Heterogeneity in Consumer Demands and the Income Effect: Evidence from Panel Data

This paper uses unique Spanish panel data on household expenditures to test whether unobservable heterogeneity in household demands (taste, etc.) is correlated with total expenditures (income). The main finding is that tastes are indeed correlated with income for about half of the goods considered, implying that cross‐sectional estimates of income elasticities for these goods are biased. The goods are the following: food eaten outside home, alcohol and tobacco, transportation, and energy. The elasticity of alcohol and tobacco is more than halved when taking unobserved heterogeneity into account. For transportation, the bias is sufficiently large to misclassify the good as a luxury.     

Methodology,theory and inquiry in Italian economic and social thought: The making of Francesco Coletti

During the first decades of the twentieth century, Italian economist Francesco Coletti (1866–1940) was recognised as an authority on emigration and agricultural economics. We intend to focus here on Coletti's early career to understand how he rapidly managed to secure an enviable reputation. We examine Coletti's interventions on economic semiology and measurement of national wealth. We then move on to a series of theoretical debates (notably on Marx's theory of value) to which Coletti made significant contributions. Finally, we survey Coletti's fieldwork in agriculture and emigration, topics that allowed for connecting theoretical issues, methodological constraints, and empirical data.     

The signs of change in economic evolution

Neo-Schumpeterian evolutionary economics has, since the early works of Nelson and Winter, defined evolution as the change of the mean of a characteristic of a population. This paper trancends the previous paradigm and explores novel aspects of evolution in economics. Within the traditional paradigm change is provided by directional selection (and directional innovation). However, the full definition of evolutionary processes has to include two important types of selection that change the variance without necessarily changing the mean. Stabilizing selection removes any outlier and diversifying selection promotes the coexistence of behavioural variants. This paper emphasizes the need for an integrated analysis of all three types of selection. It also demonstrates that the evolutionary algebra provided by Price’s equation increases the intellectual coherence and power of thinking about selection and other aspects of evolutionary processes. Directional, stabilizing and diversifying selection are then related to fitness functions that can produce the different types of selection; and the functions are used for simple simulations of the change of the population distribution of a quantitative characteristic. Finally, the paper adds to evolutionary economics a novel way of using Price’s equation to decompose the statistics of the changes of the frequency distributions. The changes of mean, variance, skewness and kurtosis are all decomposed as the sum of a selection effect and an intra-member effect. It is especially the signs of these effects that serve to define and characterize the different types of selection. Both this result and the general analysis of the types of selection are of relevance for applied evolutionary economics.     

Some immediate - but negative - effects of openness on product development performance

This paper charts an unnoticed theme in the current debate on open innovation, namely the foundational question whether increasing openness is beneficial? The paper approaches this question by conceptualising the degree of ‘openness’ and analyses the importance of increasing degrees of openness for NPD performance. Inter-organizational relationships in New Product Development lay the foundation for operationalising openness because these represent important sources of ideas and knowledge in purposive inbound open innovation. This exploratory paper finds that on immediate NPD performance measures the single firm strategy is performing better than the collaborative strategy. However, we also find that the use of internal and external relationships is highly correlated and that these interact with each other. Finally, with increasing degrees of openness the product development projects are slower than the norm in the industry, slower than what is usual for the firm’s projects and had higher cost than the norm in the industry and the firm’s usual projects. These results offer a more critical perspective on openness and NPD performance than the literature on the open innovation paradigm suggests. The paper discusses these results and offers some challenges for management and research of open innovation.     

Neither invented nor shared here: The impact and management of attitudes for the adoption of open innovation practices

Despite the massive interest in open innovation, limited attention has been expressed concerning the intra-organizational challenges in implementing it. An exemplary issue is the unwillingness of employees to undertake extra-organizational knowledge transactions in the form of negative attitudes against the sourcing of external knowledge (the not-invented-here (NIH) syndrome) and against the external exploitation of knowledge assets (the not-shared-here (NSH) syndrome). Using survey data collected from 331 firms, this article empirically assesses the theoretical assertion that the NIH and NSH syndromes have negative impacts on the adoption of inbound and outbound open innovation. Furthermore, it investigates how their effects can be reduced through competence-building programs based on the training of employees. By focusing on two attitudinal antecedents to openness, the findings offer an explanation for the problems that firms face in benefiting from inflows and outflows of knowledge and possible guidance as to how managers can disengage such attitudes.     

The character of demand in mature organic food markets: Great Britain and Denmark compared

We investigate the organic food market in two selected European countries, Great Britain and Denmark, identifying main differences and similarities. We focus particularly on consumer perceptions and priorities, labelling schemes, and sales channels as a basis for assessing market stability and prospects for future growth. We employ a unique set of household panel data that includes information on stated values and concerns as well as registered purchasing behaviour. Most organic food on both markets is produced and processed by large-scale industrialised units and distributed through mainstream sales channels, consumer confidence being sustained at present by organic labelling schemes that appear to function well. However, a parallel market, based on the supply of goods through various direct sales channels to heavy users, prevails. We find that organic food purchase decisions are primarily motivated by ‘private good’ attributes such as freshness, taste and health benefits, attributes that may be perceived as being compatible with modern production and sales structure. Mature markets for organic foods nevertheless appear to be vulnerable to consumer dissatisfaction, particularly among heavy users of organic food products.     

Minimum Rate of Return Guarantees: The Danish Case

We analyze minimum rate of return guarantees for life-insurance (investment) contracts and pension plans with a smooth surplus distribution mechanism. We specifically model the smoothing mechanism used by most Danish life-insurance companies and pension funds. The annual distribution of bonus will be based on this smoothing mechanism after taking the minimum rate of return guarantee into account. In addition, based on the contribution method the customer will receive a final (non-negative) undistributed surplus when the contract matures. We consider two different methods that the company can use to collect payment for issuing these minimum rate of return guarantee contracts: the direct method where the company gets a fixed (percentage) fee of the customer's savings each year, e.g. 0.5% in Denmark, and the indirect method where the company gets a share of the distributed surplus. In both cases we analyze how to set the terms of the contract in order to have a fair contract between an individual customer and the company. Having analyzed the one-customer case, we turn to analyzing the case with two customers. We consider the consequences of pooling the undistributed surplus over two inhomogeneous customers. This implies setting up different mechanisms for distributing final bonus (undistributed surplus) between the customers.