The Political Economy of the Media: Coverage of the Lumber Tariff Dispute

The political economy of groups suggest that policies are more likely to be implemented if the benefits are concentrated and the costs are dispersed. The importance of the role of media in society changes the classic models. Media can awaken the sleeping masses to the dispersed costs of a policy and raise resentment towards the group who benefits. Thus, the content of media coverage can affect policy. Strömberg's (2001) model shows that the amount of newspaper space devoted to an issue should rise as the square of the number of people affected. This paper finds empirical support for Strömberg's theoretical findings with content analysis of newspaper coverage of the lumber tariff dispute.     

Location and attendance in major league baseball

This study uses a travel-cost model to analyse the attendance impacts on Major League Baseball (MLB) of the closest substitute MLB team. It is found that the closer two teams are, the lower attendance is at each team relative to two teams that are farther apart. In addition, when a new team moves into the area of an existing team, there is an additional initial reduction in attendance for the incumbent team. This has implications for actions aimed at changing the number of teams in MLB either by contraction or by possible antitrust approaches that would increase the number of teams, especially in megalopolis markets. Further, and consistent with past demand studies, pricing is in the inelastic portion of gate demand and fan loyalty is a significant contributor to the estimation of gate attendance.     

Measurement of industry conduct with a latent structure

Empirical industrial organization economists have long been concerned with measuring the degree of competition in markets and understanding its underlying determinants, but they have faced serious difficulties, including data requirements and misspecification issues. This paper offers an alternative method of estimating market power and industry conduct. Market power is estimated for the fresh apple industry with a latent modelling structure. Specifically, variations of the MIMIC model are adapted to this problem. These variations are the multiple‐indicators (MI) and the filtered‐measure (FM) approaches. The results suggest that although the Washington apple industry has a large market share, it does not exercise market power. Factors that mitigate the exertion of market power in the fresh apple market include competitor shipments and retailer power. Copyright © 2004 John Wiley & Sons, Ltd.     

Takings of development rights with asymmetric information and an endogenous probability of an externality

A game-theoretic model is used to analyze the interaction between the landowner and the government. In the benchmark model, efficiency can be reached when compensation is tied to the private value of developed land, which is contrary to much of the takings literature. Further, the level of compensation needed to create an efficient outcome with no over-development is derived. Next, two cases are considered: asymmetric information and an endogenous probability of an externality. First, the presence of the positive externality is revealed only to the landowner before the decision to develop early. In this case, if the landowner does not receive the full market compensation, then he or she has an incentive to eliminate the externality. In the second case, the model includes an endogenous probability of a positive externality occurring that depends on investment in conservation. For an efficient outcome to occur, the landowner should be compensated by the full amount of the positive externality. This compensation scheme aligns the incentives of the owner with society.     

Why diversity and expectations matter

This article was delivered in a session entitled Insights from a behavioral lens: why perceptions and diversity matter. In the article, I ask whether a diverse academic workforce is an asset to a University, and more generally to society, and conclude that it is. Although this conclusion is based on empirical data from US universities, the message is universal. Even when correcting for years of experience, rank, and nature of appointment and women's work‐life situation, there is still a negative expectation bias, whereby women and minority candidates are not expected to be as good as male researchers (a bias that also exists in the case of the appointment of female Chief Executive Officers). On the other hand, more women and minority appointments increase the productivity of women students.     

Segmenting the Wine Market Based on Price: Hedonic Regression when Different Prices mean Different Products

Many economists have estimated hedonic price functions for red and white wine. However, estimating a single hedonic price function imposes the assumption that the implicit prices of the attributes are the same for any red or white wine. We argue that even within these two categories, wines are differentiated, and disregarding this heterogeneity causes an aggregation bias in the estimated implicit prices. By estimating hedonic functions specific to price ranges, we show that the wine market is segmented into several product classes or market segments. We find that a model accounting for the existence of wine classes has greater ability to explain the variability in the data and produces more accurate and interpretable results regarding the implicit prices of the attributes.     

A Latent Structure Approach to Measuring Reputation

The present study provides estimates of reputation as a dynamic latent variable that is determined by price premiums and market data. Further, it analyzes the effect of extrinsic factors on reputation. Specifically, this study seeks to (i) quantify the reputation of Washington apples over time, (ii) study the dynamic nature of reputation, and (iii) analyze the effect of the label “Washington Apple.” The model adopted in this study is the dynamic multiple-indicator multiple-cause (DYMIMIC) modeling approach, which is a special case of the general latent variable modeling scheme called “state-space” models. Both DYMIMIC and hedonic approaches are applied to the data on Washington apples, and results from the two approaches are compared.     

Identifying consumer preferences for nutrition information on grocery store shelf labels

Nutrition labels can potentially benefit consumers by increasing product knowledge and reducing search costs. However, the global increase in obesity rates leads one to question the effectiveness of current nutrition information formats. Alternative formats for providing nutrition information may be more effective. Shoppers at a major grocery chain participated in choice experiments designed to identify preferences for nutrition information provided on grocery store shelf labels. Shoppers demonstrate a strong affinity for shelf-label nutrition information and the presentation of the nutrition information significantly affects their preferences as well. Several demographic variables help to explain differences in preferences.