Because you're worth it? Determinants of Vice Chancellor pay in the UK

Wage inequality has increased across most developed nations; this has been manifested in a wide range of organisations and sectors, with implications for well‐being and sustainability; within UK universities, this has become increasingly visible. There is increasing pressure on universities to deliver social and economic impact in an increasingly market‐driven and metric‐driven environment. In the UK context, increasing financial pressure has led to both an escalation of student fees and constrained wage growth for faculty. In contrast, most Vice Chancellors have secured substantive pay packages raising concerns that regulatory failures may be contributing to the rise. We show that Vice Chancellors use their internal power within organisations to extract a disproportionate amount of the value created by the institution. However, we encountered much diversity according to the quality of governance, highlighting the extent to which not only contextual but also internal dynamics drive wage inequality.     

Do health system reforms stand a chance?

While most major reforms of health systems fail, those that succeed are motivated by politicians' quest for reducing the health burden on their budget in response to a shift in voters' preferences away from public health. An Edgeworth box is used to depict their preferences, in addition to those of (potential) patients and health‐care providers. Politicians are found to severely constrain the area of mutual advantage, suggesting that only minor reforms are possible unless they promise to lower health‐care expenditure. An efficiency‐enhancing change that would enlarge the box and hence the area of mutual advantage would be to suppress the requirement imposed on health insurers to purchase domestically, rather than being free to directly import health‐care services and drugs.     

The Context of Entrepreneurial Judgment: Organizations,Markets, and Institutions

The economics and management literatures pay increasing attention to the technological, competitive, and institutional environment for entrepreneurship. However, less is known about how context influences the judgment of entrepreneurs. Focusing on the emerging judgment‐based approach to entrepreneurship, we argue that economics can say much about how the organizational, market, and institutional context shapes entrepreneurial judgment. We describe entrepreneurs as individuals who deploy scarce, heterogeneous resources to service customer preferences at a profit. Because of uncertainty, this process is essentially experimental, and context influences the experimental process. Thus, entrepreneurs will seek to design the internal organization of the firm so that it facilitates internal experimentation. Moreover, the market or task environment determines the need for experimentation (e.g., how fast do consumer preferences change, how does technology evolve, which assets are available at which terms, etc.). Finally, the institutional environment influences, for example, the transaction costs of acquiring and divesting assets as firms adjust their boundaries through ongoing commercial experimentation.     

Creating compassion: How volunteering websites encourage prosocial behaviour

Organisations increasingly use websites to promote prosocial behaviour such as volunteering, philanthropy, and activism. However, these websites often fail to encourage prosocial behaviours effectively. To address the lack of relevant research, we develop, then refine, a design model that identifies the user experience factors that create intention to engage in prosocial behaviour on websites. We test an initial model developed from the literature, by interviewing forty participants, each of whom visited and compared six volunteering websites. Our analysis of the participants' user experience reveals eighteen elements that interplay to create intention to engage in prosocial behaviour. Our refined design model comprises ten website features (interaction, factual, anecdata, external recognition, organisational expression, value suggestion, explanatory content, visual media, written media and, website design), seven perceptions (ease of use, aesthetics, information quality, trust, negative affect, positive affect, and argument strength), and one motivation (egoism). These findings provide novel insights into how to design Information and Communications Technology (ICT) to encourage prosocial behaviour.     

Economic transition and growth

Some extensions of neoclassical growth models are discussed that allow for cross‐section heterogeneity among economies and evolution in rates of technological progress over time. The models offer a spectrum of transitional behavior among economies that includes convergence to a common steady‐state path as well as various forms of transitional divergence and convergence. Mechanisms for modeling such transitions, measuring them econometrically, assessing group behavior and selecting subgroups are developed in the paper. Some econometric issues with the commonly used augmented Solow regressions are pointed out, including problems of endogeneity and omitted variable bias which arise under conditions of transitional heterogeneity. Alternative regression methods for analyzing economic transition are given which lead to a new test of the convergence hypothesis and a new procedure for detecting club convergence clusters. Transition curves for individual economies and subgroups of economies are estimated in a series of empirical applications of the methods to regional US data, OECD data and Penn World Table data. Copyright © 2009 John Wiley & Sons, Ltd.     

Diagnosing housing fever with an econometric thermometer

Housing fever is a popular term to describe an overheated housing market or housing price bubble. Like other financial asset bubbles, housing fever can inflict harm on the real economy, as indeed the U.S. housing bubble did in the period following 2006 leading up to the general financial crisis and great recession. One contribution that econometricians can make to minimize the harm created by a housing bubble is to provide a quantitative “thermometer” for diagnosing ongoing housing fever. Early diagnosis can enable prompt and effective policy action that reduces long-term damage to the real economy. This paper provides a selective review of the relevant literature on econometric methods for identifying housing bubbles together with some new methods of research and an empirical application. We first present a technical definition of a housing bubble that facilitates empirical work and discuss significant difficulties encountered in practical work and the solutions that have been proposed in the past literature. A major challenge in all econometric identification procedures is to assess prices in relation to fundamentals, which requires measurement of fundamentals. One solution to address this challenge is to estimate the fundamental component from an underlying structural relationship involving measurable variables. A second aim of the paper is to improve the estimation accuracy of fundamentals by means of an easy-to-implement reduced-form approach. Since many of the relevant variables that determine fundamentals are nonstationary and interdependent we use the endogenous instrumental variable based method (IVX) to estimate the reduced-form model to reduce the finite sample bias which arises from highly persistent regressors and endogeneity. The recursive evolving test proposed by Phillips, Shi, and Yu (PSY) is applied to the estimated nonfundamental component for the identification of speculative bubbles. The new bubble test developed here is referred to as PSY-IVX. An empirical application to the eight Australian capital city housing markets over the period 1999–2017 shows that bubble testing results are sensitive to different ways of controlling for fundamentals and highlights the importance of accurate estimation of these housing market fundamentals.     

LACK OF RIGOUR IN DEFENDING FAIRTRADE: A REPLY TO ALASTAIR SMITH

Alastair Smith (2009 ) claims to refute a few criticisms of Fairtrade. It is shown that his empirical evidence consists of anecdotes with no statistical or other evidential value, and that his economics is wrong. Though Fairtrade is an agricultural marketing system, he appears not to be aware of the literature on agricultural marketing or co‐operatives. Accordingly he makes statements not in accord with the accepted theory or evidence. He assumes, for instance, backward‐sloping supply curves and that the prices offered by state marketing boards are not affected by markets. There are ethical trading alternatives which avoid all the criticisms of Fairtrade.     

Socio-economic impacts of migrant clustering on Dutch neighbourhoods: In search of optimal migrant diversity

The recent empirical literature on the impact of migrant clustering on socio-economic welfare indicators shows inconclusive and often even contradictory results. In this paper we argue that there is not an unambiguous empirical outcome of migrant or ethnic diversity, but that it depends on the level of migrant or ethnic composition itself. A low degree of socio-economic and cultural diversity may be beneficial for neighbourhoods, whereas an excessive degree of diversity may be harmful. We test this hypothesis by (i) constructing a migrant clustering index for all neighbourhoods in the Netherlands based on a gamma index; and, subsequently, (ii) incorporating it in a regression framework to assess three relevant socio-economic outcomes: neighbourhood income, number of students, and average housing value. We show that there is apparently an optimal level of migrant clustering, and that it is remarkably robust. For the Netherlands as a whole and for the ten largest Dutch cities as well, it is striking that largely similar effects were found. Our results suggest that population composition in neighbourhoods may vary up to about 40 per cent from the national average before migrant clustering generates negative effects.     

A Multi-state model of state dependence in labor supply: Intertemporal labor supply effects of a shift from joint to individual taxation

In this paper I develop an intertemporal discrete choice model of female labor supply to analyze the effects of true state dependence and its effect on labor supply behavior over time. The estimation results show that state dependence is significantly positive at the extensive margin and lower but in general still significant at the intensive margin. I apply this model to study the short and long run labor supply effects of a fundamental reform of the German income tax system, i.e. the shift from joint to individual taxation of married couples and show that labor supply responses are significantly higher in the long run than in the short run.     

Learning trajectory in offshore OEM cooperation: Transaction value for local suppliers in the emerging economies

We focus on the unique role of offshore OEM cooperation as a learning opportunity for local suppliers in the emerging economies. In particular, we conceptually argue and empirically confirm the links between learning intent, capability enhancement, governance mode, and overall innovativeness from the perspective of local suppliers in offshore OEM cooperation in China as well as the influence of local business culture within these links. We address two issues: (1) offshore OEM cooperation can be a unique opportunity for local suppliers with strong intent to learn from foreign buyers for capability enhancement and (2) the moderating effects of trust and contact as two distinctive governance modes. Addressing the two issues, we make two specific contributions to the research on inter-firm cooperation, both of which derive from the often-neglected theoretical lens of transaction value. Our general contribution lies in the extension of the transaction value perspective by specifying its dual tenets of inter-firm co-specialization and shared-trust as the central theme of inter-firm cooperation to complement the transaction cost economics and also contextualize the research on inter-firm cooperation in terms of different partners’ perspectives as well as different governance modes.