Modelling Heterogeneity and Uncertainty in Contingent Valuation: an Application to the Valuation of Informal Care

Both the lack of market data and the need to adopt a more holistic approach in the valuation of non‐market activities within health care have pointed towards the use of contingent valuation (CV) methods. However, to date, few studies have employed such techniques to value informal care, despite its provision being an important public policy question. We propose an analytical framework that through the use of random parameters models and respondents' certainty scales can incorporate both unobserved and observed heterogeneity in the CV modelling. This is the first CV study of informal care for Scotland (UK) and a £7.68 per hour value is estimated.     

How Online Product Reviews Affect Retail Sales: A Meta-analysis

A growing body of research has emerged on online product reviews and their ability to elicit performance outcomes desired by retailers; yet, a common understanding of the performance implications of online product reviews has eluded us. Scholars continue to navigate an array of studies assessing different design elements of online product reviews, and various research settings and data sources. We undertake a meta-analysis of 26 empirical studies yielding 443 sales elasticities to examine how these variables relate to retail sales. Building on well-established meta-analytical methods, we address the following questions: How does review valence influence the elasticity of retailer sales? What about review volume? For which product types and usage situations do online product reviews have a greater impact on retailer sales elasticity? Which types of online reviewers and websites exert the greatest influence on retailer sales elasticity? Our study answers these important questions and provides a much needed quantitative synthesis of this burgeoning stream of research.     

Last dance or second chance? Firm performance,CEO career horizon,and the separation of board leadership roles

In recent years, many firms have chosen to separate their CEO and board chair positions. Prior research has demonstrated that there are three forms that a CEO–board chair separation can take: apprentice, departure, and demotion. In this paper, we examine the antecedents of these three types. Our results show that the three types of separation each have different profiles in terms of the prior performance of the firm, the independence of the board, and the career horizon of the incumbent CEO. The findings in this paper provide unique insights into the factors that drive boards' structural choices. As questions about board leadership structure become more nuanced and more relevant in both scholarship and practice, a full understanding of these factors will only become more important. Copyright © 2013 John Wiley & Sons, Ltd.     

The Role of Nonattenuated Rights in Positive Economics: A Critical Appraisal

This article assesses the institutionalist elements of Friedrich Hayek's neoliberal political economy by presenting his views on the entangled relations between the state and markets in capitalism. Through the analysis of Hayek's work, the article contributes to further consolidating the view that neoliberalism is an ideological project of institutional transformation which, despite some enduring myths, has an irreplaceable role for a state with many important functions in a more limited democracy. Markets, for their part, are politically contested social constructions that depend on previous non-market institutions for their existence and legitimation. This paper argues that Hayek's work corroborates this institutionalist claim.     

A Framework for Reconsidering the Lake Wobegon Effect

The Lake Wobegon Effect (LWE) describes the potential measurement-error bias introduced into survey-based analyses of education issues. Although this effect potentially applies to any student-report variable, the systematic overreporting of academic achievements such as grade point average is often of preeminent concern. This concern can be easily circumvented if official records data are available; however, many researchers can only access student-reported data. In this article, the authors examine whether using student-survey data in place of official records data meaningfully biases regression estimates. They motivate their contribution by noting a useful statistical feature of overreporting on bounded variables such as grade point average. Specifically, the misreports will be negatively correlated with the true grade point average, yielding a form of nonclassical measurement error that actually counteracts the bias. The authors connect this observation to reliability ratios used in labor economics, which are simple ways to adjust for attenuation bias, when needed. In two applications, we find that it is unnecessary to correct for the LWE bias because it is so small.     

What Influences Trader Choice of Electronic versus Intermediated Execution?

We examine the determinants of US equity trader choice of electronic versus intermediated execution. While traders exhibit a strong overall preference for automation, when the market is less liquid at order submission time, traders seek market maker automated and human order‐matching services more often. Traders' overall tendency to choose intermediaries is highly correlated with their demand for liquidity. Market maker participation rates are higher for more active and larger size traders. Traders who choose intermediaries more often trade more stocks, execute orders quicker, price orders more aggressively, and disperse their trading over longer periods of time. Although US stock intermediaries continue to lose market share, our results highlight the important role these firms can play in an increasingly automated, electronically driven marketplace.     

Effects of distribution channel structure in markets with vertically differentiated products

This study examines how the structure of distribution channels may influence firms’ quality and price strategies and how they may in turn affect consumer welfare. It treats product quality as a decision variable so that the degree of product substitution becomes endogenous rather than exogenous as in previous studies. We find that, with vertically differentiated firms, the changes in channel structure have asymmetric effects depending on whether they occur in the high-quality channel or in the low-quality channel. The product quality of the high-quality channel decreases when it decentralizes unilaterally. However, product quality of the low-quality channel would increase when it decentralizes. The high-quality manufacturer and its channel suffer more from decentralization in comparison with their low-quality counterparts, and the low-quality manufacturer actually receives greater profits when both channels are decentralized. An important driver behind these asymmetries is the interaction between firms’ pricing incentives in integrated versus decentralized channels and what consumer segments they serve. Our analysis indicates that decentralization may reduce consumer welfare, but decentralization in the high-quality channel hurts consumers more than that in the low-quality channel. Therefore in a competitive environment where firms make both quality and price decisions, channel integration would have significant welfare enhancement effects through the elimination of double marginalization, especially if it happens in the high-quality channel. Moreover, we demonstrate that once quality is endogenized, integration is the only equilibrium of channel structure choices. This suggests that the private incentives of firms may actually benefit consumers but do not have to be in line with the general preference of industry regulation for decentralization.     

The Taiwanese love motel - An escape from leisure constraints?

The paper reports research derived from over 800 respondents who self-completed questionnaires while patronising love motels in the Taipei greater metropolitan region, Taiwan. The paper provides a brief history of Taiwanese love motels and distinguishes them from western massage parlours. Five clusters are found that are based on two primary canonical discriminate functions that explain 83 percent of the variance - the dimensions being sexual conventionality-adventurousness and comfort seeking. These dimensions are wholly consistent with the basic premise of the love motels, although additionally privacy for intimate relationships is also important. The survey questionnaire was based on a concept of physical and relationship constraints on leisure, and generally it was found that the ‘push’ factors based on a need to escape these constraints was weaker than the ‘pull’ factors of comfort and privacy.     

Saltwater Crocodiles as Tourist Attractions

These study reports the results derived from a pilot research study based on a phenomenographic research approach with 50 respondents in the Northern Territory of Australia. The data permitted a perceptual map to be drawn which identifies tourist fascination with crocodiles as being based on attributes of potential threat, danger, power, links with the prehistoric, and survivorship. However the study also found that when asked to describe the Northern Territory, crocodiles did not immediately come to mind, even though, arguably, the reptile is etched upon the ethos of the 'Top End'. However prompted responses quickly elicited mention of crocodiles. There was also a preference to see crocodiles within their natural terrain. Some evidence of a minority of tourists being prepared to mitigate their behaviours was also found, and hence this study may have wider implications.