Research contributions by Professor Ehrlich are based on innovative applications of general economic theory to study diverse human behavior and social institutions, with particular emphasis on the role of human Capital, time, information, and uncertainty. The most provocative illustration concerns participation in illegitimate activities and the development of a 'market model' of crime. Use of optimization and equilibrium analysis along with econometric methodology to explain variations in the incidence of crime and corruption and optimal crime control and criminal justice policies across place and time has challenged received theories in criminology, and opened up a new research frontier in economics.
Work on behavior under uncertainty has provided a new framework for studying the joint demand for market insurance, self-Insurance, and self- and life-protection. Work on advertising links advertising and other selling efforts by firms to the demand for information by consumers, and to the division of labor between buyers and sellers in the production of desired information about the characteristics of market goods.
Work on Health and longevity deals with length, or quantity of life as a distinct choice, which competes with aspects of the quality of life over the allocation of lifetime resources. It analyses investment in health and longevity as an integral part of both human capital theory and the general theory of self-protection against detrimental risks to life. The model offers insights concerning both the time trend and significant diversities in life expectancies and assessments of 'value-of-life-saving' measures across population groups and over time.
Work on endogenous economic growth applies human capital theory and time allocation within families and firms to explain income growth and income inequality in both developing and developed countries. This work focuses on the role of the family in human capital formation, and the contribution of specific motivating and institutional forces in influencing the diversity and pace of productivity growth at the micro (family and firm) and macro levels. These forces include altruism, the need for old-age security, private vs. public ownership of economic resources, and government control of private economic activity. The work also links economic growth with the aging of the population in developed countries, and assesses the incentive effects of conventional social insurance plans on the economy's growth path.
Recent work on the role of human capital in asset management and the market for risky assets seeks to augment received theories in financial economics, which treat the prices of risky assets as (fully-) information revealing, by modeling the process under which market prices become informative. This work focuses on the role of human capital endowments and private information collection and their implications for portfolio choices, market-price volatility, equity premiums, and the distribution of both earnings and financial income.
Ehrlich’s work on human capital and endogenous growth has recently been recognized through a major Faculty Development Award from the New York Office of Science, Technology and Academic Research, which he has used to establish the Center of Excellence on Human Capital, Technology Transfer, and Economic Growth And Development in 2006. See web page at http://head.buffalo.edu/. This development was bolstered in 2007 by his appointment as Founding Editor-in-Chief of the Journal of Human Capital (JHC), published by the University of Chicago Press, which is also housed at the Center. See: http://www.journals.uchicago.edu/loi/jhc/.
Apart from publishing his work in major refereed journals and books, Professor Ehrlich has also contributed numerous articles in the US and international media on the subject of human capital and its role in sustained economic development, as well as on social security reform and the economics of crime.