Willingness-to-Pay Estimates and Their Relevance to Agribusiness Decision Making

Although methods such as contingent valuation have received a great deal of attention in environmental valuation literature, fewer studies have reported willingness-to-pay estimates with agribusiness applications. Because agribusinesses are increasingly interested in producing and selling differentiated goods and services whose values has not been established by well-functioning markets, we provide a short introduction to willingness-to-pay methodology and provide a discussion of several different methods used to estimate willingness-to-pay. More specifically, we discuss how much of the work in environmental and experimental valuation literature can be extended to agribusiness applications, which have their own set of unique issues.     

Capital asset pricing models with default risk: Theory and application in insurance

The Capital Asset Pricing Model has been used frequently to derive a fair price of insurance. But the use of this model overestimates insurance premiums because it does not account for the insolvency risk of insurers. This paper examines how the insurance price should be fairly adjusted when insurers' default risk is considered. It develops a model which shows that fair insurance premiums are lower when insurance firms have a positive probability of being insolvent. Using data of property liability insurers during the period from 1943–99, the paper further estimates the effects of the insolvency risk on insurers' underwriting profit rate. It shows that the incorporation of the default risk of insurers in the model, by significantly reducing the required price for insurance, would lead to lower profit potentials. Some writers argue that including the insolvency risk when calculating insurance premiums is not so necessary because of the existence of states' guaranty insurance funds which protect consumers. However, as shown in the paper, these funds have provided inadequate protection to consumers. Therefore, because of the increase in the number of insolvencies in recent years, and because of the limited coverage provided by states' guaranty funds, it seems that considering the insolvency risk in insurance pricing has become very necessary.     

Spousal surcharge programs--an overview

Spousal surcharge programs help employers whose goal is to provide "above-average" health benefit plans by limiting the potential "financial leakage" liabilities from covering the spouses of employees who are eligible for other health care coverage. Spousal surcharge programs are just one alternative available to help employers manage the rising cost of providing health care coverage to dependents. This article explores the prevalence, plan design, financial implications, administrative and other considerations in implementing a spousal surcharge program.     

Economic analysis of injury prevention--applying results and methodologies from cost-of-injury studies

Injuries pose an economic problem of immense proportion to communities in every society. The economic burden from injuries can be quantified through cost-of-injury studies, using techniques adopted from cost-of-illness research. This study explores the feasibility of applying results and methodologies from existing cost-of-injury studies in economic analyses of injury prevention interventions and programmes. The literature on cost-of-injury studies and economic appraisals of injury prevention efforts was examined to elicit studies that calculated injury costs. Studies were accepted for inclusion if they included an analysis of the costs of all injuries occurring in a geographical area (community, region or country) during a specific time period, employed a societal perspective and an incidence-based costing approach and were conducted in industrialized countries. There were 12 studies that met the inclusion criteria. The average total cost per injury case was USD $3536, while the average share of indirect to total cost per injury case was 71%. However, the cost figures showed wide variation across the studies. Based on the limited similarity of findings from the studies, it was concluded that it is not feasible to apply results and methodologies from existing cost-of-injury studies. The cost estimators described in this study could possibly be adapted for use as reference points in economic analyses of existing programmes, but any other uses should be approached with caution. Locally obtained data are needed for reliable economic analyses of injury prevention interventions and programmes.     

Developing and assessing critical thinking skills in marketing students: The power of making explicit problem-solving processes

Applied research is a course that has been taught to develop and effectively assess critical thinking skills in marketing students. A modified version of the problem-solving model using explicit problem-solving processes is employed in the design of course material and delivery. Assessment data support students’ ability to critically think at both lower and higher levels. Assignments include creative and timely experiential exercises to reinforce important marketing concepts, encourage student interest, and develop critical thinking skills.     

The time‐varying performance of UK analyst recommendation revisions: Do market conditions matter?

This study examines the time‐varying performance of investment strategies following analyst recommendation revisions in the UK stock market, with specific emphasis on the impact of changing market conditions. We find a negative relationship between the recommendation performance and market conditions as measured in terms of past market return and market volatility. In particular, the upgrade (downgrade) portfolio generates significantly positive (negative) net abnormal returns in bad market conditions (e.g., the dot‐com bubble burst in 2000 and the credit crisis in 2007), but not in other periods of time. Moreover, our non‐temporal threshold regression analysis shows that the reported negative relationship disappears when market conditions become better, i.e., when the past market return (market volatility) is higher (lower) than a certain level, indicating the importance of taking non‐linearity into account in the long sample period as examined in this study. Our time‐series bootstrap simulations further confirm that the superior recommendation performance in bad market conditions is not due to random chance; analysts have certain skills in making valuable up/downward revisions in bad markets.     

Harvest contract price volatility for cotton

Changes in agricultural and international trade policy have increased attention to issues of price volatility and risk management. Previous work in the area of price volatility has typically focused on grains, with little work dealing with cotton. The objective of this analysis was to examine the determinants of price volatility for cotton, focusing on the growing season volatility of the harvest contract. Different econometric techniques, including ARCH/GARCH, were employed to estimate the effects of a set of variables on price volatility. The potential for a nonlinear relationship between price and volatility was examined. Findings suggest a significant seasonal pattern to volatility as well as a nonlinear relationship between price and volatility. The results also suggest that cotton price volatility has not significantly changed with respect to changes in agricultural policy. © 1999 John Wiley & Sons, Inc. Jrl Fut Mark 19: 717–733, 1999     

Critical Political Economy and Material Transformation

The starting point for this paper is that critical political economy needs to take up the challenge that originates in Marx's seminal contributions of conceptualising the economy as both processes of value creation and processes of material transformations. This is because, inter alia, the successful production of commodities requires knowledge of their constituent materials and their potential transformations and the ways in which these can be managed through the production process to allow the creation of surplus value and profits. Using the steel and automobile industries as an example, I show how a wide range of materials can be produced with a variety of desirable properties through careful control of the production process. Sophisticated management of the production process depends upon the knowledge of the properties of the materials and of the ways in which these can be combined and transformed to give types of steels with particular desired combination of properties. Capitalist interests have increasingly shaped the processes of R&D through which knowledge about the materials, their properties and their transformations has been developed and deployed to produce profits via producing steel and – inter alia – automobiles.     

Review essay: And leisure for all

Eight Hours for What We Will: Workers and Leisure in an Industrial City 1870–1920, by Roy Rosenzweig (New York: Cambridge University Press, 1983). 320 pp., $29.95. ISBN 0–521–23916–8.

How Boston Played, by Stephen Hardy (Boston: Northeastern University Press, 1982). 272 pp. $19.95 cloth. ISBN 0–930350–27–8.     

Identification of house price bubbles using user cost in a state space model

This article studies how much variation in house prices results from nonfundamental factors. We propose a relative valuation approach to quantifying a bubble in housing by incorporating the housing User Cost into a state space model. We find that UK house prices were undervalued from January 1995 to May 2001 and subsequently moved into a bubble over the period to October 2012. Our results support the bounded rationality hypothesis in the long run. However, we also find that the irrational and the rational expectation hypotheses can coexist in the short run when explosive bubbles are driven by price dynamics.