A class of changing elasticity of substitution production functions

This paper presents a new class of production functions with a changing elasticity of substitution between two input factors. Over a freely chosen number of intervals for the input factor intensity freely chosen elasticities of substitution can be imposed. The resulting production function can thus account for changing elasticities of substitution during the development of the factor intensity. The production function is applied in a calibration exercise and a novel normalization procedure is proposed. The theory behind this production technology builds on the functional normalization of CES production functions.     

The Political Roots of Corporate Social Responsibility

This article argues that whether and how a firm chooses to adopt Corporate Social Responsibility (CSR) initiatives is conditional in part upon the domestic political institutional structures present in its home market. It demonstrates that economic globalization has increased the pressure applied to companies to develop CSR policies that might help overcome specific governance gaps associated with the globalization phenomenon. Drawing upon an examination of domestic institutions and overall political structure, it argues that the political conditions and expectations present in a company’s home market will condition whether a firm might pursue CSR activity. For home markets, it is posited that perceived electoral salience will be filtered through government type and ideology, and state/societal structures will influence if and how firms will use CSR. Specific arguments are developed from these categorizations. The article concludes with a discussion of how researchers might further explore links between CSR, domestic political structures, and corporate political activity.     

Africa's changing farm size distribution patterns: the rise of medium‐scale farms

This study assesses changes over the past decade in the farm size distributions of Ghana, Kenya, Tanzania, and Zambia, drawing on two or more waves of nationally representative population‐based and/or area‐based surveys. Analysis indicates that much of Sub‐Saharan Africa is experiencing major changes in farm land ownership patterns. Among all farms below 100 hectares in size, the share of land on small‐scale holdings under five hectares has declined except in Kenya. Medium‐scale farms (defined here as farm holdings between 5 and 100 hectares) account for a rising share of total farmland, especially in the 10–100 hectare range where the number of these farms is growing especially rapidly. Medium‐scale farms control roughly 20% of total farmland in Kenya, 32% in Ghana, 39% in Tanzania, and over 50% in Zambia. The numbers of such farms are also growing very rapidly, except in Kenya. We also conducted detailed life history surveys of medium‐scale farmers in each of these four countries and found that the rapid rise of medium‐scale holdings in most cases reflects increased interest in land by urban‐based professionals or influential rural people. About half of these farmers obtained their land later in life, financed by nonfarm income. The rise of medium‐scale farms is affecting the region in diverse ways that are difficult to generalize. Many such farms are a source of dynamism, technical change, and commercialization of African agriculture. However, medium‐scale land acquisitions may exacerbate land scarcity in rural areas and constrain the rate of growth in the number of small‐scale farm holdings. Medium‐scale farmers tend to dominate farm lobby groups and influence agricultural policies and public expenditures to agriculture in their favor. Nationally representative Demographic and Health Survey (DHS) data from six countries (Ghana, Kenya, Malawi, Rwanda, Tanzania, and Zambia) show that urban households own 5–35% of total agricultural land and that this share is rising in all countries where DHS surveys were repeated. This suggests a new and hitherto unrecognized channel by which medium‐scale farmers may be altering the strength and location of agricultural growth and employment multipliers between rural and urban areas. Given current trends, medium‐scale farms are likely to soon become the dominant scale of farming in many African countries.     

Managerial economics: a forward looking assessment

We examine recent trends in managerial economics, particularly in relation to behavioral, experimental, global and organizational influences. Managerial economics shows healthy development over the recent decade and is still grounded in practical applications. Examples are given using recent articles from Managerial and Decision Economics. Copyright © 2010 John Wiley & Sons, Ltd.     

Value of a hotel stay: a case study in Hong Kong

This study examines the value of a hotel stay from the perspective of hotel customers and hotel service professionals. Respondents, including hotel customers and hotel service professionals, were asked the extent of their agreement or disagreement with statements related to four different value dimensions: functional value, emotional value, social value, and customer-perceived sacrifices. Results showed that there are significant differences between the hotel service professionals’ perceived value of the hotel stay and customers’ perceived value of the hotel stay. The differences are found in social value and customer-perceived sacrifices.     

The impact of airport capacity constraints on future growth in the US air transportation system

This paper simulates airline strategic decision making and its impact on passenger demand, flight delays and aircraft emissions. Passenger flows, aircraft operations, flight delays and aircraft emissions are simulated for 22 airports in the US, under three airport capacity scenarios. The simulation results indicate that most system-wide implications for operations and environmental impact seem to be manageable, but local impacts at congested hub airports may be significant. The response of the air transportation system to avoid airports with high delays could significantly impact passenger demand and air traffic for these and directly dependent airports. The simulations also suggest that frequency competition effects could maintain flight frequencies at high levels, preventing a significant shift toward larger aircraft, which would otherwise reduce the impact of the capacity constraints.     

Rebates,Matches, and Consumer Behavior

An experiment conducted to examine the effects of different discount formats on consumer purchases is reported. Participants made a series of purchase decisions for chocolate bars given (1) “rebates” from the listed price, (2) “matching” quantities of chocolates for each bar purchased, and (3) simple price reductions. Contrary to standard theoretical predictions, and consistent with results in the context of charitable contributions by Eckel and Grossman (2003), we find that participants purchase significantly more chocolate bars under a “matching” sales format than under a comparable “rebate” format. Inattention to the net consequences of decisions, as well as some “rebate aversion,” explain the preference for matching discounts.