A Classical Garden of Liberal Economics

This chapter discusses the Classical Liberal methodology. In the Classical Liberal method, formal theory was something to be conscious of, to be kept in the back of one's mind as difficult policy issues were confronted. However, it was secondary to educated common sense, and the method required one to be clear about the judgments one was making in applying a particular model and in deciding which assumptions were reasonable and which were not. Applied policy economics had to explicitly deal with all such issues, which meant that no firm policy conclusion followed from scientific theory. In policy, science played only a supporting role. However, in what would increasingly become associated with the neoclassical method, that would change, and scientific theory would occupy center stage within the realm of policy thinking.

Toxic Choices: The Theory and Impact of Smoking Bans

This paper first proposes a theoretical model of smoker behaviour that serves as a vehicle to evaluate workplace smoking bans. It is a nicotine inventory management model where smoking during one phase of the day impacts utility in other phases. Smoking intensity choice forms part of the optimization. Calibrated model simulations suggest that, with the exception of heavy smokers, workplace bans have small impacts due to substitution possibilities. Quantile regression estimates support the theory. However, restrictions on smoking in the home are an order of greater importance, even when instrumented. The policy conclusion is that workplace ban effectiveness depends heavily upon private choices.