THE SQUARED ORNSTEIN-UHLENBECK MARKET

We study a complete market containing J assets, each asset contributing to the production of a single commodity at a rate that is a solution to the squared Ornstein-Uhlenbeck (Cox-Ingersoll-Ross) SDE. The assets are owned by K agents with CRRA utility functions, who follow feasible consumption/investment regimes so as to maximize their expected time-additive utility from consumption. We compute the equilibrium for this economy and determine the state-price density process from market clearing. Reducing to a single (representative) agent, and exploiting the relation between the squared-OU and squared-Bessel SDEs, we obtain closed-form expressions for the values of bonds, assets, and options on the total asset value. Typical model parameters are estimated by fitting bond price data, and we use these parameters to price the assets and options numerically. Implications for the total asset price itself as a diffusion are discussed. We also estimate implied volatility surfaces for options and bond yields.     

Comparing the impacts of Internet technology and national culture on online usage and purchase from a four-country perspective

The Internet has successfully generated an ever-expanding cohort of users for all its major concomitant activities, including information gathering, communications and transactions. So far no attempt has been made to validate whether such a success is so deep as to transcend national cultures. Nor any work has been conducted to compare the internationalisation¹ performances between online usage activities. The current study addresses these two research gaps from the perspective of four countries, i.e. Britain, Germany, Japan and Taiwan. Results show that although the technological forces have been quite successful in internationalising overall online usage activities, they succumb to the cultural forces as far as only the transactions activity, or more colloquially online purchase, is concerned. This indicates the relative difficulty in internationalising online purchase vis-à-vis other online usage activities. Further research on locating a series of step functions or kick-off time points regarding the development of online purchase is suggested.     

Economic development and Indigenous Australia: contestations over property,institutions and ideology*

Economic development for remote Indigenous communities cannot be understood unless the relative importance of customary activity, potentially enhanced by native title legal rights in resources, is recognised. The present article uses a three‐sector hybrid economy framework, rather than the usual two‐sector private (or market) and public (or state) model to more accurately depict the Indigenous economy. Examples are provided of the actual and potential significance of the customary sector of the hybrid economy. Focusing on the concepts of property and institutions, it is demonstrated that significant local, regional, and national benefits are generated by the Indigenous hybrid economy. A role is foreshadowed for resource economists and the New Institutional Economics in quantifying these benefits, including positive externalities, so that they might be more actively supported by the state.     

Dynamics of the federal funds target rate: a nonstationary discrete choice approach

We apply a discrete choice approach to model the empirical behaviour of the Federal Reserve in changing the federal funds target rate, the benchmark of short‐term market interest rates in the US. Our methods allow the explanatory variables to be nonstationary as well as stationary. This feature is particularly useful in the present application as many economic fundamentals that are monitored by the Fed and are believed to affect decisions to adjust interest rate targets display some nonstationarity over time. The chosen model successfully predicts the majority of the target rate changes during the time period considered (1994–2001) and helps to explain strings of similar intervention decisions by the Fed. Based on the model‐implied optimal interest rate, our findings suggest that there is a lag in the Fed's reaction to economic shocks during this period. Copyright © 2004 John Wiley & Sons, Ltd.     

The Intergenerational Supply of Loggers Under Conditions of Declining Economic Well-Being

This paper addresses the supply-side explanations of a logger shortage by estimating an occupational choice model that considers the role of earnings, nonpecuniary determinants and intergenerational factors. Our results showed that: (1) relative earnings have no statistically significant effect on career choice; (2) improvement in the public image of loggers substantially increases entry into logging; and (3) a strong intergenerational supply linkage exists but is currently being eroded.     

Fashion consumers and fashion problem recognition style

Consumer spending over the life span of today's 18‐ to 25‐year‐old emerging adults will reach into the $10 trillion range. Emerging adults are a powerful force in shaping demand for consumer products. The problem recognition styles associated with emerging adults can help marketers understand this group of consumers and provide insight into what kinds of products, services, and messages will appeal to them as lifelong consumers. The purpose of this study was to examine differences between men and women and among fashion consumer groups in fashion problem recognition style. Participants were a convenience sample of emerging adult consumers from one Midwestern university in the US, 136 men and 158 women who completed the Measure of Fashion Innovativeness and Opinion Leadership, Fashion Problem Recognition Style Scale, and provided demographic information. Both fashion followers and men reflected a need‐based approach to problem recognition. Both fashion change agents and women reflected a want‐based approach to problem recognition. Male fashion followers differed from all other groups in indicating a need‐based approach to problem recognition. This study built on previous work by examining differences in problem recognition style owing to fashion consumer group and gender. The basic premise behind problem recognition style was validated; that is, actual state (need‐based) vs. ideal state (want‐based) approaches to fashion problem recognition did relate to fashion consumer group membership and gender.