Do I have to go shopping again? A theory of choice with movement costs

In this model, the standard theory of the one-person household is extended into space and time. The theory is extended into space by imposition of a real trip cost on the act of purchase, separate from the money price of commodities. It is extended into time by imposition of a real cost of storage (represented by “deterioration”) on the stocks of goods held in the household between shopping trips. The necessity for storage permits the theory to include an endogenous choice of capacity to store as well as choices among consumption, leisure, and shopping trip frequency. By use of duality theory, the comparative static effects of price, wage, and trip costs are examined. Production and transformation within the household are integrated into the model and shown to be covered by the dual approach.     

Do investors actually value sustainability? New evidence from investor reactions to the Dow Jones Sustainability Index (DJSI)

Research Summary: Research exploring investor reactions to sustainability has substantial empirical limitations, which we address with a large‐scale longitudinal financial event study of the first global sustainability index, DJSI World. We examine investor reactions to firms from 27 countries over 17 years that are added, deleted, or continue on the index. We find that once relevant controls and comparisons to observationally equivalent firms beyond the index are included, DJSI events have only limited significance and/or materiality. Nonetheless, investors' valuation of sustainability around the world has evolved over time, involving diminishing reactions to U.S. firms and increasing benefits, particularly of continuation on the index, over time. The study highlights the importance of careful analysis and longitudinal global samples in making inferences about the financial effects of social performance. Managerial Summary: The debate about how investors perceive corporate social responsibility (CSR) predates Milton Friedman's famous statement that the only social responsibility of business is to increase profits. Although extensive research has studied whether sustainability contributes to financial performance, we have yet to understand whether investors believe it pays off. This financial event study of reactions to the addition, continuation, and deletion from DJSI World, the first global sustainability index, shows that investors care little about DJSI announcements. Nonetheless, there is some evidence that global assessments of sustainability are converging and that investors may increasingly be valuing continuation on the DJSI, suggesting that firms may gain at least limited benefits from reliable sustainability activities.     

An Investigation of Policy Administrative Costs Using Panel Data for the English Environmentally Sensitive Areas

This paper explores transactions costs in the context of agri‐environmental policy schemes based on management agreements. While transactions costs encompass a wide range of organisational costs, the focus here is on the public‐sector administrative costs of policy implementation. Empirical administrative cost functions were estimated to investigate the factors affecting the magnitude of such costs, using panel data spanning five years for the 22 English Environmentally Sensitive Areas. The extent of participation appears to be important in explaining administrative cost variability across areas. The data suggested the existence of size economics with regard to the numbers of agreements made in any one ESA, and a significant effect of scheme experience in exerting downwards‐pressure on administrative costs. Policy budgeting and evaluation should take into account the non‐trivial costs of organisation, particularly if agri‐environmental schemes based on the procurement of conservation goods through management agreements are to be extended in future.     

The cost of telephone service: An international comparison of rates in major countries

An exhaustive analysis of all 1979 telephone calls in the US Bell System determines market baskets of telephone services consumed by residential subscribers and by business subscribers. Individual calls are classified according to duration, distance, hour and day of week, and type of service. The annual cost of purchasing these market baskets is evaluated using the complete rate structures of nine countries. Telephone service is least expensive in the US and only slightly higher in Canada. Costs in Sweden, the UK and Italy are moderately higher than the USA. The highest rates are found in Japan, the FRG, France and Australia.     

The nature of Japan's comparative advantage, 1965-80

This paper compares the dynamic factor proportions theory to the product cycle theory in explaining Japan's comparative advantage for the 1965-80 period. Three tests were used: (1) domestic Japanese relative prices of more and less competitive export commodities; (2) trends in capital-labour ratios, skill ratios, R&D intensity and product turnover for Japan's manufactured exports; (3) price elasticities over time of Japan's exports. The results suggest that: (1) the product cycle must be considered along with the factor proportions theory for the pre-oil shock period; (2) the product cycle theory is superior for the post-oil shock period.