Modeling Airbnb demand to New York City while employing spatial panel data at the listing level

Using spatial panel data comprising a cross section of 1,461 continuously active Airbnb listings obtained from AirDNA, as well as time series data from NYC and Company and the OECD covering the time period September 2014 to June 2016, the present study quantifies own price, cross price, and income elasticities of Airbnb demand to New York City within an empirical tourism demand framework. The particular goal of the study is to establish whether the relationship between Airbnb and the traditional accommodation industry is of a substitutional or of a complementary nature. Employing a one-way fixed-effects spatial Durbin model, it can be concluded that demand is price-inelastic for Airbnb accommodation in New York City, which is a luxury good, and that the city's traditional accommodation industry as well as neighboring Airbnb listings are substitutes for the investigated Airbnb listings. The estimation results are robust against several alternative specifications of the regression equation.     

The effect of spatial interdependencies on prioritization and payments for environmental services

Empirical studies and on-the-ground policies assessing optimal selection of projects in the context of payments for environmental services programs rarely consider spatial proximity of one project to other projects. This occurs despite evidence from theoretical and ecological studies that benefits are often spatially interdependent. This paper develops a flexible construct of “spatial synergy benefits” using the principles of Newtonian gravity similar to efforts in other application areas. This approach is novel to the literature on environmental preservation and, as a systematic method, can account for a wide variety of spatial interdependencies. The empirical setting for the application is farm and forest preservation in Delaware, with a quadratic knapsack algorithm used to select the optimal set of parcels. Application results show that the specific level of the spatial synergy benefit measure does not significantly alter the number of parcels and acreage preserved, but that the composition of the optimal set changes as agglomeration preferences increase. These changes in the optimal targeted set indicate a potential bias in past research on PES selection. Policy makers informed by methods that do not explicitly account for spatial agglomeration preferences often make incorrect investment choices from a cost-effectiveness perspective.     

Estimating Value Creation from Revealed Preferences: Application to Value‐based Strategies

Research summary : We develop and apply a new set of empirical tools consistent with the tenets of value‐based business strategies, leveraging the principle that “no good deal comes undone” and the methods of revealed preferences, to empirically estimate drivers of value creation. We demonstrate how to use these tools in an analysis of value creation in buyer–supplier relationships in the UK corporate legal market. We show that our approach can uncover evidence of subtle mechanisms that traditional methods cannot easily distinguish from each other. Furthermore, we show how the estimates can be used as parameters of biform games for out‐of‐sample analyses of strategic decisions. With readily available data on relationships between firms, this approach can be applied to many other contexts of interest to strategy researchers. Managerial summary : Managers need to understand the drivers of value creation for customers in order to make competitive positioning decisions and understand when they can capture value under competition. However, estimates of the relative importance of each driver are typically difficult to obtain. In this article, we help remedy this problem by demonstrating a novel method that obtains estimates of the contribution of various drivers of value creation from commonly available data of buyer–supplier relationships. These estimates can then be used to inform the strategy‐making process. Copyright © 2017 John Wiley & Sons, Ltd.     

Firm-level determinants of tax evasion in transition economies

Business tax evasion is an important issue for governments. Yet the factors that determine business tax evasion have not been sufficiently examined in the literature in general, and in transition contexts in particular. To address this gap, this study uses the WB/EBRD Business Environment and Enterprise Performance Survey (BEEPS) database with a sample of over 12,692 firms from 26 transition economies. Applying various modelling strategies, we argue that tax evasion is a function of firm-level and institutional-level variables. We contribute to the literature by providing robust evidence showing that the perceived tax burden has a positive impact on tax evasion. We also find that the tax evasive behaviour of firms is positively influenced by low trust in government and in the judicial system as well as by higher perceptions of corruption and higher compliance costs. We find that smaller firms, individual businesses and firms in sectors that are less visible to the tax administration are more likely to get involved in evasive behaviour. Overall, institutional factors play an important role in determining firms’ tax evasion behaviour in transition economies. This finding has important policy implications.     

Stochastic optimization of sustainable hybrid generation bioethanol supply chains

This paper focuses on designing a hybrid generation bioethanol supply chain (HGBSC) that will account for economic, environmental and social aspects of sustainability under various uncertainties. A stochastic mixed integer linear programming model is proposed to design an optimal HGBSC. A case study set in the state of North Dakota in the United States is used as an application of the proposed model. The results suggest that the designs of optimal HGBSC change when different sustainability standards are applied. In addition, sensitivity analysis is conducted to provide deeper understanding of the proposed model.     

Time orientation and construal level: effects on eating and exercising behaviour and preferences

Eating and exercising behaviour are both characterized by immediate and future consequences. Consequently, consideration of these consequences (i.e. time orientation) predicts eating and exercising behaviour. We investigate whether construal level acts as an underlying mechanism of these relations. Students (N = 101) completed measures of consideration of immediate and future consequences (i.e. CFC‐food and CFC‐exercise), construal level, eating and exercising behaviour and preferences. For self‐reported eating and exercising behaviour, only direct effects of consideration of immediate and future consequences were found. For eating preferences, however, there was evidence of an indirect effect through construal level. A stronger tendency to consider future consequences led to a stronger preference for utilitarian (as compared with hedonic) food products through a more abstract construal level. All in all, construal level partially explains the differential relations between consideration of immediate and future consequences and eating and exercising behaviour and preferences.     

Motivations to grow energy crops: the role of crop and contract attributes

Perennial energy crops are a promising source of bioenergy whose production involves production risks, long‐term commitment of land and need for crop‐specific investments without the coverage of crop insurance potentially available for conventional crops. We conduct a choice experiment in five states in the Midwestern and South‐central regions of the U.S. to examine the effect of crop‐contract attributes on the joint discrete‐continuous choice decisions to adopt an energy crop and convert acres to it from a status quo use, while controlling for the effect of various farmers’ risk and time preferences, sociodemographic characteristics, and availability of crop insurance for conventional crops. We find robust evidence that high discount rates, high upfront establishment costs and need for crop‐specific investments create disincentives for adoption and allocation of land to energy crop production. The effects of riskiness of returns and risk aversion are less robust across specifications. The effect of conventional crop insurance on the energy crop adoption decision differs across types of insurance; in particular, farmers with revenue insurance are statistically significantly less likely to adopt an energy crop. Our results have implications for the design of effective contracts and policy incentives to induce the production of energy crops.     

Understanding tourist space at a historic site through space syntax analysis: The case of Gulangyu,China

Although tourist development appears to be an effective approach for the further development of historic towns, researchers have often contended that a balance is difficult to maintain between protection and development. This article applies space syntax analysis to provide an understanding of tourist space at historic sites on Gulangyu Island. The relationship between street network integration and the urban fabric as well as tourist preferences collated from data mining are explored and verified. Then, results of the space syntax analysis along with the proposed historic site plan are compared to provide suggestions in plan evaluation. This research provides a visualized and quantitative approach to the field of tourist management via the application of Geographic Information System (GIS) to urban morphological features, tourist preferences and results gathered by way of planning practice. The effectiveness and limitations of this proposed new approach are also debated and substantiated.     

The cost of capital and optimal financing policy in a dynamic setting

This paper revisits the Modigliani–Miller propositions on the optimal financing policy and cost of capital in a dynamic setting. In an environment without taxes and bankruptcy costs, the results are generally consistent with the Modigliani–Miller Propositions 1 and 2. However, the first proposition should be presented and interpreted more carefully, as given firm characteristics, there is only one optimal capital structure. Thus, a firm’s capital structure is relevant. A relaxation of assumptions about either taxes or bankruptcy costs leads to conclusions that are generally different from those in Modigliani and Miller (1958). The model predicts that leverage and sales-to-capital ratios decrease but firm size and capital stock increase with the subjective discount factor of the firm’s manager if there are taxes and bankruptcy costs. The empirical analysis supports these predictions.     

Optimal portfolios under worst-case scenarios

In standard portfolio theories such as Mean–Variance optimization, expected utility theory, rank dependent utility heory, Yaari’s dual theory and cumulative prospect theory, the worst outcomes for optimal strategies occur when the market declines (e.g. during crises), which is at odds with the needs of many investors. Hence, we depart from the traditional settings and study optimal strategies for investors who impose additional constraints on their final wealth in the states corresponding to a stressed financial market. We provide a framework that maintains the stylized features of the SP/A theory while dealing with the goal of security in a more flexible way. Preferences become state-dependent, and we assess the impact of these preferences on trading decisions. We construct optimal strategies explicitly and show how they outperform traditional diversified strategies under worst-case scenarios.