Abstract:A variety of models provide differing predictions regarding the effect of an increase in the number of competitors in a market (seller density) on prices and price dispersion. We review different approaches to generating equilibrium price dispersion and then empirically estimate the relationship between seller density, average product price, and price dispersion in the retail gasoline industry using four unique gasoline price data sets. Controlling for station-level characteristics, we find that an increase in station density consistently decreases both price levels and price dispersion across four geographical areas. JEL Codes: L13, D43, D83

Hierarchical linear modeling was used to model the dynamics of family income-to-needs for participants of the National Institute of Child Health and Human Development Study of Early Child Care (N = 1,364) from the time that children were 1 through 36 months of age. Associations between change in income-to-needs and 36-month child outcomes (i.e., school readiness, receptive language, expressive language, positive social behavior, and behavior problems) were examined. Although change in income-to-needs proved to be of little importance for children from nonpoor families, it proved to be of great importance for children from poor families. For children in poverty, decreases in income-to-needs were associated with worse outcomes and increases were associated with better outcomes. In fact, when children from poor families experienced increases in income-to-needs that were at least 1 SD above the mean change for poor families, they displayed outcomes similar to their nonpoor peers. The practical importance and policy implications of these findings are discussed.

Within-child associations between family income and child externalizing and internalizing problems were examined using longitudinal data from the NICHD Study of Early Child Care and Youth Development (2004a, 2004b; N=1,132). Variations in income effects were estimated as a function of whether families were poor, whether mothers were partnered, and the number of hours mothers and their partners were employed. On average, children had fewer externalizing problems during times when their families' incomes were relatively high than during times when their families' incomes were relatively low; the estimated benefits of increased income were greatest for children who were chronically poor. For both externalizing and internalizing problems, income was most strongly associated with problems when chronically poor children's mothers were partnered and employed.

Higher quality child care during infancy and early childhood (6-54 months of age) was examined as a moderator of associations between family economic status and children's (N = 1,364) math and reading achievement in middle childhood (4.5-11 years of age). Low income was less strongly predictive of underachievement for children who had been in higher quality care than for those who had not. Consistent with a cognitive advantage hypothesis, higher quality care appeared to promote achievement indirectly via early school readiness skills. Family characteristics associated with selection into child care also appeared to promote the achievement of low-income children, but the moderating effect of higher quality care per se remained evident when controlling for selection using covariates and propensity scores.

Existing studies of child care have not been able to determine whether higher quality child care protects children from the effects of poverty, whether poverty and lower quality child care operate as dual risk factors, or whether both are true. The objective of the current study was to test two pathways through which child care may serve as a naturally occurring intervention for low-income children: a direct pathway through child care quality to child outcomes, and an indirect pathway through improvements in the home environment. Children were observed in their homes and child care settings at 6, 15, 24, and 36 months. An interaction between family income-to-needs ratio and child care quality predicted School Readiness, Receptive Language, and Expressive Language, as well as improvements in the home environment. Children from low-income families profited from observed learning supports in the form of sensitive care and stimulation of cognitive development, and their parents profited from unobserved informal and formal parent supports. Policy implications are discussed.