What to show on the wine labels: a hedonic analysis of price drivers of Sicilian wines

Unlike previous literature, we construct a hedonic model of wine price that incorporates all the main categories of variables simultaneously to enable a better evaluation of their importance on wine price formation. A comprehensive model has the advantage of providing more reliable estimates of the attributes' implicit prices thereby facilitating firms' pricing and improving effectiveness of wine production and marketing decisions. We utilize two different datasets of Sicilian wines collecting data from influential wine guides. Our results suggest that wine price strongly depends on objective features such as vintage, alcoholic content, geographical origin, grape variety, producer size and cellaring potential. In addition, use of containers like tonneaux and barrique positively affects prices, whereas use of concrete containers has a negative influence. No univocal indications emerge with regard to the effect of the type of company, type of viticulture and firm age. As for sensorial characteristics, our analysis provides novel evidence of the importance of olfactory variables such as aroma intensity and the presence of particular smells in the wine. Finally, current guides’ grades and firm reputation play a crucial role in determining wine prices as well.     

Valuing recreational water clarity and quality: evidence from hedonic pricing models of lakeshore properties

This study extends the economics literature on the relationship between recreational water quality and residential property pricing by separately testing the relationships between both water clarity and quality and the price of lakeshore residential properties in Ontario, Canada. Our econometric approach includes objective measures of both attributes: Secchi disk readings for water clarity and phosphorus concentrations for water quality. Econometric results presented in this study suggest that a one-metre improvement in water clarity results in an 8 per cent residential property price premium, while a one standard deviation improvement in water quality boosts lakeshore residence prices by 32 per cent.     

An Index Approach to Measuring Product Differentiation: A Hedonic Analysis of Airfares

The main objective of this paper is to introduce an Allen-type index of differentiation based on cost functions. With this index, we create an economic measure of product differentiation that quantifies differences between products. Applied research has some generally accepted economic measures, for example, the Herfindahl–Hirschman Index for market concentration, or the Gini coefficient for inequality. Product differentiation, however, does not yet have an established measure. Our objective is to fill that gap and introduce a measure that can be used in market-related applied research such as market power, antitrust, price indexes, or market strategy. To operationalize the index, we introduce the concept of a core product and use cost functions to measure the degree of differentiation from the core product. To demonstrate the use of the index, we study the effect of product differentiation on price formation in the airline industry using an enhanced hedonic model. The model is empirically tested on 103,980 observations of quarterly US domestic airfare data between 2002 and 2016 and shows that product differentiation has a significant effect on both price and mark-up.     

Expert opinion and cuisine reputation in the market for restaurant meals

As food is an experience good, the market for restaurant meals is a market where the cost of acquiring information regarding quality is relatively high. In such markets consumers often turn to reputation measures to guide purchase decisions. As Australia does not have a longstanding cuisine style of its own, and given Australia has been open to substantial immigration inflows since federation, it represents an especially appropriate market to study regarding the impact of individual restaurant reputation and collective cuisine reputation on meal prices. The following study uses the hedonic price approach to investigate the implicit price of individual reputation indicators, cuisine type reputation indicators and other objective indicators in the market for restaurant meals. The empirical findings presented suggest that both individual restaurant reputation and cuisine type reputation are important. Other important factors are shown to include the quality of the restaurant wine list, the availability of private dining rooms, and whether or not there is an outdoor dining option.     

From Labour Market Institutions to an Alternative Model of Labour Markets

This post-disciplinary article goes beyond orthodox labour economics and combines insights from the ‘socio-economics of labour markets’ (SELM), and critical realism (CR), to develop a SELM^CR perspective, which is then used to create an alternative conception of labour market institutions and an alternative model of labour markets, i.e. the SELM^CR model.     

A Pilot Study Using an Online,Experimental, Two-Asset Market

The author uses an online securities market to engage students in their exploration of asset pricing in microeconomics courses.     

An assessment of mortgage interest inflation measurement bias in the UK

This article recognizes the highly differentiated nature of UK mortgages. Applying hedonic pricing models in the generation of interest quality adjusted indices this study would suggest the need for a 0.24 percentage point increase in the retail price index (RPI) (which, at an average RPI of 3%, represents a measurement error of 9%). Moreover, this study finds that lenders tend to restrain increases in observable initial interest rates, but more than recoup this restraint through quality adjustments. These findings question the practice of removing mortgage interest repayments from macroeconomic inflationary target measures. This indicates the need to recognize the indirect inflationary impact of base rate rises on the price of highly differentiated debt based products.     

Labour market segmentation and union wage gaps

Abstract

There has been a great deal of research regard the effects of unions on union – non-union wage gap. Most of the studies regarding the impact of unions on wages have assumed that apart from the division between union and non-union workers, the labour market is relatively homogeneous. A number of economists, however, have argued that the labour market is segmented, implying that there are distinct labour markets and that some workers employment opportunities are concentrated in “bad jobs” while other workers employment opportunities are concentrated in “good jobs” which are rationed.

This paper will explore whether the relative wage differential between union and non-union workers differs between the independent primary, subordinate primary and secondary labour markets. Labour market segments are defined using “job zones”. “Job zones” are distinct groups defined by the level of specific vocational preparation necessary for a particular occupation, allowing for the comparison of skill levels and training for each occupation. The data on “job zones” comes from the Occupational Information Network database (O?Net). We estimate separate equations for union and non-union workers in each segment using data from the Current Population Survey and calculate union non-union differentials for each labour market segment. The findings of this paper suggest that the greatest differentials are in secondary labour markets followed by differentials in the subordinate primary labour market and that the smallest wage differentials are in the independent primary labour market.     

Prediction of Graduate Performance in Economics

Professor Hansen's paper describes an effort to predict the success of graduate students in economics at The University of Wisconsin. Undergraduate grade point average, GRE scores, and the quality of the undergraduate schools were used as independent variables in a linear multiple regression model. Graduate grade point average was the dependent variable. The value of the independent variables as predictors is analyzed both jointly and in isolation. Among the important conclusions reached by Hansen is that heavy reliance upon a single predictor such as the undergraduate grade point average is unwise, that the GRE quantitative score takes on greater significance as the graduate student advances into the second year of his program, and that school quality must be taken into account.     

An assessment of the macroeconomic determinants of inequality

The paper provides an assessment of the determinants of income inequality in a broader macroeconomic context. In particular the hypothesis that income inequality is related to fundamentals affecting economic growth is examined.     

Labour market deregulation, 'flexibility' and innovation

Labour ‘flexibility’ is often portrayed as importantto competitive success. Using evidence from an original surveyof UK firms, this paper investigates the relationships betweenfirms' use of, on the one hand, various flexible work practices,human resource management techniques, and industrial relationssystems and, on the other hand, the innovative activities ofthose firms. Our results suggest that the sort of ‘lowroad’ labour flexibility practices encouraged by labourmarket deregulation—short-term and temporary contracts,a lack of employer commitment to job security, low levels oftraining, and so on—are negatively correlated with innovation.     

The participation decision versus the level of participation in an environmental treaty: a spatial probit analysis

This paper represents treaty participation as a two-stage game, for which nations first decide whether or not to participate and then they choose their level of participation. The resulting subgame perfect equilibrium is used to derive a reduced-form equation for estimating and separating the influences of the variables at the two decision stages. This spatial probit equation forms the basis for a full-information maximum likelihood estimator that accounts for the simultaneity bias associated with public good spillins at both stages. When the procedure is applied to the Helsinki Protocol, we find that the strategic influence of a variable may drastically differ depending upon which stage is scrutinized.     

The consumption-real exchange rate anomaly: nontraded goods and distribution services

An empirical analysis of risk sensitivity of supply response is attempted here for seven major field crops in California over a twenty-two year period 1949–70. Two distinct types of risk sensitivity are evidenced by the empirical trend e.g., for crops like alfalfa, sugarbeets and sorghum, where short run adjustment factors are important, the year-to-year acreage changes reflect the negative impact of price and returns risk very strongly. For other crops like rice and barley, where long run factors of adjustment are important, the impact of price changes rather than the variance of prices or returns are more important. This pattern of risk sensitivity has important economic implications for welfare gains resulting from price support and stabilization policies pursued by the federal government.     

公共交通改善期望对住房价格及其价格空间结构的影响——基于杭州地铁规划的实证研究

以杭州地铁项目为例,基于大样本住房交易跨期综列数据,构建扩展的特征价格模型,通过比较期望交通改善和非改善区域在地铁项目传言、立项前后住房价格的变化,分析了公共交通改善期望对附近住房价格及其价格空间结构的影响。研究结果显示,公共交通改善期望对住房价格和价格空间结构具有明显的影响效应,且影响效应具有空间性和时间性。从空间上看,期望交通改善对基础设施较为薄弱的远郊区影响最为明显,而对于繁华的市区影响却不显著。从时间上看,地铁开始传言和地铁规划批准使得远郊和近郊住房价格有较大的上涨,且地铁规划获批准后的增值效应更为明显。     

Do domestic bond markets participation help reduce financial dollarization in developing countries?

In this paper, I analyze the effect of domestic sovereign bond market (BM) participation on financial dollarization using a large panel of 114 developing countries over the period 1984–2009. Building on entropy balancing, my results reveal strong evidence that domestic BM participation significantly reduces financial dollarization in domestic BM countries compared to their non-domestic BM peers. Moreover, I find that the favorable impact of domestic BM on financial dollarization (i) is larger for inflation targeting countries compared to non-inflation targeting countries, (ii) is apparent exclusively in a non-pegged exchange rate regime, (iii) and is larger when there are fiscal rules that constrain the discretion of fiscal policy makers. Finally, I show that the induced drop in inflation rate and its variability, nominal exchange rate variability, and seigniorage revenue are potential transmission mechanisms through which the presence of domestic BM reduces financial dollarization in domestic BM countries.     

Are momentum crashes pervasive regardless of strategy? Evidence from the foreign exchange market

This article studies the option-like behaviour of popular momentum strategies implemented in foreign exchange markets. The results confirm recent research findings of strong option-like behaviour for momenutm measures, based on the cumulative return from 12 and 6 months prior to the formation date Surprisingly, there is no such evidence for the popular momentum strategy accounting for a 1-month formation period.     

Minimum participation rules for the provision of public goods

This paper considers the endogenous formation of an institution to provide a public good. If the institution governs only its members, players have an incentive to free ride on the institution formation of others and the social dilemma is simply shifted to a higher level. Addressing this second-order social dilemma, we study the effectiveness of three different minimum participation requirements: (1) full participation/unanimity rule; (2) partial participation; (3) unanimity first and in case of failure partial participation. While unanimity is most effective once established, one might suspect that a weaker minimum participation rule is preferable in practice as it might facilitate the formation of the institution. The data of our laboratory experiment do not support this latter view, though. In fact, weakening the participation requirement does not increase the number of implemented institutions. Thus, we conclude that the most effective participation requirement is the unanimity rule which leaves no room for free riding on either level of the social dilemma.     

Liquidity and equity returns in Borsa Istanbul

We investigate the relationship between expected returns and liquidity measures in Borsa Istanbul. To do so, we gather a wide range of illiquidity measures that can be applied to the market. Firm-level cross-sectional regressions indicate that there is a positive relationship between various illiquidity measures and one- to six-month ahead stock returns. Findings of the article are robust after using different sample periods and controlling for well-known priced factors, such as market beta, size, book-to-market ratio and momentum. The portfolio analysis reveals that stocks that are in the highest illiquidity quintile earn 7.2%–19.2% higher risk-adjusted annual returns than those in the lowest illiquidity quintile. The illiquidity premium is stronger for small stocks and stocks with higher return volatility and it increases (decreases) during periods of extremely low (high) market returns.     

A generalized impure public good and linear characteristics model of green consumption

This paper provides a general framework for understanding consumer behavior related to goods and services that may be considered environmentally friendly, ethically produced, fairly traded, or some combination thereof. We generalize the impure public good model and derive its comparative static properties. The model accounts for any number of impure public (green) goods and joint production of any number of both private and public characteristics. The generalization provides a bridge between the impure public good model and the well-known linear characteristics model, both of which are special cases of the model developed here. The results show how demand for green goods and characteristics such as environmental quality depends on wealth, exogenously given levels of public goods, and the technologies of joint production. The effects of changes in technology depend critically on whether jointly produced characteristics are complements or substitutes in consumption. Several of the results are rather counterintuitive and differ in meaningful ways from existing models of impure public goods and linear characteristics. The results also illuminate several reasons for greater caution about whether it is reasonable to assume that green goods and services are necessarily beneficial for the provision of public goods.     

Labour Markets in China: A Study of the Structure and Evolution of Wages

This paper examines the development of labour markets and the evolution of a structure of wages in China, using household surveys for 1988, 1995, 2002 and 2007. It finds evidence of both provincial and sectoral segmentation in labour markets, with eastern regions and the state-controlled sector enjoying high wage premiums in the early reform period. During the reform, China has progressed slowly towards an integrated labour market with convergence in incomes between the rural non-agriculture sector and the urban market-based sector by 1995, when industry flourished in the rural areas. The wage gap between the rural non-agriculture sector and other sectors increased and the urban state-controlled sector remained segmented with respect to all other sectors up to 2002. However, the data from 2007 show there has been increasing sectoral and spatial integration.