Using a Simple Contest to Illustrate Mechanism Design

This article describes a simple classroom activity that illustrates how economic theory can be used for mechanism design. The rules for a set of contests are presented; the results typically obtained from these contests illustrate how the prize structure can be manipulated in order to produce a particular outcome. Specifically, this activity is designed to show how changing the prize structure can impact both the contestants’ average efforts and the effort level of the hardest-working contestant. The activity can be run in a 50-minute class, has instructions that fit on a single piece of paper, and, although it can be run in large classes, requires only six students.     

The State as Both Regulator and Player: The Politics of Transfer of Development Rights in China

The conventional argument that the introduction of transfer of development rights (TDR) shifts the power of land use regulation from the state to the market is increasingly under challenge. In China, the state's grip on land is reinforced through TDR, in which the state is both regulator and player. This state-dominated form of TDR affects China in three ways. First, competing aspirations of different scales of government complicate how TDR is implemented. Although the central state promotes TDR to maintain a national balance of arable land, some local states instrumentalize it to expand their landed basis of accumulation. Secondly, TDR tends to benefit the state but not its people. It may increase the fiscal income of the sending government and lessen the land shortage of the receiving government, but sometimes at the expense of the interests of land users without land ownership. Thirdly, given the state's deep involvement in TDR programs, the key for China's TDR to protect arable land lies not so much in clear property rights or a fully fledged market as in effective checks and balances regarding the state's powers over TDR. These three observations attest to the embeddedness of TDR in the local political economy.     

Saint Paul, Minnesota: Excesses of the growth coalition and the rise of the alternative growth coalition

The City of Saint Paul, Minnesota, in the Upper Midwest region of the United States along the Mississippi River, provides an excellent example of the excesses of the growth coalition. It is also a good example of the creation of an alternative growth coalition of neighbourhood-based organisations seeking to ensure that growth benefits those in most economic need.

Like most American cities in the Eastern and Midwestern parts of the United States that grew up as manufacturing centres, Saint Paul experienced some decline in recent decades as its suburban areas grew. Changes in the economy of the country from manufacturing to service sectors and the common inability of central cities to compete with retail shopping centres in the suburban areas left Saint Paul with some areas of vacant land and distressed buildings.     

Are stock and real estate markets integrated? An empirical study of six Asian economies

Rising asset prices spurred by Asia's emerging economy have drawn much attention recently. This study examines one source of growth patterns in asset prices by analyzing the integration relationship between stock markets and real estate markets in Asia. Six economies are selected for empirical analysis: China, Hong Kong, Japan, Singapore, South Korea, and Taiwan. Results show that stock markets are integrated with real estate markets in Japan, and partially integrated with real estate markets in China, Hong Kong, and Taiwan. This implies that these two investment vehicles are substitutable in China, Hong Kong, Japan, and Taiwan, and provide diversification potential for investment portfolios in South Korea and Singapore. Examining the timing of market changes, we found the real estate market leading the stock market in some countries, and the stock market leading the real estate market in others. We conclude that stock and real estate markets show a variety of inter-relationships depending on economic and political policy environments.     

Big ideas for a small town: the huddersfield creative town initiative

Whilst much of the attention of those concerned with culture and regeneration has rightly been focused upon the core cities and regional capitals, it would be a mistake to assume that smaller towns and cities do not also have a role to play. Huddersfield, West Yorkshire, is one of a number of towns clustered around the Pennines that grew, and for a hundred years prospered, from the textile trade but which, by the 1980s, were in serious economic decline. This article examines how culture has contributed to the regeneration of the town and the wider local authority district.¹ It reviews the developing role of the creative industries within the district and, in particular, the role of the local Council as a key catalyst for many of the institutional and policy shifts that have contributed to this development. The paper is very much intended as reflection on a particular case study. It is certainly not offered as a blueprint but as an opportunity to contribute to the developing knowledge base concerned with the role of the cultural and creative industries in urban development.     

Scenarios for greenhouse gas emissions reduction from tourism: an extended tourism satellite account approach in a regional setting

Tourism results in the emission of climate-changing greenhouse gases. There has been limited destination-focused quantitative analysis of how tourism might be reshaped to reduce these emissions. This paper uses an extended tourism environmental satellite account methodology to examine the case of tourism in Wales, a United Kingdom region. It shows how an estimate of the emissions associated with trips to, and in, the region – internally, from the rest of the UK and from abroad – can contribute to regional aspirations to reduce greenhouse gas emissions. The analysis suggests that substantial emissions cuts are dependent upon technical developments outside of tourism itself. Four potential scenarios are devised and analysed. Scenario 1 shows the value of low carbon electricity production in cutting tourism-related emissions. Scenario 2 analyses a possible 50% fall in international arrivals and 10% increase in UK domestic arrivals – maintaining employment but reducing emissions. Scenario 3 shows the effects of switch from private to public transport modes for 50% of UK resident arrivals. Scenario 4 examines the outcomes of reducing ground transport emissions by using electric, biofuel and hybrid technologies. All scenarios cut emissions, none are highly effective and most are dependent on changes in society and governance.     

The contribution of tourism to the UK economy: Satellite account perspectives

This paper reports on recent UK progress towards the construction of a tourism satellite account. The nature of the account is explained and the paper argues that the tourism satellite account provides an indication of the contribution of visitor-related service activity to the UK economy. The paper demonstrates that a consistent accounting of tourism industry activity potentially provides new information for policymakers and the tourism industry itself. The account can inform decisions in terms of directing scarce resources, and in identifying critical elements in tourism sector success or failure. Moreover, the tourism satellite account permits the industry to be understood in the mainstream of economic analysis.     

Productivity and computers in Canadian banking

Canadian banks have invested millions in computer systems in the last two decades. Yet the banks and outside observers have been uncertain that these investments have had net benefits. In this paper, unique data collected directly from a bank is used to investigate the impact of these investments on bank output, input and productivity. Using data from 1974–1987, a translog cost model is estimated. Both capital and labor are divided into information and noninformation inputs. The results are generally consistent with economic theory. The attempt to separate technical change from possible scale effects is very sensitive to alternative specification. Overall there has been some productivity growth associated with the changing computer technology. However, many of the benefits seem to have accrued to the customer and have not directly lead to gains for the bank.     

Dynamic modelling of real estate investment trusts and stock markets

Taiwan launched the first case of real estate securitization in 2005. The interrelationship between Taiwan Real Estate Investment Trusts (T-REITs) and the aggregate equity markets and segmented industries has drawn the interests of both investors and academia. This paper employs Toda and Yamamoto's (1995) procedure and the generalized impulse response approach to uncover the extent and the magnitude of the relationship between T-REITs and aggregate and segmented stock prices. We collected daily data of the first two issued T-REITs, Fubon No.1 and Cathay No. 1, from March 2005 to March 2010 and October 2005 to March 2010, respectively, to examine their causal relationships with aggregate stock markets, the financial sector, and the construction sector. The empirical results indicate that all variables have break points, reflecting shocks from the Subprime Mortgage Crisis or deregulation of the Qualified Domestic Institutional Investors (QDII) for Mainland Chinese to invest in Taiwan. We also discover that an individual T-REIT may lead or lag behind stock price indices due to its capitalization scale or business type. The transitory initial impacts of innovations in T-REITs on stock price indices are observed herein.