Advertising as special service provision under non-price vertical restraints: exclusive territories in beer distribution

This article presents statistical evidence which supports Lester Telser's 1960 hypothesis, that when vertical restraints are made illegal, intrabrand competition results which diminishes the provision of point-of-sale, special services. This results because of the public goods problem exhibited by the special services. Increased special service provision by the national manufacturer must then substitute for the special service provision left unfilled by the wholesaler. Evidence relating to the efficacy of such substitution is also presented.     

Timing of Entry under Externalities

Received August 23, 2000; revised version received May 14, 2001     

(En-)‘lightening’ children: Assessing the impacts of access to electricity on learning achievement levels

The welfare impacts of electrification are well documented in the literature, including the effects of electricity on school enrolment. However, the spillover effects of electrification on children's achievement levels are scarce. We use three complementary but distinct econometric models to establish a causal relationship between electrification and test scores using nationally representative household panel data from India. We find positive results irrespective of the choice of econometric model, and these results seem to be mediated by changing time-use patterns of children with access to electricity. We first exploit the plausibly exogenous variation in access to electricity due to a universal electrification program in the state of West Bengal in India and we find positive effects of electrification on children's test scores. By age group, we find that younger cohorts benefit more in terms of their reading scores than older cohorts. Then, to ascertain external validity of these results, we replicate them over a nationally representative sample using fixed effects and instrumental variables estimation and find similar results. At the intensive margin, we find that access to more hours of electricity positively affects test scores. We identify an increase in time spent by children on study-related activities as the potential channel for these results.     

Real wages,real interest rates,and the Phillips curve

This article argues that any analysis of a Phillips curve should include the real interest rate in addition to inflation and real wages as any changes in the interest rate changes the labour–capital input mix in the production process leading to a change in the level of employment in the economy. To justify this argument a Phillips curve model is developed, which includes the real interest rate in addition to inflation and real wages. After the diagnosis of the time series properties of the data, an error correction model is developed and estimated using a set of US annual data from 1948 to 1996. The estimated parameters of the model do suggest that one should really take into consideration of the real interest rate while analysing the Phillips curve. A non-nested test (F-test) also suggests that the Phillips curve model with real interest rate as an additional variable performs better than the conventional method that does not include the real interest rate.