UPWARD STRUCTURAL MOBILITY,EXCHANGE MOBILITY,AND SUBGROUP CONSISTENT MOBILITY MEASUREMENT: U.S.–GERMAN MOBILITY RANKINGS REVISITED

We formalize the concept of upward structural mobility and use the framework of subgroup consistent mobility measurement to derive a relative and an absolute measure of mobility that is increasing in upward structural mobility and compatible with the notion of exchange mobility. In our empirical illustration, we contribute substantively to the ongoing debate about mobility rankings between the U.S. and Germany by demonstrating that the U.S. typically does exhibit more upward structural mobility than Germany.     

Adoption of organic farming: Are there differences between early and late adoption?

Based on the fact that not all farmers adopt a technology at the same time, it is argued in this paper that the distinction between groups is important because early, medium and late adopters respond differently to economic and non-economic factors when they consider whether to take up organic farming or not. The individual effects on adoption between the groups are identified by the use of multinomial logit analysis. The results provide evidence that there are significant differences in the characteristics between the adopter groups. The findings also reveal that the factors that affect adoption play a different role for early, medium and late adopters, particularly with regard to farming intensity, age, information gathering as well as attitudes of the farmer. More specifically, early adopters were the youngest to adopt organic farming and their decisions were found to be less profit related compared to other groups. Late adoption is constrained by risk considerations, while environmental attitudes and social learning were identified to be important determinants for all adopter groups. Overall, the findings strongly suggest, that for policy measures to be effective, the current state of diffusion has to be taken into account.     

Experiential Learning in Economics

Real-life economic situations are simulated, and students are asked to perform decision-making roles. Economics is learned through “experience.”     

On the Role of Outsiders in Technical Development

In this paper, it is argued that outsiders play an important role in the dynamics of technical change and that, for this reason, outsider involvement is also an important entry if one wants to 'improve' or democratize technical development. Outsiders are defined as people not involved in technical development and not sharing the rules that guide the design and development of a technology. The totality of these rules makes up the technological regime of a technology. Technological regimes are characterized by certain trajectories of technical development. The focus in this paper is on outsiders who may trigger (radical) technical change that transform current technological regimes. Three different types of such outsiders are distinguished and their role in technical development is discussed: professional scientists and engineers, outsider firms and societal pressure groups.     

Measuring the benefits of local publilc goods: environmental quality in Gaston County,North Carolina

Local governments across the United states have been confronted with a growing range of federal and state-mandated environmental protection programmes. It is found that an application of contingent valuation to a local environmental policy is internally valid by theoretically and empirically examining the economic determinants of responses to a hypothetical referendum. The resulting option price estimate is statistically reliable and has a reasonable order of magnitude. Results indicate that respondents are willing to pay for improvements in water quality,but not air qualilty. It is found that informatiion from various external sources helps to explain risk perceptions, and these perceptions, in turn influence willingness to pay. The aggregate benefits of an air and water polllution control programme to Gaston County are estimated to be $13.07 million annually with a 90% confidence interval of $11.07 million and $16.12 million.     

New Asian Regionalism: Evidence on the Impact Ofthe Asean +3 Free Trade Agreement on Its Member Countries

The emergence of new Asian regionalisms such as ASEAN+3 (10 ASEAN countries plus China, Korea and Japan) and other bilateral, plurilateral and multilateral free trade agreements in recent years requires research into these important developments and their underlying fundamental trade-growth causation. Popular existing methodologies such as the CGE/GTAP, gravity theory and panel regression (Dollar and Kraay, 2004) may be inappropriate due to their limited scope, heavily calibrated structure, cross-section data or non-simultaneity features (see also other criticisms in Productivity Commission Report, 2003). The paper extends the gravity theory to time-series data and applies a new flexible modelling approach to construct a simultaneous-equation model of trade and growth for the ASEAN and the East Asia 3. Using data from the World Bank national accounts and CHELEM regional and international trade over the period 1968–2000, the paper then estimates the model by both standard (OLS and 2SLS) and improved Stein-like (2SHI) estimation methods to provide superior MSE impact estimates. Implications of the findings for ASEAN+3’s economic integration, trade policy and prospects for trade and welfare improvement for this important regional FTA will also be discussed.

     

Warm glow and the transmission of pro‐socialness across generations

The transmission of pro‐socialness across generations is modeled using the warm‐glow approach. The parent generation seeks to cultivate pro‐social values in their children as this would improve their material well‐being when they grow up as cooperative adults. I show that communities endowed with more productive resources have a stronger incentive to teach their children social cooperation. Thus, there is a correlation between a village's level of material well‐being and villagers’ steady‐state level of pro‐socialness. When the cost of moral education is directly dependent on the parent generation's level of pro‐socialness, the multiplicity of steady states may emerge. If a community's initial level of pro‐socialness is high, the system will reach an interior steady state; in contrast, if this initial level is low, eventually the level of pro‐socialness will approach zero in the long run. Thus communities that start with similar initial levels of pro‐socialness may end up at drastically different steady states.     

What nutrition label to use in a catering environment? A discrete choice experiment

Worksite and university canteens are increasingly used for daily main meal consumption. Following the use of front-of-pack nutrition labels on pre-packed foods, the provision of easily accessible nutrition information on foods prepared and consumed out of home is a highly topical policy issue with the potential to help consumers making better informed and more healthy food choices when eating out. Information that is presented in a format preferred by the target group is more likely to be used. A sample of 1725 university canteen users participated in a web-based choice experiment designed to identify and understand individual preferences for alternative nutrition labels on canteen meals. Participants valued the presence of nutrition labels on canteen meals and showed a preference for more detailed formats. Ability and motivation to process information as well as socio-demographics explained differences in label preferences. Observed decreasing marginal utility from combinations of two simple label formats as well as from combinations of two detailed formats, signalled information insufficiency versus information overload, respectively. In order to satisfy most canteen users’ information needs, a nutrition label that contains basic Guideline Daily Amount (GDA)-type of numerical information in combination with familiar visual aids like stars and colour codes is proposed to be used in university canteens.     

High‐end Encroachment Patterns of New Products

Previous research describes two key ways in which a new product may encroach on an existing market. In high‐end encroachment, the new product first sells to high‐end customers and then diffuses down‐market; in low‐end encroachment, the new product enters at the low end and encroaches up‐market. This paper focuses on high‐end encroachment, which can further be broken down into three subtypes, which are called the immediate, the new‐attribute, and the new‐market forms of high‐end encroachment. This paper makes three key contributions. First, it provides a sound theoretical underpinning for the three distinct subtypes of high‐end encroachment—a linear reservation price curve model (LRPCM) is used to establish this theoretical foundation. Second, this paper delineates and illustrates four different ways the high‐end new‐market diffusion process may progress over time. These four are: (1) the traditional type, where the new product diffuses relatively slowly and methodically over time; (2) the fad scenario, where the new product opens a new market but then fizzles out after a relatively short period of high sales; (3) the rapid diffusion outcome, where the new product opens a new market and then rapidly diffuses down‐market; and (4) the prolonged‐niche type, where the new product purposefully restricts itself to its own niche rather than diffusing down‐market. The third key contribution of this paper is to offer managerial insights into the new‐market high‐end encroachment process by discussing two short case studies; namely, a retrospective look at the introduction of the iPhone, and a prospective look at Tesla's challenges in growing the market for its electric car. With regard to the iPhone, it helps explain why Apple precipitously dropped the price of the iPhone by one third only 68 days after its introduction. With regard to Tesla, it discusses how Tesla must leverage the revenues that stem from its current high‐end pricing power. Tesla must be able to progress down the learning curve fast enough so that it can create a virtuous cycle; a cycle in which cost reductions and technology improvements lead to price reductions and increased sales, which in turn lead to further cost reductions. At the conclusion of the paper, a step‐by‐step approach is offered to aid in determining which type of encroachment should be pursued and in determining how the encroachment pattern will eventually develop. The encroachment framework and the step‐by‐step approach are intended to help managers better assess and mitigate the risks inherent with a new product introduction.     

Technology, agglomeration, and regional competition for investment

Abstract.  Competition for firms by region has a long-standing history, and the academic literature has debated whether such competition is efficient. We develop a model that explores technology development by firms facing regional competition for their investment and examine the endogenous determination of region policy, firm technology, and agglomeration externalities. We find a new source of inefficiency – regional competition leads firms to inefficiently distort their development and selection of production technology to improve their standing in the regional competition for their investment. We show that these inefficient firm decisions on technology and location can also weaken agglomeration externalities.