Boettke is the single most effective graduate mentor in the Austrian economics tradition today. One of the many teaching tools Boettke uses is the devil’s test. The test is an effective teaching tool because it clarifies what the goals of the political economist as critic can be. Boettke teaches his students that much can be done to clarify the logic of incentives, which in turn clarifies the debate in political advocacy. We argue that the devil’s test is a good example of how Boettke enables students to become not only effective teachers but also productive scholars. The analytical framework of the heuristic enables students to analyze complex policy questions in a rigorous way. Many of Boettke’s students have successfully used the distinction between motivational assumptions and causal processes, which is implicit in the devil’s test, in their research.

• Reapplying behavioral symmetry: public choice and choice architecture

  Public Choice

  New justifications for government intervention based on behavioral psychology rely on a behavioral asymmetry between expert policymakers and market participants. Public choice theory applied the behavioral symmetry assumption to policy making in order to illustrate how special interests corrupt the suppositions of benevolence on the part of policy makers. Cognitive problems associated with market choices have been used to argue for even more intervention. If behavioral symmetry is applied to the experts and not just to market participants, problems with this approach to public policy formation become clear. Manipulation, cognitive capture, and expert bias are among the problems associated with a behavioral theory of market failure. The application of behavioral symmetry to the expanding role of choice architecture will help to limit the bias in behavioral policy. Since experts are also subject to cognitive failures, policy must include an evaluation of expert error. Like the rent-seeking literature before it, a theory of cognitive capture points out the systematic problems with a theory of asymmetry between policy experts and citizens when it comes to policy making.

• Entrepreneurship: Catallactic and Constitutional Perspectives

  Review of Austrian Economics

  The most important distinction between Virginia political economy (VPE) and the other branches of public choice scholarship is a close affinity of the former to Austrian economics. Contributions in both the Virginia and the Vienna (Austrian) traditions have emphasized this connection and highlighted the analytical and ideological interdependencies of the two schools. This paper argues that an application of the Austrian theory of political entrepreneurship to the VPE framework can provide important insights regarding the direction of political change. Kirzner’s theory of entrepreneurship explains that coordination of individual action is possible where price signals provide information. When price signals are absent the entrepreneurial process breaks down. There is common ground between Kirznerian entrepreneurship and Buchanan’s creative action. Scholars at the intersection of the Virginia and the Vienna traditions can use this common ground to make pattern predictions regarding the direction of political change.

• "Income-Expenditure Elasticities of Less-Healthy Consumption Goods"

  Journal of Entrepreneurship and Public Policy

  Purpose To identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies, cakes, chips, candy, donuts, bacon, and carbonated soft drinks – varies across the income distribution by calculating their income-expenditure elasticites. Design/methodology/approach Data on 22,681 households from 2009-2012 from the Bureau of Labor Statistics’ Consumer Expenditure Survey were used. The data were analyzed using ordinary least squares regressions and Cragg’s double hurdle model which integrates (i) a binary model to determine the decision to consume and (ii) a truncated normal model to estimate the effects for conditional (y > 0) consumption. Findings Income had the greatest effect on expenditures for alcohol (0.314), food away from home (0.295), and fast food (0.284). A one percentage-point increase in income (approximately $428 at the mean) translated into a 0.314 percentage-point increase in spending on alcoholic beverages (approximately $1 annually at the mean). Income had the smallest influence on tobacco expenditures (0.007) and donut expenditures (-0.009). Research limitations/implications Percentage of a household’s discretionary budget spent on the studied goods falls substantially as income gets larger. Policies targeting the consumption of such goods will disproportionately impact lower-income households. Originality/value This is the first manuscript to calculate income-expenditure elasticities for the goods studied. The results allow for a direct analysis of targeted consumption policy on household budgets across the income distribution.

• Sin Taxes and Sindustry: Revenue, Paternalism and Political Interest

  The Independent Review

  "The new paternalists advocate using excise taxes to discourage “undesirable” behavior and to offset costs imposed on third parties. But using tax policy to socially engineer behavior gives rise to another social pathology: wasteful political entrepreneurship."

• Institutional Change and the Importance of Understanding Shared Mental Models

  Kyklos

  Arthur Denzau and Douglass North’s paper “Shared Mental Models: Ideologies and Institutions” seeks to explain differences in economic performance across time and space recognizing that under conditions of uncertainty actors base their decisions “in part upon […] myths, dogmas, ideologies, and ‘half-baked’ theories.” The model Denzau and North develop is firmly rooted in the orthodoxy of economics but emphasizes the significance of shared ideologies and ideas in driving economic change. In this paper, we discuss how the legacy of Denzau and North (1994) should be applied to current and future economic inquiries and, in particular, how it might inform work in development economics, behavioral economics, and in the study of the effects of social norms on economic outcomes. We argue that a perspective that emphasizes the role of the economic actor as entrepreneur in the context of shared mental models and institutions can improve economic analysis in those areas of research, which currently focus on the economist as exogenous policy expert.

• The Rise of the Regulatory State Institutional Entrepreneurship and the Decline of Markets for Blood

  The Independent Review

  The regulatory state, some writers claim, arose in response to failures of the legal system. In the case of blood markets, however, regulation came about not from public outcry caused by faulty laws and courts, but from lobbying by interest groups who expected special benefits from regulation.

• Encouraging a Productive Research Agenda: Peter Boettke and the Devil's Test"

  Journal of Private Enterprise

  Peter Boettke is the single most effective graduate mentor in the Austrian economics tradition today. One of the many teaching tools Boettke uses is the devil’s test. The test is an effective teaching tool because it clarifies what the goals of the political economist as critic can be. Boettke teaches his students that much can be done to clarify the logic of incentives, which in turn clarifies the debate in political advocacy. We argue that the devil’s test is a good example of how Boettke enables students to become not only effective teachers but also productive scholars. The analytical framework of the heuristic enables students to analyze complex policy questions in a rigorous way. Many of Boettke’s students have successfully used the distinction between motivational assumptions and causal processes, which is implicit in the devil’s test, in their research.

• Technological Change and the Lowest Common Denominator Problem: An Analysis of Oregon's VMT tax experiment

  Journal of Town and City Management

• Reapplying behavioral symmetry: public choice and choice architecture

  Public Choice

  New justifications for government intervention based on behavioral psychology rely on a behavioral asymmetry between expert policymakers and market participants. Public choice theory applied the behavioral symmetry assumption to policy making in order to illustrate how special interests corrupt the suppositions of benevolence on the part of policy makers. Cognitive problems associated with market choices have been used to argue for even more intervention. If behavioral symmetry is applied to the experts and not just to market participants, problems with this approach to public policy formation become clear. Manipulation, cognitive capture, and expert bias are among the problems associated with a behavioral theory of market failure. The application of behavioral symmetry to the expanding role of choice architecture will help to limit the bias in behavioral policy. Since experts are also subject to cognitive failures, policy must include an evaluation of expert error. Like the rent-seeking literature before it, a theory of cognitive capture points out the systematic problems with a theory of asymmetry between policy experts and citizens when it comes to policy making.

• Entrepreneurship: Catallactic and Constitutional Perspectives

  Review of Austrian Economics

  The most important distinction between Virginia political economy (VPE) and the other branches of public choice scholarship is a close affinity of the former to Austrian economics. Contributions in both the Virginia and the Vienna (Austrian) traditions have emphasized this connection and highlighted the analytical and ideological interdependencies of the two schools. This paper argues that an application of the Austrian theory of political entrepreneurship to the VPE framework can provide important insights regarding the direction of political change. Kirzner’s theory of entrepreneurship explains that coordination of individual action is possible where price signals provide information. When price signals are absent the entrepreneurial process breaks down. There is common ground between Kirznerian entrepreneurship and Buchanan’s creative action. Scholars at the intersection of the Virginia and the Vienna traditions can use this common ground to make pattern predictions regarding the direction of political change.

• "Income-Expenditure Elasticities of Less-Healthy Consumption Goods"

  Journal of Entrepreneurship and Public Policy

  Purpose To identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies, cakes, chips, candy, donuts, bacon, and carbonated soft drinks – varies across the income distribution by calculating their income-expenditure elasticites. Design/methodology/approach Data on 22,681 households from 2009-2012 from the Bureau of Labor Statistics’ Consumer Expenditure Survey were used. The data were analyzed using ordinary least squares regressions and Cragg’s double hurdle model which integrates (i) a binary model to determine the decision to consume and (ii) a truncated normal model to estimate the effects for conditional (y > 0) consumption. Findings Income had the greatest effect on expenditures for alcohol (0.314), food away from home (0.295), and fast food (0.284). A one percentage-point increase in income (approximately $428 at the mean) translated into a 0.314 percentage-point increase in spending on alcoholic beverages (approximately $1 annually at the mean). Income had the smallest influence on tobacco expenditures (0.007) and donut expenditures (-0.009). Research limitations/implications Percentage of a household’s discretionary budget spent on the studied goods falls substantially as income gets larger. Policies targeting the consumption of such goods will disproportionately impact lower-income households. Originality/value This is the first manuscript to calculate income-expenditure elasticities for the goods studied. The results allow for a direct analysis of targeted consumption policy on household budgets across the income distribution.

• Sin Taxes and Sindustry: Revenue, Paternalism and Political Interest

  The Independent Review

  "The new paternalists advocate using excise taxes to discourage “undesirable” behavior and to offset costs imposed on third parties. But using tax policy to socially engineer behavior gives rise to another social pathology: wasteful political entrepreneurship."

• Institutional Change and the Importance of Understanding Shared Mental Models

  Kyklos

  Arthur Denzau and Douglass North’s paper “Shared Mental Models: Ideologies and Institutions” seeks to explain differences in economic performance across time and space recognizing that under conditions of uncertainty actors base their decisions “in part upon […] myths, dogmas, ideologies, and ‘half-baked’ theories.” The model Denzau and North develop is firmly rooted in the orthodoxy of economics but emphasizes the significance of shared ideologies and ideas in driving economic change. In this paper, we discuss how the legacy of Denzau and North (1994) should be applied to current and future economic inquiries and, in particular, how it might inform work in development economics, behavioral economics, and in the study of the effects of social norms on economic outcomes. We argue that a perspective that emphasizes the role of the economic actor as entrepreneur in the context of shared mental models and institutions can improve economic analysis in those areas of research, which currently focus on the economist as exogenous policy expert.

• The Rise of the Regulatory State Institutional Entrepreneurship and the Decline of Markets for Blood

  The Independent Review

  The regulatory state, some writers claim, arose in response to failures of the legal system. In the case of blood markets, however, regulation came about not from public outcry caused by faulty laws and courts, but from lobbying by interest groups who expected special benefits from regulation.

• Encouraging a Productive Research Agenda: Peter Boettke and the Devil's Test"

  Journal of Private Enterprise

  Peter Boettke is the single most effective graduate mentor in the Austrian economics tradition today. One of the many teaching tools Boettke uses is the devil’s test. The test is an effective teaching tool because it clarifies what the goals of the political economist as critic can be. Boettke teaches his students that much can be done to clarify the logic of incentives, which in turn clarifies the debate in political advocacy. We argue that the devil’s test is a good example of how Boettke enables students to become not only effective teachers but also productive scholars. The analytical framework of the heuristic enables students to analyze complex policy questions in a rigorous way. Many of Boettke’s students have successfully used the distinction between motivational assumptions and causal processes, which is implicit in the devil’s test, in their research.

• Technological Change and the Lowest Common Denominator Problem: An Analysis of Oregon's VMT tax experiment

  Journal of Town and City Management

• Rational Irrationality and the Political Process of Repeal: The Women's Organization for National Prohibition Reform and the 21st Amendment

  Kyklos

  The theory of rational irrationality suggests that voters are biased and do not face sufficient incentives to choose rationally; instead they vote for various private reasons. As a result, socially and economically destructive policies can receive widespread public support. Furthermore, because there is no private benefit of learning from experience, such policies can persist over time. We argue here that despite this otherwise dismal outlook on public policy, the theory of rational irrationality leaves two avenues for economically sensible reform: First, when the ex post costs of irrationality are higher than expected, rationally irrational voters will reduce their consumption of irrationality and demand more rational policies. Second, rationally irrational voters can be convinced to rationally update their policy preferences through the use of appealing rhetoric and persuasion by experts. We discuss these two avenues for reform using the example of the repeal of the 18th amendment, which, as we will show, relied on both updating as well as persuasive campaigning.

• Reapplying behavioral symmetry: public choice and choice architecture

  Public Choice

  New justifications for government intervention based on behavioral psychology rely on a behavioral asymmetry between expert policymakers and market participants. Public choice theory applied the behavioral symmetry assumption to policy making in order to illustrate how special interests corrupt the suppositions of benevolence on the part of policy makers. Cognitive problems associated with market choices have been used to argue for even more intervention. If behavioral symmetry is applied to the experts and not just to market participants, problems with this approach to public policy formation become clear. Manipulation, cognitive capture, and expert bias are among the problems associated with a behavioral theory of market failure. The application of behavioral symmetry to the expanding role of choice architecture will help to limit the bias in behavioral policy. Since experts are also subject to cognitive failures, policy must include an evaluation of expert error. Like the rent-seeking literature before it, a theory of cognitive capture points out the systematic problems with a theory of asymmetry between policy experts and citizens when it comes to policy making.

• Entrepreneurship: Catallactic and Constitutional Perspectives

  Review of Austrian Economics

  The most important distinction between Virginia political economy (VPE) and the other branches of public choice scholarship is a close affinity of the former to Austrian economics. Contributions in both the Virginia and the Vienna (Austrian) traditions have emphasized this connection and highlighted the analytical and ideological interdependencies of the two schools. This paper argues that an application of the Austrian theory of political entrepreneurship to the VPE framework can provide important insights regarding the direction of political change. Kirzner’s theory of entrepreneurship explains that coordination of individual action is possible where price signals provide information. When price signals are absent the entrepreneurial process breaks down. There is common ground between Kirznerian entrepreneurship and Buchanan’s creative action. Scholars at the intersection of the Virginia and the Vienna traditions can use this common ground to make pattern predictions regarding the direction of political change.

• "Income-Expenditure Elasticities of Less-Healthy Consumption Goods"

  Journal of Entrepreneurship and Public Policy

  Purpose To identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies, cakes, chips, candy, donuts, bacon, and carbonated soft drinks – varies across the income distribution by calculating their income-expenditure elasticites. Design/methodology/approach Data on 22,681 households from 2009-2012 from the Bureau of Labor Statistics’ Consumer Expenditure Survey were used. The data were analyzed using ordinary least squares regressions and Cragg’s double hurdle model which integrates (i) a binary model to determine the decision to consume and (ii) a truncated normal model to estimate the effects for conditional (y > 0) consumption. Findings Income had the greatest effect on expenditures for alcohol (0.314), food away from home (0.295), and fast food (0.284). A one percentage-point increase in income (approximately $428 at the mean) translated into a 0.314 percentage-point increase in spending on alcoholic beverages (approximately $1 annually at the mean). Income had the smallest influence on tobacco expenditures (0.007) and donut expenditures (-0.009). Research limitations/implications Percentage of a household’s discretionary budget spent on the studied goods falls substantially as income gets larger. Policies targeting the consumption of such goods will disproportionately impact lower-income households. Originality/value This is the first manuscript to calculate income-expenditure elasticities for the goods studied. The results allow for a direct analysis of targeted consumption policy on household budgets across the income distribution.

• Sin Taxes and Sindustry: Revenue, Paternalism and Political Interest

  The Independent Review

  "The new paternalists advocate using excise taxes to discourage “undesirable” behavior and to offset costs imposed on third parties. But using tax policy to socially engineer behavior gives rise to another social pathology: wasteful political entrepreneurship."

• Institutional Change and the Importance of Understanding Shared Mental Models

  Kyklos

  Arthur Denzau and Douglass North’s paper “Shared Mental Models: Ideologies and Institutions” seeks to explain differences in economic performance across time and space recognizing that under conditions of uncertainty actors base their decisions “in part upon […] myths, dogmas, ideologies, and ‘half-baked’ theories.” The model Denzau and North develop is firmly rooted in the orthodoxy of economics but emphasizes the significance of shared ideologies and ideas in driving economic change. In this paper, we discuss how the legacy of Denzau and North (1994) should be applied to current and future economic inquiries and, in particular, how it might inform work in development economics, behavioral economics, and in the study of the effects of social norms on economic outcomes. We argue that a perspective that emphasizes the role of the economic actor as entrepreneur in the context of shared mental models and institutions can improve economic analysis in those areas of research, which currently focus on the economist as exogenous policy expert.

• The Rise of the Regulatory State Institutional Entrepreneurship and the Decline of Markets for Blood

  The Independent Review

  The regulatory state, some writers claim, arose in response to failures of the legal system. In the case of blood markets, however, regulation came about not from public outcry caused by faulty laws and courts, but from lobbying by interest groups who expected special benefits from regulation.

• Encouraging a Productive Research Agenda: Peter Boettke and the Devil's Test"

  Journal of Private Enterprise

  Peter Boettke is the single most effective graduate mentor in the Austrian economics tradition today. One of the many teaching tools Boettke uses is the devil’s test. The test is an effective teaching tool because it clarifies what the goals of the political economist as critic can be. Boettke teaches his students that much can be done to clarify the logic of incentives, which in turn clarifies the debate in political advocacy. We argue that the devil’s test is a good example of how Boettke enables students to become not only effective teachers but also productive scholars. The analytical framework of the heuristic enables students to analyze complex policy questions in a rigorous way. Many of Boettke’s students have successfully used the distinction between motivational assumptions and causal processes, which is implicit in the devil’s test, in their research.

• Technological Change and the Lowest Common Denominator Problem: An Analysis of Oregon's VMT tax experiment

  Journal of Town and City Management

• Rational Irrationality and the Political Process of Repeal: The Women's Organization for National Prohibition Reform and the 21st Amendment

  Kyklos

  The theory of rational irrationality suggests that voters are biased and do not face sufficient incentives to choose rationally; instead they vote for various private reasons. As a result, socially and economically destructive policies can receive widespread public support. Furthermore, because there is no private benefit of learning from experience, such policies can persist over time. We argue here that despite this otherwise dismal outlook on public policy, the theory of rational irrationality leaves two avenues for economically sensible reform: First, when the ex post costs of irrationality are higher than expected, rationally irrational voters will reduce their consumption of irrationality and demand more rational policies. Second, rationally irrational voters can be convinced to rationally update their policy preferences through the use of appealing rhetoric and persuasion by experts. We discuss these two avenues for reform using the example of the repeal of the 18th amendment, which, as we will show, relied on both updating as well as persuasive campaigning.

• Governing Nebraska's Fiscal Commons: Addressing the Budgetary Squeeze

  Mercatus Center, State and Local Policy

  State policymakers involved in drafting state budgets will face increasing difficulties in coming years as the rising cost of spending obligations such as schools, health care, and pension funds strains states’ ability to pay for them. At the same time, federal support for state programs will continue to shrink as the federal government is forced to grapple with its own fiscal problems. States will need to either reform their budgets or raise taxes as a proportion of income. This decision could be game-changing both for state budgets and for federalism more broadly. Economist Michael D. Thomas focuses on trends in the state of Nebraska, which faces a looming fiscal problem. The expansion in the scope of tasks the state now manages, not just in terms of federal programs but also in terms of funding local programs, has resulted in spending mismatches with local priorities and a state government that is squeezed between the federal and local governments. The way forward is to set realistic priorities for spending at the state level. Nebraska has long benefited from a relatively good fiscal position, and is therefore in a better position to manage this task than other states.