Aggregation of Efficiency Indices

Measurement of technical efficiency is carried out at many levels of aggregation—at the individual branch, plant, division, or district level; at the company- or organization-wide level; at the industry or sectoral level; or at the economy-wide level. In this paper, we examine the conditions under which these indexes constructed at various levels of aggregation can be consistent with one another—that is, the extent to which efficiency indexes can be consistently aggregated. Unfortunately, our results are discouraging, indicating that very strong restrictions on the technology and/or the efficiency index itself are required to enable consistent aggregation (or disaggregation).     

In the air again: frequent flyer relationship programmes and business travellers' quality of life

This research explores whether frequent flyer programmes somehow add to the quality of life of the frequent business traveller (defined in this study as business flyers who had flown round trip 26 or more times in the past 12 months). A questionnaire was mailed to subscribers of a newsletter for members of frequent air and hotel programmes. Results indicated that frequent flyer programmes contribute positively to frequent business travellers' lifestyles and to their quality of life, perhaps by countervailing some of the negative aspects of frequent business travel. Copyright © 2003 John Wiley & Sons, Ltd.     

Financial Econometrics, Financial Innovation, and Financial Stability

Innovation in financial markets, spurred to a significant extentby developments in finance theory and financial econometrics,has played a critical role in spurring economic growth. However,the current turmoil in financial markets raises fundamentalquestions about the nature of financial innovation and the roleof policymakers in maintaining financial stability. This paperexplores these questions, focusing on the complexities of modelingfinancial risk and the potential trade-off between policiesaimed at combating short-run financial instability on the onehand and the potential financial market distortions and moralhazard that can result from such policies on the other.     

Do liquidity measures measure liquidity?

Given the key role of liquidity in finance research, identifying high quality proxies based on daily (as opposed to intraday) data would permit liquidity to be studied over relatively long timeframes and across many countries. Using new measures and widely employed measures in the literature, we run horseraces of annual and monthly estimates of each measure against liquidity benchmarks. Our benchmarks are effective spread, realized spread, and price impact based on both Trade and Quote (TAQ) and Rule 605 data. We find that the new effective/realized spread measures win the majority of horseraces, while the Amihud [2002. Illiquidity and stock returns: cross-section and time-series effects. Journal of Financial Markets 5, 31–56] measure does well measuring price impact.     

FACTORS AFFECTING THE LABOR SUPPLY DECISIONS OF REGISTERED NURSES

We estimate the labor force participation and the full‐time and part‐time work decisions of female registered nurses (RNs) and find higher wages are not a significant factor to (a) increase the likelihood of working nor (b) to encourage full‐time work. Another key factor is age which, given the aging of the RN population, foreshadows dwindling labor supply. This, while demand for RNs is predicted to continue to rise, will exacerbate labor shortages in the market for RNs. The results also offer insight to explain the reduction in labor supply wage elasticities for female workers in general in the United States. (JEL I11, J22, J44)     

Empirical analysis of media versus environmental impacts on park attendance

This study examined whether park attendance was affected by red tide events. The analysis found that the presence of red tide, objectively measured with four models including nearby cell counts, did not affect park attendance. However, the appearance of the search phrase “red tide” in local newspapers revealed significant reductions in average daily park attendance of 398 (21 percent) visitors, representing revenue losses of $16,955. An effective red tide impact mitigation strategy may be to educate members of the press regarding the public response resulting from red tide coverage.     

Decompositions of corn price effects: implications for feed grain demand and livestock supply

This article examines how corn prices affect the demand for feed grains and the supply of livestock outputs. The differential approach to the theory of the multiproduct firm is employed to examine ex ante decisions about feed grain demand and livestock supply. The estimation results suggest that livestock producers have little flexibility in adjusting the demand for corn in response to an increase in corn prices. The substitutable relationship between corn and distillers’ grains contributes to alleviating pressures on feed costs in response to high corn prices. In addition, the estimation results highlight that the composition of livestock supply can be altered by changes in livestock prices. On the basis of the estimated elasticities, the decompositions of profit‐maximizing input demand are conducted to examine the effects of changes in corn prices on feed grain demand and livestock supply. The decomposition results reveal that an increase in corn prices reduces corn demand but raises the demand for distillers’ grains mainly due to the substitution effects of corn price changes. The decomposition results also show that an increase in the price of corn reduces cattle supply but raises the supply of chicken and pork due to the output relationships in supply.