Estimation of dynamic panel data models with sample selection

We propose a new method for estimating dynamic panel data models with selection. The method uses backward substitution for the lagged dependent variable, which leads to an estimating equation that requires correcting for contemporaneous selection only. The estimator is valid under relatively weak assumptions about errors and permits avoiding the weak instruments problem associated with differencing. We also propose a simple test for selection bias that is based on the addition of a selection term to the first‐difference equation and subsequent testing for significance of this term. The methods are applied to estimating dynamic earnings equations for women. Copyright © 2011 John Wiley & Sons, Ltd.     

Ethical sensitivity to stakeholder interests: A cross-cultural comparison

This study applied Hofstede’s typology to examine the effect of culture on ethical sensitivity toward various stakeholders. It was found that uncertainty avoidance had a positive effect and that power distance and individualism/masculinity had negative effects on ethical sensitivity. The results also indicated that ethical sensitivity to stakeholder interests is dependent on which stakeholder is affected. Although Americans and Taiwanese sales agents were equally sensitive to customer interests, the Taiwanese were more sensitive to the interests of their company and a competitor but were less sensitive to the interests of a colleague. This study should prove valuable to international marketers because the cultural typology allows managers to identify differences in work-related values of employees across different nationalities and thus provides a theoretical base for designing more effective sales management practices. Jeffrey G. Blodgett (Ph.D., Indiana University) is an associate professor of marketing at the University of Mississippi. His research interests include consumer complaint behavior and cross-cultural issues. His work has been published in theJournal of Retailing, Journal of Services Research, Journal of Business Research, Psychology and Marketing, and in other marketing journals. Long-Chuan Lu is an assistant professor of marketing at the National Chung-Cheng University of Taiwan. He received his Ph.D. from the University of Mississippi. His work has previously appeared in theJournal of Business Ethics, in addition to other journals and conference proceedings. Gregory M. Rose (Ph.D., University of Oregon) is an assistant professor of marketing at the University of Mississippi. His research interests include consumer socialization and cross-cultural consumer behavior. He has published articles in theJournal of Consumer Research, Journal of the Academy of Marketing Science, Journal of Business Research, Journal of Consumer Psychology, Journal of Advertising, Journal of Marketing, and other journals and proceedings. Scott J. Vitell is the Phil B. Hardin Professor of Marketing at the University of Mississippi, receiving his Ph.D. from Texas Tech University. His previous work has appeared in theJournal of the Academy of Marketing Science, Journal of Business Research, andResearch in Marketing and the Journal of Business Ethics, in addition to numerous other journals and conference proceedings.     

Role of the Internet Site in the Promotion Management of Sports Teams and Franchise Brands

This study examines the role that a website plays in the development of fan allegiance and as a promotion management tool for a sports team and brand. Research indicates that the combination of sports, media (television in particular), and sponsorships when employed in an integrated manner, can develop consumer connection to brands. This study suggests that the Internet is also an important part of an integration strategy of sports, media, and promotion. By working with a new team in the AIFA indoor football league, the researchers were able to determine what helped make fans allegiant to the team before the franchise's inaugural game. The results show that even before the team played its inaugural home contest, fans had become allegiant to the franchise brand and team by using the team internet site. These results indicate that an internet site can serve as a strong promotional tool in an integrated marketing plan of sports, media, and promotion to move fans toward brand loyalty and toward primary goals of the firm, including increased sales.     

Muy local: Differentiating Hispanic and Caucasian shoppers of locally produced foods in US grocery

The current study reviews consumer purchasing of locally produced foods in retail grocery stores across Hispanic and Caucasian groups in the United States. Six hypotheses were tested via the creation and evaluation of a measurement model within the structural equation modeling process. Results suggested that group differences exist between Hispanic and Caucasian consumers across the constructs of attitudes, perceived product availability, subjective norms, intention to purchase and extent of purchase. Implications for marketing strategies across groups and product categories are provided, along with future research directions.     

Nonhomothetic Preferences and International Trade

This study examines whether nonhomothetic preferences underlie the “missing trade” problem associated with factor content of trade models. We first find that per capita income goes a long way in explaining differences in goods consumption across countries. We then find a striking correlation between the factor content of consumption and per capita income, and show that accounting for this is a key part of resolving the case of the missing trade. However, nonhomothetic preferences over broad categories of expenditure play only a small role in this phenomenon. Rather, we find that as income grows, spending is directed towards the relatively capital‐intensive version of a given good. Since recent research shows that capital intensity is correlated with quality ( Schott, 2004 ), our results suggest that within‐product quality differences are likely important for explaining the factor content of trade, whereas nonhomothetic preferences over broad categories of expenditure are much less so.     

Delivery horizon and grain market volatility

We study the difference in the volatility dynamics of CBOT corn, soybeans, and oats futures prices across different delivery horizons via a smoothed Bayesian estimator. We find that futures price volatilities in these markets are affected by inventories, time to delivery, and the crop progress period and that there are important differences in the effects across delivery horizons. We also find that price volatility is higher before the harvest starts in most cases compared to the volatility during the planting period. These results have implications for hedging, options pricing, and the setting of margin requirements. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark 30:846–873, 2010     

What is a strategic acquisition? Decision modeling in support of foreclosed housing redevelopment

This paper describes and develops a model for calculating location-based strategic values of foreclosed properties considered for acquisition and redevelopment by community development corporations (CDCs). A property’s strategic value refers to its proximity to site-specific neighborhood amenities and disamenities (e.g. schools, public transit, distressed properties), given the relative importance of that proximity to CDC organizational and community objectives. We operationalize the concept of strategic value, and apply this concept to a salient public sector decision problem. Using data and value assessments from a CDC engaged in foreclosed housing redevelopment, we compute measures of strategic value for a set of acquisition candidates. We show that strategic values can differ in systematic ways depending on the types of amenities and disamenities identified as relevant for CDC acquisition decisions, the relative importance assigned to those amenities and disamenities, and the utility maximization objectives of the CDC. We conclude by proposing a multi-criteria decision model for foreclosed housing acquisition and redevelopment which incorporates a theory of residential housing impacts for which strategic value measures are a special case.     

Using uncensored communication channels to divert spam traffic

We analyze a simple, feasible improvement to the current email system using an uncensored (open) communication channel. Such a channel could be an email folder or account, to which properly tagged commercial solicitations are routed without filtering along the way. We characterize the circumstances under which senders would voluntarily move much of their spam into the open channel, leaving the traditional email channel dominated by person-to-person mail. We then show that under certain conditions all email recipients are better off when an open channel is introduced. Only recipients wanting spam will use the open channel enjoying the less disguised messages and cheaper sale prices, and for all recipients the dissatisfaction associated with both undesirable mail received and desirable mail filtered out decreases.     

Estimating panel data models in the presence of endogeneity and selection

We consider estimation of panel data models with sample selection when the equation of interest contains endogenous explanatory variables as well as unobserved heterogeneity. Assuming that appropriate instruments are available, we propose several tests for selection bias and two estimation procedures that correct for selection in the presence of endogenous regressors. The tests are based on the fixed effects two-stage least squares estimator, thereby permitting arbitrary correlation between unobserved heterogeneity and explanatory variables. The first correction procedure is parametric and is valid under the assumption that the errors in the selection equation are normally distributed. The second procedure estimates the model parameters semiparametrically using series estimators. In the proposed testing and correction procedures, the error terms may be heterogeneously distributed and serially dependent in both selection and primary equations. Because these methods allow for a rather flexible structure of the error variance and do not impose any nonstandard assumptions on the conditional distributions of explanatory variables, they provide a useful alternative to the existing approaches presented in the literature.     

Taxes and production: The case of Pakistan

This paper investigates the effectiveness of investment incentives and corporate income taxes in influencing production and investment decisions in the Pakistani wearing apparel and leather products industries. Three tax instruments are considered: the corporate income tax (CIT), the investment tax credit (ITC), and the capital cost allowance (CCA).The results show that since there are significant capital adjustment costs, it is important to distinguish between the short, intermediate, and long-run effects associated with the tax instruments. Production decisions are relatively more responsive to changes in the ITC rate compared to changes in either CCA or CIT rates in each run. However, only in the long run for the apparel industry are the ITC and CCA rates cost effective in stimulating investment. The CIT is never cost effective. Thus targeted instruments outperform the general CIT instrument. In addition, although the incentive to invest is enhanced, there is little effect on output. Therefore, tax incentives essentially make production techniques more capital intensive.