Land use and commodity production

An agricultural land use system á la Von Thünen is adduced. Sraffa's theory of production, prices, and distribution is situated within this system. The specific inter-relations of the Von Thünen model and the Sraffa model are then discussed. The discussion is particularly focussed around the problem of the determination of land rent in relation to both production and consumption. Some final comments are appended on the process of land use change.     

On the linearity of the wage–profit relation in a Sraffa’s model: a mathematical summing-up

This paper sums up in a common analytical structure the main results, scattered in economic literature, concerning the linearity between rate of profit and real wage in a simple Sraffa’s model. The paper is mainly based on previous results of one of the two authors and on results of Miyao (Int Econ Rev 18:151–162, 1977) and Schefold (Zeitschrift für angewandte Mathematik und Physik 27:873–875, 1976a; Zeitschrift für National?konomie 36:21–48, 1976b).     

Spatial equilibrium with local public goods: Urban land rent,optimal city size and the Tiebout hypothesis

This paper extends the standard model of urban land rent to consider the spatial equilibrium conditions in a local public goods market as hypothesized by Charles M. Tiebout. An analysis is made of the spatial dimensions of public goods, their degree of ‘localness’ and their impact on land values. It is shown that the optimal population size of the community (Tiebout's sixth assumption) is simultaneously derived with the optimal supply of local public goods and local taxes. It is also shown that land rent is a poor output indicator of Tiebout's equilibrium conditions and that the capitalization assumption is not the appropriate test for his hypothesis.     

Regional income inequality and economic development

It is the purpose of this paper to critically re-examine Williamson's original axiom of regional inequality as it relates to the process of national development under a new dimension: income distribution disparities within the population of the regions. The dynamic association between inequality and development in general and the convergence hypothesis in particular will be retested. Instead of Williamson's coefficient of variation we introduce a set of Regional Dissimilarity Indices that measures the dissimilarity of the spatial distribution of population by income at the national level.     

Spatial competition,concentration and welfare

This paper gives the general conditions under which the firm's f.o.b. mill price may rise or fall due to spatial separation of buyers and/or spatial entry of rival firms. Several theorems are proposed concerning the fundamental mechanism underlying certain paradoxical implications of two orthodox spatial competition models. A third alternative model of competition set forth elsewhere is reexamined, and is shown to generate the largest market areas for individual firms, the lowest product prices, and the greatest industry supply — the greatest consumer welfare.     

Differencing of random walks and near random walks

The traditional rationale for differencing time series data is to attain stationarity. For a nearly non-stationary first-order autoregressive process—AR (1) with positive slope parameter near unity—we were led to a complementary rationale. If one suspects near non-stationarity of the AR (1) process, if the sample size is ‘small’ or ‘moderate’, and if good one-step-ahead prediction performance is the goal, then it is wise to difference the data and treat the differences as observations on a stationary AR (1) process. Estimation by Ordinary Least Squares then appears to be at least as satisfactory as nonlinear least squares. Use of differencing for an already stationary process can be motivated by Bayesian concepts: differencing can be viewed as an easy way to incorporate non-diffuse prior judgement—that the process is nearly non-stationary—into one's analysis. Random walks and near random walks are often encountered in economics. Unless one's sample size is large, the same statistical analyses apply to either.     

The initial value problem for the trade cycle in euclidian space

[Ten Raa, 1984] has shown how arithmetics ideas carry over to distributions over space and can be used to solve open, static spatial problems such as the determination of urban equilibrium. This article extends the approach to dynamic spatial economics by tracing spatial distributions through time. It is shown that the basic ideas of ordinary differential equations carry over to the present context, provided that ‘functions’ are spatially distributed valued. The consequent differential equations for the distributions are solved. [Puu, 1982] spatial trade cycle model falls out as a special case and its associated initial value problem can now be completely solved.     

Goodness of fit for seemingly unrelated regressions: Glahn's R2y.x and Hooper's r̄2

This paper presents a measure of goodness of fit for Zellner's seemingly unrelated regressions. The measure is a monotonic transform of the appropriate (asymptotic) F-statistic, is bounded on [0, 1] and is maximized by Zellner's estimation technique. Glahn's composite correlation coefficient is shown to be a special case of this measure. It is also compared to Hooper's squared trace correlation coefficient. All three measures as well as some additional asymptotic summary test statistics are calculated for the two-equation example of Zellner. The applicability of the latter test statistics seems not to be recognized in applied work.     

An approach to evaluate incentive policies for energy development

The federal energy agencies are continuously seeking new energy resources to make the U.S. self-sufficient in its energy requirements. Geopressured resources have been identified for quite some time as possible candidates. However, the fundamental barriers to commercializing this source of energy are the excessive capital investments necessary and high uncertainty. This study proposes a methodology for exploring the use of economic incentives as instruments to stimulate the growth of geopressured resource development in the United States. It also identifies how incentive policy options are related to the fundamental barriers against a U.S. geopressured gas capability. The study models the geopressured development project as a Monte Carlo simulation. The geopressured system model simulates the production from a known geopressured resource. The profitability of the geopressured resource development project under alternate incentive policy options is evaluated as to their impact on two base case scenarios of potential investors in such development projects. The evaluations concern the policy impacts on improving project economics and risks. Results indicate that economic incentive policies are effective tools for improving the profitability of geopressured resource development projects. Each incentive serves different purposes with regard to inherent economics, project risks, marketplace uncertainties, and developers' access to capital. The effectiveness of the incentive policies depends on the developer's attitudes and attributes.     

Estimating the demand for housing characteristics: A survey and critique

Many economists criticize the concept of the composite commodity'of housing that forms the basis of modern urban economics. As a result, much empirical work has been produced that attempts to estimate the household demand for housing and locational characteristics. The purpose of this paper is to take stock of the literature. The theoretical foundations of the literature and the econometric procedures employed are analyzed and critiqued. In addition, the empirical results are examined in order to identify any patterns that exist. The principal conclusion of this survey is that the theoretical basis is sound, but the econometric applications leave much to be desired. One consequence is that the literature has produced few empirical regularities. Another is that more studies using better estimation procedures and better data are needed before it can be safely argued that the composite commodity concept is replaced by the characteristics approach.     

On the exclusion theorem'

This paper examines the locational decision of the firm in a linear space economy under increasing returns to scale and imperfect competition. All intermediate locations are excluded by the firm from its possible location without being adversely affected. This is a stronger result than Sakashita's and Mathur's which require non-increasing returns to scale and perfectness in input markets. In this sense, our paper leads to a more general version of the Exclusion Theorem.     

Rate of return analysis and economies of scale in higher education

This paper presents the results of a study of the rate of return on undergraduate education at the University of Bradford, United Kingdom, and compares them with returns calculated independently for the U.K. university system as a whole. Rates of return are measured for separate undergraduate courses and considerable variation is shown, courses in science and technology generally having lower return because of their higher costs. Private returns to the individual graduate are shown to be substantially greater than those to society as a whole. The government's return, in the form of increased tax receipts is shown to be positive. Further results demonstrate increasing marginal rates of return to society as a result of the economies of scale associated with the expansion of enrolment planned for the decade 1971–1981. The problems involved in projecting rates of return into the future are considered.The paper is directed to teachers and students of the economics of education.     

A dynamic model of housing production

This paper derives the optimal development strategy for a housing producer with perfect foresight in a steady-state environment where dwellings deteriorate as they age. Under the assumption of zero demolition costs, the optimal strategy is an infinite sequence of identical buildings. Building abandonment is shown to be possible with positive demolition costs. A solution highlighting the model's spatial properties is computed using Cobb-Douglas functions.     

How supervisors set the tone for long hours: Vicarious learning,subordinates' self-motives and the contagion of working hours

This paper develops a theoretical model that highlights the mechanisms underlying the contagion of long working hours from supervisors to subordinates at different stages of their relationship. Drawing upon social learning theory, we suggest that subordinates mimic the supervisor's working hours through vicarious learning. Focusing first on the role-taking stage of the supervisor-subordinate relationship, we identify four factors, namely supervisor's perceived status, subordinate's work centrality, congruence between organizational norms and supervisor's working hours, and subordinate's identification with the supervisor, that may influence the perceived desirability of adopting the supervisor's working hours. We then examine the relative influence of each of these factors through the lens of subordinates' self-motives. Turning, next, to the routinized supervisor-subordinate relationship, we elaborate on how social contagion may evolve over time. Lastly, the implications of our model as well as future research avenues are presented.     

The systemic variables and elasticities in Alonso's general,theory of movement

This paper explores the theoretical underpinnings of interregional movement models generalized by William Alonso focusing on the systemic effects of origin supply conditions and destination demand conditions. It is found that although Alonso's theory is logically consistent in terms of regional aggregation and interregional migration accounts, in practice the elasticity estimation of the systemic variables is problematic. Unless the affinity term is broadly defined, the trends in the ratio of interregional to intraregional affinities, cast suspicion on the family of spatial interaction models because of the inseparability of distance from origin and destination characteristics, and spatial autocorrelation problem.     

A linear programming model of housing market equilibrium

This paper reviews Wheaton's assertion that the Herbert-Stevens Linear Programming Model produces solutions which do not meet Alonso's criteria for market equilibrium. It demonstrates that, although Wheaton's criticism is valid in general, under certain conditions an alternative specification of the objective function coefficients and the dual variables in the linear program produces a model whose solutions satisfy Alonso's criteria. Finally, this paper shows that the NBER model is an application in which a linear programming problem computes market equilibria.     

The value of information in a sealed-bid auction

In this paper, we explore bidders' incentives to gather information in auctions, when there is one bidder with only public information and another with some private information. We find that the bidder with only public information makes no profit at equilibrium, while the bidder with private information generally makes positive profits. Moreover, the informed bidder's profits rise when he gathers extra information, and the increase in greater when the information is collected overtly than when it is collected covertly. When the uniformed bidder can observe some of the better-informed bidder's information, he prefers to make his observations covertly. If the seller has access to some of the better-informed bidder's information, or if he has affiliated information of his own, he can raise the expected price by adopting a policy of making that information public. However, there are cases where a policy of publicizing his information would lower the expected price. The distinguishing feature of these latter cases seems to be that the seller's information is complementary to the information of the better-informed bidder.     

Demographic change and implications for planning economic strategy

The growth of population and jobs in nonmetropolitan areas and the decline in growth of metropolitan areas during the previous decade represented a significant reversal in previous settlement patterns in the industrial world. This paper examines the importance of economic and demographic change in explaining recent spatial patterns of concentration and deconcentration within a system's framework, and suggests implications for strategic economic and planning policies. The central hypothesis of this paper is that the nature of these interrelationships determine in large part the dynamics of change within metropolitan and nonmetropolitan areas and makes possible a comprehensive view of the implications, for spatial redistribution, of planning policies and strategies.     

Bertrand oligopoly in a spatial context: The case of quantity independent transportation costs

The theory of spatial competition [for a review, see Gabszewicz and Thisse (1985)] is usually based on the assumption of transportation costs which are proportionate to distance and quantity. In reality, however, there exist frequently considerable economies of scale, especially with respect to the conveyed quantity of goods. A good case in point is transportation cost incurred by a consumer patronizing a shopping area. Cost economies of scale will in general influence consumers' optimal choice with respect to quantities and best market places. In the extreme, consumers' outlays on transportation can be considered independent of the purchased quantity, but approximately proportionate to distance. In the present paper, the impact of this assumption on spatial competition is analysed. It will be shown, that existence and uniqueness of spatial oligopolistic equilibrium is restored. Furthermore, due to some residual monopolistic power, prices do not converge to the perfectly competitive equilibrium prices when the distance between the firms shrinks to zero. In conclusion the model exhibits a fundamental difference in the market structure, when the spatial aspect is incorporated.     

Entry and price dynamics in a perfect foresight model

This paper studies firms' entry and price dynamics in a model that combines the assumptions of free entry and perfect foresight with the hypothesis of consumer's loyalty postulated by Phelps and Winter. The analysis of the transition to long-run equilibrium reveals that, in such a model, the entry of firms is related to the difference between current prices and costs. In relation to the growth of the firms' output, it is shown that the model is consistent with Gibrat's Law. Finally, it is shown that the size distribution of firms approaches asymptotically a Pareto distribution.