The effect of constraints on house costs

The U.S. residential construction industry allegedly is impeded by constraints such as (a) union restrictions, (b) restrictions on building supplier competition, (c) small size of home building firms, and (d) restrictive building codes that supposedly cause inefficiency and high cost. To determine the impact of such constraints on construction costs, the price of new, single-family houses was related to characteristics of these houses and measures of the constraints through multiple regression analysis. The best combination of house characteristics was selected to explain variations in cost. Then, constraint variables were added to this combination to determine the impact of constraints on construction outlays. The findings suggest that the quantitative effect of constraints upon the costs of one-family houses is small. Local building codes probably add no more than 2%, while the impact of unions on construction worker wages would appear to increase housing costs only by about 4%.     

An Enhanced Framework for Improving Cooperation Between Marketing and Other Functions: The Differential Role of Integrating Mechanisms

In order to compete effectively in the marketplace,it is critical for marketing and other functional departmentsto work in harmony with each other. Building on the work of Griffinand Hauser (1996), an enhanced framework is proposed to furtherour understanding of when integrating mechanisms designed toincrease cooperation between marketing and other functions arelikely to be most effective. The framework suggests that theefficacy of an integrating mechanism varies across marketingsinterfaces with different functions—manufacturing, finance,and R and D. Further, the effects of internal and externalvolatility of an organizations environment on cooperation areincorporated into the framework. Implications for theory andpractice are discussed.     

Reducing marketing’s conflict with other functions: The differential effects of integrating mechanisms

To operate effectively, marketing must work in harmony with other functional departments in a firm. This study focuses on marketing’s interactions with three functions that play a key role in the achievement of marketing goals—finance, manufacturing, and R&D. The authors combine insights from previous studies and interviews with practicing managers to identify six integrating mechanisms proposed to mitigate manifest interfunctional conflict (behavior that frustrates marketing initiatives). In addition, they investigate the role of internal volatility (turbulence within an organization) in shaping manifest conflict. Based on a large-scale, multi-informant empirical study, the authors identify the more effective of these six integrating mechanisms. Furthermore, they argue and demonstrate these mechanisms are differentially effective across the marketing-finance, marketing-manufacturing, and marketing-R&D interfaces. Implications for theory and practice are discussed. Elliot Maltz received his MBA from the University of California at Davis and his Ph.D in marketing from the University of Texas at Austin. Prior to coming to the Atkinson School, he taught at the Marshall School of Business at the University of Southern California. Dr. Maltz’s research focuses on how market information can be effectively transmitted from marketing to other functions within a firm (e.g., R&D, manufacturing) or across firms (e.g., in distribution channels, strategic alliances) to facilitate new product development or marketing initiatives designed to respond to changes in market conditions. His research has been published in theJournal of Marketing, theJournal of Marketing Research, theJournal of Business Research, and theJournal of Product Innovation Management and Long Range Planning Ajay K. Kohli is the Isaac Stiles Hopkins Professor of Marketing at the Goizueta Business School at Emory University. His undergraduate degree is in electrical engineering, and his master’s and Ph.D. degrees are in business administration. He has also taught at the Harvard Business School, the University of Texas at Austin, Koblenz School of Corporate Management in Germany, and at the Norwegian School of Management, Norway. His published work focuses on market orientation, sales management, and B2B Marketing. He has received several research and teaching awards including the Jagdish N. Sheth Award for the best article published in theJournal of the Academy of Marketing Science in 1997, the Alpha Kappa Psi award for best practice-oriented article published in theJournal of Marketing (1990), and the Jack Taylor award for excellence in teaching at the University of Texas at Austin.     

The effects of a large discrete maize price increase on the distribution of household welfare and poverty in rural Kenya1

This study estimates the effects of a large discrete maize price increase on the welfare of a sample of rural Kenyan households. The usual first‐order welfare approximation formula is extended to a second‐order formula that allows for supply and demand responses to the price change. Results show that many rural households are not affected greatly by the price change, and there are about as many gainers as losers. However, these full sample results mask important differences across regions. Welfare gains generally take place in major production areas while losses are in areas where most households are net buyers of maize. Semiparametric methods are used to investigate the relationship between income and the size of the welfare effect, and poverty dominance techniques are applied to study the impacts of the maize price increase on rural poverty.     

The role of physical distribution services as determinants of product returns in Internet retailing

Pressure continues to build on Internet retailers to squeeze out inefficiencies from their day-to-day operations. One major source of such inefficiencies is product returns. Indeed, product returns in Internet retailing have been shown to be, on average, as high as 22% of sales. Yet, most retailers accept them as a necessary cost of doing business. This is not surprising since many retailers do not have a clear understanding of the causes of product returns. While it is known that return policies of retailers, along with product attributes, are two important factors related to product return incidents, little is known about which aspects of the online retail transaction make such a purchase more return-prone. In the current study, we seek to address this issue. We use a large data set of customer purchases and returns to identify how process attributes in physical distribution service (PDS) influence product returns. The first attribute involves perceptions of scarcity conditions in inventory availability among consumers when retailers reveal to consumers information on inventory levels for the products that they intend to buy. Our results show that orders in which items are sold when these conditions are revealed to shoppers have a higher likelihood of being returned than orders in which these conditions are not revealed. While prior research has argued that inventory scarcity perceptions have an effect on purchases, our findings suggest that they are also related to the likelihood of these purchases being returned. The second attribute involves the reliability in the delivery of orders to consumers. We find that the likelihood of orders being returned depends on the consistency between retailer promises of timeliness in the delivery of orders and the actual delivery performance of the orders. Moreover, we find that the effect that consistency in the delivery has in the likelihood of returns, is stronger for orders that involve promises for expedited delivery than for orders with less expeditious promises. That is, although the occurrence of returns depends on the delays in the delivery of orders to consumers relative to the initial promises made by the retailers, this effect is more notable for orders that involve promises of fast delivery.