Mismeasured Household Size and its Implications for the Identification of Economies of Scale*

We consider the possibility that demographic variables are measured with errors which arise because household surveys measure demographic structures at a point‐in‐time, whereas household composition evolves throughout the survey period. We construct and estimate sharp bounds on household size and find that the degree of these measurement errors is non‐trivial. These errors have the potential to resolve the Deaton–Paxson paradox, but fail to do so.     

A content analysis of financial services magazine print ads: Are they reaching women?

The financial services industry has undergone what can only be called a ‘transformation’ over the last 25 years. Deregulation has increased competition in all sectors. Thus, firms must understand the needs of their customers. The number of women as financial services decision makers has been rapidly growing, and it is estimated that within 15 years women will represent over 65 per cent of top wealth-holders. This study looks at how the financial services industry communicates with potential women customers through print advertising. The most frequently used appeals when advertising in women's magazines are similar to those used in men's magazines, but they differ from those used in general magazines. Surprisingly, advertisers, however, do not seem to tailor their ads differently to women than to men, despite evidence that women respond to different approaches.     

Efficiency and equity gains in the rental market for arable land: observations from a communal area of KwaZulu-Natal,South Africa

Between 1993 and 1996, Thomson made a concerted effort to stimulate a rental market for arable land in the Upper Tugela Catchment region of the former KwaZulu homeland, South Africa. The number of transactions increased with associated gains in equity and efficiency. This study revisits the market and examines its performance in the year 2000. It was found that the number of rental transactions and lessees had declined, but that the area of land transacted had increased sharply. This apparent anomaly can be explained by an increase in fixed transaction costs that prevented prospective participants from entering the market, and a decrease in variable transaction costs that encouraged lessees to trade larger areas. Lessees are consolidating land from several different lessors, with gains in equity and efficiency still evident. Government extension staff could play a key role in sustaining and broadening access to rental markets for cropland in communal areas by reducing fixed transaction costs as Thomson did.     

Economic effects of trade patterns on productivity: Evidence from the Korean automobile industry

Among inter-firm trade patterns, the cooperative trade system has proved to be superior to arms-length or market-oriented trade in the long run. Within the cooperative trade system, the transition from dedicated (single supplier) trade to network trade is proving a remarkable phenomenon. In our theoretical model, we compare the relative economic efficiencies between dedicated and network trade systems. Then in empirical analysis, we examine the relationship between alternative trade patterns and the productivity of the automobile industry. The main results of the theoretical model show that network trade results in a higher profit level than dedicated trade as a rule, although network trade is less stable than dedicated trade. Empirical study reveals that increasing network trade leads to higher productivity.     

The new institutional economics and its relevance to social economics

There has been a quiet revolution in economic theory, led by the New Institutionalists. Pioneered by Douglass C. North, this group argues that institutions are the main determinants of economic performance, yet neoclassical economics has no role for institutions. Contrary to many misconceptions, this theory of institutions can be integrated with neoclassical economics, leaving mainstream economic theory in tact, but broader and more relevant. The purpose of this article is twofold. First, the main arguments of the New Institutionalists are summarized. Second, the bridge between institutions and social economics is explored. The article concludes by arguing that the New Institutional approach is fruitful, and that the theory will gradually be integrated with neoclassical economics, until the two merge into a single body of theory.     

Simultaneous versus sequential public good provision and the role of refunds — An experimental study

We experimentally study contributing behavior to a threshold public good under simultaneous and sequential voluntary contribution mechanisms and investigate how refund policies interact with the mechanism. We find that, for a given refund rule, efficiency is greater under a sequential contribution mechanism than under a simultaneous contribution mechanism. Furthermore, for a given order of contributions, we find that full refund unambiguously achieves higher efficiency in the simultaneous mechanism while this is not the case in the sequential mechanism.     

Rural Amenity Values and Length of Residency

New residents of rural communities are often assumed to have preferences for development and conservation that differ from those of longer-term residents. However, the literature offers little to quantify presumed preference heterogeneity. This article assesses whether stated preferences differ according to length of residency. Results are based on a conjoint (choice experiment) survey of Rhode Island rural residents. Heterogeneity—according to length of town residency—is modeled using dummy variables, multiplicative interactions, and Lagrangian interpolation polynomials. Results are compared across the three models, and identify a range of attributes for which willingness to pay depends on length of residency.