Environmental levies and distortionary taxation:: Pigou, taxation and pollution

I note an important distinction between the optimal price of environmental quality in a second-best world and the optimal level of environmental quality. Using an analytical general equilibrium model, I show that for reasonable parameter values, an increase in tax distortions (arising from an increase in required tax revenues) leads to a fall in the optimal Pigouvian tax rate even while environmental quality improves. In general, knowledge of the direction of changes in optimal environmental tax rates due to changes in the economy is not sufficient for understanding the impact on environmental quality.     

A multivariate Poisson mixture model for marketing applications

This paper describes a multivariate Poisson mixture model for clustering supermarket shoppers based on their purchase frequency in a set of product categories. The multivariate nature of the model accounts for cross-selling effects between the purchases made in different product categories. However, for computational reasons, most multivariate approaches limit the covariance structure by including just one common interaction term, or by not including any covariance at all. Although this reduces the number of parameters significantly, it is often too simplistic as typically multiple interactions exist on different levels. This paper proposes a theoretically more complete variance/covariance structure of the multivariate Poisson model, based on domain knowledge or preliminary statistical analysis of significant purchase interaction effects in the data. Consequently, the model does not contain more parameters than necessary, whilst still accounting for the existing covariance in the data. Practically, retail category managers can use the model to devise customized merchandising strategies.     

Clusters,knowledge spillovers and new venture performance: An empirical examination

Firms in geographic regions with industry clustering have been hypothesized to possess performance advantages due to superior access to knowledge spillovers. Yet, no prior studies have directly examined the relationship between a firm's location within a cluster, knowledge spillovers and firm performance. In this study, we examine whether technological spillovers explain the performance of new ventures in cluster regions. We find that ventures located within geographic clusters absorb more knowledge from the local environment and have higher growth and innovation performance, but contrary to conventional wisdom, technological spillovers are not the contributing cause of higher performance observed for these firms.     

Pirates and invaders: Land acquisition in urban Colombia and Venezuela

In Bogotá the poor purchase the land on which they build their homes; in Valencia they invade public and private land. Why are there such different attitudes on the part of the state in the two cities? Why indeed do the local authorities discourage land invasion in Bogotá but permit illegal subdivisions, while in Valencia invasion settlements aresometimes positively encouraged and usually serviced? Does the difference lie in the local political situations, in the nature of the land market, in the planning or legislative framework or in the attitudes of the poor? Whatever the exact cause one fact remains clear; both mechanisms provide the poor with sufficient land to maintain political stability and to prevent incursions into the housing areas of the rich. Such outcomes are encouraged by the policies of the local service and planning agencies. So successful are these mechanisms indeed, that rather than providing a threat to the political and economic system, invasions and pirate urbanizations actively support it.     

Transfer payments and the Phillips Curve

Policy makers are today confronted with a worsening relationship between inflation and unemployment. Voluminous economic literature on the “Phillips Curve” has long attempted to show why inflation and unemployment are normally inversely correlated. More recent literature has sought to identify factors that could worsen the apparent tradeoff. This paper uses the labor sector of the System Dynamics National Model to analyze the potential impacts of increased transfer payments on inflation and unemployment. The results suggest that in the short run, higher transfer payments can prolong job search, thereby boosting unemployment, while simultaneously driving up wages due to reduced labor availability. But over the longer term, rising wages raise the attrractiveness of working, thereby compensating for higher transfer payments. Therefore, higher transfer payments are not permanently inflationary. Key long-run impacts of transfer payments may be to raise relative costs of labor, thereby lowering employment through factor substitution, and to discourage dropout from the labor force so as to maintain eligibility for payments.     

A geometric approach to disequilibrium exchange rate fluctuations: The case of Switzerland

This article deals with the effects of exchange rate fluctuations in non-Walrasian macromodels. A demand driven model (‘Keynesian Unemployment’) and a supply driven model (‘Classical Unemployment’), both estimated on Swiss data, are alternatively considered. In each case an exchange rate modification and possible accompanying policy measures are considered. The feasible consequences on employment and the balance of trade are investigated by means of a geometric comparative static technique. For each type of fix-price equilibrium, the favourable conditions for a devaluation and a revaluation are thus emphasised.     

Psychographic constructs and demographic segments

As marketers attempt to place advertisements based on demographic profiles, the use of psychographic information becomes more important. The purpose of this research is to evaluate the validity of selected psychographic measures as well as to then relate these constructs to demographic segments. The analysis, using LISREL VI, assesses the constructs, which then, based on MANOV, are related to demographic segments. Implications of the study for validating psychographic measures and for applying this knowledge are discussed. © 1995 John Wiley & Sons, Inc.     

Tests of functional form in dynamic econometric models: Some empirical experience

Econometric theory has provided several rival tests of functional form specifications in economic relations, but there is little empirical experience in using many of them. This note reports some practical applications, and compares the performance of various tests, in specifying dynamic econometric models.     

European Tourism Product Purchase Methods and Systems

The distribution of tourism products, within Western Europe, is being affected by consumer needs as well as technological advancement. This article attempts to identify the current trends in distribution usage as well as the pressures which may bring about a shift in purchase behaviour, especially in relation to buying direct from wholesalers. In conclusion, the article identifies the current adoption of technology as one means of creating long-term advantage in the travel industry. However, it also reveals that direct agency channels could be developed if companies were willing to take advantage of the emergence of new opportunities.