The cost efficiency of Australian airports post privatisation: A Bayesian methodology

This paper reports on the cost efficiency of Australian airports using a Bayesian panel stochastic frontier model. With data from 2002 to 2007, the paper focuses mainly on the post privatisation period of Australian airports. The results show that the cost efficiency of Australian airports has increased over time to reach a high value of 90.08% in 2007. The paper discusses the potential impact of factors such as privatisation, price cap regulations and capital investments on the current efficiency level of Australian airports.     

Performance of French destinations: Tourism attraction perspectives

In this paper, we assess and compare the performance of French tourism destinations, using the Data Envelopment Analysis (DEA) two-stage procedure, where in the first stage the efficiency score are calculated, and then followed in the second stage by a bootstrapped truncated regression model. In the context of France such analysis takes an additional importance, especially as the country is expected to face a decrease in its tourism competitiveness. A discussion in terms of D-attraction and E-attraction is also proposed and policy recommendations are derived.     

Testing the Heckscher–Ohlin–Vanek theory with a natural experiment

I use the historical episode of near‐elimination of commuting from the West Bank into Israel to test three key predictions of the Heckscher–Ohlin–Vanek model of trade and find strong support for them. On the production side, I use variation between districts and find that wage changes were not correlated with the size of the shock to the labour force (factor price insensitivity) and that districts that received larger influx of returning commuters shifted production more towards labour‐intensive industries (Rybczynski effect). On the consumption side, data are consistent with identical homothetic preferences, which, combined with the production results, supports the Heckscher–Ohlin–Vanek theorem on the factor content of trade.     

Suppressing resistance to low-skill migration

Just like any other trade activity, migration tends to generate gains to all parties involved, the migrants as well as the native population, if markets are well-functioning. But typically these gains tend to be rather small. However, when the labor market is mal-functioning, migration may exacerbate the imperfections in the market. Consequently, it could lead to losses to the host-country population, which can be quite sizable.An additional problem raised by migration is the toll it imposes on the welfare state. As a democracy, the host-country cannot exclude migrants from various entilement programs and public services. As a consequence, the modern welfare state could find it more and more costly to run its various programs when they attract low-income migrants.These considerations may help explain why there is strong resistance to migration. Consequently, to be able to benefit from migration, one may want to improve the functioning of the markets (with a compensation to wage earners that compete with unskilled migrants) and to downsize the scope of the state entitlement programs.The current version was prepared while the first author was visiting the Research Department and the second author was visiting the Fiscal Affairs Department of the International Monetary Fund.     

Capital income taxation under majority voting with aging population

An old person typically has a mixed attitude toward the welfare-state benefits, when they are financed by capital taxes, because her income derives mostly from capital. We develop a majority-voting model which focuses on the effect of aging on this dilemma. Surprisingly, the theory predicts that tax rates on capital income could actually rise as the population ages, even though older individuals would be expected to own more capital than the young and thus vote against higher taxes. We then confront the key prediction of the model with panel data for ten European Union countries, over the period 1970–1996. We investigate the asymmetric effect of aging on the taxation of capital and labor. The implications of the model are shown to be consistent with panel data. JEL no. H0, H5, P1     

Dynamic legislative decision making when interest groups control the agenda

We consider dynamic decision making in a legislature, in which in each period legislators vote between the status quo (previous period?s policy) and a new bill. However, the agenda formation process is captured by interest groups, that is, the new bill on the agenda is determined by an all-pay auction among these groups. We show that convergence to the median voter of the legislature arises if interest groups are patient enough but not necessarily otherwise. We characterize the bound on the speed of convergence in a family of stationary equilibria in which policy bounces between right-wing and left-wing policies. We also show that convergence may be faster if organized interest groups represent only one side of the policy space, e.g., when only business and not consumer interests are organized.     

Internationalization and Performance of Retail Firms: A Bayesian Dynamic Model

This paper offers a fresh approach to the literature examining the effect of internationalization on retail-firm performance. We draw on the organizational learning theory to test the moderating effect of four variables which are hypothesized to affect the performance of internationalizing retailers through facilitating the transfer of learning in international markets. The study innovates by introducing a new performance metric, and an advanced methodology to account for the dynamic aspects of organizational learning. Testing our hypotheses on a sample of international retailers, we find that the relationship between internationalization and performance is U-shaped, and moderated by mergers and acquisitions, age at entry to international markets and country of origin. The findings extend prior research by providing more comprehensive evidence regarding the conditions under which internationalization leads to improved performance. The authors conclude by outlining the implications for practice.     

Benchmarking the Asia Pacific tourism industry: A Bayesian combination of DEA and stochastic frontier

This study measures and compares the efficiency of leading tour operator and hotel companies across several Asia Pacific countries. We use an innovative methodology that is based on combining the stochastic frontier and data envelopment analysis in a Bayes framework. We show from the results that Australia, Singapore and South Korea are the most efficient in both their tour operator and hotel industries. We further show that international hotels in the region have a slightly higher efficiency than local hotels. We provide a listing of the most efficient tour operators and hotels in each country and discuss the implications of our findings.