POLITICAL ECONOMY AND PEEL'S REPEAL OF THE CORN LAWS

The repeal of the Corn Laws in Britain in 1846 has been much debated as to whether interest groups or ideology contributed most to this policy reform. This paper examines a conventional view that Sir Robert Peel, in proposing repeal, converted from protection to free trade under the influence of the ideas of political economy. It is shown that economic ideas had a crucial influence on Peel, but that he remained skeptical of political economy as a doctrine.     

Book reviews

Technological Risk H. W. Lewis ,Yew York and London, W. W. Norton ,and Company, 1991, xiii+353pp., £15.95.

Towards Global Localisation: the computing and telecommunications industries in Britain and France Philip Cooke, Frank Moulaert, Erik Swyngedouw, Olivier Weinstein & Peter Wells with Martine Lamattre & Patrice Grevet London, UCL Press, 1992, 227pp., £30.00 hardback.

A Strategy of Change: concepts and controversies in the management of change David C. Wilson London, Routledge, 1992, 147pp., ISBN 0-4 15-053269, £10.00 pbk.     

Adam Smith's “tolerable administration of justice” and the Wealth of Nations

Adam Smith argues that a country’s income depends on its labor productivity, which in turn hinges on the division of labor. But why are some countries able to take advantage of the division of labor and become rich, while others fail to do so and remain poor? Smith describes how the security of property rights, through a “tolerable administration of justice,” allows investment and exchange to take place, bringing about economic progress. Recent empirical work on economic development has supported Smith’s emphasis on a country’s political “institutions,” particularly the judiciary, in determining its national income.     

All eyes on you: The social audience and hedonic adaptation

Marketers have a keen interest in keeping customers happy past the point of product acquisition. However, consumer happiness with products typically declines over time, a process called “hedonic adaptation.” Understanding this process is essential for managing consumers' post-acquisition experiences, and yet marketers have not explored how the ubiquitous social environment influences hedonic adaptation. We explore the effect of a social audience (i.e., the presence of others and the perception that those others are noticing you) on adaptation to positive products using two real-world studies and one lab study. We show that a social audience can slow hedonic adaptation by cuing consumers to believe that others are admiring their product. This perceived admiration, in turn, helps consumers see the product through fresh, unadapted eyes. These findings help clarify the role of the consumption environment in adaptation, help explain why product happiness can vary by consumer over time, and show that the effects of social forces do not always occur at the moment of product acquisition.     

A system for evaluating social welfare programs and allocating contributed resources based on citizen input

This paper describes the development and implementation of a social welfare program evaluation system developed by a Community Council to aid the resource allocation decision process of a local United Way. The system assigns a “utility” measure to each program based on how the program satisfies the long-term social welfare goals of the community adjusted for the effect of short range, time dependent criteria affecting the region. Data for the processes described was obtained by quantifying the subjective feelings of the individual members of the Community Council. The results have been accepted by the United Way Organization and are currently being used to assist in the planning and resource allocation functions of the fund.     

Identifying spatial interactions in the presence of spatial error autocorrelation: An application to land use spillovers

Spatial spillovers—interaction effects among neighboring agents in space—are a common characteristic of a variety of processes that are of interest to environmental and resource economists. Empirical identification of these interactions is challenging, however, due to the endogenous nature of the interactions and the inevitable unobserved spatial correlation that, if uncontrolled, can result in spurious estimates of the interaction parameters. Traditional spatial econometric models rely on maintained assumptions that impose separate structures for the spatial error and interaction processes and thus are insufficient for solving this identification problem. To identify spatial land use spillovers in a hedonic model of residential housing values, we pursue an alternative approach by exploiting a natural experiment in the data. We use exogenous physical land features that impose a direct constraint on residential development on some, but not all, of the land that falls within our study region and use this to construct a “partial population identifier.” We find that this estimation strategy solves the endogeneity problem and reduces spatial error autocorrelation, but does not fully eliminate it. Estimation of the model using a more restricted sample in combination with the partial population identification strategy is successful in eliminating the remaining spatial error autocorrelation. We conclude that less restrictive approaches to controlling for unobserved spatial correlation, such as the natural experiment pursued here, may provide a superior alternative to identifying spatial spillovers.