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Abstract:
Does a State's regulatory scheme that permits in-state wineries directly to ship alcohol to consumers but restricts the ability of out-of-state wineries to do so violate the dormant Commerce Clause in light of Sec. 2 of the Twenty-first Amendment?

in-state, out-of-state, wineries, Commerce Clause

Abstract:
Equity in housing is a major component of household wealth in the United States. Steady gains in housing prices over the last several decades have generated large potential gains in household wealth among homeowners. Mankiw and Weil (1989) and McFadden (1993b) have argued that the aging of the US population is likely to induce substantial declines in housing prices, resulting in capital losses for future elderly generations. However, if households can anticipate changes in housing prices, and if they adjust their non-housing savings accordingly, then welfare losses in retirement could be mitigated. This paper focuses on two questions: (1) Are housing prices forecastable from current information on demographics and housing prices?; and (2) How are household savings decisions affected by capital gains in housing? We use metropolitan statistical area (MSA) level data on housing prices and demographic trends during the 1980's and find mixed evidence on the forecastability of housing prices. Further, we use data on five-year savings rates from the Panel Study of Income Dynamics and find no evidence that households engage in changing their non-housing savings in response to expectations about capital gains in housing. Thus, the projected decline in housing prices could result in large welfare losses to current homeowners and large intergenerational equity differences.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
Using Waves one through fifteen of the PSID data set, we investigate the pattern of housing mobility amongst the elderly. We focus especially on two issues: (1) Determining which household characteristics tend to increase the probability of a move; and (2) Whether elderly households systematically move to smaller, less expensive dwellings when they do move, and, if so, which characteristics make such "downsizing" particularly likely. We find that wealthier households are less likely to move and to downsize, and that changes in family composition or retirement status significantly increase the likelihood of a move. We do not find much evidence of imperfections in the housing market, or of pervasive liquidity constraints. Finally, we develop a Lagrange Multiplier test for unobserved heterogeneity amongst elderly households, and strongly reject the null hypothesis of homogeneity.

Abstract:
The objective of this paper is to find the quantitative importance of some predictors of mortality among the population aged 70 or over. The predictors are socio-economic indicators (income, wealth and education), thirteen health indicators including a history of heart attack or cancer, and subjective probabilities of survival. The estimation is based on mortality between waves 1 and 2 of the Asset and Health Dynamics among the Oldest-Old study. We find that the relationship between socio-economic indicators and mortality declines with age 13 health indicators are strong predictors of mortality and that the subjective survival probabilities predict mortality even after controlling for socio-economic indicators and the health conditions.

Abstract:
This paper investigates whether subjective expectations about future mortality affect consumption and bequests motives. We estimate a dynamic life-cycle model based on subjective survival rates and wealth from the panel dataset Asset and Health Dynamics among Oldest Old. We find that bequest motives are small on average, which indicates that most bequests are involuntary or accidental. Moreover, parameter estimates using subjective mortality risk perform better in predicting out-of-sample wealth levels than estimates using life table mortality risks, suggesting that decisions about consumption and saving are influenced more strongly by individual-level beliefs about mortality risk than by group level mortality risk.

Abstract:
Testing life-cycle models and other economic models of saving and consumption at micro level requires knowledge of individuals' subjective believes of their mortality risk. Previous studies have shown that individual responses on subjective survival probabilities are generally consistent with life tables. However, survey responses suffer serious problems caused by focal responses of zero and one. This paper suggests using a Bayesian update model that accounts for the problems encountered in focal responses. We also propose models that help us to identify how much each individual deviates from life table in her subjective belief. The resulting individual subjective survival curves have considerable variations and are readily applicable in testing economic models that require individual subjective life expectancies.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
Medicare Part D provides prescription drug coverage through Medicare approved plans offered by private insurance companies and HMOs. In this paper, we study the role of current prescription drug use and health risks, related expectations, and subjective factors in the demand for prescription drug insurance. To characterize rational behavior in the complex Part D environment, we develop an intertemporal optimization model of enrollment decisions. We generally find that seniors' choices respond to the incentives provided by their own health status and the market environment as predicted by the optimization model. The proportion of individuals who do not attain the optimal choice is small, but the margin for error is also small since enrollment is transparently optimal for most eligible seniors. Further, there is also evidence that seniors over-react to some salient features of the choice situation, do not take full account of the future benefit and cost consequences of their decisions, or the expected net benefits and risk properties of alternative plans.

Abstract:
No abstract is available for this paper.

Abstract:
We study the Medicare Part D prescription drug insurance program as a bellwether for designs of private, non-mandatory health insurance markets that control adverse selection and assure adequate access and coverage. We model Part D enrollment and plan choice assuming a discrete dynamic decision process that maximizes life-cycle expected utility, and perform counterfactual policy simulations of the effect of market design on participation and plan viability. Our model correctly predicts high Part D enrollment rates among the currently healthy, but also strong adverse selection in choice of level of coverage. We analyze alternative designs that preserve plan variety.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
Medicare Part D provides prescription drug coverage through Medicare approved plans offered by private insurance companies and HMOs. In this paper, we study the role of current prescription drug use and health risks, related expectations, and subjective factors in the demand for prescription drug insurance. To characterize rational behavior in the complex Part D environment, we develop an intertemporal optimization model of enrollment decisions. We generally find that seniors’ choices respond to the incentives provided by their own health status and the market environment as predicted by the optimization model. The proportion of individuals who do not attain the optimal choice is small, but the margin for error is also small since enrollment is transparently optimal for most eligible seniors. Further, there is also evidence that seniors over-react to some salient features of the choice situation, do not take full account of the future benefit and cost consequences of their decisions, or the expected net benefits and risk properties of alternative plans.

Medicare, prescription drugs, insurance demand, health production, dynamic discrete choice

Abstract:
When offered a new product whose attributes are unknown, customers can determine whether they like the product by trying it themselves or can wait to observe the experience of other customers who try the product. We specify a rational decision process and investigate the implications of learning from others on the sales of new products and the impact of advertising.