Spatial differentiation in the supermarket industry: The role of common information

In this paper, I investigate the geographic location decisions of supermarkets to infer their tradeoffs between locating close to favorable demand conditions and differentiating themselves geographically from rivals. The model is based on a discrete-choice game between two types of supermarkets, and incorporates firm uncertainty arising from firm- and location-level private information as well as researcher uncertainty arising from location-level common information. Thus the model addresses the concern that firms’ actions may be based on factors that are unobservable to the researcher, thus correlated conditional on observables. The estimates reflect a significant level of common information. Importantly, I find that ignoring unobserved location heterogeneity results in biased estimates of both the competitive effects and the effects of location-specific observables on profits. Counterfactual predictions are therefore misleading if unobserved location heterogeneity is unaccounted for.     

ICT labor,software usage,and productivity: firm-level evidence from Turkey

Journal of Productivity Analysis - This paper examines the impact of information and communication technology (ICT) on firm-level productivity in Turkey using a novel longitudinal data set. We...     

Indonesia's Crisis: Implications for the Region

What began as a currency crisis in Indonesia in the third quarter of 1997 rapidly turned into a deep financial crisis with wide-ranging economic and social impacts, and finally became a serious political crisis that exploded in May 1998, forcing President Soeharto to resign. Soeharto's departure, however, did not resolve the crisis. He left behind an economy in shambles, a serious political vacuum and a highly polarised society. The issues to be dealt with are wide-ranging, including the loss of Indonesia's position in the international system, the domination of industry by foreign capital and the imposition by the IMF of a certain model of economic development. Regional and international aspects of the crisis have not become an issue in the public debate and policy discourse in Indonesia. This article looks at these implications.     

Military Expenditure and the Arms Trade in the Asian-Pacific Region

The trend towards further reductions in world military expenditure does not seem to be shared by most Asian-Pacific countries. Military expenditure in the region continues to expand, but the military burden (the proportion of military expenditure in GDP) and the military share (the share of military expenditure in central government expenditure) are declining in most Asian-Pacific countries. This is largely due to sustained high economic growth in the region. Thus far, the military burden has not had an adverse effect on the region's economic growth, but continued expansion of military expenditure is not sustainable in countries where the military share is high. Asian-Pacific countries are vigorously developing, modernizing and upgrading their indigenous arms production capabilities. This effort has been aided not only by the availability of financial resources but also by the changing nature of the international arms market that offers attractive package deals, including various licensing, co-production and offset manufacturing arrangements.     

An assessment of the impact of watershed programmes on agricultural sustainability in Hamedan province,Iran

This paper assessed the effects of watershed programmes (WPs) on the sustainability of agro-ecosystems in Hamedan province, western Iran. This research was a causal–comparative study, and various techniques were used to collect data, such as survey data, archival data, observations, and face-to-face interviews with key informants. The causal–comparative method requires a comparison of agro-ecosystems with and without WPs. Therefore, a survey was conducted using a stratified random sampling to select 136 households in agro-ecosystems with and without WPs. Nine indicators were selected to evaluate sustainability. Significant differences were found between the two agro-ecosystems in biodiversity, soil quality management, hydrological processes, energy-use efficiency (EUE), access to public services, farm management practices, and social capital. No significant variation was found in the indicator of quality of life, even though that indicator was found to be slightly higher in the agro-ecosystem that had WPs. Results revealed that the agro-ecosystem with WPs, with the exception of the social capital, productivity, biodiversity, soil quality, EUE, farm management, and hydrological processes as well as access to public services had significantly higher values than the agro-ecosystem without WPs. Therefore, it can be concluded that despite WPs' positive impact on biodiversity, soil quality, hydrological processes, EUE, farm management, productivity, and access to public services, it had a negative impact on social capital. The findings suggest that WPs affected the agro-ecosystem by increasing the stability and economic viability of the agro-ecosystem and decreasing social dimensions. A new approach, including demand-driven WPs rather than supply-driven ones to cater to the specific needs of local people, was recommended for the promotion of the social acceptability of WPs.     

Revisiting the welfare effects of eliminating business cycles

We investigate the welfare effects of eliminating business cycles in a model with substantial consumer heterogeneity. The heterogeneity arises from uninsurable and idiosyncratic uncertainty in preferences and employment status. We calibrate the model to match the distribution of wealth in U.S. data and features of transitions between employment and unemployment. In comparison with much of the literature, we find rather large effects. For our benchmark model, we find welfare effects that, on average across all consumers, are of a bit more than one order of magnitude larger than those computed by Lucas [Lucas Jr., R.E., 1987. Models of Business Cycles. Basil Blackwell, New York]. When we distinguish long- from short-term unemployment, long-term unemployment being distinguished by poor (and highly procyclical) employment prospects and low unemployment compensation, the average gain from eliminating cycles is as much as 1% in consumption equivalents. In addition, in both models, there are large differences across groups: very poor consumers gain a lot when cycles are removed (the long-term unemployed as much as around 30%), as do very rich consumers, whereas the majority of consumers—the “middle class”—sees much smaller gains from removing cycles. Inequality also rises substantially upon removing cycles.     

The role of risk aversion in public goods dilemmas with environmental uncertainty: an experimental analysis

The purpose of this study is to extend earlier research on environmental uncertainty in public goods dilemmas. The present paper reports the results of an experiment designed to examine the effect of risk aversion on public goods provision. A von Neumann–Morgenstern utility function with constant coefficient of relative risk aversion is used to investigate the impact of risk attitudes within a threshold public goods environment. The outcome of the threshold public goods experiment shows that subjects are indifferent to the changes in environmental conditions. Additionally, the analysis indicates that risk aversion is a significant determinant of voluntary public goods contribution level.     

AN ANATOMY OF U.S. PERSONAL BANKRUPTCY UNDER CHAPTER 13

We build a structural model that captures salient features of personal bankruptcy under Chapter 13. We estimate our model using a novel data set that we construct from bankruptcies filed in Delaware between 2001 and 2002. Our estimation results highlight the importance of a debtor's choice of repayment plan length on other Chapter 13 outcomes. We use the estimated model to conduct policy experiments to evaluate the impact of more stringent laws that impose restrictions on the length of repayment plans. We find that these provisions would not materially affect creditor recovery rates and would not necessarily make discharge more likely.