The inconsistency of common scale estimators when output prices are unobserved and endogenous

This paper explores the inconsistency of common scale estimators when output is proxied by deflated sales, based on a common output deflator across firms. The problem arises when firms operate in an imperfectly competitive environment and prices differ between them. In particular, we show that this problem reveals itself as a downward bias in the scale estimates obtained from production function regressions, under a variety of assumptions about the pattern of technology, demand and factor price shocks. The result also holds for scale estimates obtained from cost functions. The analysis is carried one step further by adding a model of product demand. Within this augmented model we examine the probability limit of the scale estimate obtained from an ordinary production function regression. This analysis reveals that the OLS estimate will be biased towards a value below one, and how this bias is affected by the magnitude of the parameters and the amount of variation in the various shocks. We have included an empirical section which illustrates the issues. The empirical analysis presents a tentative approach to solve the problem discussed in the theoretical part of this paper.     

Gasoline prices,transport costs,and the U.S. business cycles

The effects of gasoline prices on the U.S. business cycles are investigated. In order to distinguish between gasoline supply and gasoline demand shocks, the price of gasoline is endogenously determined through a transportation sector that uses gasoline as an input of production. The model is estimated for the U.S. economy using five macroeconomic time series, including data on transport costs and gasoline prices. The results show that although standard shocks in the literature (e.g., technology shocks, monetary policy shocks) have significant effects on the U.S. business cycles in the long run, gasoline supply and demand shocks play an important role in the short run.     

Asset prices in an exchange economy when agents have heterogeneous homothetic recursive preferences and no risk free bond is available

We study a pure exchange economy under incomplete markets where households have heterogeneous homothetic recursive preferences and lending and borrowing are precluded. We fully characterize the properties of the efficient allocations and the equilibrium asset price. The ownership distribution dynamics reveal the emergence of a dominant agent, who after some finite time, remains the only investor that increases asset holdings until asymptotically owning the entire wealth. Investors can be ranked according to a unique parameter that aggregates agents’ preference characteristics and we show how time discount rate, attitude towards risk and intertemporal substitution contribute to capital accumulation.     

Monetary policy and asset prices in an open economy

This paper examines whether central banks should respond to asset price fluctuations in a two-country sticky price model. We compare a monetary policy rule that targets both domestic asset prices and foreign asset prices with several alternative monetary policy rules. This paper shows that this policy rule can produce preferable outcomes because the domestic central bank incorporates important information that both domestic and foreign asset prices possess into its monetary policy. Our model suggests that central banks should consider both domestic and foreign asset prices in a two country framework with asset price fluctuations.     

Energy prices and aggregate economic activity: an interpretative survey

In this article, we survey the theory and evidence linking fluctuations in energy prices to those in aggregate economic activity. We then examine the implications of this research for both monetary policy and energy policy in response to oil price shocks. The currently available research seems to provide relatively reliable guidance for monetary policy. Because the precise channels through which oil price shocks affect economic activity are only partially known, however, research offers less guidance about how countries should design energy policy should cope with oil price shocks.     

The causes and development of health care system costs: The danish experience

In most western countries the cost of health care occupies an increasing share of the available resources in the economy. By analysing the pharmaceutical technology, which is one of the technologies in the health care system, it is demonstrated that this development cannot totally or partially be referred to the cost of medicine. On the contrary, medicine occupies a decreasing share of the total health care cost in most countries. It is shown that in the past the use of medicine has considerably reduced the loss in society by reducing the human sufferings and the economic implications of lost working days. But also today real and potential savings exist. By using Swedish findings in the areas of rheumatic illnesses and gastric ulcers it occurs that large savings can be obtained by reducing the losses due to lost working days. The author calls for a more positive understanding of the pharmaceutical industry and the conditions in which it operates. To achieve this the industry itself must be more open minded.     

Human capital revisited: The role of experience and education when controlling for performance and cognitive skills

Human capital theory predicts that differences in wages arise because of differences in human capital. The latter can be accumulated in two ways: through experience and education. Using matched firm–worker data for the Ghanaian Manufacturing sector we first test whether changes in wages over the life cycle reflect changes in performance, following the methodology of Medoff and Abraham [Medoff, J.L., &; Abraham, K.G. (1980). Experience, Performance, and Earnings. Quarterly Journal of Economics, 95(4), 703-736; Medoff, J.L., &; Abraham, K.G. (1981). Are Those Paid More Really More Productive? The Case of Experience. Journal of Human Resources, 16(2), 186–216]. We find that wage–seniority profiles are independent of performance – a result that holds when controlling for firm fixed effects. Extending the analysis, we include a control for on-the-job-training and find that it does not attenuate the seniority profile, which is also at odds with human capital theory. We do find however that firm characteristics play an important role. Wage–seniority profiles are steeper in large firms, but performance profiles are not, suggesting that the results from Medoff and Abraham are specific to large firms. We then assess the role of education. Our results confirm that education is important for the allocation to job levels. Using data on cognitive ability, we also find that the effect of education on wages is at least partially because it signals cognitive ability. We also find evidence that the returns to education are not related to performance, while the returns to cognitive ability are.     

On Markov error‐correction models,with an application to stock prices and dividends

This paper considers Markov error‐correction (MEC) models in which deviations from the long‐run equilibrium are characterized by different rates of adjustment. To motivate our analysis and illustrate the various issues involved, our discussion is structured around the analysis of the long‐run properties of US stock prices and dividends. It is shown that the MEC model is flexible enough to account for situations where deviations from the long‐run equilibrium are nonstationary in one of the states of nature and allows us to test for such a possibility. An empirical specification procedure to establish the existence of MEC adjustment in practice is also presented. This is based on a multi‐step test procedure that exploits the differences between the global and local characteristics of systems with MEC adjustment. Copyright © 2004 John Wiley & Sons, Ltd.     

Fast traders and slow price adjustments: an artificial market with strategic interaction and transaction costs

Journal of Economic Interaction and Coordination - In this paper, we propose an artificial market to model high-frequency trading where fast traders use threshold rules strategically to issue...     

Game experience: an analysis of English and Welsh domestic cricket spectators

• This study investigated differing emphasis cricket spectators place on key game experience variables. Spectators were classified based on membership, frequency of attendance and demographics. The mixed methods designs used a qualitative strand, which identified four key game experience variables; star players, quality of game, social facilitation and auditory and olfactory elements. The quantitative strand was used to empirically test these game experience variables. This survey of 584 cricket spectators identified auditory and olfactory elements, quality of game, and social facilitation as the three important game experience variables relevant to various cricket spectator segments. The findings revealed that women, members, older spectators and moderately frequent attendees placed greater emphasis on auditory and olfactory. Older spectators and members also placed greater emphasis on quality of game. It was also found that regardless of how frequently spectators attend games, they placed equal emphasis on social facilitation.
• In this exploratory study, tentative light is shed on the largely unexplored subject of cricket spectator consumption experience. As such it helps provide practitioners in the industry as well as researchers with a better understanding of cricket spectators.

Copyright © 2009 John Wiley & Sons, Ltd.     

Freedom and gross in-migration: an empirical study of the post-great recession experience

Determinants of migration, including policy variables such as tax rates, have been extensively studied by regional scientists over the past several decades. The development of the Economic Freedom of North America Index has allowed researchers to test the relationship between migration patterns and economic freedom, with recent studies finding that net in-migration is positively related to economic freedom. Using a new cross-section measure of economic and personal freedom at the state level, we investigate the relationship between gross in-migration and economic freedom on the one hand and then between gross in-migration and total freedom on the other hand. This empirical study of domestic U.S. migration during the post-Great Recession period finds clear evidence that migrants prefer to move to those states affording higher levels of economic freedom and higher levels of total freedom.     

The impact of security concentration on adverse selection costs and liquidity: an examination of exchange traded funds

We examine the determinants of liquidity and adverse selection costs in a sample of basket securities. Using Exchange Traded Funds (ETFs), we find evidence that adverse selection costs are decreasing in the number of equities held in the underlying portfolio, but adverse selection costs do not increase as the concentration among the securities increases. We find no evidence that industry concentration increases basket security adverse selection costs or reduces liquidity. We also document significantly lower levels of adverse selection costs in ETFs versus a matched sample of equities. In addition, ETFs have quoted dollar depth that is 35 times larger than a matched sample of equities, but ETFs also have higher effective and quoted spreads. However, when considering spreads and depth in a single metric, ETFs have significantly higher levels of liquidity.     

Property rights theory,transaction costs theory,and agency theory: an organizational economics approach to strategic management

Property rights theory has common antecedents with contractual theories of the firm such as transaction costs and agency theories, and is yet distinct from these theories. We illustrate fundamental theoretical principles derived from these three theories by analyzing the business case of oil field unitization. Theoretical principles and application of theory to oil field unitization are each summarized. From this, it is possible to see how property rights theory is well suited to explain business situations where inefficient economic outcomes persist. Additionally, property rights theory forges new theoretical connections with other branches of organizational economics, in particular, resource‐based theory. Copyright © 2005 John Wiley & Sons, Ltd.     

西北地区小城市衰败街巷空间更新设计研究——以庆城县老城区为例

我国已经进入城镇化发展的中后期,城市的发展已经由大规模的增量建设进入存量优化的新阶段,而作为城镇化发展的主要部分,小城市的持续更新中遇到许多特有的问题,西北地区发展较为缓慢的小城市就普遍存在老城区街巷空间的衰败,这些空间严重影响城市的更新发展.本研究以庆城县老城区为例,提出城市街巷空间更新存在的一些问题,对类似小城市所存在的相关问题提出策略和建议,为西北地区小城市发展更新提供策略.     

Revisiting agency and transaction costs theory predictions on vertical financial ownership and contracting: electronic integration as an organizational form choice

This paper provides an organizational economics foundation to guide managers in matching the comparatively more efficient organizational mode with transactional characteristics such as: (1) the degree of (human capital) asset specificity involved in the transaction, (2) the degree of uncertainty surrounding the transaction, and (3) the number of trading partners (suppliers and buyers) in the vertical supply chain. The key role of technology, and more specifically the e‐business infrastructure and its effects on organizational mode choice, is highlighted. The main results from this analysis suggest that changes in information technology are changing the nature of transaction costs leading to more efficient management through an electronic integration solution thus favoring contracting and outsourcing than would have been technologically possible when Williamson's Markets and Hierarchies (Markets and Hierarchies: Analysis and Antitrust Implications. Free Press: New York, 1975) was published. It is emphasized that the transaction cost economics principles are durable but that the breathless advances in information technology, especially in the past decade, have comparatively favored lower transaction costs of markets over hierarchies. Copyright © 2006 John Wiley & Sons, Ltd.     

Estimation and decomposition of inefficiency when producers maximize return to the outlay: an application to Norwegian fishing trawlers

This paper deals with estimation of a production technology where endogeneous choice of input and output variables is explicitly recognized. In particular, we assume that producers maximize return to the outlay (RO). For simplicity and tractability we start with a Cobb–Douglas transformation function with multiple inputs and outputs and show how the first-order conditions of RO maximization can be used to derive an estimating equation which is nothing but a partial input productivity equation. This equation does not suffer from the econometric endogeneity problem although the output and input variables are endogenous. First, we consider the case where producers are fully efficient allocatively but technically inefficient. The model is estimated using a single equation stochastic frontier approach. The model is then extended to allow allocative inefficiency and it is estimated as a system using generalized method of moment. Algebraic expressions are derived to decompose the effect of technical and allocative inefficiencies on RO. We also consider translog specifications that are estimated as (1) a single equation frontier model as well as (2) a system. We use a panel of Norwegian fishing trawlers data to estimate the model. Outputs are different species caught while inputs are labor and vessel size. We also control for number of days of operation, age of the vessel and year effects. Empirical results show that the average rate of RO is reduced by about 20 to 30 % due to technical inefficiency. On the other hand, average allocative efficiency is found to be about 78 %. The average overall efficiency is found to be around 60 %.     

Development and Psychometric Analysis of an Instrument to Measure the Reasons that Oncological Patients give when Participating in a Psychological Intervention

This work presents the psychometric study of a questionnaire on participation in psychological therapy (QPPT). The study is applied to oncological patients and the questionnaire was designed to evaluate the reasons given by chronic patients when participating or not in programmes of psychological treatment. The questionnaire includes six rational areas which resulted from the confirmatory factorial analysis.The internal consistency of the scales was analysed through Cronbach’s Alpha, and their discriminatory capacity between criterion groups of oncological patients was tested by means of t-tests and discriminant analyses. The results support, to a reasonable extent, the reliability and validity of the QPPT as an instrument to evaluate the reasons of participation or refusal of psychological treatment in oncological patients.     

The relationship between the migration experience and risk perception: A factor in the decision to become an entrepreneur

This study examines the proposition that the migration experience influences perceptions of risk and, as such, the ‘migrant condition’ is a factor in explaining relatively high rates of entrepreneurship among immigrants in many host countries. The study analyses data obtained from the Global Entrepreneurship Monitor (GEM) Spain 2009 Survey with regard to perceptions of risk in beginning a new venture. The study finds that immigrants to Spain, irrespective of their origin or ethnicity, are less likely than native Spaniards to perceive business creation as a risky situation. Moreover, the findings suggest that the perception of risk has a significant impact on the decision to engage in business start-up activity.     

Absorptive capacity and interpretation system's impact when ‘going green’: an empirical study of ford,volvo cars and toyota

Whether or not it pays to be green or under what circumstances is an important ongoing debate among economic researchers. However, this question, with its rather instrumental rationality, may underestimate another key issue: the ability of companies to create value that can be captured from customers. This paper reports on three companies in the automotive industry developing and launching cars with improved eco‐environmental performance and less petrol consumption. The study reveals that, despite being captured in the same technological paradigm, the individual company's mode of environmental interpretation and its aspiration to exploit new technology may be two important explanatory factors in its ability to go green profitably. The study indicates that an enacting mode of environmental interpretation may be superior to a discovering mode, and suggests that for companies having a discovering mode there may be a need to complement existing engineering practice with insights into consumer psychology, and bundling of common good versus private good product attributes. The research upon which this paper is based was conducted using an insider/outsider approach in studying the three companies. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.