Michael Burda - Sciences Po Spire

hours have an effect on observable variables. Rather than specifying and
estimating a structural model, we first estimate nonparametric, full fixed effect
models (”difference-in-difference” specifications) which attribute all time
differences to a single trend. The discussion of the last section suggests that
it will be necessary to take the issue of endogeneity of regime seriously when
attempting to identify the effects of the laws, since authorities acting in the
public interest are most likely to regulate in those areas in which the gain
from harmonizing activity are greatest. This will require a careful search for
instruments. Finally we turn to individual CPS data to verify the effects at
the individual level.
5.2 Data
Our analysis was conducted on a panel of the fifty US states over the period
extending from 1969-1993, and involves — here in the form of Sunday closing
or “blue“ laws. Because some variables are available for only a subsample of
this period or only sporadically, however, the estimation period will generally
be shorter. Implicitly, we assume that each state replicates the national
average, up to an additive constant and an error term. Because many variables
are available for only a subsample of this period or only sporadically,
showever, the estimation period will generally be shorter. A complete table
of summary statistics of the data used is presented in the Appendix.
5.2.1 Blue Laws in the United States
A distinctive element of this study is the use of a unique dataset of blue
laws regulation in the US states in the period 1969-1993. The collection of
these data involved a somewhat tedious review of state legislative records to
identify and track changes in regulatory regimes. Because it is difficult to
accomodate every nuance in state legislation, a set of eight dummy variables
were defined over the sample. 17 Most important among these are the dummy
variables STRICT, MODERATE and MILD, which describe the law in place
during the year in a particular state. STRICT describes a state regime in
which Sunday sales is severely regulated, and represent exceptions rather
than the rule. Trade in food, tobacco, liquor as well as hardware, clothing
and other goods are prohibited. MODERATE refers to regimes which exempt
food explicitly from the SEVERE regime, while MILD adds a number of
17 Descriptive statistics of these variables can be found in the Appendix.
16