Carryover effects of advertising on sales of durable goods

In a landmark paper, Clarke [Clarke, D.G., J. Marketing Res. 13 (November 1976): 345–357] addressed the question of how long the carryover effect of advertising on sales persists. Appropriate cautions are included in the conclusions reached by Clarke since the preponderance of studies that he reviewed involved mature frequently purchased low-priced products. His conclusion is that, for such products, the carryover effect of advertising lasts a matter of months rather than years. The current study examines durable goods and provides preliminary evidence that for some durables, advertising effects may have a duration interval that exceeds a year.     

Smuggling and price disparity

This paper proposes a model of smuggling consistent with the coexistence of smuggling, legal trade and price disparity, defined as a domestic price which exceeds (is less than) the return from legal export (import). These phenomena have been found to characterize Indonesian smuggling. A framework is presented in which legal trade is used to cloak smuggling activity with the implication that the greater the volume of legal trade, the less the costs of smuggling. This model is then used to explain the observation noted above and to show that smuggling may be welfare increasing vis-à-vis the non-smuggling situation, and that even if the suppression of smuggling is costless, tax revenue maximization may require a positive level of smuggling. In addition, the model is applied to coffee and rubber exports from Indonesia.     

The clinton health reform

There are some difficult, even some agonizing tradeoffs, that we have to confront if we want to achieve the objectives of universal coverage and cost containment set forth in the Clinton plan. Will universal coverage lead to uniform results? If we mandate coverage, who is actually going to be paying for it and in what form? Do targeted subsidies based on nonincome classifications of individuals (i.e., employment status) create more distortion than equity? A concern to focus on is whether the Clinton plan will be controlling health care spending or an individual's ability to spend for their choice of health care.     

HETEROGENEOUS EFFECTS OF THE ACA MEDICAID EXPANSION ON HOSPITAL FINANCIAL OUTCOMES

This study examines the effect of the Affordable Care Act's Medicaid expansion on hospital financial outcomes. A key innovation relative to prior studies is that we explicitly account for heterogeneity across states in the timing and extent of the expansion as well as across hospital types. We find that Medicaid expansion led to a decrease in uncompensated care expenditures and an increase in average operating margins. The effects were larger in states where the Medicaid expansion led to a greater increase in program eligibility. Operating margins improved most for public hospitals and facilities located in rural areas. (JEL I11, I13, I18)     

Local versus Global Assessment of Mobility*

Mobility indices are popular tools designed to quantify the extent of income changes by aggregating “local” distributional change into a “global” scalar according to some rule. For some mobility measures, this aggregation rule is only implicit in their standard definition. We derive an insightful approximation to the (statistical) aggregation rule for the important class of mobility indices introduced by Shorrocks (Journal of Economic Theory 19 (1978), 376–93) and further generalized by Maasoumi and Zandvakili (Economic Letters 22 (1986), 97–102), which enables us to characterize their normative properties. We also develop methods for estimation and inference. A substantive empirical contribution emerges from the comparison of mobility between the United States and Germany. Our methods reveal why income mobility is higher in Germany than in the United States: Higher German mobility in the bottom of the distribution is combined with an implicitly higher weighting by the mobility index at the bottom.     

Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain?

This paper asks whether the income gap between rich and poor nations can be explained by multiple equilibria. We explore the quantitative implications of a simple two-sector general equilibrium model that gives rise to multiplicity, and calibrate the model for 127 countries. Under the assumptions of the model, around a quarter of the world’s economies are found to be in a low output equilibrium. We also find that, since the output gains associated with an equilibrium switch are sizeable, the model can explain between 15 and 25% of the variation in the logarithm of GDP per worker across countries.     

Social economics and economics imperialism

Address delivered at a session on April 2, 1993 at the Midwest regional meetings of the Association for Social Economics, Indianapolis, IN.     

Investment in organization capital

We study a firm’s investment in organization capital by analyzing a dynamic model of language development and intrafirm communication. We show that firms with richer internal language (i.e., more organization capital) have lower employee turnover, and higher diversity in skill and wages among incumbents who are promoted from within the firm. Our results also suggest that firms in rapidly changing industries are less likely to invest in organization capital, and are more likely to have high managerial turnover. Finally, our model shows that employment protection regulations lead to more investment in organization capital but less innovation.     

External linkages and product innovation in small manufacturing firms

The requirement for small firms to collaborate, as a means to supplementing and complementing limited internal resources, has dominated much of the academic and policy debate on regional development and small firm innovation throughout the late 1980s and 1990s. However, relatively little empirical work has sought to look further than simple frequency enumeration - noting that the most innovative and better performing firms are generally more likely to have links with external organizations. Based upon a sample of 228 small West Midlands' manufacturers, this study considers the source, function, geography and strength of innovation-related co-operation. While the general findings point to innovators making greater use of external linkages, of certain types and in particular directions (notably the preponderance of vertical value chain linkages), the results are less emphatic than might have been anticipated. This leads to consideration of the factors contributing to and impeding joint innovation and the firms' perceptions of the impact of innovation. From this, it appears that much of the observed difference between innovators and non-innovators lies in less objective measures. The data suggest the importance of inter-personal dynamics, attitude and expectations in facilitating successful collaboration.     

Directional heterogeneity of environmental disamenities: the impact of crematory operations on adjacent residential values

A hedonic study of residential house sales in Rawlins, Wyoming, was conducted to estimate the impact of an environmental shock from a new point source upon adjacent residential property values. We use a unique data base of house sale prices and associated house attributes, including structural and neighbourhood characteristics and geographic distances and directions from the source of the shock, atmospheric emissions from a new crematory. Our data spans 27 months of house sales: 7 months before, and 20 months after the startup of crematory operations. Results indicate that proximity, measured both in terms of direction and distance from the crematory, imparts a statistically significant negative impact on average house sale prices–an increase of 0.3 to 3.6% of average sale price for every one-tenth mile increase up to one-half mile in distance away from the crematory, but depending on direction from the crematory. This distance benefit increases somewhat with calendar time only for houses located west of the crematory.