"Better Living Through Economics" consists of twelve case studies that demonstrate how economic research has improved economic and social conditions over the past half century by influencing public policy decisions. Economists were obviously instrumental in revising the consumer price index and in devising auctions for allocating spectrum rights to cell phone providers in the 1990s. But perhaps more surprisingly, economists built the foundation for eliminating the military draft in favor of an all-volunteer army in 1973, for passing the Earned Income Tax Credit in 1975, for deregulating airlines in 1978, for adopting the welfare-to-work reforms during the Clinton administration, and for implementing the Pension Reform Act of 2006 that allowed employers to automatically enroll employees in a 401(k). Other important policy changes resulting from economists' research include a new approach to monetary policy that resulted in moderated economic fluctuations (at least until 2008!) , the reduction of trade impediments that allows countries to better exploit their natural advantages, a revision of antitrust policy to focus on those market characteristics that affect competition, an improved method of placing new physicians in hospital residencies that is more likely to keep married couples in the same city, and the adoption of tradable emissions rights which has improved our environment at minimum cost.
Introduction by John J. Siegfried 1
Overview: Highlights of the Benefits of Basic Science in Economics by Charles R. Plott 6
Comment by Daniel S. Hamermesh 36
Comment by Daniel Newlon 40
1 The Evolution of Emissions Trading by Thomas H. Tietenberg 42
Comment by Wallace E. Oates 59
2 Better Living through Improved Price Indexes by Michael J. Boskin 63
Comment by Jerry Hausman 84
3 Economics and the Earned Income Tax Credit by Robert A. Moffitt 88
Comment by V. Joseph Hotz 106
4 Trade Liberalization and Growth in Developing Countries by Anne O. Krueger 110
Comment by Douglas A. lrwin 126
5 The Role of Economics in the Welfare-to-Work Reforms of the 1990s by Rebecca M. Blank 130
Comment by Nancy Folbre 143
6 Better Living through Monetary Economics by John B. Taylor 146
Comment by Laurence H. Meyer 164
7 The Greatest Auction in History by R. Preston McAfee and John McMillan and Simon Wilkie 168
Comment by Jeremy Bulow 185
8 Air-Transportation Deregulation by Elizabeth E. Bailey 188
Comment by Nancy L. Rose 203
9 Deferred-Acceptance Algorithms: History, Theory, Practice by Alvin E. Roth 206
Comment by Peter Cramton 223
10 Economics, Economists, and Antitrust: A Tale of Growing Influence by Lawrence J. White 226
Comment by Kenneth G. Elzinga 249
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