Cost thresholds,cut-offs and sensitivities in stated choice analysis: Identification and implications

Within the discrete choice literature, there is growing recognition that some respondents do not process all attributes when evaluating their choice outcomes. Worryingly, the cost attribute is often among those attributes that are likely to be ignored by respondents. We use probabilistic decision process models (similar in form to latent class models, but where we define the classes to describe specific heuristics) to facilitate situations where respondents adopt cost thresholds and cut-offs. We further develop this model to address the potential confounding between preference heterogeneity and processing heterogeneity by simultaneously allowing for a segmentation of respondents based on their sensitivities to cost. Results, based on an empirical dataset on the existence value of rare fish species in Ireland, provide further confirmation that a share of respondents did not attended to cost. Importantly, however, when heterogeneity to cost levels is accounted for the inferred incidence of complete non-attendance is markedly lower, to the extent that when cost thresholds and cut-offs are also accommodated it almost disappears. This modelling approach leads to significant gains in model fit and has important implications for welfare analysis.     

The Impact of Trade Barriers on Mandated Biofuel Consumption in Canada

A customized version of the deterministic Food and Agricultural Policy Research Institute (FAPRI) modeling system was used to assess the impacts of two alternative scenarios: (1) an increase in Canadian ethanol demand to 10% of domestic liquid fuel consumption by 2011 met through increased ethanol imports, and (2) the same increase in Canadian ethanol demand met only through increased domestic supply. The results reveal import barriers injure Canadian consumers by limiting their access to supplies offered for sale at lower prices by more efficient producers, particularly those located in subtropical regions. With freer trade, the domestic ethanol price would fall while the world price would rise due to the higher demand for ethanol in Canada. The results also show that import restrictions directly undermine the effectiveness and increase the costliness of a higher consumption mandate in Canada. The relatively less expensive ethanol is for the final consumer, the more likely they will use it as fuel over available alternatives. The implication is that restricting imports of ethanol is counterproductive to the policy objective of increasing domestic ethanol consumption. Nous avons utilisé une version adaptée du système de modélisation déterministe du Food and Agricultural Policy Research Institute (FAPRI) pour évaluer les répercussions de deux scénarios possibles : 1. une hausse de la demande canadienne d’éthanol équivalant à dix pour cent de la consommation intérieure de combustible liquide d’ici 2011 grâce à l’augmentation des importations d’éthanol; 2. la même hausse grâce, cette fois, à l’augmentation des approvisionnements intérieurs seulement. Nos résultats ont indiqué que les obstacles à l’importation lèsent les consommateurs canadiens en limitant leur accès à des approvisionnements offerts à faibles prix par des producteurs plus efficaces, en particulier ceux des régions subtropicales. En présence d’une libéralisation accrue des échanges, le prix intérieur de l’éthanol reculerait tandis que le prix mondial augmenterait en raison de l’accroissement de la demande d’éthanol au Canada. Nos résultats ont également indiqué que les restrictions à l’importation réduisent directement l’efficacité et augmentent la cherté du mandat visant à stimuler la consommation d’éthanol au Canada. Plus le prix de l’éthanol sera abordable pour le consommateur final, plus ce dernier sera enclin à l’utiliser comme combustible par rapport aux autres sources disponibles. Imposer des restrictions à l’importation d’éthanol fait plus de tort que de bien à l’objectif de la politique qui vise à accroître la consommation intérieure d’éthanol.     

A Holistic vs. an Attribute‐based Approach to Agri‐Environmental Policy Valuation: Do Welfare Estimates Differ?

Different economic valuation methodologies can be used to value the non‐market benefits of an agri‐environmental scheme. In particular, the non‐market value can be examined by assessing the public’s willingness to pay for the policy outputs as a whole or by modelling the preferences of society for the component attributes of the rural landscape that result from the implementation of the policy. In this article we examine whether the welfare values estimated for an agri‐environmental policy are significantly different between an holistic valuation methodology (using contingent valuation) and an attribute‐based valuation methodology (choice experiment). It is argued that the valuation methodology chosen should be based on whether or not the overall objective is the valuation of the agri‐environment policy package in its entirety or the valuation of each of the policy’s distinct environmental outputs.     

UNDERSTANDING INDUSTRIAL CRISES[1]

This article provides a conceptual framework for understanding industrial crises. These crises are organizationally-based disasters which cause extensive damage and social disruption, involve multiple stakeholders, and unfold through complex technological, organizational and social processes. The characteristics of industrial crises are illustrated through a comparison of three diverse crises - the Bhopal disaster, the Tylenol poisonings, and the explosion of the space shuttle Challenger. Relationships among these characteristics are presented in a model of industrial crisis. Some issues for further research are identified.     

Do they matter? The role of non-academics in the internationalization of academic spin-offs

Internationalization and academic entrepreneurship have been receiving a lot of attention not only in academic research but also in policy practice. While academic spin-offs suffer from limited resources and lack of entrepreneurial skills, they often penetrate international market through their innovative products and technology since the very early years of their establishment. In the literature, little attention has been paid to explicitly examine the internationalization process of academic spin-offs as well as the role of non-academics. In order to investigate the impact of non-academics on the performance of spin-offs, we carried out an empirical analysis of 126 Spanish spin-offs which were divided into two market categories, international and domestic market. With regard to the percentage of non-academics in founding team, we found that their impact was more relevant to the performance goals than to innovativeness. On the other hand, the size of non-academic networks contributed significantly not only to the performance goals but also to innovation. However, we did not find a significant relationship between the strength of non-academic networks and the performance goals and innovativeness of the international spin-offs. Overall, we concluded that the role of non-academics was crucial for supporting the internationalization of the spin-offs.     

Justifying departmental expenditure programmes

In spite of the marketing ‘hype’ which surrounded the birth of its Enterprise Initiative, some genuine and worthwhile developments seemed to be taking root in the Department of Trade &; Industry. Time will tell whether the cultural and policy changes will outlive Lord Toung.     

How quickly do CEOs become obsolete? Industry dynamism,CEO tenure,and company performance

Scholars have characterized CEO tenures as life cycles in which executives learn rapidly during their initial time in office, but then grow stale as they lose touch with the external environment. We argue, however, that the opportunities for adaptive learning are limited because (1) a CEO assumes office with a relatively fixed paradigm that changes little thereafter; (2) inertia limits the speed at which an organization can align itself with a new CEO's paradigm; and (3) for any within‐paradigm learning to occur, the external environment must be stable enough so that the cause–effect relationships that CEOs glean today remain relevant tomorrow. In a longitudinal study of 98 CEOs in the relatively stable branded foods industry and 228 CEOs in the highly dynamic computer industry, we found results that strongly supported our hypotheses. In the stable food industry, firm‐level performance improved steadily with tenure, with downturns occurring only among the few CEOs who served more than 10–15 years. In contrast, in the dynamic computer industry, CEOs were at their best when they started their jobs, and firm performance declined steadily across their tenures, presumably as their paradigms grew obsolete more quickly than they could learn. Copyright © 2006 John Wiley & Sons, Ltd.     

INTERPRETING ORGANIZATIONAL TEXTS

The mere observing of a thing is no use whatsoever. Observing turns into beholding, beholding into thinking, thinking into establishing connections, so that one may say that every attentive glance we cast on the world is an act of theorizing…