Design efficiency for non‐market valuation with choice modelling: how to measure it,what to report and why*

We review the basic principles for the evaluation of design efficiency in discrete choice modelling with a focus on efficiency of WTP estimates from the multinomial logit model. The discussion is developed under the realistic assumption that researchers can plausibly define a prior belief on the range of values for the utility coefficients. D‐, A‐, B‐, S‐ and C‐errors are compared as measures of design performance in applied studies and their rationale is discussed. An empirical example based on the generation and comparison of fifteen separate designs from a common set of assumptions illustrates the relevant considerations to the context of non‐market valuation, with particular emphasis placed on C‐efficiency. Conclusions are drawn for the practice of reporting in non‐market valuation and for future work on design research.     

The importance of customer input in the development of very new products

This research explores the acquisition of customer input and its importance in the development of very new products. Data were gathered on 55 product development projects from the computer telephony integration industry – a new industry experiencing rapid technological change. The data were used to test hypotheses concerning the relationships between product newness, the importance of customer input in the development process, and the use of customer intensive market research methods. We found that the importance of customer input increases with market newness of a product up to a point and then drops off for very new products, whereas the importance of customer input increases with technological newness of a product without dropping off. We also found that the importance of customer input significantly increases the use of customer intensive market research methods; whereas, neither market nor technological product newness in themselves had much direct effect on research methods.     

The impact of demand management policies on black vs. white employment

This article uses vector autoregression analysis to examine the relative impacts on black and white employment growth of monetary and fiscal actions. It was found that the employment responses to anticipated policy actions, while significant, were generally short-lived, with the exception of the effects of anticipated money growth on white employment. The influences of unanticipated policy changes are of a longer duration. The predominant finding in which black employment growth responded differently from white employment growth was in response to a monetary shock. The black employment response was sharply negative while the white employment response was a gradual increase over nine quarters. The results indicate that this difference occurred only during the 1980s and not in the 1970s and suggests that the effects of bank failures and credit rationing during this period may have significantly hurt minority employment opportunities.     

UK Industrial Policy: Old Tunes on New Instruments?

This paper discusses the current Labour government's industrialpolicy—as most recently reflected in its document on manufacturingstrategy—in the context of industrial policy in the UKover the last 50 years and the form that it has taken elsewherein Europe. It concludes that the thematic priorities for UKindustrial policy in the 1960s—international competitiveness,innovation, competition, and skills—continue to be thekey themes of UK policy today. The paper presents data thatillustrate the gaps that exist in key indicators of performancebetween the UK and its main economic competitors. The differencebetween the 1960s and the 2000s is that there are new instrumentsof policy. Two areas in particular are focused on—competitionpolicy and technology policy—and an attempt is made toassess the likely effectiveness of these new instruments. Thepaper concludes that the international evidence base for thesenew approaches is reasonably robust but that it is still toosoon to tell if they are having the hoped-for impact on theperformance of the UK economy.     

Regional Comparisons,Spatial Aggregation,and Asymmetry of Price Pass-Through in U.S. Gasoline Markets

Spot to retail price pass-through behavior of the U.S. gasoline market was investigated at the national and regional levels, using weekly wholesale and retail motor gasoline prices from January 2000 to the present. Asymmetric pass-through was found across all regions, with faster pass-through when prices are rising. Pass-through patterns, in terms of speed and time for completion, were found to vary from region to region. Spatial aggregation was investigated at the national level and the East Coast with the aggregated cumulative pass-through being greater than the volume-weighted regional pass-through when spot prices increase. These results are useful to the petroleum industry, consumers, and policy makers by providing a basis to estimate the retail price effects that result from a change in spot price.     

Outsourcing and Vertical Integration in a Competitive Industry

We develop a partial equilibrium, perfectly competitive framework of a (potentially) vertically integrated industry. There are three types of firms: upstream firms that use primary factors to produce an intermediate good; downstream firms that use primary factors and intermediate goods to produce a final good; and vertically integrated firms that do both. We establish conditions under which vertically integrated firms exist and outsource (part of) the production of the intermediate input. We study the changes in industry configurations resulting from changes in costs and demand.     

Medical Malpractice Liability and Physician Migration

This paper uses national data on individual physicians and two control groups to provide evidence on the extent to which each of five medical malpractice reforms impacts the decision to move one's medical practice to another state. We find robust evidence that states that have implemented noneconomic damage caps experience less out-migration of physicians than states that do not have these reforms. In addition, we find some evidence that joint and several liability reforms and patient compensation funds also impact the migration decisions of physicians.