WILLINGNESS TO PAY FOR AMATEUR SPORT AND RECREATION PROGRAMS

A contingent valuation method (CVM) survey in Alberta, Canada, allows estimation of the household willingness to pay (WTP) for enhancements in the province's extensive sport and recreation programs. The estimated annual WTP of $18 per household for small enhancements in the programs far exceeds the estimated WTP of households in the United States to avoid the loss of major league sports teams, as determined in previous CVM studies. Those opposed to gambling, which helps to fund the Alberta programs, are more likely to favor using income taxes to finance expansions. ( JEL H41, L83)     

Price Dispersion and the Gains From Search in Local Food Markets

The wide range of prices found in local food markets allows consumers to reduce the cost of food purchases through comparison shopping in two or more stores. Little is known, however, about how much can be saved by comparing prices for a whole market basket of food items. This paper presents evidence relating to the savings which can be realized through comparison shopping, and shows how savings can vary in markets of different sizes. Analysis of data on the prices of a market basket of food items in 15 local markets indicates that there are substantial differences in the dispersion of prices between small, medium and large food markets. The effect of these differences is to make the potential saving from comparison shopping much greater in large market areas, as compared with small ones. It is found that the dollar benefits of comparison shopping to consumers are likely to be greater than the costs of search in large shopping areas, but may not justify the costs in small and medium size areas.     

More on Estimation Risk and Simple Rules for Optimal Portfolio Selection

For the risk-averse investor, consideration of estimation risk is important in selecting an expected-utility-maximizing portfolio. It has previously been shown that the composition of the tangency portfolio is unaffected by the recognition of estimation risk if the Full Covariance Model is used. Alternatively, if the Market Model is used, the composition of the tangency portfolio has been shown to be affected by the recognition of estimation risk. However, as is demonstrated in this paper, the effect will generally not be as substantive as previously believed and in many situations can be safely ignored.