Consumer substitution decisions: an integrative framework

Substitution decisions have been examined from a variety of perspectives. The economics literature measures cross-price elasticity, operations research models optimal assortments, the psychology literature studies goals in conflict, and marketing research has examined substitution-in-use, brand switching, stockouts, and self-control. We integrate these perspectives into a common framework for understanding consumer substitution decisions; their specific drivers (availability of new alternatives, internal vs. external restrictions on choice); the moderating role of a consumer’s commitment to an initially desired alternative; and the affective, motivational, cognitive, and behavioral outcomes of substitution. We use this framework to recommend new avenues for research.     

Hospital Retailing

The United Kingdom 1988 Health and Medicine Act offered local Health Authorities the opportunity to generate income from commercial activities unrelated to health care. Retailing offers large income potential, and some Authorities are taking full advantage, employing commercial advisers or entering into agreements with retail developers and retailers to exploit this potential. The authors set out to discover whether there was much potential in hospital retailing, assess the views of the main interest groups involved (Health Authorities, retailers and customers) and see whether any guidelines could be suggested to aid Authorities and retailers considering taking this route. Their conclusion is that there is much potential since there are advantages for all three groups providing that customers requirements were met and that developers avoid an over-commercial environment in hospitals.     

How to Measure and Draw Causal Inferences with Patent Scope

Abstract

This paper presents an easy-to-use measure of patent scope that is grounded both in patent law and in the practices of patent attorneys. We validate our measure by showing both that patent attorneys’ subjective assessments of scope agree with our estimates, and that the behavior of patenters is consistent with it. Using our validation exercise, we find that previous measures of patent scope (i.e., the number of patent classes, the number of citations made by future patents, and the number of claims in a patent) are uninformative or misleading. To facilitate drawing causal inferences with our measure, we show how it can be used to create an instrumental variable, patent examiner scope toughness, which we also validate. We then demonstrate the power of this instrument by examining standard-essential patents. We show that an (exogenous) diminishment of patent scope leads to patents being much less likely to be declared standard essential.     

Symmetric and Asymmetric Stationarity Tests of Productivity

Studies of productivity in the operations and engineering management literature have typically focused on identifying the drivers of productivity and how best to manage resources. To date, the issues of the time-series behavior and the stochastic structure of productivity have largely been overlooked. This article examines the times-series properties of productivity utilizing several unit root and stationarity tests including one that allows for asymmetric adjustments to equilibrium. The findings suggest that productivity is a nonstationary process and first-differencing is necessary to render a stationary series. Moreover, we find some evidence of an asymmetric adjustment process in the productivity growth rates of manufacturing.     

An Evaluation of a Developmental Economic Education Project Given Limited Data

The Joint Council on Economic Education's Developmental Economic Education Program (DEEP) has been subjected to evaluations, both on a nationwide basis and in terms of the effects of a given project in a local area. Usually, the results have been positive, but too few of the evaluations have employed rigorous statistical analysis. Furthermore, the lasting effects of the program have not been sufficiently considered. The authors of this article recognize important limitations in their study, but present interesting evidence of the possible impact of the DEEP project in one city (Minneapolis) and suggest the policy implications of their findings.     

Modeling the Response of Gasoline-Crude Oil Price Crack Spread Macroeconomic Shocks

To date, considerable attention has been given to evaluating movements in crude oil and gasoline prices and in determining the significance of fundamental state variables that may influence these prices. This paper differs from the existing literature by identifying the response of the single-product gasoline-crude oil crack spread to unexpected changes in real output growth, inflation, the corporate default risk premium, and the stance of monetary policy utilizing the econometric techniques of vector autoregression and generalized impulse response analysis. The generalized impulse response method does not impose a priori restrictions as to the relative importance each of the state variables may play in the process of transmitting unexpected information from the macroeconomic variables to the crack spread. The results show the extent and the magnitude of the relationship between the crack spread being investigated and macroeconomic factors.     

Performance appraisal and culture: practice and attitudes in Hong Kong and Great Britain

This article compares the practice of and attitudes towards performance appraisal for managerial and professional staff in Hong Kong and Britain, and considers the extent to which actual practice and employee preferences are in alignment. Findings suggest that appraisal may be more widespread in Hong Kong than in Britain. However, British appraisal tends to be more participative and to place greater emphasis on discussing objectives, development and career plans. Hong Kong appraisals appear to be more directive and Hong Kong respondents perceive a higher level of 'negative' appraiser behaviour. In spite of this, Hong Kong respondents show if anything slightly more confidence in the utility of appraisal than do British respondents. They show stronger support for appraisal's use for reward and punishment and less support for the objectives-setting and training and development uses than do the British sample. Hong Kong respondents are more likely than their British counterparts to favour involving a more senior manager in appraisal, and they are less likely to prefer more frequent appraisals. There was little evidence that Hong Kong respondents had a stronger preference for group-based appraisal criteria, although they did show more support than the British sample for the use of personality as a basis for appraisal. Overall, the suggestion is that appraisal has been adopted in Hong Kong organizations but that the practice of appraisal has been adapted to suit the cultural characteristics of the society.     

Labor skills and factor proportions trade in the gulf cooperation council

A new measure of factor intensity and abundance from trade theory is utilized to predict potential trade and income redistribution between traditional and modern economies in the Gulf Cooperation Council. Differences in labor skill intensity and abundance suggest there will be substantial trade between the modern (Bahrain, Qatar, UAE) and traditional (Kuwait, Oman, Saudi Arabia) economies in the GCC. Due to the limited data, the UAE and Kuwait are taken to represent the modern and traditional economies.     

Process Versus Product Innovation: Do Consumption Data Contain Any Information?

In a model of endogenous growth in which product and process innovations are the joint outputs of an unspecified research program, we show that if quality growth is not captured by official price indices the usual isomorphism of product and process innovations breaks down. We derive and estimate a Euler equation for a representative consumer under the assumption of measurement error. Unobserved quality improvements account for at least half of growth, and real productivity growth in postwar United States was two to five times greater than measured total factor productivity (TFP) growth. We also find that at least 15% of the measured slowdown in TFP growth can be attributed to unobserved increases in the relative importance of product innovations.     

An Overview of Normal Theory Structural Measurement Error Models

This paper gives an introduction and overview to the often under‐used measurement error model. The purpose is to provide a simple summary of problems that arise from measurement error and of the solutions that have been proposed. We start by describing how measurement error models occur in real‐world situations. Then we proceed with defining the measurement error model, initially introducing the multivariate form of the model, and then, starting with the simplest form of the model thoroughly discuss its features and solutions to the problems introduced due to measurement error. We discuss higher‐dimensional and more advanced forms of the model and give a brief numerical illustration.