Is the public sector too large in an economy with club goods? A case when consumers differ in both tastes and incomes

In an archetypal economy with a single private good and a single shared good, the latter represents the public sector. With the shared good a club good, we ask if second-best (SB) provision of it is too small, as usually claimed for pure public goods. When consumers differ only in exogenous incomes, if the club good is a superior good in a single-club economy, overprovision in the SB occurs if club good demand is convex in income. We show this can extend to an economy where consumers differ in both tastes and incomes, depending on the covariances between consumers' incomes and their relative strength of preference for the club and private goods, and the covariances between incomes and taste parameters.     

The relationship between the costs and prices of a multi-product monopoly: The role of price-cap regulation

This paper examines the role of price-cap regulation in influencing the relationship between the costs and prices of a multi-product monopoly. Based on a simple model of mark-up pricing, a combination of analytical and numerical analysis is used to show how cost increases among the firm's products can cause a divergence of prices from the Ramsey structure if the cost increases are non-uniform or if the demand elasticities for the products are non-uniform. However, in the absence of additional cost changes, profit-maximising prices which are subject to a price-cap constraint converge to the Ramsey structure if the previous period's quantities are used as weights in the firm's price-cap constraint. Consequently, given this formulation of the firm's price-cap constraint, only in situations of recurring cost changes are prices likely to show on-going divergence from the Ramsey structure.This paper reports on research funded by the Australian Electricity Supply Industry Research Board. I am grateful to two anonymous referees for their helpful comments on previous versions.     

Measuring the impact of R&;D on Productivity from a Econometric Time Series Perspective

In this paper we argue that the standard sequential reduction approach to modelling dynamic relationships may be sub-optimal when long lag lengths are required and especially when the intermediate lags may be less important. A flexible model search approach is adopted using the insights of Bayesian Model probabilities, and new information criteria based on forecasting performance. This approach is facilitated by exploiting Genetic Algorithms. Using data on U.K. and U.S. agriculture the bivariate time series relationship between R&D expenditure and productivity is analysed. Long lags are found in the relationship between R&D expenditures and productivity in the U.K. and in the U.S. which remain undiscovered when using the orthodox approach. This finding is of particular importance in the debate on the optimal level of public R&D funding.JEL Classification: C22, C51, Q16     

House Prices and Bubbles in New Zealand

This paper studies actual (real) house prices relative to fundamental (real) house values in New Zealand for the period 1970–2005. Utilizing a dynamic present value model, we find disparities between actual and fundamental house prices in the early 1970s and 1980s and from 2000 to date. We model the bubble component that is related to fundamentals (the intrinsic component), making it possible to highlight whether a bubble still exists after that component is accounted for. We then analyze any remaining bubble to detect any momentum behavior. Much of the overvaluation of the housing market is found to be due to price dynamics rather than an overreaction to fundamentals.

Skill and Earnings Amongst Golfers on the Southern-African Sunshine Tour

This paper estimates the determinants of the success of golfers on the Southern-African Sunshine Tour. Using a simultaneous-quantile regression approach and real earnings per tournament as a measure of success, a higher greens-in-regulation percentage and a lower number of putts per greens-in-regulation are associated with higher earnings. Calculations of the value of the marginal product of key golfer skills suggest a dynamic human capital acquisition process for many Sunshine Tour golfers at the earliest stages of their professional golf career.     

Anticipatory Savoring and Consumption: Just Thinking about That First Bite of Chocolate Fills You Up Faster

Two laboratory studies examine how consumers adjust their eating to the size of the portion they expect to receive. Participants who knew in advance that they would receive six pieces of chocolate waited less time before eating each piece and ate more pieces than participants who expected to receive only two pieces when they started, even though both groups were ultimately offered six pieces. In the second study, natural variance in how long participants waited before tasting the chocolates was negatively related to how many additional pieces they thought they could eat after finishing the last piece. These results suggest that increasing the interval prior to taking the first bite of a piece of chocolate reduced overall consumption. When consumers focus their attention on eating, the interval before taking the first bite captures anticipatory savoring—psychologically looking forward to the actual consumption experience.     

Labour Market Deregulation in Australia: The slow combustion approach to workplace change

Since the beginning of the 1990s Australia has experienced a gradual but far-reaching process of labour market deregulation. Labour market deregulation has proceeded primarily through the dismantling of the distinctive system of awards-the main avenue of external, protective regulation in Australia for much of the 20th century. This paper examines labour market deregulation and its implications for the Australian workforce. It situates the changes in terms of their institutional starting point in the award system and the growing pressures in the 1980s for increased labour market flexibility. It argues that labour market deregulation is amplifying existing trends to growth in precarious employment, wage dispersion and the development of a low-pay sector amongst full-time employees. In addition, it is sponsoring a significant fragmentation of working-time arrangements.     

Geographical deregulation and competition in U.S. banking markets

The effects of geographical deregulation on competition in banking markets is examined. Using a model that develops an index of competition as proposed by Bresnahan and applied to banking markets by Shaffer, the empirical evidence suggests that geographical deregulation has not had a significant impact on competition. The limited effects of geographical deregulation on competition is consistent with other evidence presented, suggesting that banking markets were already highly competitive. In those states where a significant effect was observed, geographical deregulation increased the degree of competition in some states but had the opposite effect in others.     

Steps to Space; opportunities for astrotourism

Recent years have seen the emergence of the astrotourist following the $20 million trip by Dennis Tito to the International Space Station (ISS) in 2001. Although this is the preserve of the hyper-elite, within the next decade it is likely that there will be more affordable opportunities on sub-orbital reusable vehicles pioneered by the Virgin group. This paper offers an overview of recent developments in the space tourism industry as a whole and offers definitions for the new sector of astrotourism. Drawing on motivational theory, the study examines the motivations and experiences that astrotourists have demonstrated through interviews reported through the media. However, parallels are demonstrated with the existing terrestrial space tourism industry, which has been largely ignored to date. Consequently the paper also examines the management of these sites and the challenges this niche presents. There is also evidence of a travel career being marketed by space tourism travel agents, dubbed by one interviewee as ‘steps to space’. This builds on potential tourists' existing aspirations for space experiences allied to these companies' credentials in adventure tourism. Whilst sharing parallels to the work of Pearce (1982), the focus of this career on one particular theme is of interest. This theoretical bridging is useful for observing tourism organisations at work, and furthermore uncovers the massive potential that developments in space tourism present for the tourism industry as a whole.     

Fight or flight: managing stigma in executive careers

We examine the labor market consequences borne by executives who remain at financially distressed firms relative to those who flee to another employer to avoid the stigma of failure. Our study makes two contributions. First, we document an ex ante dimension of executive labor markets unaccounted for by ex post settling up models. Specifically, we show that executives who ‘jump ship’—change employers in the two years prior to the failure—suffer fewer labor market consequences than their counterparts who remain with the failing firm. Second, we extend the study of bankruptcy stigma to examine how stigma might be managed by jumping ship. Copyright © 2007 John Wiley & Sons, Ltd.