A recommendation for applied researchers to substantiate the claim that ordinal variables are the product of underlying bivariate normal distributions

A simulation study was carried out to study the behaviour of the polychoric correlation coefficient in data not compliant with the assumption of underlying continuous variables. Such data can produce relatively high estimated polychoric correlations (in the order of .62). Applied researchers are prone to accept these artefacts as input for elaborate modelling (e.g., structural equation models) and inferences about reality justified by sheer magnitude of the correlations. In order to prevent this questionable research practice, it is recommended that in applications of the polychoric correlation coefficient, data is tested with goodness-of-fit of the BND, that such statistic is reported in published applications, and that the polychoric correlation is not applied when the test is significant.     

How useful is the PSE in determining agricultural support?

The support of the agricultural sector in developed countries plays a major role in the international policy agenda. The producer support estimate (PSE) is one of the best known measures which has been developed by OECD and is used all over the globe. In the PSE all types of support are aggregated and one of the main components (70% at OECD level) is the market price support (MPS). Here we show by means of characteristic examples that the MPS has no clear relation to basic economic measures determining support for producers as a consequence of policy intervention. The MPS overestimates the consequences of tariffs and export subsidies and underestimates the consequences of quota systems in determining producer support. Misperception of the size and directions of support may affect policy decision-making wrongly. The paper indicates that weighted average producer prices, corrected for quantity restrictions, may be more useful than the reference prices and quantities used by OECD.     

An exploratory inquiry into destination risk perceptions and risk reduction strategies of first time vs. repeat visitors to a highly volatile destination

The paper examines the relationships between first-time vs. repeat visitors to a highly volatile destination in terms of destination risk perceptions, risk reduction strategies and motivation for the visit. The exploratory research question centers on possible differences in tourist behavioral profiles associated with their decision to visit a foreign destination again. Set in Israel, a highly volatile tourist destination, researchers interviewed 760 international tourists using a questionnaire classifying them as either first-time or repeat visitors. Discriminant analysis revealed that first-time visitors were characterized by human-induced risk, socio-psychological risk, food safety and weather risk. In contrast, repeat visitors were associated with the destination risk factors of financial risk, service quality risk, natural disasters and car accidents. First-time vs. repeat visitors were also compared and contrasted in terms of risk reduction strategies such as consulting with people who had previously visited specific destinations and gathering information from travel agents. Differences between first-time and repeat visitors were also found regarding motivations for the visit. Similar analyses were conducted on the three sub-groups of repeat visitors, classified in terms of number of visits.     

Partial identification using random set theory

This paper illustrates how the use of random set theory can benefit partial identification analysis. We revisit the origins of Manski’s work in partial identification (e.g., [Manski, 1989] and [Manski, 1990]) focusing our discussion on identification of probability distributions and conditional expectations in the presence of selectively observed data, statistical independence and mean independence assumptions, and shape restrictions. We show that the use of the Choquet capacity functional and the Aumann expectation of a properly defined random set can simplify and extend previous results in the literature. We pay special attention to explaining how the relevant random set needs to be constructed, depending on the econometric framework at hand. We also discuss limitations in the applicability of specific tools of random set theory to partial identification analysis.     

Workers with Disabilities: Exploring the Hiring Intentions of Nonprofit and For-profit Employers

Using the Theory of Planned Behavior as a conceptual framework, focus groups were held with nonprofit and for-profit employers in order to examine behavioral intentions to hire workers with disabilities. Content analysis revealed the following main themes: (1) For-profit hiring strategies were driven by a mission to sell a product or service; (2) Nonprofit hiring strategies were driven by a mission to serve the community; (3) Forprofit hiring and nonprofit hiring were impacted by the economy; (4) Although driven to have diverse workforces, the number of workers with disabilities was largely unknown; and (5) Employer attitudes mattered and impacted job opportunities for people with disabilities. Implications of this qualitative study highlight the utility of the Theory of Planned Behavior and the role that nonprofit managers and leaders may play in improving employment opportunities for individuals with disabilities.     

The dynamics of preference formation

A model is developed and estimated which explains the formation of individual preferences on consumption under the influence of contacts with others (preference interdependence) and own consumption over time habit formation). The model employs a cardinal utility function which can be measured independently of behavioral assumptions. Since preference interdependence has been analyzed earlier, the paper concentrates on habit formation, the preference interdependence component being imputed from an earlier study. Due to data restrictions and measurement error, special econometric provisions must be made. Preference interdependence appears to explain two thirds of individual preferences and habit formation one third.     

Are Americans Really Less Happy with Their Incomes?

Recent economic research on international comparisons of subjective well‐being suffers from several important biases due to the potential incomparability of response scales within and across countries. In this paper we concentrate on self‐reported satisfaction with income in two countries: the Netherlands and the U.S. The comparability problem is addressed by using anchoring vignettes. We find that in the raw data, Americans appear decidedly less satisfied with their income than the Dutch. It turns out however that after response scale adjustment based on vignettes, the distribution of satisfaction in the two countries is essentially identical. In addition, we find that the within‐country cross‐sectional effect of income on satisfaction—a key parameter in the recent debate in the economic literature—is significantly underestimated, especially in the U.S., when differences in response scales are not taken into account.     

The changing rationale for governance choices: Early vs. late adopters of global services sourcing

Research Summary: This article studies how the logic of firm governance choices varies as a function of the time of adoption of particular sourcing practices. Using data on the diffusion of global business services sourcing as a management practice from early experiments in the 1980s through 2011, we show that the extent to which governance choices are affected by process commoditization, availability of external service capabilities, and past governance choices depends on whether firms are early or late adopters. Findings inform research on governance choice dynamics specifically in highly diverse and evolving firm populations. Managerial Summary: This article considers how firms have chosen delivery models in global services sourcing decisions over time. Based on comprehensive data, we make two major observations. First, we find that firms that began with global services sourcing early, invested mainly in their internal sourcing capacity, while outsourcing only simple tasks to external providers, whereas firms that started later invested more in their capability to outsource various services to increasingly sophisticated suppliers. Second, we find that initial investments in internal or external sourcing capabilities have a strong effect on future choices of delivery models. This explains why, even today, firms vary greatly in how they implement global sourcing decisions, and it suggests that newcomers should learn from their own peer group rather than from highly experienced firms.     

Hospitality crisis management practices: the Israeli case

This study attempts to examine hospitality crisis management practices within the context of the Israeli hospitality industry. The study develops a questionnaire that evaluates the importance and usage of four categories of practices: marketing, hotel maintenance, human resources, and governmental assistance. The findings illustrate which practices managers consider important and which practices managers actually use during an industry crisis. The paper concludes with recommendations for future research and management of crises.