Ecosystems,externalities, and economies

This paper incorporates an ecosystem model into a model of a simple economy. The decisionmaking agents in the ecosystem are individual organisms aggregated to the species level. A species may provide utility directly to humans, or it may provide utility indirectly because it is used either as a raw material in goods fabrication or as sustenance for other species. We describe a comparative static equilibrium of the ecosystem where species' demands for other species are equal to the supplies of those other species, and energy is conserved. The ecosystem is then embedded in the economy so that the effects of human intervention can be traced through both the ecosystem and the economy. Human intervention creates ecosystem externalities such that ecosystem equilibria are shifted and the new equilibria affect the utility or the production processes of other humans. This framework allows us to describe in principle which ecosystem services can be efficiently usurped by humans, which waste flows can be efficiently allowed into ecosystems, and which ecosystem organisms and physical attributes can be efficiently maintained.     

Countries and their products: A cognitive structure perspective

This research reports on consumers’ cognitive structures for countries and their products. In-depth personal interviews identified respondents’ knowledge, beliefs, myths, and other relevant cognitions related to a diverse set of 11 countries and their products. Derived cognitive dimensions were analyzed via correspondence analysis, and the 11 countries were subsequently grouped into five sets, or cognitive categories. In addition to the empirical findings, the article introduces the concept of country equity as a new way of thinking about global brands and discusses managerial implications related thereto. He has published in theJournal of Consumer Research, Journal of Marketing Research, Journal of Marketing, and elsewhere. His articles have appeared in theJournal of Marketing, Journal of the Academy of Marketing Science, Journal of International Business Studies, California Management Review, and others. He is the coauthor of two marketing research textbooks and has published in leading marketing and social psychological journals.     

Were In-Process Research and Development Charges Too Aggressive?

Abstract:  Prior research documents that US firms write off large in-process research and development charges (IPRD) for acquisitions, possibly overstating the current period expense to inflate future earnings. Consequently, in 1998, the US Securities and Exchange Commission (SEC) began scrutinizing IPRD charges. We use pre-acquisition R&D expenses of 144 target firms as a benchmark for assessing whether IPRD charges are appropriate. Overall, the results suggest that most firms during our sample period were not overly aggressive in expensing IPRD–especially for acquisitions subsequent to the SEC's scrutiny. The results also indicate that the SEC's intervention reduced the frequency of overstated IPRD charges.     

Analysis of risk and risk-reduction strategies—A multiple product case

This study investigated both the amount of risk that consumers face in a new car purchase situation and the different types of strategies that they use to reduce that risk. The findings revealed that owners of different makes of cars perceive varying amounts of risk to be associated with the purchase of a new car. However, no significant differences in the overall amounts of risk associated with the different purchase situations were found. Also it was found that different strategies for reducing the risk were utilized by the different car ownership groups.     

Strategic environmental policy and the accumulation of knowledge

In dealing with a transnational pollutant-emitting duopoly welfare-maximising policy makers face two negative externalities: imperfect competition and unpriced emissions. Strategic environmental policy models show that these externalities involve a trade-off between reducing pollution and allowing for rent-seeking of the respective firm. This dilemma usually results in a suboptimal internalisation of the negative externality emerging from emissions. Indeed, the conventional model setup includes an R&D stage that enables the firms to mitigate regulation costs. But the typical one period configuration ignores that R&D expenditures create knowledge capital which is, due to its inherent cumulativeness, also effective in following periods. Our model analyses the established trade-off in a two period setting and therefore allows for an investigation of intertemporal knowledge accumulation. We find that the intertemporal effects provide an incentive for a policy maker to set a higher tax rate compared to a one-period setup which lessens the magnitude of the suboptimal internalisation of emissions. Under certain conditions even a tax rate above the Pigouvian level is possible in period 1.     

Nonhomothetic Preferences and International Trade

This study examines whether nonhomothetic preferences underlie the “missing trade” problem associated with factor content of trade models. We first find that per capita income goes a long way in explaining differences in goods consumption across countries. We then find a striking correlation between the factor content of consumption and per capita income, and show that accounting for this is a key part of resolving the case of the missing trade. However, nonhomothetic preferences over broad categories of expenditure play only a small role in this phenomenon. Rather, we find that as income grows, spending is directed towards the relatively capital‐intensive version of a given good. Since recent research shows that capital intensity is correlated with quality ( Schott, 2004 ), our results suggest that within‐product quality differences are likely important for explaining the factor content of trade, whereas nonhomothetic preferences over broad categories of expenditure are much less so.     

Religion,economics and politics: The Bishops and Keynes in the post-Keynesian ERA

This paper makes a proposal for reintroducing sociological or social economics into contemporary economic science. Such a reintroduction is proposed to be substantive, by analyzing the social structuring of the economy, and formal, by including sociological/social economics in the current (JEL) classification system of economic disciplines (code A.15). Both epistemological and ontological arguments can be presented to support the proposal. Epistemological arguments invoke the presence of essential components of sociological economics in the development of economic thought, and ontological arguments stress the role of social factors in economic life. In this paper I present primarily epistemological (theoretical-methodological) arguments for sociological economics, and secondarily ontological ones. I show that the present designation, sociology of economics, is something different from sociological or social economics in that the former refers to economic epistemology (knowledge) and the latter to economic ontology (reality). I conclude that, in addition to a sociology of economic science, we need a sociology of economic life.     

Living next to godliness: Residential property values and churches

This article extends the analysis concerning the impact of neighborhood churches on residential property values by investigating nearly 5,000 residential property transactions in Henderson, Nevada, between January 1986 and December 1990. We find that real property values decrease, at a decreasing rate, as distance from a neighborhood church increases. This result is the opposite of that reported by Do, Wilbur, and Short in a previous edition of this journal. We bolster our findings by showing that distance from the site of a future church has little or no impact on residential property values, whereas distance from an existing church is associated with lower property values. Our evidence indicates that neighborhood churches are amenities that enhance the value of neighborhood residential property. Finally, we demonstrate that larger churches (as measured by square foot of lot size) tend to have a greaterpositive impact on residential property values.