Diminishing effects of location? Some evidence from Swiss municipalities, 1950–2000

This paper analyzes how location has affected, in the second half of the twentieth century, the population growth of 2889 municipalities in Switzerland. The analysis demonstrates the temporal relativity of location attributes, even for small territorial divisions, such as the Swiss cantons. However, we also show that, both absolute and relative location attributes have weakened over time as population growth predictors, apparently due to improving road infrastructures, and growing motorization. The study has been made possible by a detailed historical population and accessibility database available for Swiss municipalities. To the best of our knowledge, no database of such scope and quality is available for any other European country.     

The search for the best deal: How hotel cancellation policies affect the search and booking decisions of deal-seeking customers

This study examined cancellation policies and their role in shaping travelers’ deal-seeking behavior, exploring the impact of cancellation fees and deadlines on three, mutually exclusive, customers’ hotel booking behavior categories: “Book”, “Book and Search”, and “Search”. 291 subjects, who participated in a week long online “booking game”, attempted to book a room in a virtual hotel and get the best deal. The results were tested using small sample t-test for comparing proportions between two independent populations, non-parametric multiple pairwise comparisons, and multinomial logit regression models. The findings indicate that the cancellation deadline affected participants’ behavior while the size of the cancellation fee had no statistically significant impact. In addition, there was no significant difference between lenient cancellation deadline and no cancellation policy.     

Towards Assessing the Knowledge Gap in Medical Tourism

The medical tourism industry is a fast growing global niche market that generated $20 billion in income for destinations around the world. This study suggests and tests a mechanism to assess the medical tourism providers’ perceptions about the tourists’ perceived important product attributes when selecting a medical tourism destination. The results indicate that the various medical tourism providers groups do not vary in their perceptions regarding 24 important attributes of the medical tourism product and that they all agree that tourists perceive the medical variables to be more important than the tourism related variables. Using the Korean market for data collection, the study’s additional contribution is providing insights for Korean government agencies, operators of medical tourism hospitals, policymakers, and marketers.     

Foreign direct investment via M&A and domestic entrepreneurship: blessing or curse?

There are conflicting predictions in the literature about the relationship between FDI and entrepreneurship. This paper explores how foreign direct investment (FDI) inflows, measured by lagged cross-border mergers and acquisitions (M&A), affect entrepreneurial entry in the host economy. We have constructed a micro-panel of more than two thousand individuals in each of seventy countries, 2000–2009, linked to FDI by matching sectors. We find the relationship between FDI inflows and domestic entrepreneurship to be negative across all economies. This negative effect is much more pronounced in developed than developing economies and is also identified within industries, notably in manufacturing. Policies to encourage FDI via M&A need to consider how to counteract the prevailing adverse effect on domestic entrepreneurship.     

Focusing the catastrophic illness debate.

Unlike other aspects of the American health experience, there is a current void of information on expensive illness experiences. This paper is designed to fill this void and prrsents an analysis of the incidence and cost of catastrophic illness in the United States. Catastrophic illness is defined as an illness episode for which a person incurs $5,000 or more of medical expenses in a calendar year. This information is used to provide a framework for focusing the debate about catastrophic and national health insurance.     

Graduate Economics Programs in the United States

Sterrett and Barr comment on the results of a survey of graduate programs in economics in the United States and on the marked increase in the number of masters degrees granted by the responding institutions.     

Unemployment Insurance and the Business Cycle: What Adjustments are Needed?

During the 2007–2011 economic downturn, the duration that one could collect unemployment insurance (UI) in the United States increased to an unprecedented 99 weeks, and the UI benefit amount increased by $25. This article explores the policy of increasing the generosity of UI during recessions using a model that accounts for the insurance and moral hazard implications of UI as well as the program's impact on job creation. When limited to adjusting the duration of benefits, a more generous UI system is optimal. However, due to UI's negative impact on job creation and the increased cost of providing benefits when unemployment is high, the optimal extension is just 1.3 months. When the government adjusts both the benefit amount and its duration, the optimal policy during downturns is a reduction in the replacement rate. This mitigates the decline in job creation and funds a UI extension of 4.3 months.     

Product Innovation Incentives: Monopoly vs. Competition

In contrast to Arrow's result for process innovations, we show that the gain from a product innovation can be larger to a secure monopolist than to a rivalrous firm that would face competition from independent sellers of the old product. A monopolist incurs profit diversion from its old good but may gain more than a rivalrous firm on the new good by coordinating the prices. In a Hotelling framework, we find simple conditions for the monopolist's gain to be larger. We also explain why the ranking of innovation incentives differs under vertical product differentiation.