Design of Stated Preference Surveys: Is There More to Learn from Behavioral Economics?

We discuss the design of stated preference (SP) surveys in light of findings in behavioral economics such as context dependence of preferences, learning, and differences between revealed and normative preferences. More specifically, we discuss four different areas: (1) revealed and normative preferences, (2) learning and constructed preferences, (3) context dependence, and (4) hypothetical bias. We argue that SP methods would benefit from adapting to some of the findings in behavioral economics, but also that behavioral economics may gain insights from studying SP methods.     

Growth and entrepreneurship

In this paper we suggest that the spillover of knowledge may not occur automatically as typically assumed in models of endogenous growth. Rather, a mechanism is required to serve as a conduit for the spillover and commercialization of knowledge from the source creating it, to the firms actually commercializing the new ideas. In this paper, entrepreneurship is identified as one such mechanism facilitating the spillover of knowledge. Using a panel of entrepreneurship data from 18 countries, we provide empirical evidence that, in addition to measures of Research & Development and human capital, entrepreneurial activity also serves to promote economic growth.     

Industry Clusters in Ohio and Sweden, 1975--1995

The purpose of the present paper is twofold. First, we formulate a general method of identifying clusters of economic activity in a country or region. The methodology is based on generally available industry data and does not start from a priori notions of geographic or technology clusters. Second, the proposed methodology is then used to identify the main clusters of economic activity in Ohio and Sweden and their evolution over the last twenty years.     

Determinants of indebtedness among young adults: Impacts of lender guidelines,explicit information and financial (over)confidence

For most people, borrowing money is a necessary aspect of life in the 21st century. Wisely handled, loans give consumers access to consumption too expensive for most individuals to purchase with cash, such as homes and cars. However, history shows that taking on too much debt can be detrimental for the individual consumer as well as society as a whole. In this paper, we investigate determinants of over‐indebtedness among young adults. We perform three studies in a setting focused on buying and borrowing money for a home. We show that, compared with an overall mortgage amount, explicit information about monthly payments reduces the tendency to take on too much debt (Study 1), that the amount borrowed depends on standards regarding the loan amount communicated through guidelines from the lender (Study 2), and that borrowers who are overconfident about their financial abilities tend to borrow more than less confident individuals (Study 3). These determinants and their policy implications are discussed.     

Consumer willingness to pay for farm animal welfare: mobile abattoirs versus transportation to slaughter

Consumer preferences and willingness-to-pay (WTP) for certainnon-market food process attributes were investigated using achoice experiment. Swedish consumers were found to be willingto pay a price premium for the use of mobile abattoirs for cattlebut not for broilers. We used two different survey versions,with and without an opt-out alternative. There is no evidencethat omission of the opt-out alternative leads to biased choices.In addition, respondents who chose to opt-out were no differentfrom those making trade-offs between attributes. The inclusionof an opt-out alternative has no significant effect on the marginalWTP. Based on estimated distributions of WTP and available costestimates, the market share for mobile abattoirs is predicted.Here we do find differences between the two survey versions:the version with an opt-out alternative revealed greater unobservedheterogeneity.     

Residential energy behaviour: does generation matter?

In this study we tested the relevance of the generational hypothesis, that is, whether the era in which household members grew up matters when understanding and predicting their behaviour, on a sample of 600 Swedish households. These households participated in a survey where they answered questions about their own energy‐related residential energy behaviour. The answers were analysed for differences between age groups, between different attitudes to environmental issues, between income levels and between dwelling types. The results showed that age was as good an indicator as the other parameters. In several areas, older households had a more energy‐efficient residential behaviour than younger ones. Examples are laundry practices and indoor heat regulation. According to the generational hypothesis, this finding implies higher energy use in the future. The study also shows that there is a broad scope for improving residential energy behaviour in Swedish society by implementing changes in laundry avoiding practices, dishwashing behaviour and indoor temperature regulation.     

Kathleen Eisenhardt: recipient of the 2012 Global Award for Entrepreneurship Research

This article reviews the academic contributions of the 2012 receiver of the Global Award for Entrepreneurship Research, Professor Kathleen Eisenhardt, Stanford Warren Ascherman Professor of Management Science and Engineering at Stanford University. The Global Award consists of 100,000 euro and a statuette by the internationally renowned Swedish sculptor Carl Milles. Eisenhardt’s work focuses on strategy, strategic decision making, and innovation in rapidly changing and highly competitive markets. Her work in the entrepreneurship field centers on strategy and organization, especially in technology-based companies, what she refers to as “high-velocity industries”. Her main empirical contribution to the entrepreneurship field is her work on ‘corporate entrepreneurship’—how existing organizations can remain innovative, including through new venture creation. More generally, Kathleen Eisenhardt’s research has bridged the two fields of entrepreneurship research and organization science.     

WILDLIFE MANAGEMENT IN ZIMBABWE: EVIDENCE FROM A CONTINGENT VALUATION STUDY

If communities living adjacent to the elephant see it as a burden, then they cannot be its stewards. To assess their valuation of it, a contingent valuation method study was conducted for one CAMPFIRE district in Zimbabwe. Respondents were classified according to their preferences over the elephant. The median willingness to pay for the preservation of 200 elephants is ZW$260 (US$4.73) for respondents who considered the elephant a public good and ZW$137 (US$2.49) for those favouring its translocation. The preservation of 200 elephants yields an annual net worth of ZW$10,828 (US$196) to CAMPFIRE households. However, the majority of households (62%) do not support elephant preservation. This is one argument against devolution of elephant conservation. External transfers constitute one way of providing additional economic incentives to local communities.     

Consumer Benefits of Labels and Bans on GM Foods—Choice Experiments with Swedish Consumers

The European Union has been relatively cautious about using biotechnology in food production. A label regime combined with the right of individual member states to ban introduction of new genetically modified (GM) strains means that GM food products in effect are banned in many countries. We show how it is possible to empirically test whether a ban can be motivated by reference to potential negative externalities. This is followed up by results from a choice experiment. We cannot reject the hypothesis of equal WTP for a ban and a labeling scheme.     

Differing patterns of industrial dynamics: New Zealand,Ohio, and Sweden, 1978–1994

New Zealand, Ohio, and Sweden have experienced sharply divergent macroeconomic developments since the early 1970s. During the 1980s, New Zealand went from being the most heavily regulated and protectionist OECD country to one of the least regulated and most open economies in the world. Ohio suffered severe economic downturns when its major industries (steel, automobiles, and machinery) went through devastating crises. Since then, a major restructuring has taken place, and manufacturing output, exports, and employment have generally grown faster than in the United States as a whole. Sweden had an outstanding industrial growth record for several decades until the mid-1970s but then suffered economic setbacks from which it has not yet fully recovered. Industrial output declined for several years, resumed growth in the early 1980s but then stagnated again in the early 1990s.The object of this paper is to study the microeconomic responses to these differences in the macroeconomic environment. While manufacturing employment declined by more than 20 percent in each country, the number of establishments in manufacturing stayed constant in Sweden while it declined by 9 percent in Ohio and more than doubled in New Zealand.While there are certainly structural differences in the composition of the manufacturing sector in the three economies, these differences explain only a small portion of the differences in development patterns. Only a handful of 3-digit ISIC industries grew in terms of employment in each country between 1978 and 1993, but the growth industries were not the same across countries, and there were substantial differences in the growth patterns within these industries.